Do We Hate Solana?

The truth on how we feel about Solana. Today we define the fundamentals, compare other networks, and ultimately share how we think SOL stacks up in the Layer 1 race. ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 https://%E2%81%A0https//k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask https://%E2%81%A0https//bankless.cc/MetaMask ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum https://%E2%81%A0https//bankless.cc/Arbitrum ⁠ 👾GMX | V2 IS NOW LIVE https://bankless.cc/GMX 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap https://%E2%81%A0https//bankless.cc/uniswap ------ TIMESTAMPS 00:00 Intro 01:41 Addressing The Criticism 07:32 Defining The Fundamentals 14:05 Comparing Other Networks 19:11 Takes from Crypto Twitter 22:55 Our Thesis 26:19 Solana UX 30:37 Ethereum's Flaws 33:38 Discord Reactions ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠ https://www.bankless.com/disclosures%E2%81%A0

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

• 0:00Ryan Sean Adams?

  The bull market's in, and when you use Solana, it's got fantastic user experience. Let me just say that. One of the best wallets come out of the community, the Phantom Wallet. Fantastic user experience, right? It feels very good to get a transaction through to end up pay like, you know, micro fractions of a cent and to do many of the things that the original Ethereum vision promised.

• 0:24Ryan Sean Adams?

  All right, David, so we put out a Bankless Takes yesterday and I got a lot of feedback from that.

• 0:29David Hoffman?

  Lots of feedback.

• 0:30Ryan Sean Adams?

  YouTube comments. And actually, the highest signal for me is the Bankless Citizen Discord.

• 0:35David Hoffman?

  Yeah.

• 0:35Ryan Sean Adams?

  So that's where, you know.

• 0:37David Hoffman?

  You know, people are real there.

• 0:40Ryan Sean Adams?

  Yeah. And so some of the feedback is basically like, I guess I would summarize it.

• 0:44David Hoffman?

  Can we start with what's the Bankless Takes episode? What is the structure of this?

• 0:48Ryan Sean Adams?

  Yes, Bankless Takes episode is a episode that you and I kind of formulate based on the last week of our hot takes, things that we're thinking about or the conversations.

• 0:59David Hoffman?

  Just takes, opinions, stuff we're thinking about.

• 1:01Ryan Sean Adams?

  Opinions and the conversations that might be going into crypto Twitter. I think when we were preparing this week's takes agenda, it was basically like, what I really cared most about was talking about the bull case for Ethereum.

• 1:15David Hoffman?

  Right.

• 1:15Ryan Sean Adams?

  And how, yeah, and how it feels like it has a lot of strengths. And, you know, 2K is undervalued, like going to the bull market. So that was my main take, the main thing I wanted to talk about. Also, on the menu, there was a big Twitter discussion about Solana. There was a conversation about is Solana doing a flipping? We had a discussion about this and I was like, David, I don't even know if we should talk about this at all.

• 1:41David Hoffman?

  What specifically? The Solana element?

• 1:44Ryan Sean Adams?

  Yeah, the Solana element because.

• 1:45David Hoffman?

  The ETH element was ETH's fundamentals are really strong. And also fundamentals are, and understanding them are important. And one of the meta conversations that was happening in the Twitter sphere was the back and forth between Fishy and Santiago on the podcast. And Fishy was all about like, you just said that Solana has a 20% chance of flipping Ethereum. What fundamentals are you basing that on? Basically saying like, you can't, you are just making this up because how can you not? Because of the fundamentals are missing.

• 2:18Ryan Sean Adams?

  So I totally understand how they were related and that's why we ended up including it. The reason that I was cautious about that is because like. That can feel like punching down, or that can feel like dunking, and that can feel like negative hate content.

• 2:31David Hoffman?

  Right.

• 2:32Ryan Sean Adams?

  When you're not saying-

• 2:33David Hoffman?

  Because it's our takes, because it's our opinion.

• 2:35Ryan Sean Adams?

  Yeah, when you're saying that like, this one thing is great, but this other thing that the market thinks is great, and that a whole bunch of users think is great from an asset value accrual perspective, this other thing, like, is, maybe isn't so great.

• 2:50David Hoffman?

  Right. The incumbent, the big one, is fantastic, and the disruptor, the smaller one, the one tenth size of the one, is shitty and bad.

• 2:58Ryan Sean Adams?

