Can Ethereum Compete with Bitcoin, Solana & Celestia? | Mike Ippolito & Jon Charbonneau

What is Ethereum’s North Star, and does it even need one? There has been angst in the Ethereum community, growing over the last year, as Ethereum has become squeezed by its competition. Bitcoin’s story as money is growing in mainstream society. Solana has captured the hot ball of money in crypto. And Celestia’s data availability continues to progress at a faster rate than what is found at home in Ethereum. This is Ethereum’s Three-Front War, a topic we covered in a recent episode with Justin Drake. And today we‘re joined by Jon Charbonneau and Mike Ippolito to contextualize and diagnose what Ethereum needs in order to thrive in this competitive landscape. ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🦄UNISWAP | BUG BOUNTY PROGRAM https://bankless.cc/Uniswap-Bug-Bounty 🐧 CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiSimple 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⁠ 📈 iYield: YOUR FINANCIAL PICTURE, SIMPLIFIED https://bankless.cc/iYield 🔒 SAFE | INTRODUCING SAFENET https://bankless.cc/SAFE ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/109?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E ------ TIMESTAMPS 0:00 Intro 6:00 Jon’s Article 16:48 How did we get here? 23:16 Ethereum’s Three Front War 43:14 Ethereum Wins by its Synergies 52:52 Ethereum’s Focus 1:01:58 Ethereum Tactical Advice 1:18:18 Ultra Sound Money vs World Computer 1:30:26 Closing & Disclaimers ------ RESOURCES Mike Ippolito https://x.com/mikeippolito Jon Charbonneau https://x.com/jon_charb Jon’s Article https://dba.xyz/ethereums-north-star/ ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠

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

• 0:00Speaker 00

  There's just this massive hump that people are not going to be able to get over, that they like things that cash flow, they can model, etc. Growth. They like growth. Growth. So the description of the world computer of Ethereum and this network, this economy of different applications that look like businesses, you got a lot of people there very quickly. And I think, maybe this would be a controversial thing to say, but I think Ethereum has a better shot at money on a long-term time horizon than something like Bitcoin does.

• 0:32David Hoffman?

  Welcome to Bankless, where we explore the future of Ethereum and ask the question, what is Ethereum's North Star? And does it even need one? There has been some angst in the Ethereum community growing over the last year as Ethereum has become squeezed by its competition. Bitcoin's story as money is growing in mainstream society, while ETH's story as a financial asset has not experienced that same level of success. Meanwhile, deeper in the crypto trenches, Solana has captured the hot ball of money of crypto, attracting the marginal new user and new capital into its ecosystem. And over in the distance, Selesa's data availability continues to progress at a faster rate than what is found on the Ethereum Layer 1. This is Ethereum's three-front war, and we covered this in a topic on a recent episode with Justin Drake. But this three-front war is a technical war,

• 1:17David Hoffman?

  and armies are led by generals. Projects have leaders who make both strategic and tactical decisions in pursuit of a goal. What is Ethereum's goal? What is Ethereum designed to do? What are the core devs building? Ethereum has been at peacetime for its entire life and has had the luxuries of building in a peacetime world. Today, more people are thinking that this era of Ethereum's life has come to an end, and a phase change is needed for Ethereum to enter into a more aggressive stance towards this competition that some in Ethereum claim that it's not competing with. On the episode today, we have John Charbonneau, who recently released one of his best articles to date, which thoroughly contextualizes and diagnoses the issue at hand with Ethereum. And I highly recommend reading this article, even if you find yourself averse to the ideas.

• 2:02David Hoffman?

  In fact, especially if you feel a negative reaction to the article, I even more encourage reading it. Joining us on this podcast is Mike Ippolito, who has always been immensely valuable in these conversations, given his breadth of knowledge to all the relevant ecosystems and his general pragmatism. John and Mike and I were on a panel together discussing this very topic at DevCon, which was the ground zero for the light bulb that triggered John to write the article in question and also for the podcast that you are about to hear today. So Bankless Nation, I hope you enjoyed this podcast with Mike Ippolito and John Charbonneau. But first, before we get into that conversation, a moment to talk about some of these fantastic sponsors that make this show possible. Bankless Nation, I got John Charbonneau and Mike Ippolito with me. John Charbonneau, professional lowercase r researcher, host of a podcast that doesn't exist,

• 2:45David Hoffman?

  writer of the longest articles that crypto can somehow still muster the attention to read, and co-founder of DBA. John, welcome to Bankless.

• 2:52Speaker 00

  How's it going?

• 2:53David Hoffman?

  And Mike, Tribulus Ippolito, professional podcaster, host of lowercase r researchers, closeted soul maxi, a man who can only turn left, and co-founder of Blockworks. Mike, also welcome to Bankless.

• 3:05Speaker 00

  Only turn left is a deep cut. I don't think the audience is going to get that one. That's just for you, David.

• 3:09David Hoffman?

  Yeah, that will be lodged in people's heads. It's great to have you guys. This podcast is coming on the back of a release of a very long blog post from John Charbonneau. Very readable blog post. I think the length is actually kind of deceiving. And it was a conversation that we also had on a panel at an event at DevCon. I think this content, this post, and hopefully the conversation that we're having today, is like a long time coming. I think the crypto world was very ready to read your post, John. I think it kind of distilled a lot of the angst that we have felt in Ethereum, about Ethereum, about the ETH price. And I think some people might, maybe I'll open up the conversation with this. I think some people might be ready to say, oh, it was just price action. Like ETH price has returned.

• 3:54David Hoffman?

  Now the sentiment is fixed. But I kind of want to actually decline that idea because the angst, the issue, is still there, even if price number does go up. And so, John, maybe you can kind of just give us a speedrun of the article and your kind of like diagnosis and your motivations for writing the article. For people that haven't read it, what are just like the big elements that you focused on while you were writing it?

• 4:16Speaker 02

  Thanks for prompting it too. The panel at DevCon was actually when, so I had been like kind of jotting down notes on what I thought I was going to do of like a sort of related post. And then after we did that panel, I was like, this is great. I need to like write this. I literally went home to my hotel after that. I was like, this is what I'm doing. Skipped events. That's what I ended up. Yes. No, I ended up like skipping events throughout the week. And that was like a lot of what I did throughout the week and then the week after and then the week after and then I published it. Yeah, I mean, the TLDR of it for people who haven't read it yet is basically like, we've kind of had this kind of clear overarching problem in Ethereum for a while now. That's like, it's not a specific technical thing, or like, a problem at a very low level. Like, it's a pretty high level vision thing that like,

• 5:01Speaker 02

  I think has generally been lacking of when you look at Ethereum as now quite a number of like very credible competitors on really all of the different dimensions that Ethereum is competing on. And in each of those dimensions, it's a very clear competitor that is like focused on those things. And like, you know, they're like, they're quote unquote like North Star, their goal really is. So I mean, like very specifically like Bitcoin, like everyone knows what Bitcoin does. Like, the whole point of this thing is like, it's digital gold, it's money. And, you know, it's very easy to tell the story because like everyone knows what that is. And then you have like these kind of like financial rails, smart contract platforms. I mean, Solana is the very clear example there of, you know, everyone knows Solana's story, whether like, whether you love it or hate it, everyone

• 5:46Speaker 02

  knows what it is, everyone knows how it works, everyone knows the vision, like, it is, you know, totally, I want to build decentralized NASDAQ, you know, permissionless markets for everyone in the world, equal access to information, makes sense. And then the other kind of third leg of it is generally, I would say like Celestio, which is this kind of like big kind of roll up vision, which is much more of just like, a broader, you know, we want to make it easy for anyone to launch any kind of application, you know, make these unstoppable applications that are censorship resistant, you know, everyone can verify these things. You know, you have a light note on your phone. And so all three of those are like very clear coherent visions of like, this is the thing that we're focused on. And Ethereum is like, kind of been sitting in the middle for a while. And it's actually been like pretty unclear, like what of those dimensions that Ethereum wants to compete on?

• 6:31Speaker 02

  And like, why is kind of like the more fundamental underlying question of, you know, if you ask someone like, what is Ethereum's purpose? You get like a hundred different answers if you ask a hundred different people.

• 6:42David Hoffman?

  Right.

• 6:44Speaker 02

  And so I think that people have ignored that for a long time because that sounds like sort of like, I don't know, a semantic thing or like, ah, it's decentralized. You know, different people see different things. And so I think that kind of like, we kind of just like let that fly for a long time. But then I think that people have started to realize over the course of the past year. No, this isn't just a like, oh, it makes it, you know, hard to talk about it. Or just like, it's this complicated thing that like, makes it hard to explain to my mom. It like actually ends up creating like real coordination problems. In particular, I'm like the one half of it that I described as a basically kind of like building coordination. Is that basically if we don't all agree on like, why we're building this thing? That ends up flowing down into, okay, well then we don't agree on like what properties we need to build.

• 7:26Speaker 02

  Like, do we need to build a like fast and cheap chain that's doing execution and all these things? You can't answer that if you don't like, know what's the use case that we're building for. So that's half of it. And then that ends up like slowing down and making a really confusing conversation. Whenever we try to like actually improve the chain, it kind of slows everything down there. And you end up with potentially conflicting goals as well, too. And then the other half of it is that kind of like marketing part, I would say is like downstream of like having a clear north star, like knowing what your product is. And that does matter a lot. Whether you're trying to, you know, communicate to new developers, new investors in the ecosystem, like, hey, this is the reason that we're exciting. Like, come build on my chain. You need to have a clear story to kind of inspire people.

• 8:09Speaker 02

  And especially if Ethereum does actually want to compete on money. I mean, money is just a story. So if we don't even agree internally in Ethereum on, you know, what is the overarching vision? What is the story? Well, then you're never going to be able to like sell the thing. So it's this kind of just like high level kind of perspective and realization that we've seen playing out over the past year of increasingly one half is Ethereum has a lot of like very credible competitors on different dimensions. And then the other half is more internal to Ethereum of, okay, it's really unclear like which of these things that we actually want to compete on and why. And so we need to like really clarify that and then kind of everything falls downstream.

• 8:44David Hoffman?

  When I was reading your article, I was getting like two kind of parallel punchlines that really work well together. The first is that Ethereum has a coordination problem. And this is showing up in like the all core devs calls and like discussing what EIPs Ethereum is going to work on to prioritize. And like some of the anecdotes that are out there is that there's some technical debates about, you know, which, what should we do next about like, you know, should it be fossil or multiple concurrent proposers? And these are just both technical upgrades. And a lot of these are being debated technically, but they're actually, if you zoom out, they're actually more just like directional differences, like what do we want Ethereum to be? And so like, while it might appear to be a technical debate, it's actually more of just a what is, what are we building here debate?

