Solana is Launching a Phone? | Co-Founders Anatoly & Raj

Solana just released a flagship Android phone for web3 called Saga. And it really begs the question: does a blockchain need to have its own phone? Well, we brought on Co-Founders Anatoly Yakovenko and Raj Gokal to make the case. Let us know what you think about this release in the comments below or on Twitter @BanklessHQ - bullish or bearish Saga and why? ------ 📣JUNO | Crypto Friendly Banking https://juno.finance/bankless ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 🚀ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool ⚖️ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum ❎ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🦁BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🌴MAKER DAO | DECENTRALIZED LENDING https://bankless.cc/MakerDAO 🔐LEDGER | SECURE STAKING https://bankless.cc/Ledger ------ Timestamps: 0:00 Intro 6:15 Bear Market Vibe Check 10:03 Solana’s Bear Market Agenda 14:28 Why Web3 Needs a Phone? 17:30 Solana Mobile Phone Explained 25:52 The Solana Mobile Thesis 30:50 Mobile Hardware Features 33:45 Mobile Wallet Adapter 36:15 Solana dApp Store 41:40 Is Solana Mobile a Distraction? 47:00 Jason Keats & Osom 50:45 Describing the Solana Mobile Device 51:32 Competitors 54:40 Costs to Launch a Phone 56:32 Solana Centralization Critique 1:03:50 Solana Scalability ------ Resources: Anatoly Yakovenko https://twitter.com/aeyakovenko Raj Gokal https://twitter.com/rajgokal Solana https://solana.com/ Solana Mobile https://twitter.com/solanamobile ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:09Ryan Sean Adams?

  Hey Bankless Nation, welcome to another episode of State of the Nation, where we do a deep dive on a specific topic relevant in crypto. Hey guys, are you ready for the Web3 Phone Wars? Because I think that is just kicking off. David, that is our subject today. Last rollup, we had a take on the Solana phone. I feel like, David, we didn't exactly nail that take. All right, we didn't get a complete take there, and we want to rectify that today. We want to do a deep dive with a more nuanced take on what Solana is launching. So we have Anatoly and Raj, the co-founders of Solana, to tell us more about the Solana phone. David, what are we going to cover today?

• 0:50David Hoffman?

  Yeah, so there's a, interestingly, in the last two weeks, three phone announcements all happened. Solana is definitely the biggest, the biggest phone announcement with like the most amount of just like effort and energy put behind it. So of course, we've got to bring the Solana team on to talk about it. But overall, like the thing that we were missing when we were talking about it on the weekly rollup, Ryan, is like, obviously, we use crypto on our computers. You know, your phone is also a computer, but what does a phone-first ecosystem really unlock the Web3 crypto world? What does that really bring? And that is a question that I don't think we knew what the answer was on the weekly rollup, and that's the question I think we are trying to answer here. What does a mobile-first, mobile-specific Web3 ecosystem really bring to the table,

• 1:34David Hoffman?

  not just for Solana, but for the entire crypto industry? And why is everyone seemingly having their mobile play at this present moment? So there's lots of things to unpack here.

• 1:43Ryan Sean Adams?

  And I still have some questions, David, and I still have a little bit of skepticism, but I'm hopeful by the end of this episode, we might be able to update our take on what the Solana phone actually is, where it adds value to the ecosystem, and what it is about. So that is the subject today. Also, David, got to tell them about our friends and sponsors over at Juno. So David, Juno has this fantastic crypto-native bank, is what I would call it. What's special about a Juno account?

• 2:12David Hoffman?

  So it has all of the powers of crypto built right into it. So you get your, your, your normal features that you'd expect like yield on your USDC or your Bitcoin or your Ether. But I'm pretty sure this is the only checking account in the world that goes straight from your checking account straight into crypto, but not just on crypto.

• 2:29Ryan Sean Adams?

  It's gotta be the only one, right?

• 2:30David Hoffman?

  On layer twos. You go from your bank account to Optimism, Arbitrum, Polygon, and they also have ZK Sync and Starkware coming soon as well. It's the only bank account in the world that does that. You get your direct deposit into this account and then you get zero fees to swap that direct deposit fiat into the crypto assets that you know and love. And you can also automate that too. So like checking account to layer twos, that's crazy. Yield on your crypto assets, we like that. But then also getting your direct deposit in crypto. Juno, it's the crypto-first bank account for the digital age.

• 3:02Ryan Sean Adams?

  They got a deal going on too, right? So look at the top, it says, "Welcome Bankless listeners." There's a little deal. Tell us about that, David.

• 3:08David Hoffman?

  Yeah, so if you deposit money from your direct deposit, you get $100 from Juno. And if you deposit crypto on the crypto side of things, you get $10. They are paying you to be a customer.

• 3:19Ryan Sean Adams?

  Yeah, as long as you gotta have a bank account, you have real-life fiat bills, you need one of these. It is a step to go bankless and it's an upgrade from your Wells Fargo account. I can tell you that much. David, gotta ask you the question we start every single state of the nation with, which is, what is the state of the nation today, sir?

• 3:38David Hoffman?

  You know that Batman movie with Bane where there's that meme where he goes, "We're going mobile." That is the state of the nation, Ryan. We are going mobile.

• 3:46Ryan Sean Adams?

  Oh my God, that's a deep cut right there. I barely remember that clip, okay?

• 3:51David Hoffman?

  Yeah, well anyways, everyone's going mobile. Solana is looking like it's leading the charge into the mobile-first ecosystem. So we're going to explore what does it mean to go mobile as a crypto industry? Because it's not just putting your crypto apps on your phone. It's much more than that. And I think Anatoly and Raj have some of the answers there as to what Web3 mobile really, really looks like.

• 4:13Ryan Sean Adams?

  Look, this is a big project to sink your teeth into during the build market, which is what we're in. So we'll get the full scoop in just a minute. We'll be right back with Anatoly and Raj from Solana, but before we do, we want to thank the sponsors that made this episode possible.

• 4:28David Hoffman?

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• 5:12David Hoffman?

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• 5:56David Hoffman?

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• 6:39David Hoffman?

  which contributes funds to One Tree Planted, an organization with ongoing global reforestation efforts, creating a world where digital participation and the health of our environment can live side by side. Soon, Maker will be present on all chains and Layer 2s, bringing the biggest and best DeFi credit facility to everywhere there is DeFi. So follow Maker on Twitter, @MakerDAO, and learn from the oldest and most resilient DAO in existence.

• 7:01Ryan Sean Adams?

  Hey, guys. Welcome back. We are here with the co-founders of Solana. We've got Anatoly, who's a co-founder of Solana, and also the co-founder of Solana Labs. So the protocol and the labs company. We also have Raj, who's the co-founder of Solana, the COO of Solana Labs, and a board member of the Solana Foundation. We're going to talk a little bit about all of those organizations so you get some context. But the main topic of discussion is the Solana mobile phone. Raj, Anatoly, how are you guys doing?

• 7:30Speaker 02

  Great.

• 7:31Speaker 03

  Yeah, great. How are you guys?

• 7:33Ryan Sean Adams?

  We're doing OK. You know, this is a time for reflection. It's a time where we get to concentrate and there's not as much noise in the space. But let's start there, before we get into the phone conversation. How are you guys doing in the bear market? What has changed? What has stayed the same? What are the vibes like over in the Solana ecosystem? And, you know, what you guys are building right now? Anatoly, why don't you start?