  So I didn't want to, like, my instinct was, we shouldn't include it, like, we shouldn't talk about it, because just the perception is, you're propping up one thing, and you're punching down the other.

• 3:08David Hoffman?

  Right.

• 3:09Ryan Sean Adams?

  When really, I think, we ended up including it, and the case for that was basically, well, it's all the same conversation about, like, what are crypto fundamentals?

• 3:17David Hoffman?

  Right.

• 3:17Ryan Sean Adams?

  And that is the topic. So, like, part of the Twitter conversation here, this is a tweet from Italyo, "Just watch the latest Bankless HQ episode," and quoted, "Solana is more narrative than actual fundamentals." One of us may have said that, probably said that. And he goes, "You have an L2, and 527, you have an L, sorry, you have an L1 and 527 L2s stuck in a vicious infrastructure cycle, but that's fundamentals for these guys. I'm going to put Ryan in the BitBoy category from now on." So I had a nice little conversation with this guy on Twitter, and I said this, "Ethereum was also more narrative than fundamentals last cycle, but by fundamentals,

• 3:59Ryan Sean Adams?

  I mean profitable block space sales, and I defined it as such in the episode. It's fine if you disagree, I could be wrong."

• 4:05David Hoffman?

  Right.

• 4:05Ryan Sean Adams?

  It's a Bankless Takes episode, so we give our hot takes. One thing I'll just say there is, like, that's what the episode is. It's our hot takes. I don't know that, um, is this episode format a good idea?

• 4:17David Hoffman?

  It's in the name. It's in the name.

• 4:19Ryan Sean Adams?

  I don't know. Some people like it. Some people like the space. I guess some the spice. I guess some people get upset. Uh, when we give kind of our raw takes, but that that's the episode format. And he goes, he continues. For whatever reason, your hot takes about any network that's not ETH, L2s are just bad takes. I understand we are all biased towards something, but come on. I asked him, what am I most wrong about? Would you say? He's the entire thesis around Ethereum layer twos versus Solana. And I said, it's an investment thesis. You're welcome to have your own, argue for it, right? Like, that's it. It's an investment thesis. I think the quest here is, and maybe this was kind of lost in translation, or just like the perception of us continually dunking on Solana.

• 5:03Ryan Sean Adams?

  Is I am like, and you are, um, trying to understand how to value assets in this space. Yes. It's been one of the longest pursuits of what we've been trying to do in this space. I think that's important to have some sort of consensus take that we all as an industry and that everyone like looking at these assets, looking to buy them, has a framework for valuing them. Because if we don't, okay? Any pump and dump, like memetic narrative thing can go from like one to 2,000, 20,000, and then back to zero. And it's all memetic. It's all a bunch of Dogecoin.

• 5:45Ryan Sean Adams?

  And I, my hope for this industry is that we get beyond memetic pricing. And we actually, just like other capital assets in the real world, we have some takes on how to value the space. And yes, we might not get it right. We have to change this over time, but that to me is like a sign of maturity. And it's important. So I'm always looking for it. And I'm open to adjusting what the fundamentals are and how to value the space. But like, If we don't have some sort of foundation for how we talk about these assets and value them, aren't we just falling prey to whatever like pumping up narrative memetic thing exists? And we're just a bunch of memes, aren't we?

• 6:25David Hoffman?

  You give room for things that absolutely have zero fundamentals to pretend that it does have fundamentals. And one thing I think, one mistake or just problem that we produce when we do these bankless takes episode is that there's a lot of motivations about like, hey, why are we saying the things that we're saying? Or doing the things that we're doing that aren't totally upfront because people haven't been listening to bankless forever. And they don't understand like David and Ryan's emphasis on fundamentals or the motivations. And then we are also the opinionated media company who's got opinions about stuff. And so those two particles combine and it results in the effect of just like Ethereum's got the fundamentals. That's why we emphasize it. That's why we talk about it. It's good for the industry.

• 7:10David Hoffman?

  That the number two blockchain has very strong fundamentals. That's why I believe in the flipping and that's just grounding crypto in reality, which it's been disconnected for, for almost its entirety of its existence. These are the things that we want to see more of in the industry. And then when we see like so much just like narrative excitement around Solana, and we don't see that same grounding in reality, it turns into us punching down.

• 7:35Ryan Sean Adams?

  I want to, I want to kind of flip that a little bit because it is true. And this criticism is important that we hear and receive that is just like, we have a narrow definition of fundamentals right now.