• 9:29David Hoffman?

  And without that debate being answered, a lot of progress in Ethereum is being slowed. So that's like one half of, I think, the punchline of your article is Ethereum has a coordination problem, has a North Star problem. And separately, in addition to that, Ethereum has credible competition. And these two points really land extra hard when combined is because, you know, Solana, Celestia, more aggressively moving, more aggressive teams that can like move fast and break things. And then, you know, Bitcoin, which is kind of already very far along, along like a narrow path for itself. It doesn't want to do too much. It just wants to be money. Money is very big, but still nonetheless, like pretty clear in its path for what it wants for itself. And so these two things together kind of create the current like angst that we've seen in Ethereum.

• 10:14David Hoffman?

  Mike, you were part of the genesis of this conversation on the panel over in DevCon. Just give me your thoughts about what you had when you were reading the article.

• 10:20Speaker 00

  I think part of the reason it's been, I think it's been difficult to have this conversation publicly for a couple of different reasons. One is a psychological element of do we want to admit that there's a problem here? The second is there are multiple conversations that are getting jumbled up into one. And that's why you have some people describing this as a product problem and others describing this as a marketing problem. I would like to address or introduce two new dimensions to that as well. And just say there's a, when you're looking at an organization, whether that's something that's extremely decentralized like Ethereum, or a country like the United States, or a small startup, or a corporation, I think those are all roughly the same challenges. And you could bucket into that coordination challenge or that coordination problem that you mentioned, David.

• 11:02Speaker 00

  And it's, there's a leadership component, a strategy component, a product component, and a marketing component. And I think just to, I want to return to that, but the first problem, do we have a problem here? It also reminds me a little bit of the MAGA movement, not to bring the politics angle into this. I had a really negative interpretation originally of that because it was like, I don't want to admit that there's a problem with America. I love America. I grew up in America. My parents told me it's the greatest country in the world. Now, I don't know, I look at it a little bit differently because the first step to solving a problem comes from admitting that there's a problem or a challenge. And I think that basically, just judging by my Twitter and anecdotal conversations, I think half of people are on the page that, hey, maybe there is an issue here that we need to address. And there's still another half that says, we don't want to admit that there's a problem. Everything is okay.

• 11:47Speaker 00

  But to break down, I think the different conversations that are happening, there's a leadership, strategy, product, marketing. And I think actually from a marketing perspective, I would, I'm going to maybe take a contrarian opinion that I think Ethereum has phenomenal marketing. I don't think there's a marketing problem at all. I don't think that centralized top-down marketing works in the context of L1s. What you really want in L1s is grassroots, community-driven, bottom-up marketing. You want a bunch of people to basically yap. The problem, and Ethereum has that in spades, more so than anyone other than Bitcoin or maybe now Cardano or XRP. But the problem is that they're not getting a coherent input about what to yap about. So it sounds very discordant and you have all these arguments that are going on. Lots of yappers, not much message.

• 12:32Speaker 00

  Lots of yappers, not much message. On the leadership side of things, I think that there is a debate to be had around leadership. It ends up getting stymied because people say, we don't want some centralized top-down thing like Solana. But I think there are numerous different ways that you can be an effective leader. And one of those is setting a vision, right? Or a North Star, or a goal, or a mission, or where we're ultimately going. And then empowering and entrusting other people to act on the mission. So I am a believer that someone needs to come up with the why, someone that has moral authority. And then you empower other people to come up with the how of actually executing that vision, which I think is the right, the right vision for Ethereum. The strategy side of things, you can basically think of strategy as saying no to things.

• 13:13Speaker 00

  And I'm not of the opinion that Ethereum can't compete on everything that it's trying to compete. Compete on, I would disagree that it should compete on every single one of those verticals right now at the same time. I think it has to say no to some verticals, even on a short-term time horizon, get a wedge and become the best at one of the things that it's trying to compete on. And then in a number of years, it can ultimately compete, I think, on everything that it ultimately wants. And I mean, we'll get to this with John's World Computer vision, but I would be in the camp that that's probably the best way. The World Computer leads to the money angle, I think. And then there's the product stuff. And I think, yeah, that's everything John mentioned in the article about actually creating a product that people want, making it measurable

• 13:55Speaker 00

  and setting, you know, just quantifiable ways of is this actually what the market wants?

• 14:00David Hoffman?

  Hmm. Can we take some time and try and diagnose how we got here in Ethereum land? Ethereum has some very interesting properties. It started off in 2014, 2015 with a pretty centralized team, but it very quickly moved to this decentralized EIP process. Vitalik started, started off with this process being pretty hands-off pretty quickly into Ethereum's lifespan. And really Ethereum has, to its credit, pioneered this decentralized coordination model in a way that like the world has never seen before. Like the level of decentralized coordination Ethereum is like pretty astounding. And to me, it's kind of a breakthrough of like what humans can do with like the assistance of internet protocols. And that works like really well for

• 14:45David Hoffman?

  a while, especially as we had, John mentions in his post, some very clear North Stars and like temporary North Stars, like the merge. Like the merge rallied everyone in Ethereum to get the merge done. And again, to Ethereum's credit, got a lot of very big things shipped into it. And I think a lot of the low hanging fruit has been picked off. And now we're starting to like, ask, all right, what's, what's next for Ethereum? And some of these problems of being a decentralized coordinated community are starting to like rear its head. And also like things age, right? These systems age as people kind of know the game, like different pockets of influence emerge. Ethereum, I think, really liked in John's post, political interests have kind of been pushed to the margins and like push away.

• 15:29David Hoffman?

  From the center, the EF doesn't want to be top down. And so it's pushed political power away. And then those political epicenters, the layer twos, like the MEV supply chain started like, you know, things like flashbots, things like optimism, started to became like politically powerful. And that influence has started to like work its way back in. And now we are dealing with the consequences of that. And so like, that's just an age thing. That's a timeline thing. We are now in the year 2024, 2025. And so what decentralized coordination looks like is different now than it did five years ago. Maybe this is my kind of like setting up the context for this question, but like, John, help us like diagnose how and why we got here. What are the properties that got us to this place?

• 16:09Speaker 02

  So I'd say half of it is definitely a natural age thing. Like this is kind of the natural progression of things.

• 16:17Speaker 02

  The other half, and probably the bigger component, component of it, I would say, is that I think it was quite intentional. And that's a product of kind of what Ethereum's roots were, which were very Bitcoin-y, which is not the case for all of these new, you know, Celestia, Solana type chains that you're seeing pop up now. These are not people who were like, I really wanted to build this thing on Bitcoin. But, you know, I guess we just need to go make our own thing. It was just like, they are just building a new tech platform. Versus Ethereum, you know, had very Bitcoiner roots, like those are the people who started the project. Like that was a roundup time.

• 16:52Speaker 02

  And so I think that was kind of just like, that is the kind of cultural inclination of most people in there. And so there is a much earlier and more aggressive push to like, very intentionally, try to decentralize all the decision making, you know, the whole emphasis on a very multi-client architecture. Try not to have like a very strong single leader and try to like decentralize the decision making processes. All of these things. And a lot of the, the culture of kind of manifested in the technical roadmap of, we're going to push out a lot of the technical complexity. And what that ends up doing is that further that, you know, in pushing out technical complexity, you're also in practice pushing out a kind of the political power as well.

• 17:34Speaker 02

  Because if you're not building those things that everyone is using now, well, now the Layer twos are building those things, you know, they're buying client teams. Like all you have all these other different parties that like they end up having a lot of political influence and kind of like what is Ethereum itself doing? So I'd say it's a mix of those two things of like there is some level of natural decentralization. I mean, you see that even in Solana now where, you know, they're going to have multiple client teams. You know, it's not just labs doing everything. It's, you know, Gito has a lot of input in the process. Fire dancer has a lot of the input in the process like that is going to slow things down. But they don't have all of these other points of we're going to intentionally, you know, like our founder and core team are going to be less opinionated about things like they're not going to do that. Like they're going to keep being opinionated.

• 18:19Speaker 02

  They're not going to have all these L twos that are putting a lot of political influence into the process and all of those things. So it's a mix of those kind of two things.

• 18:27David Hoffman?

  Mike, do you want to add anything?

• 18:29Speaker 00

  No, I agree with all of that. I think part of this is just natural growing pains. Let's just remember that there were literally block sized wars that got fought in Bitcoin over this.

• 18:38David Hoffman?

  Right.

• 18:38Speaker 00

  There's a really, it's really short. You can look it up, but Naval Ravikant has this quote about groups don't disagree, they schism. And you can kind of understand why that is having lived through crypto. If you consider yourself as being part of a tribe, there's a natural cycle to it where, you know, you're part of one tribe. This happened to me with Bitcoin where that's what gets you into the space in the first place. You buy into a lot of the arguments and then once you get a little deeper, you start to see some of the issues. You're like, oh, well, maybe there's some challenges here. We should talk about that. But for whatever reason it is bag bias or people tying their entire identity to their coin. People are less willing to hear that. It turns a certain amount of people off. There's this kind of debating conflict and then a whole bunch of people end up leaving.

• 19:20Speaker 00

  And so you can, you can see why this, this pressure to schism exists. And so I think like John said, part of this is just really natural growing pains for a protocol that's been as successful and will be as successful as Ethereum going forward into the future. And then I think there is a, there, my opinion would be that is we're not rewiring human nature here. Even large decentralized organizations like the US government, which is actually a very decentralized organization, has to have some sort of figurehead because you have to, people are just wired a certain way after hundreds of thousands of years. And just having someone to set. A kind of high-level vision, I think, is important.

• 20:01Speaker 00

  And there are numerous examples, by the way, of DAOs, of the leaders of protocols attempting to decentralize, hand over control of the community. And then either those protocols aren't as successful anymore, without naming any names, or their leaders have come back. And so I think we just need to recognize that whether or not the leaders of Ethereum want to take on the mantle of that power, that power exists. And if they don't take it on, someone else will ultimately end up taking it on.

• 20:27David Hoffman?

  I want to bring up the illustration of the three-way Venn diagram, because I think that also does a really good job of grounding the conversation. So you have three circles overlapping, all overlapping in the center. You have Bitcoin, Celestia, and Solana. Execution, data availability, consensus. It's like how I think Justin Drake will frame it. I don't know if you guys, if you agree with that, like the relationship between the three ecosystems, but I thought it was a pretty useful metaphor here. And of course, John, your article is about Bitcoin, Solana, Celestia as being the three credible competitions to Ethereum. Bitcoin is actually winning versus Ethereum in the money, but all three are competing with Ethereum. And then you have, where it overlaps altogether, is Ethereum.