• 8:01Speaker 02

  Well, I think the bull market was the exception for us. We started in the 2018 bear market.

• 8:08Speaker 02

  So we're kind of used to the slog of it. Like, this feels normal to me, actually. Like, we've got to work, we've got to, like, you know, hustle and, you know, make connections, talk to a lot of people, build. So it kind of feels more natural. So I feel like, you know, you guys calling it the build market, that's a good analogy. Good way to put it.

• 8:30Ryan Sean Adams?

  Raj, you feel the same? How are you feeling?

• 8:31Speaker 03

  Yeah, totally. I mean, I think... I if I got better at monitoring the velocity of email and Telegram, I might be able to find and calculate some kind of like leading indicator of, you know, a market collapse. But it's just amazing. I mean, I think the the noise really cuts cuts down by a factor of 10 and it becomes so much more clear, you know, what the what the important and durable problems are to solve that are gonna push the space forward for another 10 years. So, yeah, I think during during the the big run up, it felt like it grew to sort of a fever pitch and and, you know, you see these wild

• 9:14Speaker 03

  dreams about what what might be possible and what people want to build. And I think when when when clearer minds prevail and and the markets cool down, it just becomes a lot clearer what's actually worth building.

• 9:29David Hoffman?

  Right. Yeah, I absolutely resonate with that. And this was, I don't know how how many cycles you guys have been into, maybe answer that that question next, but this was my second go around. And at the peak of this bull market, like I knew things were crazy. I knew things were weird, but like there are sometimes they were like, damn it, I fell for it again, like.

• 9:46Speaker 02

  Yeah, same, same.

• 9:48David Hoffman?

  I've seen this before and it still got me. How many how many cycles have you guys gone through?

• 9:54Speaker 02

  This this would have been the second bull run that I was like, hyper aware of what was happening. Yeah, same.

• 10:01David Hoffman?

  So during this during this bear market, now that we have our sober caps on, just explain it, explain to me like what's just the vision for like what Solana wants to get done in the bear market. Obviously, this this mobile thing, which is going to be the the focus of this conversation. But just like generally in the whole Solana ecosystem, what do you guys focus on during the bear?

• 10:20Speaker 02

  It's still the same thing. So I think product like how to get crypto adoption, how to get crypto to a billion people. Those are like the big dreams. And it's really, really hard for us to know which apps or what use cases are going to drive it. So the only way we can do that is to like get devs to build them, like get a thousand people throwing darts against the board and one of them is going to hit a bullseye. So we're really focused on developer tooling, developer adoption, like everything. And that ultimately boils down to even like low level network performance, because the faster the network is, the cheaper it is, the more devs, use cases they can launch and build and, you know.

• 11:01Speaker 02

  Hopefully get the next bull market started. You think back to like DeFi summer, that was four companies really, right? That was it. So out of the thousand devs, I took a thousand shots on goal for them, did it right? And that kicked everything off. So we need the next four or five, whatever entrepreneurs to figure that out.

• 11:23Ryan Sean Adams?

  Uh, does anything change when token price is like down big, right? So like ETH price is down 80%, you know, Bitcoin's way down, Solana's down like 87%. High is, are there things you can't do when token price is down? Or does like, is price kind of just back background noise? It doesn't really matter. It doesn't affect your roadmap plans.

• 11:46Speaker 02

  We never grew to a large company. So Labs is 75 people. So like we were not, it's not like we got to cut personnel and stuff like that. That's been like, I think, like, we only hired people when like there was a fire that, or like I was so overloaded. Or like that we could hand off a task that I'm like, okay, you go do this and then I go do the next thing. And that has kept us, I think, at a size that it price isn't as important as to, I think, maybe other companies.

• 12:19Speaker 03

  Yeah, I think, I think either, you know, um, you, you over levered and you're an investor, you're a hedge fund. You know, or you were providing an unsustainable product that really needed growth, needed, needed a market run up to, to keep going. And you blow up or, you know, uh, the lighter version is you, you just scaled up a little bit too much. You have to do layoffs, but both of those are, are pretty painful and, and luckily we haven't had to do either.

• 12:45Ryan Sean Adams?

  One, uh, one comment while you're talking, uh, Anatoly about kind of DeFi summer, it was just four companies. One thing I've been thinking of is actually how resilient DeFi has been over the past couple of months, particularly when you contrast it to C-Fi and how actually if you think about this from a fundamentals perspective, like this is what's just happened in crypto, how all of the C-file, that all the trusted proxies kind of broke down, yet DeFi.

• 13:10David Hoffman?

  I survived is more fundamentally bullish for DeFi than DeFi Summer 2020. In my mind, that is true. And so if you're a fundamentals investor, if you're a builder, and you just watched all of the collapse of C-Fi around you and DeFi is still standing, fundamentally, that is incredibly bullish, even though price doesn't reflect it, right? So just an observation I have. Yeah, I don't know.

• 13:38Speaker 02

  100% agree with you. When Maker, uh, like survived the 2020 crash, when everything dropped in one day by like 50% and Maker survived it, I was like, okay, this is despite people like shitting on it and like complaining about like the, it was like a, it was a stressful time for them. But the fact that it basically survived, I was like, okay, this is a thing that can handle a double black swan that was built like on this like kind of toy. Like everyone, like it was like a toy computer, right? Like prior to that, but all of a sudden it's one that can handle like this crazy financial collapse. And I thought that really to me showed the resilience of DeFi.

• 14:22Speaker 02

  And that was before I think DeFi really broke to the, out into the mainstream.

• 14:28David Hoffman?

  Okay. So I want to turn this conversation to, to the phone conversation. And so I want, I want to read a quote that thankfully somebody put from our own weekly roll up into the YouTube chat here. So I said, we said on the, on the roll up, Bankless says that a blockchain having its own phone feels like a big distraction and quote feels weird. Questioning why Solana entered the hardware game when blockchains are software. So I'll, I'll open up the, the question to you guys. Like, why does Web 3 or, or even a specific blockchain ecosystem need a phone? Like what, what does that do for that ecosystem?

• 15:02Speaker 02

  So Labs is a company. It's not the protocol, right? The protocol is a bunch of math, a bunch of codes run by a bunch of validators. And Labs, the company builds products. One of those products is a phone. And it's a web three phone. It is primarily like we're focused on the Solana part, but the stack, the SMS stack, it's open source. So if there's devs that want to add Ethereum support, Bitcoin support, send PRs, we'll integrate them, we'll get them audited and we'll make it happen. And the goal for this product, right, is to build an awesome experience, a delightful experience for signing, for self custody, for those integrations between applications, like native

• 15:45Speaker 02

  applications and digital items, NFTs, and all the stuff you want to do with web three. Just make it really, really like as amazing as using Apple Pay, right? Like every time we use Apple Pay, I'm like, this is, I don't want to enter another credit card ever again, right? Like this doesn't suck. I want the same experience for crypto. We don't have that, like, and you kind of need a couple pieces for that to work. The main piece is taking the seed phrase and sticking it inside the secure element on the, on the phone. It's not a new piece of hardware. I was at Qualcomm like seven years ago, there were secure elements on every device that ever shipped. There's a trust zone on

• 16:26Speaker 02

  every device that ever shipped. Just adding those APIs, you can do BIP 39 key recovery. It's pretty, pretty simple, right? Like having the trust zone be able to sign and give the user trusted display. So the wallet can't lie to you what you're signing. The wallet never sees your seed phrase. That means that Phantom can, is now can ship an application. The user doesn't have to trust Phantom to not screw up their seed phrase. And that thing can be brought up and tapped to pay when you go pay for your coffee, or when like Magic Eden wants you to, you know, pay for an NFT or something like that. So that like piece of hardware allows devs to innovate. And that innovation is what I hope will bring product market fit, get to those billion users. You need

• 17:09Speaker 02

  devs to throw darts at the ball, you know, at the target. Right now, they've all been doing this on desktop. Mobile is such a, such a prevalent thing, especially outside of the US and in Europe, like most people just have a phone as their primary computer. That's actually, most of them, an Android phone.