• 7:46David Hoffman?

  Yeah, more narrow than what people like to accept or want to accept or agree with.

• 7:50Ryan Sean Adams?

  So like the narrow definition of fundamentals that we were talking about in that episode is basically like capital asset fundamentals. It's like P and L. It's like, like I'm under the like belief right now. I think that we can start to value our layer one assets based on how much cash.

• 8:14Ryan Sean Adams?

  It actually throws out like discounted cash flow, like school of finance. Other people will say, what the F are you doing? Like, one, it's way too early to do that. This asset class can't be valued like other asset classes yet. We're still trying to figure this out. And so don't even talk about, you know, block space profit.

• 8:34David Hoffman?

  Right.

• 8:35Ryan Sean Adams?

  Or revenue or anything like that, doesn't matter. Another school of thought will say, well, actually, we don't want any of these things to be profitable at all. Like, it's a fantastic strategy for a blockchain to subsidize user fees in order to get more, more users through issuance. Like, that's a brilliant way to do it. It's called business development. It's called growth. And why are we getting on our high horse when we have like, you know, the population of a midsize US city.

• 9:02David Hoffman?

  Right.

• 9:02Ryan Sean Adams?

  Using crypto right now. Right? And like, we're actually, the prize is millions of users. And so the actual fundamentals here should be user experience, like active users, like the apps, the dev teams. Like, is it, is it, is it actually going to work in onboard people? And you, a bunch of ETH holders and maximalists, are narrowly defining it as how much block space you sold. And like, who cares? It's all about network effect and users. And people are using chains like Solana and they're like, this is better.

• 9:38David Hoffman?

  Right.

• 9:38Ryan Sean Adams?

  It's way better.

• 9:39David Hoffman?

  Yeah.

• 9:40Ryan Sean Adams?

  It's way better than Ethereum, for instance, Ethereum layer one, main chain from a UX perspective. And they're seeing the fragmentation of layer twos and being like, so this is your great solution to that? That's what they mean by fundamentals. And we have a more narrow definition when we were talking about it in yesterday's episode.

• 9:56David Hoffman?

  Okay, I think, I think that our narrow definition of fundamentals is correct in.

• 10:06David Hoffman?

  Well, it's just correct. In the longest of terms, it becomes more relevant and I will take the fact that in the near term, that it doesn't really matter. It's more noise. And you know, if you invested based off of like block space sales or fundamentals, you would not have made as nearly as much, you would be have underperformed the market probably in the fullness of time because it's all narrative based, right? And so there's this era in crypto in which narrative really, really matters because this is very young industry and we're all trying to price in the future when there's such little amount of reality grounding us.

• 10:39Ryan Sean Adams?

  But I think that's what, that's what people stumble on David, when you say it's all narrative based, right? And that's what they like, people are jumping on and I think justifiably so in some cases. Bad UX is not just a narrative. Like, that's a fact.

• 10:55David Hoffman?

  Yes, yeah.

• 10:56Ryan Sean Adams?

  Paying $10 for a transaction, like when you're just trying to send money from one place to another, that's not a narrative. That's a fact.

• 11:06David Hoffman?

  Yeah, but it's like, it's derived, the whole idea of block space sales is to me like a first principles version of evaluating fundamentals. And I accept that it's like, that's a narrow way of doing this. Like, just having good UX is something that people experience like and firsthand and that turns into their version of reality, which is totally like valid. And it's like secondary to the fact like, that's great that you have UX, but does it translate into block space sales? The reason why block space sales are so important is that one of the core tenets of the bankless thesis is positive economics. Because positive economics means that your

• 11:46David Hoffman?

  system is going to stand the test of time. It captures more value than it leaks. If your system leaks more value over time, then in the fullness of time, it will eventually not work. It will eventually dissipate. It might be, if you only leak a little bit of value, it might work for like, I don't know, a very long time, thousands of years perhaps. And so granted that there is wiggle room here with how fast your system leaks value versus how fast it doesn't. Like Terra Luna leaked way too much value way too quickly. And but still, the point stands that there's this very concrete way of evaluating systems, which is, does it, is it positively economic? Does it capture more value?

• 12:27Ryan Sean Adams?

  Yeah.

• 12:27David Hoffman?