• 21:11David Hoffman?

  Ethereum is at the center, trying to do all three, doing all three with some decent measure of success. And then also, you have Celestia with more data availability than Ethereum, you have Solana with more execution than the Ethereum Layer One, and then Bitcoin with just straight up more moneyness than Ethereum. And so these are like the three players here that are trying to like unbundle Ethereum. Like, the vision, the idea of Ethereum being drawn and quartered comes to mind, or drawn and thudded by these like three ecosystems. And so like, I just have this like picture of like this Ethereum body with three ropes tied to it, and it's flexing as hard as it can, trying to pull data availability and money and execution to it.

• 21:54David Hoffman?

  And then Solana, Celestia, Bitcoin are all pulling those same resources away to their respective ecosystems. So that's kind of like the grounding, I think, that helps illustrate this conversation. So on this Solana, Celestia, Bitcoin three-way spectrum, John, where do you think Ethereum lies in its prioritization? And so where do you think it is? And then where do you think it ought to lie with where it ought to prioritize things?

• 22:20Speaker 02

  I would say broadly, it is kind of in one, two, three order. I, well, I'll tweak it to show kind of the evolution of it. I would say initially, it was, I would say Solana Bitcoin, then Celestia, like in the early on, where like it really had that kind of world computer vision.

• 22:40Speaker 00

  When it was like only competing with Bitcoin.

• 22:42Speaker 02

  When it was like, when it was just starting and it was like, very clearly like, I would say like more differentiated from Bitcoin. Like they weren't trying, like particularly the genesis of Ethereum, you know, you weren't trying to copy Bitcoin. There was less focus on the money, there was more focus on the world computer, which is like the kind of vision that like I am trying to bring back. So I would say it almost like looked more like Solana at the beginning, which is interesting. And then I think over time with, you know, especially with the alt L1s and all these other things popped up, it started to move more towards like Bitcoin as a prioritization of like, we're going to be the money thing with like the minimum viable execution. And then it becomes, you know, that kind of like, there's quotes of like Bitcoin was the, the vision or whatever, like Ethereum is the execution of that.

• 23:24Speaker 00

  Right.

• 23:24Speaker 02

  I'm like, we're, we're just doing Bitcoin with like just enough functionality that you need for all these different things. And then I would say where that's like, started to progress to is still primarily Bitcoin-y, but with like a pretty strong emphasis on the Celestia leg of it, of you know, we're really bought into this kind of L2 vision. But with a kind of like different L2 vision from Celestia, where Celestia's kind of L2 vision is, you know, it's very embodied in their like sovereign rollup ideology of like, it is much more of a, you know, we are just making this verifiable unstoppable internet. It is a much more kind of like app and user centric.

• 24:03Speaker 02

  Like we are, we are a platform to like change the internet for you guys versus Ethereum is a more Ethereum centric. And then like everything kind of comes out from there and like of like ETH is money. And therefore this makes sense as the center of the internet and like all of the other things will build on top of us because, because of that kind of root. So where I think it is now concretely is like, it's kind of shifted towards, I'd say like largely Bitcoin-y. And that's manifested in a lot of the stuff we're talking about earlier of like.

• 24:29Speaker 00

  Like, you know, we end up with this like multi-client architecture, decentralized leadership. People are talking about the issuance and all these things all the time. And then on the technical focus, like what most people are trying to do is like stuff like blobs and peer das, which is concretely looking, you know, kind of more like Celestia. And where people have been largely ignoring that kind of, you know, should Ethereum execution, like, does this really matter? Has largely been ignored for a while. And I'd say that's part of the push of what I think it makes sense to kind of reemphasize again. Is to kind of bring more of that back into it and start that shift over of be a little, a little less Bitcoin-y. At least for now, a little more of, you know, focus on the execution, the world computer, you know, this like neutral layer again. And then I think that ends up evolving into like more money at the end, but the path dependence of those things matters.

• 25:14David Hoffman?

  Yeah. Okay. So the way that you would say is like Ethereum is most like Bitcoin with rollups. You know, the Bitcoin plus Celestia and it's competing with those two things the most. And it's kind of disregarded its own like Solana end of the spectrum. It's disregarded its own execution, which kind of makes sense because like which alternative ecosystem has grown the most over the last two years? Which ecosystem has taken advantage of that fact that Ethereum has disregarded its own layer one execution? Oh, it's the ecosystem that has optimized for layer one execution. Mike, any, any commentary here?

• 25:47Speaker 00

  Yeah, I think a lot of this comes down to path dependence. And I have this memory of the challenge that Ethereum has, right? I think ultrasound money confused a lot of people, me included. And I remember describing to my dad early on. You know, I had a lot of trouble getting him around the hump of Bitcoin. It was like, but there's no yield. It doesn't do anything productive. And you can go and look at guys like Jack Bogle, describe people's natural, why they don't like commodities as an investment in general. There's just this massive hump that people are not going to be able to get over that they like things that cash flow, they can model, et cetera.

• 26:24David Hoffman?

  Growth. They like growth.

• 26:26Speaker 00

  Growth. So the description of the world computer of Ethereum and this network, this economy of different applications that look like businesses. You got a lot of people there very quickly. And I think maybe this would be a controversial thing to say, but even the monetary. I think Ethereum has a better shot at money on a long-term time horizon than something like Bitcoin does. Bitcoin has sort of gone the meme approach to money, and I view it as a counter reaction to the issues that fiat money is having. We print too much fiat money, so we get a total fixed supply. That's great as a meme. That's a really strong meme. On a really long-term time horizon, that doesn't work as a monetary property. You need some amount of flexibility.

• 27:07Speaker 00

  And I kind of look at Ethereum's monetary scheme and think it's a better long-term scheme. The issue is you're confusing people by trying to ride two horses with one ass. And I also think there's been a misunderstanding as well of where the leverage for L1s really lies because of these brain-damaged words like settlement. And I'm not of the opinion that most people choose the L1 because of these settlement properties. I think there's a minimum viable amount of decentralization you need with a settlement part. Then it becomes a cost thing, but really what it is, is it's the liquidity of the L1. And why did so many people choose Ethereum last cycle? There was this massively liquid asset. You could build anything you wanted. You could speculate quite a bit, and that was super valuable for the network.

• 27:52Speaker 00

  And I think there was this misunderstanding among some people in Ethereum circles that said, oh, we're being chosen because we're the most decentralized. And the market was not choosing Ethereum for that reason. And so that's why I'm in the camp of world computer, focus on execution, whatever you want to do. And we can talk about how this, I think, dovetails really nicely with the roll-up centric roadmap. It's all about having leverage and users and liquidity more so than these vague concepts of, or one very myopic way to measure decentralization, I think.

• 28:25David Hoffman?

  Yeah, I think that does extend into the rollup centric roadmap very well because in 2021, 2020, when crypto got, you know, 100 times more users, they went to Ethereum because that's where the liquidity was. If you wanted to mint and launch an NFT project, you did it where the money was. And so everything went to Ethereum. And that's because it's where the money and users were.

• 28:45Speaker 00

  And just to make concrete examples there as well, look at the early DeFi apps that got product market fit. Uniswap, Maker, Aave. What were those protocols allowing people to do? Use Ethereum in some way.

• 28:59David Hoffman?

  Right.

• 28:59Speaker 00

  Take loans out, lever up, get yield, trade things, MEV. All of those initial use cases were based around having a deep and liquid, a one token that people wanted to speculate around.

• 29:11David Hoffman?

  Right. And Ethereum, I will say, is getting its layer two energy is what's powering layer twos. It's the same phenomenon.

• 29:18Speaker 00

  Yeah.

• 29:18David Hoffman?

  It like, not to discredit the fact that Ethereum is decentralized and layer twos want some level of like, property rights and censorship resistance, totally valid. And also, layer twos will go to where the money is. The incentives go to where the money is and where the users are. And so I think this also kind of brings into a point that I think John said is like, well, layer twos will follow the liquidity just like users. And so you can like, kind of imagine alternative version of Ethereum, an alternative timeline where Ethereum prioritized the layer one first, before prioritizing layer twos, which is what is Solana is doing. Solana is prioritizing layer one execution. And then you, you keep everyone on the boat. You keep all the users, you keep all the liquidity.

• 30:01David Hoffman?

  And then you kind of let layer two spawn more emergently from that. Maybe, John, you can kind of like run us through that simulation of a roadmap, maybe like Solana's, where you actually are on the rollup centric roadmap. You were totally going to do rollups. We love rollups. We love the Celestia. We love the Cosmos vision. We're just going to scale the layer one as meaningfully as possible, like what could have been in this world.

• 30:23Speaker 02

  All of it, like, I would say, like, makes sense in hindsight of, I think the key term that we will end up saying here a lot and that, like, people are realizing more is like, this is all just a path dependence thing of like, I think that most of us agree, like, as Vitalik has written as well, like, the endgame of most of these blockchains looks the same. And I think that Ethereum has had a very strong inclination over time to ignore the, like, what is the practical thing today and the path dependence of these things? And that is probably unsurprising when you have a very, you know, this, like, optimistic, research-driven community, which is, you know, talking about one-shot signatures and these things that are like 50 years away. And you're planning for this, like, yes, this theoretically makes sense in the endgame, but ignoring that point of like,

• 31:08Speaker 02

  okay, but like, yeah, in practice, why did the L2s launch on Ethereum in the beginning? Like, it wasn't because we had this, like, honestly, like, this, like, perfect roadmap that had everything figured out or all these amazing decentralization properties. It was, all the users are on Ethereum, that is where the most assets are, ETH is worth a lot of money. We can go onboard those people into our chain and like now, now we have product market fit, we can just like take those users and those assets. And that particularly makes sense when you realize that kind of like frame of, I mean, like, and this is what like totally pokes out actually all the time, it's like you can make Solana an L2. Like, what fundamentally is an L2 at the end of the day, when you think of it, is like, it's a good bridge to another chain.

• 31:47Speaker 02

  So where are L2s necessarily going to go is just, they're just bridges, they're gonna be, they're obviously gonna bridge to where the assets are. And so it's not a surprise that for the first time over the past year, and in a pretty consistent line with the Sol price, pretty much, and the activity on Sol is like, people are talking about Solana L2s for the first time. And why is that? It's because Solana now has a lot of users and a high asset value on their chain. So of course, it makes sense to build like a good bridge effectively to Solana and get their users, get their assets. It didn't make sense when Solana wasn't worth a lot and they didn't have any users. It's not that Solana got, you know, more decentralized and had these like properties of a settlement layer from a technical level from, you know, a year ago versus today.