• 17:30David Hoffman?

  Okay, so you said that all of the devices that shipped out of Qualcomm, and I'm assuming every single mobile device out there has that like secure element, like 99% at least.

• 17:39Speaker 02

  The hardware is there, the software is not.

• 17:42David Hoffman?

  Right, okay, so I think that that leads us into like there are two, there's two parts of this conversation. There's the hardware of the Solana phone, the Saga phone, and then there's the the software, the SMS stack.

• 17:55Speaker 02

  Yep.

• 17:55David Hoffman?

  Would you say like one of these things is more important than the other? And if you're telling me that like every bit of hardware has more or less the same like parts, the same components, I'm guessing it's the SMS, the Solana mobile stack part of this.

• 18:07Speaker 02

  Over the long term.

• 18:09David Hoffman?

  Over the long term.

• 18:09Speaker 02

  Long term, over the long term, I hope that what we're doing just gets co-opted by Google and Apple. And they're like, yeah, this should exist and they just ship it. And then all of a sudden we cracked them open and Web3 mobile native is there and everyone's happy. I think like what you imagine like, you know, post crypto adoption, you imagine your phone doing native signing, right? Native applications, like all that stuff being integrated, being shipped by every major manufacturer, that's gonna happen. But somebody has to do it first and the device, this flagship device, it's built by an amazing team like Jason. If it wasn't for Jason, this would have never happened. He's the founder of Awesome.

• 18:52Speaker 02

  He was the lead architect of iPad Pro. He built like James Cameron's submarine door, did like crazy projects for Johnny Eve that he can't talk about. And like was the first or second hired essential. And like this is the device and his ability to ship hardware is what like allowed this idea to actually go from, you know, me dreaming about the day that we're gonna have like native crypto experiences on mobile. And they're like, okay, let's go do this. So.

• 19:23Speaker 03

  So one important thing there is that, you know, if you, once you guys hold the device, you'll see it's, it stands alone as a flagship quality Android phone and it's, it's kind of undercutting the market on, on price. So, you know, worst case, this is just a really, really awesome Android phone for, for Android users. But yeah, as you can see from the site and if you watch the announcement, I think the video is there on, on SolanaMobile.com too. Maybe we don't need to watch it now because it's like an hour and a half long. But, you know, the first announcement was Solana Mobile Stack and, and, you know, maybe, maybe it's worth mentioning for, for folks who, who don't know, but Solana Mobile Stack is a few different features. It's, it's seed fault that uses the secure element for, you

• 20:08Speaker 03

  know, for a custody protocol. It allows instant signing of transactions, but it partitions the private keys from wallets and apps and, and the rest of the Android operating system. So it's something like, you know, cold, cold storage on your phone. And then there's the, the mobile wallet adapter, which, you know, lets you sign transactions basically across all, all mobile web. So you're not dealing with these, these web views and, and applications and, you know, copying and pasting links between apps to, to, you know, access mints and things like that. And then there's the, the DApp Store, Solana DApp Store that is, is basically no fees, no restrictions on NFTs or, or tokens. And, you know, and it's just a free playground for all the apps that people have already

• 20:51Speaker 03

  been using on Solana to just launch in a mobile native way.

• 20:55Speaker 02

  And that needs to happen because like the digital like, like items like NFTs are owned by the users, right? They're not owned by the content creator. And this is something that just doesn't work with web two mobile apps. Like Google and Apple expect the application that is the mobile app to be the creator that owns that content to be able to take 20% of the value of that content and send it to Google. But like Magic Eden can't add $2,000 in a $10,000 NFT sale on a mobile app.

• 21:27Speaker 02

  Because that would like kill them, right? Like it just doesn't work. Like when you, when you get to true digital content, like the way that the business models for like the big app stores just don't work. And they'll change eventually, but the only way they'll change is that somebody pokes that bear, you know, a little bit. So that's our hope is that like we're the ones that poke him hard enough and they're like, okay, fine, we better, we better change your models and that frees up mobile for everyone.

• 21:56Speaker 03

  Yeah, I think a couple of things that happened here too, like, you know, the first 250,000 users for Solana came through Dgen Ape Academy, you know, just these 3D apes. And it was a total shock. Like, we didn't, we didn't know that was where usage was going to come from. And that, that was a result of, you know, Metaplex launching and basically breaking like the nifty gateway model of these constrained launches and, and no on-chain, you know, royalty splits. And it iterated really rapidly through like 100,000 projects into this, you know, really strong product market fit for PFPs. And then step in, you know, we didn't know step in was gonna happen, right? And get to 2 million users that quickly. And, and I think if you speak to, you know, to app

• 22:40Speaker 03

  developers today, they have no idea how to get something like that through the app stores. It's just, it's so opaque of a, of an approval process. And, and even if they get through it so long, and then if something gets approved, they're really afraid to iterate on it and change it, you know, because it might, it might then get banned. And in my mind, you know, as soon as step in happened, there should be 10 step ins, you know, and we should be rapidly saturating, you know, everyone who has a key pair on, you know, Solana Ethereum everywhere with these applications that get product market fit and learn to grow in that way. So we can then figure out how to make them, you know, really sustainable and, and deliver more value through those, those models. So when we talk to, you know, app developers,

• 23:24Speaker 03

  There's, you know, there was just this very clear, big mental block like we're not even really thinking about a world where we can do anything in the App Store and every user has, you know, the ability to sign transactions across the whole operating system. That's just not like the way we've been operating and with users, it's just very clear, you know, pain points that, you know, today, I think crypto is in a very different place than, you know, three years ago, because now we can say, look, like Solana's got 20, at times 22 million monthly active addresses, you know, 6 million weeklies.

• 23:58Speaker 03

  And we, there's millions of people trying to get these NFTs and we hear all the time, like we see people, um, you know, carrying their laptops through conferences or, you know, leaving a party or skipping a party because there's some hot mint happening. Or, you know, um, an NFT starts mooning and they're like, I gotta go delist it. Like I literally have to go home, you know, like people are leaving, you know, this has become important enough for at least a few hundred thousand people, um, you know, maybe a few million. That, um, they're leaving their everyday life. I'm sure you guys, you know, feel this and experience this, like you, you can't really live your normal life anymore.

• 24:35Speaker 03

  Because we have to access our crypto assets. Like we've found something that is a foundational use case, um, and asset class. And, you know, we're basically tethered to these, these, uh, Dells.

• 24:47David Hoffman?

  So the, the gist I've gotten is that the, the mobile stack, the software side of this, uh, whole endeavor is the bigger, the bigger of the two stories. But the software stack can't fully express itself on the legacy hardware that currently exists in the world today. You can't take this Solana mobile stack and put it on like, uh, Apple, Apple phone or, or any other proprietary phone.