  And then you can say like, okay, well, Solana, yes, it leaks value, it inflates. But look what you get from that inflation. You get like super strong UX, you get, you know, instant transaction finality, you get like insane throughput. And so, yes, like Solana is not positively economic now, but what it is now is fantastic UX. But I would still call that like a second order of fundamentals. Does that make sense? Is that a fair take?

• 12:52Ryan Sean Adams?

  I, I think so. It was like, I think another way to like, maybe frame this and clarify it is, I think some people still do a lot of equating with like, the network and the asset in all cases, right? And this probably comes from, you know, Bitcoin, where Bitcoin Network and the Bitcoin asset, they're, they're much more like singularly unified because, I mean, previously for a very long time till we had like, you know, all of the NFTs and, and BRC 20s that are being spun, spun up on Bitcoin. There were no apps. The only app was, you know, sending Bitcoin from one person to another. That was the, the only app. And so Bitcoin, the network and Bitcoin, the asset were kind of like synonymous. When we get into a smart contract world, okay, and like chains like Ethereum or chains like

• 13:35Ryan Sean Adams?

  Avalanche or Solana or any of these or Cosmos, right? You can have a disconnect between the network and the value that is created on the network for users and the value accrual mechanisms of the token themselves. So like the token is not the network and the network is not the token, right? And like, I think this is an important investor sort of take in general. Like, again, maybe not in the early stages, but in like, kind of the later stages of things. You can have a network that creates so much value for the world. I think of networks like,

• 14:11Ryan Sean Adams?

  You know, like Napster, for instance, like peer-to-peer file sharing, a lot of like, quote unquote, "value" was created. Did any of those

• 14:18David Hoffman?

  On the periphery, yeah. The value was created at the margins.

• 14:22Ryan Sean Adams?

  Yes. Did they capture that value in the form of an equity or a token or an investable asset? No. So they had value creation without like value capture. And my biggest worry in general about some crypto assets is even if they create value, it doesn't necessarily mean that the thing that you're buying is able to capture that value.

• 14:42David Hoffman?

  Right. Which is like the big problem with Uniswap right now, right? Creating infinite amounts of value and then is like, you know, kind of a shit token.

• 14:49Ryan Sean Adams?

  I'm sensitive to it too, because it was honestly, it was a huge problem for Ethereum.

• 14:53David Hoffman?

  Right.

• 14:53Ryan Sean Adams?

  Uh, in 2019. And so what in 2019, there would be a common retort from the Bitcoin community of basically like ETH is just useful for gas.

• 15:05David Hoffman?

  ETH is gas.

• 15:06Ryan Sean Adams?

  ETH is gas.

• 15:07David Hoffman?

  It's a velocity token. It's a payment token.

• 15:09Ryan Sean Adams?

  Velocity token. Yes. It's not going to

• 15:11David Hoffman?

  People are just going to hold the minimum amount of ether they need to use the applications.

• 15:15Ryan Sean Adams?

  Right. And so the quest, like for me, since that that time is to actually understand, okay, well, why is Bitcoin even valuable in the first place? And like, I feel like I have a framework for understanding that, like, you know, monetary premium primarily.

• 15:28David Hoffman?

  Like reservation demand is basically all it is.

• 15:30Ryan Sean Adams?

  And then, and then, okay, why is Ether going to exhibit value accrual at all? Well, you've got monetary premium, but it's also a capital asset, right? So it's actually throwing off cash. And so like, I just apply that same framework to other layer one assets. And anyway, just because the network, the network could be absolutely fantastic. And like, I think it's fantastic that Tron is being used in the way that it's being used to make people more bankless. I think that like Cosmos in the way that it's being used is like fantastic. I think that Solana is also, you know, fantastic to the extent that people are using these

• 16:12Ryan Sean Adams?

  apps and the user experience as well. But the question is, will the token accrue value? One reason I actually like jettisoned from the Cosmos community was like, I didn't see the value accrual around the Atom token.

• 16:24David Hoffman?

  Right.

• 16:24Ryan Sean Adams?

  And like, to be honest, I still don't.

• 16:26David Hoffman?

  Yeah.

• 16:26Ryan Sean Adams?

  So nothing against Cosmos. Like, it's fantastic. I just don't understand how the investment is good. And sometimes I think people Like, put both hats on at the same time? In that, are you saying, you know, the Solana network is bad? Or it doesn't have fundamentals? No, the network can have fantastic UX and fundament, all of these things. The question in the episode we were trying to answer yesterday was like, well, how does value accrual work? And I still have a lot of questions on that story for Solana. Does that make sense?