• 32:32Speaker 02

  Like, nothing changed, they're building. The exact same thing. They don't even care about these all twos. It's just that they're like, they have assets and users now. And so people makes like, oh yeah, it makes sense to build on top of them. And so I, I think that Ethereum kind of, in some sense, like probably like lucked into that benefit from the beginning of, obviously when Ethereum started, it did not have the roll up centric roadmap. It was just like, we're building an execution layer. This is the thing that we know to do. But that ended up being the right move. And the like, the example that I always use is like, I, I would say that Cosmos was generally the first ecosystem that very clearly understood. What is the end game that mostly matters for this? It's like, we're probably going to have a bunch of chains. We need to figure out, you know, how do you make it easy to launch a chain? How did you make it easy to be interoperable between them?

• 33:11Speaker 02

  They had the generally correct idea. They just didn't have the right path dependent solution to that. It's just like, they kind of went right to like, you've said this before, like they kind of went right to the end game right at the beginning. They did. And it's just like, it just doesn't make sense. You just ended up with a bunch of fragmented chains. And like, none of them were actually worth a lot. So there wasn't like actually much to do on any of them. And they were just like sort of fragmented. And it was like, there was no like kind of rallying point for the ecosystem versus Ethereum was just like, we have one chain, like, let's be real, this is enough to do like 99% of the stuff that you could do in crypto today. Which was very concretely, and I, and I think that Ethereum kind of, it, it hasn't gone all the way, but there has been a trend of it's like, sort of Cosmos hubbing itself over the past couple of years.

• 33:51Speaker 02

  Of, and, and this is the reason why concretely, the first time that like, I like, we got very excited about and invested in Solana was, it was like, I don't know, it was fall, fall of 23 or whatever. Like right before the bull market picked up because I, one, I mean, part of it was just the market view. I think the market's going to come back. But it was, I was like, also had a very clear view that like, this whole roll up thing again, like makes sense in the end game. But it is very clearly does not the present situation of crypto that we need 100 trains with all these interoperability standards and all this stuff figured out. It's like, what do 99% of people in crypto want to do today? They want to like trade some meme coins, play around with some new like deep in projects and whatever. You can kind of just fit that on one chain.

• 34:30Speaker 02

  And so that, that is still directionally where we are today. It's like most of the interesting things that people want to do, you could fit on a chain like Ethereum, particularly if you just scaled it a bit. Um, and so I think there's a much more realization now of, yes, obviously Ethereum L1 is not going to fit like the entire future of the world. But that doesn't mean that we should just ignore it completely. Like it actually is valuable still as the center of this kind of L2 roadmap.

• 34:53Speaker 00

  Right. So I want to also make a point. Let's say you're listening to this conversation and you're in the ETH is money camp. I want to try to connect the dots in between getting everyone on one single environment and how that actually leads to ETH being a better money. There's this reflexive property in between ETH, the L1 token versus actual usage of the network. And it comes from this fact that the market size, the total addressable market for apps is highly dependent on the market cap of the L1 token. Highfalutin concept, two concrete examples, the early like Ave and Maker, their market size was limited by the amount of people that wanted to borrow against their ETH. So the more ETH that ETH went up, the more the demand or the market size for those applications was.

• 35:36Speaker 00

  Same thing for L2s. Why are L2s all very excited about launching Ethereum? Partially it's because there was a prioritization from the L1 on making it easier to launch L2s, but also mostly because this mass of users and liquidity on the L1. And so that's why it's very important, actually, there's this very reflexive property in between the price of the token and the actual adoption of the network. The other thing too, that I think is going to be a bit of a challenge, just speaking about Cosmos and anticipating the end game is if you look at Cosmos, they were really early to this trend of allowing users to pay in USDC as opposed to Adam the token. And I think that's roughly going to play out on L2s as well.

• 36:17Speaker 00

  This is one of those areas where L2s and Ethereum L1 have very different incentives. And so the, the broad discussion around this has been, we're trading off execution fees for liquidity network effects of ETH on L2s. But I don't see the incentive for, really, for L2s to make their customers adopt ETH. If customers want to pay for things in USDC, they're going to pay, the L2s are going to make it very easy to pay for things in USDC. And so one of the other benefits from a monetary standpoint of maintaining more activity on your network is you have control over what happens on your network. You can much more easily collect taxes that will translate into yield that will make your asset larger and the market size for all of your apps larger.

• 37:02Speaker 00

  There was an interesting discussion around EIP 1559 where they were deciding between a burn and, uh, you know, these other mechanisms that would have made it DSO. And they ultimately, if you go back and you can listen to these great episodes that Hsu did on uncommon core, when that was still a podcast.

• 37:22Speaker 00

  And he's talking with Suzu about this concept of economic abstraction. And part of the reason the burn was selected was because they didn't want off-chain payments happening. And so they wanted to control the fact that people needed to pay for block space in Ethereum. That's an example of something that you can concretely do that would affect the demand for Ethereum. If you have everyone operating on your layer versus if you move all these users to L2s that are not incentivized to do that.

• 37:47David Hoffman?

  I agree with that. The economic abstraction can now return into the Ethereum ecosystem via the layer twos. Dollars are more easy to reason about. There's just better UX. And as we expand crypto, people are just going to want to demand dollars, to transact in dollars more than they are going to want to transact in Ether. I totally, I generally agree with that trend. And I will also say, I kind of want to start to put on my Ethereum hat a little bit more strongly here.

• 38:13David Hoffman?

  And so I'll also say that like, okay, that's great that people are going to spend their dollars. But really, that's like the commodity side, the payment side of money is a very small fraction of it. As opposed to the store of value side, I will gladly spend dollars and store my ETH. And sure, we can economically abstract Ether on its layer twos and people can spend dollars. But like, if people are still electing to use and store their, and store their value in Ether and use ETH as money on these layer twos. That's actually like 80, 90% of what makes a money. And so if layer two, if users elect to use ETH as money on layer twos, that's way more, way more powerful.

• 38:52David Hoffman?

  And this starts to get into some of the thing, some of the stuff I think Ethereum really has strengths on, which is even though ETH is not, not as great of money as compared to Bitcoin, judged by its market cap. Even though ETH is not as great as execution as Solana, and even though Ethereum has less data availability, it still has a monopoly on the synergies between each of these overlapping Venn diagrams. So what do you get when you have a money mixed with layer twos? Well, you can fuel those layered twos with money and you can have demand, more demand for Ether. Because, because Arbitrum's got super fast block times and it's got a very, you know, a very strong DeFi ecosystem. What's primarily the money in that ecosystem?

• 39:34David Hoffman?

  ETH. And true, you can, maybe even dollars do supplant like ETH in these ecosystems, but nonetheless, we are still in a fiat currency crisis. Nonetheless, societies are moving away from fiat currencies. And so ETH, to take a leaf out of Mike Norder's book, is the permissionless money of these like layer two ecosystems. And that's just like one synergy. Like, what do you get when you cross the synergy of money and execution? Bitcoin and Solana? You get layer one DeFi. And Ethereum's layer one DeFi ecosystem still has like 80, 85% market share of DeFi, like a very strong dominance of where is the Ether? Actually, still on the layer one, inside of MakerDAO, inside of AVE.

• 40:16David Hoffman?

  And a quote from Eric Wall recently, who was like, well, I go gambling on Solana, but like I put my winnings in AVE on Ethereum.

• 40:25Speaker 02

  And so On L2s or Ethereum?

• 40:26David Hoffman?

  On the, on the layer one, on the layer one. Yeah, yeah. And so like, nonetheless, I think there's a lot of path dependency, things that we can bring up. And like John, I'll say that like some of the pushback that I've heard from, from some Ethereum people is not that anything in your article was technically wrong, but the vibe wasn't accurate. As in Ethereum is this decaying Roman empire. These smaller, smaller like city-states, Solana, Celestia are going to rise and take over. But like the fundamentals, the stats like are still very strongly in Ethereum favor. And so I'll kind of just present that to you. Like, talk about the synergies that Ethereum has. And like, how, how should we like weigh these things in these conversations?

• 41:10Speaker 02

  So I'll get to that in one second. The one quick part that I would disagree on is that on the stats that it's way ahead, I actually disagree with that now.

• 41:18David Hoffman?

  On some stats, some stats, yeah. Solana has like a lot of economic, economic energy in it, for sure.

• 41:23Speaker 02

  Which is, I think, what it's been behind in practice, like its rise over the past year is that, I think in practice, like Ethereum, like Solana has actually surpassed Ethereum, even including layer, like even including all of its layer twos on a lot of key metrics. Stuff like REV, just like the total amount of like, what are users paying between MEV and fees to use the chain? What is the amount of revenue that the apps on the chain are making? You know, the applications like Radium, Jupiter, Pumpfun, GTO, like all these things. They're printing money to a degree that like even more than more than Ethereum applications. They're getting institutional like a lot of the deployments that Ethereum is getting. They're deploying the same things on Solana, like all those different things. So I think on a metrics basis, I think that the, put it like this, the discrepancy in their market caps

• 42:08Speaker 02

  is much higher than the discrepancy in actual, I would say, like what the metrics would tell you. If you were just looking at those with no understanding of kind of history.

• 42:16David Hoffman?

  But what about DeFi though? I think Ethereum still has a very large dominance of market share of DeFi specifically.

• 42:22Speaker 02

  So

• 42:23David Hoffman?

  Like TVL, maybe not fees, but TVL, yes.

• 42:26Speaker 02

  Exactly. And this gets into the like, and this is where I do think it has a serious advantage. And this gets into that kind of role computer type vision that like, which is why I do think it makes sense to compete on this. Is because what Eric described is like directionally, what I do too. And what I think directionally, most people do too, is like, yeah, I do most of my meme coin trading on Solana. And then the majority, I have more like my

• 42:51David Hoffman?

  My savings.

• 42:51Speaker 02

  Yeah, my USDC is on Ethereum, you know, stuff like that. I think that actually is like that is a real product market fit.

• 42:59David Hoffman?

  It's kind of similar to when like Bitcoiners will say, oh yeah, I'll go shitcoining. But then I'll sell it into Bitcoin at the end of the day.

• 43:05Speaker 02

  Yeah. Wonder how many successfully do that.