• 25:10Speaker 02

  You need, you need an OEM's permission to do that because you need an OEM to modify the trusted element. You can't, like us as developers can't get that code through the App Store. So we need to work with OEMs and that means working with somebody like Saga. And having a flagship device and having like a founder that gets it, that has like, Gets Web 3, gets the privacy elements of it and wants to build a thing that represents that, like the physical example of that, I think, is what can set the example for like everyone else in the world. Eventually, I'd love to have HTC, Samsung, whoever, like, take SMS and integrate. It's just a bunch of open source code.

• 25:52David Hoffman?

  Right. So Solana is not playing in the game of like Apple or who are the other? Like HTC, you guys aren't trying to be Solana Labs insanely profitable by selling this bits of hardware. You're using the hardware as like a Trojan horse to get the Solana mobile stack integrated into the greater mobile ecosystem that is beyond your guys' control. Is that right?

• 26:16Speaker 02

  I hope we sell a shitload of phones and I hope Saga and Awesome are extremely profitable. I mean, that would be great. But that's, so the thing is that like the thesis here is that 50,000 Web 3 early adopters that have this device that are active users, that without Web 3, without any restrictions in the App Store for them, is a better distribution channel for devs than the big app stores are today with millions of users. That's the big thesis, is that if we can get the right 50,000 people to have these devices, devs are going to build apps and that's going to grow and start growing maybe to 100, 200,000.

• 26:58Speaker 02

  At some point, Google and Apple will figure it out and be like, okay, we need to have a real Web 3 model and business model that works with Web 3. We need all these features. We want signing to be secure for users and they'll shift, right? But like, I don't have this belief that you are going to take down Google and Apple. That's ludicrous, right? A little bit. But crypto believes that they're going to take down, you know, the $20 trillion financial system.

• 27:27David Hoffman?

  We're not going to take it down. We're just going to make a better one.

• 27:31Speaker 02

  We want them to change, right? You want the world to change ultimately. It's not necessarily like...

• 27:37Speaker 03

  It's a pretty roundup revolve, right? Like, we call it Web 3 for a reason. It's supposed to be fairly foundational. And I think you guys, I'm sure, are as frustrated as we are about this. But like, all these cycles we've been through, and you hear, you know, these partnership announcements, and, you know, XYZ big company says, "All right, we're doing it. We're doing the crypto thing. We're jumping into Web 3." And a whole cycle goes by. As soon as the market cools down, they get cold feet. They lay off whoever they hired to work on it. You got new people come in for the next cycle, try and pick it up, and it just never goes anywhere. There's no durability. You know, because unless they see organic, you know, grassroots applications that create a credible threat to their core business model,

• 28:22Speaker 03

  they don't really move that fast. And, you know, I mean, we've seen this, like Goldman Sachs called everything rat poison, until the very last possible moment, until there's billions of dollars leaving all of their, you know, most profitable accounts to go into this new DeFi thing. Then they say, "Okay, we're hiring a 30-person team." And who knows now, with the market downturn, like, are they still persisting? Are they gonna be innovating and pushing things forward? In our experience, it just doesn't happen. So, you know, you have to have products that are fully owned and controlled by the crypto industry, and that, you know, durably relentlessly push against these problems for users.

• 29:00Ryan Sean Adams?

  Okay, so these are things, I think, that the Solana community and you guys have clarified for David and myself. Because I think the first blush, when you see this, the question is like, "Oh, is Solana trying to get into the hardware game? And do they have the audacity to compete against Apple and Samsung?" And what started to make more sense to me, as I learned more about this, is like, that's not the purpose, right? David's other nutritional podcast that he's gonna start someday, he always says to me that, like...

• 29:30Speaker 02

  You weren't supposed to tell anyone, Ryan.

• 29:32Ryan Sean Adams?

  Okay, that's still top secret. He always says to me, "Carbs are just a delivery mechanism for delivering real food to the body." So this hardware phone is just a delivery mechanism for SMS, which is the Solana mobile stack and distributing that. And hopefully you get some hardcore fans who want a full stack type phone and buy the hardware. But the goal is to kind of saturate the software stack out there. And so that starts to make more sense to me. You guys are not trying to compete against Apple or Google. But can you build out? And so one other thing, I think people mistook David and I's take on the roll up. We're actually like bullish on the potential of a web three phone.

• 30:15Ryan Sean Adams?

  Cause I think we see what you see, which is like, we can't be beholden to Apple and you know, the Google store to whitelist MetaMask. What happens if they just de-list our MetaMask and Phantom wallets? Like, what do we do then? And so we need to have a way to route around them. And, and, and also what happens if they disallow all of our like, if they call everything that we're doing with all of our crypto economics in-app purchases? And they want to cut out of that and it breaks our terms of service. Sorry, guys. So we absolutely need a way to route around that. But, but I want to ask you, it's like, are some of the features that come in the hardware side of things,

• 31:00Ryan Sean Adams?

  they're, they're already available on our like Apple phones and our Samsung phones. Like, so the seed vault piece, right? Help me, help me understand that. What like, we all have these.

• 31:12Speaker 02

  Yeah, there's, um, yeah. So you have like your, your, your, your board or whatever. It depends how the integration work. There's a separate piece of hardware from your main CPU. That is a secure element. And that thing has various features and does various services, but it can hold your secrets. And you have a trust zone component on the chip. It's slightly different on an Apple device, but I'm more familiar with the Qualcomm ones. That thing runs on the chip. It runs in a special context that the high level of OS, Android and all the applications, they can never read the memory there. So that trust zone can decode the seed phrase, generate, you know, get your key generated and then

• 31:56Speaker 02

  sign transactions. And it can also take over a part of the display or any part of the display. And it can show you like a trusted set of things that you're signing, like the numbers, like, hey, you're signing this transaction and you're actually signing a hundred dollar transfer. And the user can then confirm that like, okay, the wallet didn't lie to me. I'm actually signing a hundred dollar transfer. So all that, all that hardware pieces and all that stuff exists in every phone. It exists in every Qualcomm chip. There's Apple versions of this. And they use these systems for various applications already, like to decode your thumb print or whatever, or your face ID. But they don't use them for crypto. They don't use them

• 32:38Speaker 02

  for signing. And I think part of the reason is that like, there is no like, crypto adoption, actual number of users that sign transactions on a monthly basis, all in aggregate, all together, and all the chains are still pretty small. Like, I don't know, what do you guys estimate? Like, if you combine all the chains, Solana, even Binance Smart Chain together, how many humans actually sign stuff?

• 33:06Ryan Sean Adams?

  Ten million? Lots of zeros. I, I think, I think it's probably five to 10 million.

• 33:12Speaker 02

  Right. And that's not enough for like, Google and Apple to be like, okay, we gotta like, we gotta make changes to the OS and make changes to the Webster policies when their user numbers are in like, billions, right?

• 33:27Ryan Sean Adams?

  So, so there's so much more we could get out of these secure enclaves, the hardware piece, that we can't because we don't, Google and Apple and other manufacturers aren't giving us the software that would allow us to tap into these things. And that's what Solana Mobile Stack is trying to do. Okay. And then the mobile wallet adapter, that's open source as well, I believe. So what is that? And also, I'm curious, the context is, is this only for running Solana? Or could other blockchains also run on this?