• 16:58David Hoffman?

  Kraken knows crypto. We are all on the journey of building a better financial system. And Kraken has been leading that charge for over a decade. Crypto is world-changing tech and it's Kraken's mission to accelerate the adoption of crypto, so that you and the rest of the world can achieve financial freedom. Head over to kraken.com to see what crypto can be. And once you buy your assets on Kraken and you need to start exploring DeFi, make sure you explore it through your MetaMask portfolio. A deeper, more expansive way to use MetaMask that gives you the battle station you need to navigate the bull market. You can buy, swap, bridge, and stake your crypto assets with ease. I already know that you have a MetaMask wallet, so go check out your MetaMask portfolio. Did you know that Arbitrum is the fourth-largest chain by economic activity in crypto? How did Arbitrum get there? Well, with low fees and fast transactions, of course.

• 17:42David Hoffman?

  With over 600 apps on Arbitrum, the Arbitrum ecosystem has a solution for you. Whether you're into DeFi, NFTs, or you simply need a fast chain, or even if you want your own dedicated throughput with an Arbitrum orbit, Arbitrum has a home for you. Visit arbitrum.io to get started with your journey with one of the most active chains in crypto. And if you want to try out a newer Layer 2 to the Ethereum family, try out Cello, a battle-tested EVM Layer 1 that has recently decided to move to Ethereum. Cello is the mobile-first, carbon-negative blockchain built for the regenerative future. With the Cello Layer 2, gas fees will stay low and you can even pay for gas using ERC20 tokens. Follow Celloorg on Twitter and visit cello.org to shape the future of Ethereum. Uniswap Labs just released the Uniswap Mobile Wallet for iOS,

• 18:26David Hoffman?

  the newest, easiest way to trade tokens on the go. You can easily create or import a new wallet, buy crypto on any available exchange with your debit card, and you can seamlessly swap on mainnet, Polygon, Arbitrum, and Optimism. So you can now go directly to DeFi with the Uniswap Mobile Wallet. Safe, simple custody from the most trusted team in DeFi. Download the Uniswap Wallet today on iOS. And last up, GM. But specifically, GMX V2, offering even faster on-chain trading for DeFi liquidity providers. GMX is a permissionless decentralized exchange that offers perpetual futures and spot trading. Liquidity providers receive 63% of all of GMX's protocol fees, and GMX users get a referral link to lower fees for you and your referrals. Try out GMX V2 now at app.gmx.io. Now, onto the show.

• 19:11David Hoffman?

  This is a tweet that I put out after my Kyle Simony, "The floor is modularity" tweet. And so I kind of did a same thing for Solana. It's like, "The floor is transaction fee revenue." And Solana is like this guy who's like not touching the floor, right? And so like, the bankless take on this, the me and you take, is like, you need transaction fee revenue to be sustainable. If we want our blockchains to stand this test of time, they need to be positively economic. And then like, if you go and scroll down, you'll find like Solana community members seeing like, "Wow, David's dunking on Ethereum." Like, kind of like flipping it on its head because transaction fee revenue to many in the Solana world is extraction, right? And so this idea of a positively economic blockchain is synonymous with extraction

• 19:56David Hoffman?

  from its user base. At least that's a part of like, one of the shards of the Solana narrative that many people are coming out there. And so it's one of the same like muddling of like the investment case for Solana and the application layer for Solana. These things can be bullish separately, and you can be bullish on the Solana app layer because it's minimum viable extraction. And if you believe that, that's great, because then applications get to use Solana, they can have super fast transactions, or everything is subsidized. But then, using that same argument to say, "And therefore, sole token is bullish," is missing a link here, because the sole token is specifically subsidizing the value of the application.

• 20:37David Hoffman?

  It's a transfer of the value capture of the sole token to the value produced by the Solana application layer app. And like you get to say like, well, the token is still going to go up in price because like all the apps are built on Solana. Solana has more mind share. If it has more mind share, people are just going to buy it.

• 20:53Ryan Sean Adams?

  Has inflows, more inflows, right?

• 20:55David Hoffman?

  More buying inflows. But I would call that a narrative based buy pressure. Because like, oh, the apps are on Solana, I'll buy Sol.

• 21:02Ryan Sean Adams?

  Narrative based, or you could call it, like if you're being generous, like a monetary premium too, right? I think kind of narrative based is like proto monetary premium. Like monetary premium at some level is just like everything left over.