• 43:09Speaker 02

  So yeah, that that still is the kind of like directional bias right now, which is, which is why I think it makes sense for Ethereum to lean into that. And not just like give that up because otherwise I think the, that is the concrete. The problem is I think that the current trend is Solana is clearly gaining on all of these different things. It has more Dex volume, there's more users who are using this, like paying more fees, more interesting applications, all these things. But the last holdout really is that there's still a lot of the big money on Ethereum. This is still the place that like, I generally trust a little bit more with like big dollar amounts. But if you just like continue to ignore this execution layer. And for the next year or two, have this mixed messaging where a lot of people are actively telling like applications, like there's no future for the L1, like get off the L1. And then

• 43:51Speaker 02

  Solana keeps picking up activity and BlackRock and PayPal and all these other institutions that are deploying on Solana. Eventually, they're just going to build up their like actual serious TVL and savings there too. And then like the discrepancy is like it's all gone. And so I think that strategically Ethereum should not let that happen. It should, you know, it should understand that, yeah, a lot of the users will go there. A lot of them will do the meme coins, blah, blah, blah. But we want to try to keep a lot of the serious value stuff here because I do think that is like a real competitive advantage. And then as far as kind of the synergies and getting into like that, the economic abstraction point that you were talking about as well. So I, I think that a lot of early on Ethereum has, I think that in practice, this was correct, that Ethereum was able to kind of say,

• 44:33Speaker 02

  L2s will like definitely increase the money-ness of ETH because like these are just more places that use ETH. More networks. Exactly. And so early on, I think that was correct because economic abstraction, this is just like technically complex. Like no one did that. You just wanted to use ETH. Like, all right, we're just going to use ETH on all these chains. The direction now is obviously, you know, base announcing like, oh, like we'll use the USDC for payments, like more chains are going to do that. And so I would say that I think the more correct framing, particularly as we play this out over time, is that L2s expand the kind of the opportunity space for ETH to be used as money. But once economic abstraction becomes easier and easier, it's just creating the opportunity for it to be used that way. If users don't want it, then they're not going to use it versus today, it's directionally more, even if you don't want it, you're using ETH if you want to go use an L2.

• 45:18Speaker 02

  So it's kind of like forced on people. So that will generally be a net negative, I would say, on like ETH's money-ness over the longer term. And so part of that is what you were saying of, and I agree with this, of like most of the value of this kind of currency thing is not actually from the fact that people are using it for gas payments. I agree with that. You know, you do the M V equals P Q type calculations on this, like it's not a lot. Like it's high velocity on this stuff. But I think in practice, that is very likely, very heavily tied to it being used as the store value and all of that, like core of DeFi on this chain. When the onboarding for everyone who goes on this chain is like, you're going to own ETH and you're going to use this. And that is the thing that you need to own. It is very likely in practice that is kind of going to be the core of the ecosystem.

• 46:01Speaker 02

  Probably going to be the main asset that ends up in all these like DeFi applications. Versus if that is just never a step that you need, like I never need to get ETH to go on to this change. Like I just go on there with USDC. Then I don't see a compelling reason why Ethereum is going to like just naturally become that asset. People are just going to naturally grab it towards towards the assets they want, which is probably directly going to be BTC and USDC. That is the thing that I think that Bitcoin has gotten like very right and like luckily from the start of like, you kind of need to start with the money. Because ultimately, when the users have the choice, they're going to pick what they actually wanted the money. Not just like this is the tech platform that I'm built on top of. And so that is part of the why I think it makes sense.

• 46:43Speaker 02

  And this kind of gets to the world computer and ETH's money visions of like, a lot of this is really just a time scale thing of like, I think that yes, the end game for these things is you want them to play out into money. But I don't think that in practice, the way that you can get this thing to be money is just saying like, our ultrasound money, we're deflationary, we're better money than Bitcoin. Like empirically, most people don't buy it. Most people prefer Bitcoin, unlike the just sound monetary aspects of it. So I think that in general, probably the way to actually just increase the value of ETH in the short to medium term. And just like, kind of start with that base of how do we increase the moneyness asset value of it? Is to probably refocus on more of the focus on the L1, have a lot of the great execution there.

• 47:26Speaker 02

  This more world computer vision with that kind of as the heart of it. Because that is still where in practice, like most of this high value DeFi is all happening. That is still where most users are. So if you can really just increase that a lot and that becomes the home of it again. In practice, like ETH is probably going to go up in price. It becomes a better collateral asset, all these other things. And then that's probably the more path dependently correct way to kind of build yourself into being money over time. It's like really focus on the core and build out from there.

• 47:56David Hoffman?

  I want to bring up the North Star conversation again. Celestia, Solana, Bitcoin, I'll have very clear North Stars. Celestia, 1GB blocks, build whatever. Solana, what is it? Increased speed, reduced latency.

• 48:09Speaker 00

  Decentralized NASDAQ.

• 48:10David Hoffman?

  Yeah, decentralized NASDAQ. You know, Bitcoin, 21 million units. And then, you know, the conversation is Ethereum just has this kind of confounded like North Star idea. But I want to present the idea that couldn't it be the case that it's simply because these other three ecosystems are just going after a smaller vision than what Ethereum is going for? Ethereum's roadmap is parallel, its complexity is immense, it's hard to explain. Maybe that's because it's going for a superset of what all of these things are going for. It is the thing in the middle of the Venn diagrams, right? That's why it's got a marketing problem. That's why it's got coordination difficulties. That's why it's difficult to understand. And it's kind of like, imagine trying to explain a third vertical dimension to a flatlander. Like, that's just going to be a hard thing to explain.

• 48:56David Hoffman?

  And Ethereum's governance, its EIP progress, its ARC, its roadmap, is kind of like this random walk in towards this like vibe of a direction that is like loosely articulated by Vitalik. So like, I want to present this, this, like, maybe that's why Ethereum has like this North Star vision. It's trying to do like, the tweet that I tweeted out that was in this, in this direction was what is Ethereum's like North Star? What is Ethereum's roadmap? Better money than Bitcoin, more data availability than Celestia, better execution than Solana. And that tweet, that was a hit tweet. And I think that's because that actually resonated with a lot of people. It's like, oh, this is putting a lot of pieces to the puzzle together for me. How do you guys, would you guys like this vibe?

• 49:37Speaker 00

  So I think that this comes back to the comment that I made at the top of this episode about strategy. I do not think that it is a bad thing for Ethereum's vision to be to compete on all of those dimensions eventually. I think it's a mistake to go out and say they're competing on all of those dimensions right now. Here's another analogy that I'll give you. If Amazon had come out on day one and said, we are going to be the everything store. It would have fallen completely flat. Right. Jeff Bezos started with books. Right. And did Jeff Bezos only ever want to sell books? I don't think so, but he picked a wedge that was easy to understand. He did it better than everyone else, and then he expanded from there. So again, I want to just also just to zoom out here for a second.

• 50:22Speaker 00

  I, I think that Ethereum has the best shot at winning the largest market, which I've always viewed as commodity like money that has some amount of yield attached to it. The reasons, again, getting back to the MAGA comment here is I'd be firmly in the camp that there is a problem, you don't solve the problem unless you say it. There's not much incentive actually for me to come on a podcast like this and talk about this. Right? It's like, I know this is going to be unpopular for people. The reason is I, I care about it and I want to see the problem solved in the first step of that is admitting that there's a problem. And I would disagree, David, with that tweet that Ethereum is more complex than any of these other networks, or it's just got a bigger vision. I think all these networks have a very similar vision. And I think there's a very similar amount of complexity across all these networks.

• 51:04Speaker 00

  I think Ethereum has to improve on its strategy here and decide, again, on the path dependence point, on the time scale point, when do I want to win each of these wedges? And which wedge is going to give me the most leverage to win the next tranche up from that? And I think describing it as competing for everything at once, it's not hitting with people. And I don't think it's the right strategy.

• 51:28Speaker 02

  So I, I would split it into two. I think half of the answer is what Mike just described, um, which is, I would say like very succinctly epitomized by Kobe's reply to your tweet, um, which is, you know, uh, man who chases two rabbits catches neither, which I think is a fair argument. It is very possible that it is the wrong move strategically to like go full force on all three of these right now. And this is just a matter of prioritization. At the end of my post, that is like generally the view that I end up taking is that, I, you know, I think on some time horizon, you are competing on all these things, but like, we probably need to reprioritize and focus a little bit more on certain aspects of this, like in particular. Like I think you should probably focus more directionally on the kind of like execution front today and a little bit less on the money of this and you know that kind of comes later.

• 52:13Speaker 02

  That is like my directional bias. Um, I think it probably makes sense to do that. I would say the much larger actual other half of it though. Is what was a lot of the focus of the piece is I, I, I don't think most of the issue today is that we are trying to compete on all of those things. I think that most of the issue today is that none of us agree about whether we are competing on any of those dimensions. I do not think that there is internal agreement that we are competing on money. I think that like most people want this and like some loose notion, but a lot of people very actively dislike it and do not care about it, do not want to see Ethereum do it like. They want to be this like decentralized economy tech, all these things like it's not. It is gas.

• 52:52Speaker 02

  Yeah. And I, I mean, like the, the perfect epitome of this, like I described as like at the Banco summit, like one of the talks was like Antigone Caspar. Talking like they've been doing a lot of work around issuance and all these things. And the title of the talk is ETH is money if we, if we choose it to be. Right. Like, like that, that like highlights it like we, like we just don't know. Like we haven't decided internally, like if we're even competing on this thing. DA, I would say is the same thing of like, we have this loose notion of like, yeah, like we're going to scale this thing. Like we're going to do four eight four four, we're going to do period. We're going to do dang sharding, blah, blah, blah. Like all these different things. And like, oh, we're going to do that. Um, but I would say that there's a reasonable amount of disagreement of like, like how much do we actually have to prioritize that? Like how valuable actually is that? You know?

• 53:31Speaker 02

  If we're just doing the whole money thing anyway, I, I mean, like Bitcoin is never going to have enough DA for the world. Like we're not going to have enough DA for the world. So like, it's fine if like most of these L twos go use Celestia and I can DA and whatever for DA. Um, like it's not really a priority. Like we can have this, but like, it's not really a huge deal. We don't need to compete with Celeste directly. I mean, like Justin even says that directly. Like I quoted him in there basically a couple of times. Of he was saying like, yeah, like if DA gets a little expensive in the next couple of months as we go into price discoveries, like I think it should be totally socially acceptable for Ethereum L twos. To basically just like leave Ethereum DA, go use Celestia until it becomes like cheap again, like if it does, like that should be totally fine. Because like most of the, uh, the value is not from the cash flow. That's like the moneyness. Just let them go do that. So I would say there's complete disagreement there. And then I would say this complete disagreement.