• 34:02Speaker 02

  It's open source. It's open source. People can send us code. We'll integrate it. We'll get it audited and like, we'll make sure it lands. So in that sense, like it's true open source. We're doing all the development out front and we want contributors. But obviously, we know Solana best. So everything we're doing is Solana first. It would be ridiculous for us to try to build an awesome Ethereum integration because we don't know shit about Ethereum.

• 34:29Speaker 02

  So like, I don't even want to try, but like, it is truly open source. I'm an open source maxi. The wallet adapter, like when an application like has a connect button and you see 10 different wallets and then another application has a different set of wallets, right? That's an application specific connect button. We just want that to go away. And for the application to assume the OS has figured out what wallet the user prefers and just be connected automatically. So that allows that.

• 35:01Ryan Sean Adams?

  That's OS native, much user, much easier user experience.

• 35:06Speaker 02

  Small piece of code that again, like, we don't have like a 30 person team working on it. Right now, it's like five engineers, right? Like, so these are, this doesn't take like a shit ton of resources to build. But these are small pieces that I feel like should be in every phone and will be in five years when the world has changed and we are in crypto utopia. But right now, like, we need to build them.

• 35:29David Hoffman?

  And just to clarify what I think this looks like for the end user is that like, say, say, for example, like if I opened up my phone right now, I would have like my MetaMask wallet, I would have my other wallet, wallet number three, wallet number four. And each one of these is its own seed phrase. Each one of these is its own private key. But like, we could change that game. And then so if I go and like, I go up to open to my desktop and I go to like Uniswap, Uniswap is like, okay, do you have a MetaMask? Do you have Wallet Connect? Do you have like, and there's like 30 different wallet options. And so with this like integration into the, straight into the hardware, there's just like, show me your phone. Like, I know that's where your private keys are. Just show me that one and like, we're good to go. Is that the kind of the vision here in Atoli?

• 36:13Speaker 02

  Basically, yep.

• 36:14Ryan Sean Adams?

  And then, okay, so the the last piece here, so we talked about the seed seed vault, the mobile wallet adapter. And so the the Solana DAP store. So is there a business model for this? Like, is there any kind of take rate that the Solana app store? And then, and then what's like the listing policy? So

• 36:32Speaker 02

  The listing policy is a really hard part.

• 36:36Speaker 02

  Right now, it's basically like gonna be like our internal team trying to review it until that can't scale. And the hope is that the Saga Pass and like the ability for us to use the kind of models that we see that work in DAOs and like being able to like create moderators and things like that and make that workable, that we can scale that to to start doing moderation and creating like, basically lists, right? You should be able to subscribe to your like, Monkey DAOs, like favorite app store lists. And they're the ones providing the moderation. But that is a gnarly problem that's gonna take a lot of work.

• 37:14Ryan Sean Adams?

  It's gnarly because it's a governance problem, of course, right?

• 37:16Speaker 02

  Yeah, exactly. The model for for fees and stuff on the app store, I think, can be something simple in the future. Right now, there's no fees. But like, if you're trying to like, build something and there's no credible business model at all, ever, it's it's probably not gonna work, right? Like, in the long term, I think the way that this should work is, like, basically, some small percentage, sub 1%, like, I don't know, 20 to 20 basis point fees in every transaction. Something that I feel like is totally fine, because it's paying for the development of the of the product. But it's not crushing

• 37:58Speaker 02

  the the whole business models for all the applications running on it.

• 38:03Ryan Sean Adams?

  And to be clear, so if somebody had the Saga phone, or some other Android phone with the Solana mobile operating system installed on it, you'd have the Solana DAP store. And then you'd also have like the Google app store as well. So you download all your other Google apps through that. And then the Solana app store is for kind of the the Web three things.

• 38:27Speaker 02

  Yep, so it's fully Google Mobile Service enabled, all the Google stuff is there. Awesome has some like kind of lockdown modes where you can basically kill services. So you can, if you want to, as a user, shut down Google or other services. And that's a pretty cool feature that the Awesome team built.

• 38:49Speaker 03

  It's worth mentioning also that it's not just DApps that can launch in the Solana App Store. Any application that wants to launch in a no-fee environment can launch in that App Store. So we, you know, we've already seen a lot of the games that are leaning into Web 3. Looking at this as a pretty attractive mobile play, independent of their desire to have digital assets within the game.

• 39:13David Hoffman?

  I do think it's important to understand, and from a development standpoint or an innovation standpoint, that like 30% take rate that Apple charges on the iOS App Store, that's like a tax and which is a stunt on innovation and progress. And especially in the Web 3 world, when so much of like the backends of so many apps is a blockchain. Like OpenSea is not going to have an iOS app because they're not going to give Apple 30% of the volume going through.

• 39:42Speaker 02

  It can't.

• 39:43David Hoffman?

  That's not going to happen, right?

• 39:45Speaker 02

  Like it's physically impossible for them to do that.

• 39:48David Hoffman?

  Totally.

• 39:48Speaker 02

  They would go bankrupt, right? Like, or the users are never going to pay 30% markup on any digital purchases. It's just not going to work.

• 39:57David Hoffman?

  100%. And so not only is like the whole rest of the world been like deprived of a zero-fee environment to like fully innovate and express the world of just like mobile apps because Apple keeps on taking it all. The Web 3 world never really had that opportunity, but also needs it even more because it's inherently about like money and transactions and trading and swapping and all these things. So like we've never actually really seen a blossoming like mobile developer ecosystem. So it's kind of like no wonder why there hasn't been a blossom developer ecosystem that's gone mobile before, hopefully before this.

• 40:34Speaker 02

  It's really, really hard to build a phone. I worked on like every phone that failed that you've ever heard of, like the WebOS devices, the BlackBerry QNX ones.

• 40:44Ryan Sean Adams?

  Are you talking before iPhones?

• 40:45Speaker 02

  Yeah, yeah. Metrophone, the Amazon Fire. Do you remember that thing?

• 40:50Ryan Sean Adams?

  I do.

• 40:52Speaker 02

  So I was like one of the engineers trying to get those things to work and it's really, really tough. And I think the, the real like opportunity we have is that like maybe the crypto users are actually like the most lucrative users in the world right now because look at OpenSea's volumes, look at Magic Eden's volumes. The number of users that they have is much, much smaller than like, you know, any app in, in the iOS store that's in the top 10, but they're generating a ton of real profit and a ton of real revenue. So that, that's the opportunity.

• 41:27Ryan Sean Adams?

  One, one more question for you guys, then we, we got a cut for sponsors. We have a whole lot more to cover, including like the, the phone wars and some of the competitors that are, that are entering and second order effects and how this thing was funded and everything else. But what about this criticism? This is not a criticism or a critique we raised on the roll up, but some people are saying like, hey, Anatoly Raj, look, building a scalable blockchain is freaking hard enough. Okay. And like, there's a lot of work to do. Okay. Solana's had some outages, of course. Everyone knows Ethereum is, has not scaled yet, still hasn't done its merge. Like, we have a lot of work to do. Is this a distraction? Or why not have a separate team

• 42:13Ryan Sean Adams?

  do this? Why are you guys personally involved? What would you say to that critique or question?

• 42:17Speaker 02

  So like, for the same reason that you can't like add more engineers and accelerate the merge, right? There's just, you need experts that are deep, working on hard problems and a lot of those hard problems are solved by only one engineer that just given time and space to do it.