• 21:14David Hoffman?

  Right.

• 21:14Ryan Sean Adams?

  Um, after you take out the reservation demand for using the asset as a product, like, sorry, as a um, payment token to buy block space. And after you take out the discounted cash flow, the cash that you actually receive as a staker of uh, of Sol tokens, for instance. So it's just like this monetary premium category. And, and to me, that's like the narrative category, the meme category. Bitcoin has this, Ethereum has this, and it is the hardest piece to value. And so that's why I very, very much like blockchains that produce, you know, cash. Cause you can kind of like evaluate that.

• 21:51David Hoffman?

  The meme editor ought to be based on top of the fundamentals, right? That we don't want memes for memes sake, that's like Dogecoin. We want memes based off of measurable metrics that you can go take to like crypto skeptics out there and like here, uh, here are the apples.

• 22:07Ryan Sean Adams?

  TradFi is like, hey, let me explain how.

• 22:09David Hoffman?

  All the money out there, right?

• 22:10Ryan Sean Adams?

  Yeah. I um, I do think that actually, you know, the, the, uh, the floor is transaction fee revenue where Solana has no transaction fees. I, I don't, I think that it's actually a pretty good strategy not to try, like to not make its money on user transaction fees. And to do it on the backside, which is like, I actually think if the bull case for Sol tokens is that Sol holders make money on MEV, basically. Sol stakers make money on MEV.

• 22:35David Hoffman?

  So that was the, one of the other tweets I got in trouble with the Solana community about is like, well, you know, Solana is just as extractive as Ethereum. It just obfuscates it better. If Solana is positively economic because people are going to buy sufficient Sol tokens so they can have priority MEV extraction. Like that's just an abstraction in the backdoor extraction.

• 22:53Ryan Sean Adams?

  Yes, it's basically like. Again, it's just our thesis so far from what we've uncovered, our journey, our crypto journey for David and myself and what we think we know is blockchains make money in two ways. They either sell blocks. This is how they produce cash. They sell blocks or they sell the ordering of transactions inside those blocks. What I'm saying is if Solana-

• 23:15David Hoffman?

  Or both.

• 23:15Ryan Sean Adams?

  Or both.

• 23:16David Hoffman?

  I mean, it is both. It's just a matter of where's the balance between those two.

• 23:20Ryan Sean Adams?

  And Solana is being like, let's set transaction fees at zero.

• 23:24David Hoffman?

  Right.

• 23:24Ryan Sean Adams?

  And the bulk case for soul tokens themselves is you make money on the ordering of transactions inside the gate. Now, if they don't make money on either, okay, then they're not producing cash.

• 23:35David Hoffman?

  Negative economics.

• 23:37Ryan Sean Adams?

  Yes, but it could still be worth something in that like narrative monetary premium, memetic value category or uses money category.

• 23:46David Hoffman?

  But that's just based off of, that's based off of very little. That makes me scared.

• 23:51Ryan Sean Adams?

  It makes me scared too. I just think that's the least-

• 23:54David Hoffman?

  Like I don't, not to invoke this, but just like when you're based off of something very little, very feeble, it can crumbling down. It comes crumbling down because there's not much holding it up there.

• 24:04Ryan Sean Adams?

  Although somebody will listen to this and be like, this is coming from the Ethas money guys. Like, really? Are you serious? I mean, because we are proponents, we're proponents of monetary premium for ether, the asset.

• 24:14David Hoffman?

  Yes. Because of the fundamentals. It's a result of not first. It's the tail wagging the dog.

• 24:22Ryan Sean Adams?

  Wait, but I am bullish on Ethereum apart from the amount of cash that it throws off. Like I'm bullish that it is an asset that's going to be used, let's say throughout the Ethereum economy that includes a monetary unit, you know, we've called this economic banner.

• 24:40David Hoffman?

  A unit of account in OpenSea. It is the collateral inside of MakerDAO and Aave.

• 24:43Ryan Sean Adams?

  CDPs, like you take a loan against it, all of these things. That's like monetary premium.

• 24:48David Hoffman?

  People buy it and stake it for yields.

• 24:50Ryan Sean Adams?

  Solana could have the exact same. It could have like zero cash flow ability, but just massive monetary premium.

• 24:56David Hoffman?

  Reservation demand.

• 24:57Ryan Sean Adams?