• 54:15Speaker 02

  Agreement on the are we competing with Solana either? I would say that that is like a complete 50 50 split again of I I do not think that there's any coherent message. At all, I like, I think that like there's a mix of, I mean, one of the points that I highlighted and there was like. Justin Vitale have said at various points that, you know, the L one is competing with Bitcoin. The L twos are competing with Solana and also very explicitly saying at times. There is no future for the L one like when he was debating totally on your podcast, like if you're an application developer, go to the L two, there's no future for the L one. While at the same time, his roadmap is also like juicing the execution on the L one and doing pre comes for faster than Solana transactions. And like most of these design like execution changes end up looking like Solana.

• 54:58Speaker 02

  And I would say a very large amount of people in Ethereum like. Do I would say directionally agree with some of the stuff that I've been pushing on like we should focus more on the L one like we do want to compete on this front. And I put like Don Crotte and like a number of other people kind of in that camp. So, so short TLDR to your question back to the beginning, kind of something up is like, I think that half of the question is like. Is a fair point of like which, you know, which of these dimensions should we compete on? I think that's like a fair conversation and we probably are trying to compete a little too hard on too many of them. I think we should rebalance them. But I think the much bigger issue is that I don't think that we agree on any of them right now. Which is one of the things that I called out at the end of like, I think that like I directionally prefer this, like we should focus more on execution. Don't worry about the money right now, like that'll kind of come naturally as a byproduct of what we're doing.

• 55:42Speaker 02

  Like that is my preferred vision, but I also think it would be better for Ethereum today. If they just took like a hard right turn and went the other way and you're like, fuck it, like kick everyone off the L like off the L one, it's fine. We don't need that anymore, like we are competing with Bitcoin as money. And like we make that a very clear story and you know, we have better economics, you know, for reasons X, Y and Z. Bitcoin's block reward is going to be unstable as inflation goes away, like all these different things are economic metal, but it doesn't make sense like we're going to be better. We're going to be probably Graham Obenoff, op cat is never going to happen like you could tell a very coherent story there. Even if it's not a preferred path, I think that is like actually a much better path. Than where we are today, which is like an unclear mix of none of us agree on any of the three dimensions of what we're competing on.

• 56:25Speaker 02

  Brings it back to that, like, you know, what is a lack of North Star concretely end up with? You can't tell your story as money if we don't agree whether the thing is money. So you're obviously going to lose there. And you also aren't building the tech platform to compete with Solana because we don't even agree if we're competing with Solana or Celestia. And so that also becomes a self fulfilling prophecy of like, I wouldn't even know if we're competing with them. We're like, we're kind of telling people not to leave. And so then that becomes a self fulfilling prophecy of you're going to lose to them too. So more importantly than honestly, which direction that we like really decide to lean into. I think the problem is we just, people just don't agree which, you know, which dimensions are we competing on?

• 57:02David Hoffman?

  I'd like to get into just practical, actionable items that we can bring to the table for the Ethereum project. Cause I think we all agree, this is not a technical issue. This is a social and political issue. So like, what are the actionable things that we would like to see out of Ethereum governance to really like right the ship? My, my attitude, if I, if I can put my like, uh, my like name in the hat here is I think we should kill the five swim lanes. The urges, kill the urges. I want the urges gone. Let's replace them with three swim lanes. Data, uh, data availability, execution and consensus. Because that's correlated to like the three big economic resources that a blockchain has.

• 57:44David Hoffman?

  And only Ethereum has really identified first and is in the lead to the idea that like, we're all building the same system here. So let's go build that. But I think it's also let's, let's reframe the three, um, into and consolidate three routes of progress to optimize for Ether to be the best money possible. For Ethereum to provide the most amount of DA possible. And for the Ethereum layer one to have the strongest amount of execution possible. And then the layer two ecosystem will just naturally emerge rather than being forced. It will just naturally emerge out of that. And then the cross interoperability of the layer twos will have the benefits of a very strong layer one execution to be able to do that. Inter and interoperability. That's kind of what I would see is like reframe the roadmap. But John, Mike, like, what would you bring to the table?

• 58:28David Hoffman?

  What's it? What advice do you have for, uh, the Ethereum team, the Ethereum core devs, uh, the all core devs call? How would you suggest to them like, where should they should go?

• 58:38Speaker 02

  So the two things I had in the post more concretely were, one section was called like, "Talk to your customers." I think there's like a very clear trend in Ethereum of there is a pretty large disconnect disproportionately to other networks of like, what are the core developers doing and looking at and working on and like, what are the use cases and applications of this chain? And like a couple of tweets like I'd thrown in there very clearly, whereas I think it was like Potos who is basically saying like, you know, none of us core devs, you know, like, yeah, we don't spend time looking at applications. Like, that's fine. We don't need to. We're low level. And then Max was pointing out like, you're designing EPBS, like every, every application's transactions are now going to go through this thing. Like, shouldn't you probably understand, like, at a little

• 59:22Speaker 02

  bit better level, like, what do the applications, like, what are they doing? What do they care about? I think that's fair. And Donkrat had also like argued that in a similar vein of like, there's a big disconnect between like, what is happening on all core devs versus, you know, like, like actually having a conversation with a lot more of the applications and a lot more focus on like, what are we doing in service of like, our big customers? And I remember Kyle had mentioned that on one of the podcasts. I don't remember if it was the one that he had done with you or Gort or one of the others, but I threw the quote in there of, he was kind of like making this distinction of, he was like, you know, he was like, Mark Zeller had done a podcast recently, who's like the main guy at Ave, who's like the largest application on Ethereum. And he was talking about, he's like, I've never spoken to anyone at the EF before. And like, that just like, seems like that

• 1:00:04Speaker 02

  probably shouldn't be the case. Like, that is the biggest application on your chain with like $30 billion or whatever in it. Versus the strong contrast to that is like, look at the Solana Foundation is, you know, he was like pointing out like, they have a DeFi team, a DePin team, a stablecoin team, all these different things that is interfacing with all the specific use cases that are important. And they have had like literal technical changes come out as a byproduct of kind of that interaction and conversations of like, the one that he points out is like token extensions on Solana, which is like a feature that they have ended up implementing as a direct result of like, these are conversations that we had with, you know, payment providers and institution providers and like different applications of like, they want more control over like programmability of the token. Like, this is a useful feature that they want.

• 1:00:47Speaker 02

  We're going to implement this. Those conversations largely aren't happening on Ethereum. And so kind of like the the thought process that I end up like calling out in the post is like, I think the way that you generally should be designing any of these things from first principles is you ask yourself like, the first question is like, like, what are we building for? Like, what is the end use case? And then after that, you can ask yourself like, okay, this is the use case. What properties do we need for that use case? And then you could have an educated conversation about like, oh, this is the right EIP. This is the right upgrade to get those properties to like fulfill that use case. And right now, directionally in Ethereum, there is a lot of just like skipping that first step, which makes that second step of like, what properties we optimizing for like, not super clear, like, we don't really know.

• 1:01:30Speaker 02

  And so that third step of like, what EIPs should we put in Pectra becomes this kind of like jumbled conversation of like, it's super unclear because the the properties and the prioritization of use cases is just kind of not there.

• 1:01:41Speaker 02

  So that is kind of like a more like cultural fundamental thing. I think that'd be quite useful. And then the other aspect of it is a more just like organizational and kind of like leadership style change. And the the section that I like that I called that was like wartime CEO, which was, it was from a book, which I know Kyle has like used this analogy, the same thing over the past few months of like, it's

• 1:02:04Speaker 00

  A hard thing about hard things.

• 1:02:05Speaker 02

  Yeah, it's a book by Ben Horowitz, who's like one of the founders of A16Z, has a startup background, had run businesses before. And he has this chapter called Peace Time CEO, War Time CEO, where he's talking about kind of like the different personalities of, you know, what are the types of leadership styles and skills that you need in kind of different scenarios? And where I would say Ethereum has like had more of a history of like being kind of in peace time earlier on, where just like you just focus on like build out the market, everything is good. You know, we're the leader and that's all you have to worry about versus now, when you have credible competition, you really need to like align people a lot more and kind of get this message straight. And because like, we actually like do have real competition that we need to worry about right now. We can't just be like worried about 20 year research. It's like someone might overtake us in the next few years.

• 1:02:51Speaker 02

  And the challenge that Ethereum has right now is that like we have very aggressively decentralized leadership in a bit of like an odd way that I would say. And like one of the quotes that I had in there, which I think was kind of indicative of it was a press which was talking on the Gort. Bugass was kind of describing how like what we end up happening, having in practice in Ethereum today is like Vitalik is putting these posts out on like the roadmap of your describing like these kind of five segments. But what I was calling out in there is like, look at if you look at his post on like possible futures of the Ethereum protocol, all of them are very clearly, here are all of the technical options for you guys to look at. Like here

• 1:03:33Speaker 02

  are the trade offs for each of those things. Like asks the big questions of like a big question that we have to answer is, you know, what should happen on the L1? And then he doesn't actually give opinions on any of those things of like, what should we do on the L1? It's very like

• 1:03:46David Hoffman?

  He just defines the possible paths without choosing any of them.

• 1:03:49Speaker 02

  It's very intentional. And like I like, I fully understand the rationale and the reason for doing that is, you know, trying not to exercise this kind of centralized decision making. Because yeah, in practice, if Vitalik says a thing, like, a lot of people are probably just going to follow with it. And like, ah, does that look centralized? The problem is, I think we are in like a very weird mix today, where the practical reality is Vitalik is putting out his roadmap. And in practice, 99% of people, like, this is just the Ethereum roadmap. Like, we are still just like listening to like effectively, like this, this is the founder, like this is the roadmap, this is what we're doing. And as like I was calling out, like, I think in many ways, Vitalik actually holds a higher position in Ethereum than it like, than like totally does in Solana, in many ways.

• 1:04:31Speaker 02

  I think that he exercises less direct control of like saying like, this is what we're going to do. But just like, I mean, subjectively, if you like, look at conversations in Solana, or like if totally says a thing, and a bunch of the Solana people think it's a stupid idea, like they'll tell them it's a stupid idea. I noticed a lot less of that inclination in Ethereum, honestly. And so the deal there of that is like, we end up, it's a lot of that kind of dynamic is exacerbating what I was talking about of, we have all these technical ideas, like, we have all these EIPs that we could look at. But we don't have a like, strong starting vision of, okay, but like, what are we building for? Like, what's the use case? Like, what like, what is the thing that we all agree on? What's the purpose of this? What do we need to optimize for? And so we just ended up like going in circles on all like, the very specific technical implementations, because we really need to

• 1:05:16Speaker 02

  be fighting about the thing that's like a kind of a step earlier. And so I think the hard question is, how do we in practice solve this kind of social coordination of how do we agree on like what the vision should be? And I think the easiest way to get that is like the wartime CEO, you know, you have someone who's super opinionated, whether that's Vitalik or Justin or Don Crotte or someone who just like does take a much more active role. So at an individual level and then also probably at like somewhat of an organizational level of the EF, I would say, has a very similar vibe to what I described with Vitalik of like

• 1:05:48David Hoffman?