• 42:36Speaker 02

  And there's a bunch of, there's a really strong core team of system engineers that are constantly iterating on the chain and making it better and cheaper and faster and more reliable. If they need hires, they will get hires, right? Like, like I said before, there's like five engineers at labs that are separate team, a new team that we spun up. I, you know, my Qualcomm background gives me like a really strong network of pulling from a mobile work, from the mobile world. And that team is building this and it's a separate product. And our focus on this is, uh, people think it's a distraction, but like,

• 43:15Speaker 02

  part of the reason why this idea came to fruition, like a large part is that I talked to devs and I constantly ask them, what are the problems you're dealing with? What are the challenges? And half of them, like half of the conversations ended up mobile. Like, we can't like do what we want. Like, we have to go through these like weird inner, like interfaces and jump through web views with Phantom. And when that problem gets repeated to me over and over, I start, you know, pacing around the room, trying to figure out how I fix it. So like this, this idea of launching SMS and the phone really comes from like just talking to devs and us telling us like, this is a problem and we don't know how to, how to fix it.

• 43:55Ryan Sean Adams?

  One last thing I'll say in support of that, and then, then we get a cut though, is like, um, some people think that scalability just means transactions per second. But I think when you think about, when you define scalability as we want to bring a billion people into crypto, then you also have to take other things into account. You have to think about privacy. You have to look at user experience. You have to look at the fact that it is still mission impossible to go bankless unless you have a desktop machine. You can't go solely bankless on a mobile device right now. It's just not possible. And so that is also another definition of scalability, if you kind of broaden that. Um, so I, uh, yeah, I, uh,

• 44:38Speaker 02

  Appreciate that. I thought you guys are gonna like, try to like destroy us.

• 44:41Ryan Sean Adams?

  That's the second half. We could if we wanted to. The ammo for the second half, which David's about to seize.

• 44:48Speaker 02

  Bopping me up, I guess.

• 44:51David Hoffman?

  In the second half of the show, Ryan already listed off a few of the topics. But also, there's this Jason Keats guy, who I didn't know who he was before I started researching all about this. So I want to ask you guys about that. And then all the things that Ryan mentioned about five minutes ago. So we're going to get into all those topics and more right after we get through some of these fantastic sponsors to make the show possible. There is a brand new staking feature in the Ledger Live app today. We all like staking the assets that we're bullish on. And now you can stake seven different coins inside the Ledger Live app. Cosmos, Polkadot, Tron, Algorian, Tezos, Solana, and of course Ethereum. With Ledger Live, you can take money from your bank account, buy your most bullish crypto asset, and stake that asset to its network, all inside the Ledger Live app.

• 45:32David Hoffman?

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• 46:16David Hoffman?

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• 47:01David Hoffman?

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• 47:44David Hoffman?

  I came across this name, Jason Keats, who everyone seems to speak really, really highly of, but I had no idea who this individual was. And Toly, you want to walk us through who Jason Keats is, how he's working with you guys on this Saga phone, and what's his deal?

• 48:00Speaker 03

  So we'll launch into that real quick. I can plug, Toly just did an interview with Jason on the Solana podcast, so everyone should go check that one out.

• 48:08Speaker 02

  But I'll summarize it. So he's an astrophysicist. They got into hardware because he started building stuff for his professor for telescopes. And he was like, I like this more. And started like, that's where his like kind of career started. And he ended up starting a motorcycle company, then like working on solar panels, then joining Apple and leading the, like lead architect for iPad Pro, the first one. Like when they went from like iPad to iPad Pro, he was like the guy that did it. And was the first or second employee at Essential, which is Andy Rubin's company, like the founder of Android.

• 48:50Speaker 02

  And this project, awesome, was his baby is like, I can build a better phone than anyone else. And I have the best people to do that. And so they decided to build this thing. And they got from like nothing to EVT1, like a working device fully built in like six months, which is pretty insane. And that's the point where I met him and I started talking to him about. Trying to red pill him into like web three and mobile and my vision for it. And like, you never know these conversations, right? You meet a thousand people that are not in crypto and you talk to them and like all of a sudden like just everything clicked for him and he was like, okay, let's, let's do this.

• 49:32Speaker 02

  Let's like make a, a device that's like web three first, uh, like, but an awesome device, like a flagship, top of the line Android device that can be like head to head, be competitive with like the best set of uh, Samsung or, or Apple even. So the camera-

• 49:50Ryan Sean Adams?

  You kept saying awesome Anatoly and it's O S O M. That's what, okay. I was not following that pronunciation. I thought you were saying A W E S O M, like awesome. But this is Osum, awesome is, is it, right?

• 50:04Speaker 02

  Yep.

• 50:04Ryan Sean Adams?

  And this is what the Saga phone essentially is. It's a, a, a creation, hardware creation that awesome and Jason made.

• 50:14Speaker 02

  Yep.

• 50:15Speaker 03

  And Anatoly, it's worth mentioning that, um, you know, I think if, if this was five years ago, 10 years ago, it probably would take, you know, five or 10 times as many people as, as the awesome team has. It's a, it's a pretty small team and, um, and, and also they're, they're super high powered. You know, they, they're, they're very nimble. They, they move super fast. They bring things to market really quickly. And I, I think when totally meets somebody like that, um, you know, often it, uh, that, that speaks a lot and, and things move really quickly in a partnership.

• 50:45David Hoffman?

  And Anatoly, you've got the hardware with you right now, right? Uh, I know we're going to try and communicate what the device is like through internet, which is going to be hard. But like, but what's it like? Can you describe it?

• 50:56Speaker 02

  Um, okay. So it's got a 120 FPS screen. It's like bright and beautiful, like just looks great. And it's got a metal case. So it like feels really good and high end.

• 51:10Speaker 02

  I like it more than the glass devices that you see like out of Apple and stuff like, so beyond that, it's like a, just a really good Android phone. Like, I don't know, like how else to describe it. Like when people get this device, they're going to be like, this is a, has the, the feel of like what a premium Android device should feel like. Cool, very cool.

• 51:31Ryan Sean Adams?

  And it's only, we want to also talk about some other competitors who have kind of thrown their hat in the ring here. And you know, part of the theme is it felt like Solana launched something. And then all of a sudden, this Ethos device, and maybe it's not a device, a software,

• 51:53Ryan Sean Adams?

  mobile software for Ethereum is on the scene and Polygon as well announced a partnership with HTC. Is this all like just coincidence that everyone had the same good idea and they're all trying to implement it at once? Or like, what's going on with the timing of all of this?

• 52:09Speaker 02

  I'm gonna say we kicked it off, but I don't know. Like, I think, I think generally, there's enough really smart people in crypto now that they're all working on all the good ideas. And maybe the first one to go lurches them, everyone else forward. And we made a big splash in announcement that I think kind of maybe drove some of those decisions to like, okay, we actually have to move a little faster and like get shit out.

• 52:36Speaker 02

  But I doubt we were the only ones thinking about how we crack mobile open for crypto. But if I'll take the credit for it, sure.

• 52:44Ryan Sean Adams?

  What do you think about these other approaches? Are they, are they similar like Ethos? We haven't gone into detail on it, but I don't know if you've looked at it.

• 52:51Speaker 02

  I would have to dig into it. I think from what I'm seeing on the website, I think it's probably similar ideas to SMS. But I don't know how deep they go in terms of the integration. And also like, what is the integration on this device? Are they doing like the secure trusted element work and like all these other UX like improvements? Like, it's like, you know, the difference between Apple computers and the non-Apple computers in the 80s. There was like a vision behind them to integrate them in a very specific way.

• 53:28Speaker 02

  I hope that we have that vision, right? Between myself and Jason, that like we optimize this device from the fact how fast like the thumbprint decides that you sign the transaction and like all these things, we really want to iterate and make it like an experience that people like enjoy. But and then when they use something else, you're like, ah, this sucks, right? Like you want that, like, you want to get used to the good thing and make it really, really good. So I hope that that's what we can achieve of like me and Jason working together.

• 53:57Ryan Sean Adams?

  I just want to make the point to Bankless listeners that more competitors entering this space, good. It's good for you as a user, okay? Because all of these, all of these software companies are now fighting to make the best possible crypto, web three, mobile user experience, and they're fighting for you, for your usage, that you use their software and their phone. And that means we all get better together.

• 54:24Speaker 02

  Yeah, absolutely. Like, I've always been a fan of competition. Like, this is how it's, it's actually really sad to be building something alone. Because you don't get to bounce off and see ideas that other people form and adopt them. And things move much, much faster when you have competitors.

• 54:41David Hoffman?

  So I'm curious, how much did this all cost? And how, how was that paid for?

• 54:50Speaker 02

  I don't know if we can like talk about numbers, but this wasn't like a huge financial risk in terms of like Solana, it's five engineers. We have a partnership and some financial terms with Awesome, but nothing that's like, like, the cost of launching a phone today is much, much lower than five years ago. Because you are sitting on, on a ridiculously like optimized supply chain for building these devices for a dozen different companies and using Android, which is a very mature OS, very mature UX. And that's, that's like the huge difference these days. When, when like Facebook tried to build their phone, they wanted to build everything from scratch,

• 55:33Speaker 02

  their own OS from the ground up, their own application store, similar with Windows and that like, that's a 300 engineer kind of thing that that's, there's no way we could have pulled that off.

• 55:44Speaker 03

  Jason also has a ton of, you know, pretty longstanding supplier relationships that, you know, he's been able to pull strings for. And that's why the phone has the latest Qualcomm chip. It may be, maybe the first phone that hits the market with the latest Qualcomm chip. So, you know, Jason's really super efficient. He's got, he's got great relationships to leverage. And I think the suppliers also kind of see, see the path here. I mean, there hasn't been a more credible force in tech to launch a new mobile platform and suite of hardware products than crypto and web three. And they know that. So I think everyone's watching. If this is successful, they're prepared to, you know, to back more products, lower end products,

• 56:27Speaker 03

  more hardware peripherals, you know, whatever the market will support.

• 56:31Ryan Sean Adams?

  Okay, so I, this, this is all great, guys, and thank you for walking us through this. I think I, hopefully, bankless listeners learned a lot. Certainly, we did as well. I probably have one last question or like critique. I told you the second half was going to get a bit more tough here. But like, okay, so here's, here's, I think, what you've clarified for me is Solana is not trying to get in the hardware game. Totally get it. That makes a lot more sense to me. The value proposition here is the SMS product itself. I was always bullish on the idea of a web three software product for mobile because, again, you can't go bankless unless you have a desktop machine, and that is clearly not the future. All right?

• 57:15Ryan Sean Adams?

  So all of that is, is making sense with what you guys are doing, this strategy. What my question is, and this is still a clarification point to you, that I'm learning a bit more about the Solana ecosystem, is the Ethereum foundations, their approach to this in the spirit of decentralization is addition through subtraction, right? So their idea, the Ethereum Foundation, is that they slowly want to ossify the protocol and then go away. All right? I think I was initially under the impression that the Solana phone was like being developed and funded by the Solana Foundation. Okay, I learned that is not the case.

• 57:57Ryan Sean Adams?

  There is this entity called Solana Labs, which is kind of a commercial entity, building commercial products for the Solana ecosystem. And that helps. That is, that is interesting to me. So if you put your Ethereum hat on, right? You'd say like, almost Solana Labs is kind of a little bit like consensus, which they built in Fiora, they built MetaMask, they built all of these products to support the Ethereum.

• 58:20David Hoffman?

  They probably tried a phone at some point in time.

• 58:23Ryan Sean Adams?

  They probably have.

• 58:24Speaker 02

  Twenty times smaller, though.

• 58:26Ryan Sean Adams?

  Okay. And if Ruben's listening, he's probably like, oh, phone, good idea. I'm on that. I'm working on that. Okay, so I get that difference now. One of my hangups is, right, like, we are looking for a more decentralized future here, which means ultimately, we don't want any centralized development team to control the fate of a blockchain or the ecosystem or to have undue, undue presence, right? And so you have the Solana Foundation, which is separate. You have Solana Labs, which is the commercial entity. But there seems to be like, I don't, I don't know how the funding works. Maybe you could clarify that. If Solana Labs is funded by Sol tokens, but you guys are involved in both Solana Labs and the Solana Foundation

• 59:11Ryan Sean Adams?

  and the Solana Protocol itself. It just seems to be there's kind of a centralization aspect that's, that's different than the Ethereum ecosystem. So help me understand this element of it. And do you actually think that this is a concern? Or am I kind of overplaying it? Am I like, oh, well, it looks like this in Ethereum? And why isn't it exactly like that in Solana? And, you know, maybe there's a case of that too. Help me understand.

• 59:36Speaker 02

  It's like, I would say you're, I think it's good to be concerned about it because I think ultimately, I don't want centralization. And the foundation has a totally different goal.

• 59:50Speaker 02

  Different board, different people on it, and they're driving towards decentralization and like billion users with self custody. That's kind of their their shtick.

• 1:00:00Speaker 03

  And Anatoly is not even involved with the foundation anymore, so he doesn't have all there.

• 1:00:05Speaker 02

  I got to step, I got to like step down from it because like Leo from Certus is an amazing engineer that's able to take my role as like the person that knows the network inside out at the foundation and I can hand it off to like an amazing community member. I don't know if you guys know Certus one or Leo at all, but an awesome person. So like Labs is able to build products and like Labs has a bunch of money to do that and like a bunch of engineers to do that. And it tries to build products that generally like are not competing with ecosystem projects. So we don't want to build uh like a Magic Eden

• 1:00:44Speaker 02

  or Phantom because we see that there's amazing really rock star teams that are have funding and are executing with a vision and just kicking ass. But stuff like the phone, there's no team in the ecosystem that's like able to do it. And this is where we see like an opportunity to like, okay, maybe we do something here and it pushes the domino in the ecosystem and unlocks it. And Meta, uh Metaplex, the, the thing to that started like the NFT craze on Solana, that was incubated by, you know, a couple engineers at a Solana and a product manager and that got spun out as a separate, separate thing. Like that's been kind of how Labs operates. Um, in terms of like.

• 1:01:26Speaker 03

  It's, it's worth mentioning, by the way, you, you know, you mentioned consensus and they built Infura, they built MetaMask, they built Truffle. And, you know, on Solana, we have QuickNode and Genesys Go and all these RPC node providers. Um, we have Phantom, you know, Anatoly mentioned Magic Eden, um, there's Anchor. All these already got built independently by ecosystem projects that, you know, often if, uh, if, if we tried to even invest in them, there wasn't room. Um, by the time they, they got off the ground, they, they got product market fit really, really quickly. So, um, a lot of that, you know, based stuff, you could argue happened in, in a much more decentralized way. It didn't happen from a founder or an organization related to, you know, the, the creation of Solana, the network.