  Right, EF is downstream of Vitalik.

• 1:05:50Speaker 02

  And like the whole culture at the EF is very similar in a way of, you know, we do not take views as an organization. You know, a lot of them try

• 1:05:58David Hoffman?

  Bias of traction.

• 1:05:59Speaker 02

  A lot of them try not to be too opinionated on different matters. And so we end up with generally a very decentralized leadership and a lot of leadership that I would say is directionally much less inclined to give you their opinions versus if you look at Slott, I mean, like they're all telling you they're very, very opinionated, strong stances all the time. And then people fight it out and I'm like, whatever, you come to a decision. And so I think that in practice like that, that is the easiest way. And like probably the way that it needs to go is you need some people to step up into a little bit more of a leadership role, kind of in Ethereum. So you're like, all right, we're going to herd the cats. Like we're going to get people aligned kind of on this vision. And then you could still have this like super decentralized process. I mean, like, look, you got all these client teams that are actually going to go figure out the details of the how and all of this.

• 1:06:43Speaker 02

  But taking a little more agency on, okay, we need to align people on the vision. Like we need to agree on a vision to start with. And I think that like the community is ready for that. As evidenced by, I think, like I've been very pleasantly surprised at the reception of like the piece that I put out. And I think a lot of people are more open to this in the last month of reusing. I think that we kind of need to align around a vision more. And so it's just really a matter of how does that vision kind of come about and how do we end up all coordinating to agree on this thing? Because then everything can happen downstream of there. Then we could figure out, you know, what should we prioritize as a result of that?

• 1:07:16David Hoffman?

  Right. And I want to bring up the thing that I said at the very beginning of this podcast, which is I noticed there's like two halves of the article. It's one Ethereum has a coordination problem, which is what you were just talking about. And two Ethereum has credible competition. And I want to emphasize that the idea here is like Ethereum has a coordination problem, regardless of the existence of its competition. And I think there are some people in Ethereum who don't want to admit that it has a coordination problem because the conversation is being brought in the context of, and Ethereum is losing to Solana, and it's going to have less data availability than Celestia, and because it's not as great money as Bitcoin. And so framing it in contrast to these other ecosystem, I think sets off a knee jerk reaction of like, I decline the existence of that.

• 1:07:59David Hoffman?

  And I'm a fan, I'm an advocate of saying if that triggers you, fine. But like internally, we can identify Ethereum's coordination problem inside just discussing Ethereum. Like Ethereum doesn't have a defined, what are we building Ethereum for? It doesn't have, it has this very decentralized leadership, which has pros and cons. And so there is this trade off space that Ethereum has made. And now we are starting to run up into a lot of the costs of, again, maybe even early, very big successes for having a decentralized leadership model. And now we need to learn how to contend with these things. And these are the two bits of advice that John is bringing to the table for the Ethereum community. Mike, what would you add to it?

• 1:08:39Speaker 00

  I was just gonna say, so I feel like I've been saying this for a long time, but there's steel sharpened steel. This is why I've always been a massive fan of there being multiple different ecosystems and communities that are focused on solving different parts of this very large, multifaceted problem of how do we create and scale blockchains? And I think there's a certain reality of how humans work, which is, in order to admit that there's a problem, something actually has to break in a really fundamental way. Otherwise inertia is a really powerful force and it's too easy to just say, nope, this is mostly working. And something that you said at the top of this episode, David, is something, when we did that panel at DevCon, we were both a little concerned about, which is, ultimately, everything that we're saying today, I don't think has a massive impact

• 1:09:24Speaker 00

  on the price of Ethereum on a three or four year Time horizon. I think you're already probably starting to see it. Ethereum has an ETF. I think it's probably going to go up regardless of what comes out of this discussion. But what I worry about there is that it could paper over this larger problem, which is going to metastasize on a longer time horizon. And that would be a real shame because I keep saying this also, I think the market that Ethereum is pursuing here is one of the larger ones in all of crypto. And I agree with John's point about it. It feels, I don't mean this to sound mean or targeted or, you know, what do I know really at the end of the day, but I do, I do think leadership is a component here.

• 1:10:02Speaker 00

  I would be, this is just one man's opinion, but I would be in the camp that you need more, you need the why to come from a smaller group of people and then decentralize the how as much as you possibly can. And I think one of the reasons why people have been reticent to do this is because there's some healthy amount of turnover that has to happen, I think. This is something that really naturally happens, again, I'm going to say in governments, in startups, in large companies, in different types of communities, where if you have two people, two groups of people with competing visions, both of which are viable, one of those visions has to win.

• 1:10:38Speaker 00

  And then some amount of those people ultimately need to leave because people will opt for coherence over almost everything else. And that's, I think, what is lacking. And so I agree with John that I think there needs to be a firmer hand on the stick when it comes to leadership. And that's going to mean most likely some amount of turnover in terms of potentially users. There's also a concept in startups, you have to fire your, your users in the early days. And as you scale and you ultimately end up evolving your product. And so there is going to be some turnover and that's not a bad thing. That's the sign of healthy growth, I would say. And I think that's why as a community, we've been relatively reticent to do this, but I would say, yeah, it's firm leadership,

• 1:11:21Speaker 00

  the willingness to have some turnover or fire community members or users or whoever that ultimately ends up being so that you can get a coherent vision of how to improve your product.

• 1:11:32Speaker 02

  And the one obvious thing that I would point out too is it's not just companies and governments and whatever that happens in. It's exactly what happened to Bitcoin.

• 1:11:40David Hoffman?

  Yeah, it is.

• 1:11:41Speaker 02

  Which is why I like I use that example a few times in the post is I like there's a reason that Bitcoin has a clear vision today is because they had two sides that had very different opinions on what we should do and like what their vision was for Bitcoin. And they fought it out and it was like, all right, we're going to go a separate way. It's like, we're going to go build our thing. And they both focused on that thing and the better one won out. And that's where Bitcoin is as a result today. Because they're in a much cleaner, straightforward place of like, we all agreed on what we're building. This is what we're building. And Ethereum has kind of like sat in that middle ground for a while without kind of the, you know, if there's 20% of the community who disagrees with us completely and, you know, wants to go like wholehearted ETH's money and like kick everyone off the L1 and like, like some of these

• 1:12:25Speaker 02

  things that 80% disagree with, maybe the 20% should go build a different thing. And I think that would be like a reasonable kind of split to kind of end up happening, at least on the margin of like, we kind of need to start forcing these questions and my mind start answering them. I suppose there's kind of like letting them kind of simmer because the result ends up being we end up having two visions which are just like directly in conflict at the end of the day.

• 1:12:46David Hoffman?

  Right. I personally don't think there will be a split in the Ethereum community in the same way that like the Bitcoin chain hard forked into Bitcoin.

• 1:12:53Speaker 02

  Yeah, I don't think that will.

• 1:12:54Speaker 00

  I don't think so either.

• 1:12:56David Hoffman?

  I do agree that we should force the issue and like we, you know, numbers going up now and now we can feel a little bit better about ourselves, but that's just the dopamine, like the IV drip that will kind of like just kick the can down the road. Like you're not actually solving anything. You're just papering over it, as Mike said. So I do kind of, and I enjoy the idea of like, hey, let's make that we, it has to hurt first before it feels better. And again, admitting a problem is the first step. Towards the end of the article, John, you actually gave out a couple ideas for North Stars, ultrasound money versus world computer. Maybe you can take us through this last leg of your article.

• 1:13:31Speaker 02

  Yeah, yeah. So the the last part of it was like, I was trying to make this point of, I think you can very strongly argue for either of the extreme ends and like, I kind of like, make a case for both of them. To kind of highlight that I think you can actually go either of these directions. And I think that either of these directions is probably better than kind of sitting around in the middle. One of them, I call kind of like the ethos money or ethos ultrasound money kind of vision. Where you take a very opinionated view of like, we are primarily just like, we are competing with Bitcoin, like money is the thing. Like, it is, it is a failure if ETH does not become money. And we just like, we start from there and we work outward. So, you know, then you could be, you know, we are probably going to spend a lot of time about being super obsessive about figuring out like, what is the perfect issuance policy? Like, like this is priority number one.

• 1:14:15Speaker 02

  We're going to get our story straight so that we could start footing Bitcoin like even more effectively like, we're going to point out like why their security budget is like completely screwed and why their rollouts are like definitely not going to work. And like, we're going to have a clear, incredible story of like, why this thing makes sense. And then like, once you have a strong story of like, okay, money is the center of this thing. Then the rest of the architecture kind of falls out from that of, okay, ETH is money. And if this is the thing that matters and that every month, most of the technical stuff, we could actually get rid of. L1 scaling like, ah, it's not a big deal anymore. For the same reason that everyone is like desperately trying to build L2s on Bitcoin right now. It's because if your asset is the best money, well, then everyone is kind of forced to build on you because like you are the ledger of record for that asset. Effectively, ultimately, everything does fundamentally have to settle to you as the like, quote unquote, settlement layer.

• 1:14:58Speaker 02

  I hate that word, but like, like in practice, like that's what it ends up being. And so you could take a very strong opinionated view like, all right, like get rid of the execution stuff like, you know, tell all the apps to leave. We don't care. You know, we're not focused on increasing the gas limit. We're not focused on reducing the block times, like none of that matters. It's like, get the money story straight. Like coherent vision, which I think you like, you can pursue that and like, it might work. I don't think it will work. Like my directional biases like that probably won't because I think it's hard to out Bitcoin at its own game. But I think you like, you can make a very clear story there. The other art of a kind of argument, I would say like, or directionally North Star is like the world computer vision of. And this is the one that I directly believe in more is like, if you look at Ethereum today, like the hard

• 1:15:41Speaker 02

  Third question that we need to ask ourselves is, starting with one problem that I think a lot of people take is, I think a lot of people I've seen take this view of like, we should just ignore what the competition is doing and just like, look at kind of Ethereum in a bubble, which I don't, I don't think makes sense. I think you need to like, very much pay attention to like, what is Solana doing? What is Celeste doing? What is Bitcoin doing? Like, how do we kind of fit in there?

• 1:15:59Speaker 00

  Yeah.