• 1:02:10Speaker 02

  I think there is a difference here, though, with Ethereum, where I don't know if Solana will ossify. I think it'll become more like Linux, where there is a wider group of people that are developing the protocol, at different companies that are contributing to it. And the features track the demands that people have on the hardware as the hardware changes. Because the way that Solana works is so tied to how hardware develops, like network cards and CPUs and like all the stuff that we optimize for to take advantage of that. That changes every two years, right? That slightly changes and the protocol has to, like, the runtime has to change. The implementations have to change.

• 1:02:55Speaker 02

  They do so in a way that doesn't break applications, but that means that the code has to be updated and people have to do that. And as the network has matured, we now have like Jito, which is building Mav clients. They're contributing to the core code because they have a dependency on the core code to do a certain thing. Like Mango guys started contributing to the core code because they were seeing performance bottlenecks in their application that they were able to fix. And this is more like Linux, where, you know, Intel, Red Hat, all sorts of different companies. You can say that, like, Red Hat was like labs, right? They had the most developers at one point working on Linux, you know, the most core devs. But at some point, it really became a really, really small part

• 1:03:38Speaker 02

  of Linux as a whole. Like, I'd say at this point, probably Google Android guys contribute more lines of code to Linux than anyone else.

• 1:03:48Ryan Sean Adams?

  Thank you, guys. That's helpful. I guess last question for you, not on the phone topic, but just since we're on the topic of differences between kind of the Ethereum ecosystem and Solana. Is, can you guys just provide an update on like scaling and kind of uptime? And what the plan is there? Because I feel like David and myself and Bankless listeners have our heads wrapped around the modular blockchain scalability approach with rollups and L2Os and high settlement assurances. And ideally, like, maximum decentralization. But Solana, I think, has historically taken a different approach.

• 1:04:29Ryan Sean Adams?

  I want to hear what the approach to Solana scaling is right now, how you guys are thinking about this.

• 1:04:35Speaker 02

  Sure. This goes back to the heart of, I think, the what decentralization means to us, right? Like to the Solana community, how we define it. And this comes down to like, what are these networks supposed to provide? Right? And they're, from my understanding is that data availability and the, and extreme security of that data is what these networks are supposed to provide. And like Yellowstone blows up, the network is supposed to maintain that state in an approvable way. And that doesn't actually mean uptime. You need at least one copy of the state to survive. So you can say like, hey, look, I got the copy of the ledger. Yellowstone blew up, Russia launched nukes, but I still got my one copy in like an island

• 1:05:20Speaker 02

  somewhere. And I can prove it to you because I have all the cryptographic signatures from all the validators. This is the copy and it repopulates the network. And that obviously means in that scenario, uptime is down and you're running, you're somehow getting all the validators together and rehypothecating the network and rebooting it. But that process, right, like is part of running these systems because you're depending on somebody, somewhere, keep the copy of the state and being able to recover it no matter what. Now, what that means is that we need to maximize the number of independent, truly independent, like people that run these nodes for some reason and maintain those in a secure environment.

• 1:06:04Speaker 02

  And that includes people that run validators because they want tokens. It includes Circle, Finance, Tether, with all the exchanges. Also like DAO communities because they want to run a node for, for the, for fun, right? But also apps with RPCs. Like half of the full nodes on the network right now are because there's so much demand for RPC providers because they're serving users for like all the apps that are on Solana. And all those copies of the state are valid copies of the state. Any one of those can, can recover. So. Like, so scalability ties into this because we can't have a network that limits

• 1:06:45Speaker 02

  the number of full nodes, right? We have to design it in such a way that maximizes the number of people that can join the network, that can connect to it, and therefore maintain that copy in a real-time, secure way. Like, when the block is finalized, it's finalized everywhere globally in the entire world. So, that means it's got to process a shit-ton of signatures per second, because every vote from a validator is a signature. It's got to handle a lot of network bandwidth, because every vote takes network bandwidth. And this is kind of how we're thinking about it. Like, we need to optimize it and allow validators to deploy hardware that allows them to scale it in an unbounded way. So scalability to us means that if there's a bottleneck,

• 1:07:30Speaker 02

  validators can just add cores, and that bottleneck goes away. It doesn't require us to make protocol changes, or launch L2s, or anything like that. Not that that's a different solution, different approach, right? Like, not knocking it in any way. But having the power of scalability given to the validators, and the only thing that they need to do is, you know, go order some shit on Amazon and deploy better hardware, means that we're kind of done, right? Like, the network is scalable to whatever limits, you know, organized sand allows.

• 1:08:07Ryan Sean Adams?

  David, I think I did the thing again where I just opened up the door to an entirely different podcast at the end of this podcast.

• 1:08:15David Hoffman?

  That's what I'm currently wrapping my head around. It's like, do I continue this conversation?

• 1:08:19Ryan Sean Adams?

  David's gearing up to ask some more questions. You know what I think we should do?

• 1:08:23Speaker 02

  Yeah. The rub here is that, like, the cost of the hardware seems to be a violation of an Ethereum ethos, which is expensive.

• 1:08:33David Hoffman?

  There's like, you said similar words that we say in the Ethereum camp, where like, yeah, we want everyone to participate in network validation, like, everyone should, like, permissionlessly join the network as they so choose. But like, we're both using these things, but there's still like a difference in like what those things actually translates into. One is like in the Ethereum camp, like a 500 to $750 laptop. And in Solana, in the Solana world, it's like, well, do you have the means? And are you connected to Amazon Prime? And are you willing to spend an extra like 2 to I don't know what the

• 1:09:04Ryan Sean Adams?

  And I think Anatoly would probably say, that doesn't even matter. That's an inconsequential cost in the scheme of when you're talking about 32 ETH. And we go on, we'd have a, so I feel like we've just opened the door to a to be continued. We all love each other at the end of the day. We want to bring you guys back and talk about that.

• 1:09:23David Hoffman?

  I think there are some crypto developers out there, some Ethereum researchers who would like see the, okay, somebody's got to save this state. And if somebody has one saved state, then we're good to go. I think, I'm not smart enough to like make the argument myself, but I think that would offend a lot of it, like a core Ethereum developers.

• 1:09:40Ryan Sean Adams?

  Yeah, we should have you guys back and have, I, we shouldn't do this now, David. We should have these guys back and have that conversation, maybe in debate type. Have me and Dunkra down here. I love him. He's awesome. All right. This is an invitation for a future, but to be clear, we have covered

• 1:09:56David Hoffman?

  You've been called out.

• 1:09:57Ryan Sean Adams?

  The web three mobile phone, that has been the scope of today's conversation. Anatoly Raj, thank you so much for coming to Bankless and telling us more about that. We appreciate it. Keep building during the build market. That's what we're here to do. Thank you.

• 1:10:10Speaker 03

  Thanks, guys.

• 1:10:11David Hoffman?

  Thank you, guys.

• 1:10:12Speaker 03

  Take care.

• 1:10:13Ryan Sean Adams?

  And disclaimers, of course, all of crypto is risky. You could definitely lose what you put in, but we are headed west. This is the frontier.