• 1:16:00Speaker 02

  Um, and so my, my general was like, starting question is like, what is Ethereum currently like? It's like real unique and defend, defensible value that is providing and moat that it has. And right now, that thing like very concretely is it is the most decentralized, credibly neutral, permissionless execution layer. Like, that is the thing where those properties really matter the most. It's not on the DA side right now in practice, but most changes, like, they don't care if they use Celeste or Ethereum DA. Like, most of them, like, don't really care. I really do care if my money is in AVE on the L1, or if it's on some L2.

• 1:16:33Speaker 02

  Like, I quite frankly, don't trust most of the L2s in large scale with my money. I'm keeping it on the L1. Like, that is a very strong product market fit for Ethereum right now. Like, that example of like, what Eric was talking about, like, I did the meme coins on Solana, but like, for now, I'm keeping my serious money on Ethereum. And I think that, like, credible neutrality and kind of this, like, unstoppable world computer, I think is like a very coherent vision of, in practice, Ethereum does have that advantage today. It is winning at this game. It has a moat there. It has technical properties which make sense for it. The multi-client architecture makes sense here. The liveness properties of Gaspar makes sense here. Solana goes down every once in a while. That is a problem for this.

• 1:17:09Speaker 02

  All that we like, need to do is, we don't need to get to Solana level execution. The, the difference is like, we preserve the credible neutrality, the like, max decentralization, all of these things. On balance, though, we can shift the detail a little bit. I mean, like, the example I basically gave is like, we could change the node requirements to start from somewhere from like, we're a toaster in the Sahara Desert level to like, maybe, you maybe like, maybe you should have to run like a laptop at home, like a pretty good laptop on, you know, in like, good home internet. Like, that seems like a reasonable requirement. Um, and no, you're not, you're not going to get to Solana level performance overnight. Like, it's fine. Like, I don't need Solana level performance to just like, have a large amount of money on AVE and just like, use that normally. But-

• 1:17:51Speaker 02

  Like 2Xing the gas limit to start now and just like getting that a few X over the next few years and like getting the blocks, you know, down to like from 12 seconds to eight seconds. And then, you know, we work our way down to four and two over the next like five years. And you get single slot finality in there. Like we make a very clear credible commitment today. Like we're improving the L1. Like thi- this is an important thing and we lean into that. I, I think that is like a very strong product and like a real thing that you can offer. So I, I think it makes a lot of sense for Ethereum to like lean into that as the kind of like center of the world computer. Cause I, I think that we have sold ourselves a little bit too much of a story over the last couple of years of like,

• 1:18:27Speaker 02

  don't worry, like the L2s are going to figure everything out. Like they're all going to be like these trustless, you know, burn the keys on like the governance, like stage two, perfect rollups in like a year from now. And like everything will be totally trustless. Like that's not the reality. It's not going to happen. I don't think it's ever going to happen. And the majority of them are going to remain like, they're going to have keys to upgrade these things. Like companies are going to want to ship fast. They're going to want a competitive advantage. Like people are not going to trust these at the same levels in L1. They're, they're great. Like we should still have a, a very L2 friendly and L2 kind of like centric vision of, you know, we're promoting all these things. They're necessary. But those L2s are not the world's computer, you know? The, the, the chain that has, you know, a few people on the multi-sig and is run by a public company is not the world's computer that like, it's like, that's Coinbase's computer, which is great. It's a great product. It's awesome.

• 1:19:13Speaker 02

  It's very different than, you know, a chain like Ethereum, which is, you know, a place that, you know, you can get large international financial players, like countries issuing CBDCs. I fucking hate CBDCs, but like they're the extreme example. Like that's the place where you'd probably issue them. If you just like needed like a, a contract where you're just putting them, that kind of thing. So I think that's a real thing for Ethereum to lean into. And then from there, you know, you could tell that like, that gives you a very coherent, like, okay, this gives us a good grounding for that conversation. Should we increase the gas limits now? I absolutely think that you should. If you like, if you agree with that argument that I made, then, you know, you know, people like Don Krod who are tweeting right now, like we should double the gas limit right now. Like that makes a lot of sense. It's obvious with it. We should do that and like make a credible commitment to keep scaling over time.

• 1:19:53Speaker 02

  And I think that doing those things now is a very good forcing function for making us commit to like, this is, this is the direction that we're going on this thing. And at the end of the day, this gets back to the like, the path dependence of it. And you kind of end up competing on all these things. In practice, I think that's like actually the best, I think that gives you the highest probability of ETH winning as quote unquote money in the long term. Is actually just focusing like a little bit less on like the economics and, you know, shouting money at people right now. It's let's just build the world computer. Like if you build that thing and that thing wins. Like ETH is gonna be really valuable. Like that's really not gonna be an issue at the end of the day and kind of the rest of it falls out from that. So that's directly like the kind of the argument that I was laying out in there.

• 1:20:31David Hoffman?

  Mike, what do you think about this direction for Ethereum? Or any new direction for Ethereum? Any new North Star?

• 1:20:35Speaker 00

  I don't really have many notes on that. I think it's an interesting thought experiment to think about how the beam. All right, there was Justin Drake unveiled the beam chain at DevCon. It was in the great episode that you did with him. There were mixed reviews, I would say, on beam chain generally.

• 1:20:52David Hoffman?

  Actually, they're mostly negative.

• 1:20:54Speaker 00

  There was a good amount of pushback. I imagine if he at one point had a slide with the three different buckets of what Ethereum's roadmap was focused on, there was block production, cryptography, and I can't remember what the middle one was. But I do remember he had P0, P1, P2 in each of these three boxes. And at the bottom in red was faster slot times, so four second slot times, and it wasn't single slot finality, but it was a shorter time.

• 1:21:20David Hoffman?

  Three slots, yeah.

• 1:21:21Speaker 02

  And then like fix the issuance was at the top.

• 1:21:23Speaker 00

  Fix the issuance was at the top. I wonder as a thought experiment if he had just reversed the prioritization on that, what the response from the community would have been. Just sit and ask yourself that. I

• 1:21:32Speaker 02

  I still don't think it would have been better.

• 1:21:34Speaker 00

  Maybe not.

• 1:21:34Speaker 02

  Maybe a little better.

• 1:21:35Speaker 00

  I think it would have been because all of these, like I think I'm with you on this idea that focus on world computer, it's a it's a single coherent thing that that people can get to. But again, to me, these, these are all one thing. You know, like the mega trend, I think, you know, David, you mentioned we're in this world of crumbling fiat currency. The way that I have united these two viewpoints, at least in my head of there's a tech component to this and a money component to this is there is the big driver of capital into this space is concern around fiat currency. And that's what's moving capital into L1s. And that's why I think on a long time horizon, this whole discussion that we're having doesn't really matter. I basically, I basically think these L1s are going to go up over a period of time. But then ultimately, people are going to start asking these questions and they're going to matter.

• 1:22:19David Hoffman?

  Right.

• 1:22:20Speaker 00

  And I think that Ethereum has chosen, again, the right viewpoint here. There there is a meme discussion about is this a meme and does this really do anything? Or is there actual utility? And I could give you a million analogues in TradFi that would tell you that ultimately on a long time horizon, the market size for assets that are productive and have some amount of utility is much larger than the meme assets. And so Ethereum has done everything right. It's just this even subtle shift in reorientation in terms of leaning into that originally correct vision of providing more utility, generating fees, that type of thing. And I agree with, I agree with John that the right way to get there is to world computer, move some activity back to the L1 vision.

• 1:23:04Speaker 02

  As far as the talk, that's what I think was missing. I, I actually agree as a result of what, what we agree on as the vision that I would flip those priorities. The, the main thing that I think was lacking was just, he didn't say what the vision was. It was the, it was the epitome of, I, I agree with most of the things that were in that roadmap on like some time scale. And like that, that's cool. But like the, the example I gave in the paper was like, the reason why something like the merge or the beam chain can't be your North Star is because, you know, you can't pitch Ethereum to someone who's like, this is the chain that by 2030 is going to have a ZK consensus and single slot finality and like fix our issuance. Like, like, that's not a compelling vision. The, the vision that like a, a user wants to hear is like, okay, but why? Like, what does it do for me?

• 1:23:49Speaker 02

  I'm saying it's like, we're doing all these things because we are building the world computer and this is going to be the place, like this can be the home of global finance. And like you are going to use this thing and like this is going to be where you store all your money and like, it's going to be great. And, you know, computer in the sky, that like, that makes sense. So I, I think just like giving that vision is largely what we're missing. And then the rest is kind of downshooting.

• 1:24:08Speaker 00

  Yeah. And not to introduce this nuance at the end of this podcast, but there is a difference, I think, in between vision and goals. And a vision, honestly, one of the, the guys who comes up with the best visions in the world is Elon Musk, where if you look up, look up what the vision of Tesla is, it isn't to create the best electronic car in the world. It is to accelerate the adoption of green energy. The vision, the vision for SpaceX is not to transport weight into space at half the cost that it takes, you know, whoever to do it today, Boeing's do it today. They can't do anything. It's to move humanity. You do need this long-term, huge, like inspires people to get out of bed in the morning.

• 1:24:47David Hoffman?

  Aligning.

• 1:24:48Speaker 00

  Vision.

• 1:24:48David Hoffman?

  Aligning vision.

• 1:24:49Speaker 00

  Correct. But then what you ultimately need on a shorter-term time horizon is, okay, but I need to agree that I'm working to on a two-year time horizon.

• 1:24:56David Hoffman?

  Right, right. We still need to sell satellites and actually delivering satellites into space now and to make money now.

• 1:25:03Speaker 00

  Yeah.

• 1:25:03David Hoffman?

  So we can colonize Mars later.

• 1:25:05Speaker 00

  Exactly. Because everyone needs to know how their work funnels up into that big vision. And, okay, Elon Musk getting on stage and saying, "We're gonna move everyone to Mars in 20 years." Everyone's like, "Let's go, Elon, okay." But then the SpaceX engineer that wakes up and thinks about their job on a two-year time horizon needs to know, "What am I doing to contribute to that?" And so you need these two, you need the vision and then you need the goals that roll up into the vision.

• 1:25:30David Hoffman?

  Guys, this has been great. Thank you for, John, thank you for writing the post. Thanks for coming on and helping unpack it. And Mike, thank you for joining and helping me out here. Yeah, this has been great. Thanks, guys. Thanks for having us on. Thank you. Cheers. Bankless Nation, you guys know the deal. Crypto is risky. You can lose what you put in. But we are headed west into the frontier with an unknown North Star that maybe we know by the end of this year, maybe next year. But we're glad you're with us on the Bankless Journey. Thanks a lot.