  And so, and soul tokens, it's just uses collateral in the Solana ecosystem. And like, it could be worth hundreds of billions of dollars based on that.

• 25:06David Hoffman?

  Sure. It, on the triple bond asset thesis, you're missing a leg. And in my mind, that's that's just bigger. So yeah, that's I also don't believe in Bitcoin.

• 25:17Ryan Sean Adams?

  Well, but that's the thing is like, that's where I feel like then you have to compete as a monetary instrument. And then you really have to have like a, a strong, like I'm a little Bitcoin or old school on this, where you have to have some sort of like monetary schedule and credibility and credible neutrality around that schedule so that it gains legitimacy and like, it doesn't feel like some centralized actor can kind of tinker the monetary policy at any point of time.

• 25:44David Hoffman?

  Yeah, I mean, I mean, the Solana like monetary policy is relatively stable. It like it's inflating at seven percent or something a year and then.

• 25:50Ryan Sean Adams?

  But who can change it? How does that change?

• 25:52David Hoffman?

  I mean, that's up to Solana governance, which is also in a relatively weak state. But that's because it's like a newer system and they haven't really been focusing on governance to the degree that other systems have. Cause they've been focusing on just like shipping, execution, execution. They've got, you know, parallel fee markets, right? Like, uh, local fee markets, parallelization. And they've, they've been doing the execution thing that Ethereum has been like, well, we're going to do, we're going to do the research and governance thing. And I was like, well, Solana's like, well, then I'm going to just execute.

• 26:20Ryan Sean Adams?

  Well, that's, and that's where I think some of the pushback and criticism from bankless citizens.

• 26:25David Hoffman?

  Right.

• 26:26Ryan Sean Adams?

  And also from people on, on Twitter is basically like, you guys are living in La La world, right? Like basically, yeah, like basically Ethereum, get your shit together. Like UX sucks right now. Layer twos are hard. This whole bridging experience, like, you know, connecting, doing all these things, changing networks and meta mask. It all kind of sucks. And what they're hearing is Ethereum's like, well, we'll abstract that away. It'll be better in the future, but like, we're not talking about the future. We're talking about here and now.

• 26:55David Hoffman?

  Right. Bull market's in, yeah.

• 26:56Ryan Sean Adams?

  The bull market's in, and when you use Solana, it's got fantastic user experience. Let me just say that, like Solana really excels from a user experience. It's one of the, one of the best wallets come out of the, the community, the phantom wallet, fantastic user experience, right? It feels very good to get a transaction through to end to pay like, you know, micro fractions of a cent and and to do many of the things that the Ethereum, like the original Ethereum vision promised, right? Collateralized lending, trading of perps. Like, it's all, it all feels very DeFi, and it feels like you're doing this without kind of a Binance or centralized exchange. You're holding your own private keys, right? So people are saying that and they're like, okay, but this is here and now. And by the

• 27:40Ryan Sean Adams?

  way, it has these aspirations and promises to massively, like, the monolithic chain strategy or the integrated chain strategy is like a strategy about fantastic UX for users. And is it back to the SUZU? Like Ethereum has abandoned its users type of, it's that kind of take, I think. And I don't think that's an unfair take.

• 28:03David Hoffman?

  Yeah. And the way that I would describe this goes back to our episode with Mike at Bolito, when we had him on. It's like Cosmos is approaching the trilemma, the scalability trilemma from one angle. Ethereum is approaching it from a different angle. And Solana is approaching it from the last angle, right? And I think it's you and me, we came into crypto in the moment where Ethereum kind of really set our vision for the world, for this industry. And the Ethereum perspective of you come in to the scalability trilemma, you start with and do not compromise on decentralization, and then you figure out how to get the others. Whereas Solana is coming in, well, we're going to start with scale and we're going to figure out how to get the others.

• 28:44Ryan Sean Adams?

  Start with users and the apps.

• 28:45David Hoffman?

  Start with, yeah, start with users, right?

• 28:47Ryan Sean Adams?

  More decentralized over time.

• 28:48David Hoffman?

  As a BD system, as a BD strategy, great, killing it, works, has already been working. The whole narrative around Solana is absolutely fantastic right now. It's like deafening. Then the fullness of time, and this was my point to Mike, I'm sure you remember, is in the fullness of time, where you elect to start on the scalability trilemma, and the thing that you're trying is like critically important, and then you'll try and get the others, determines in the wholeness of time, what your system looks like at completion. And so Solana, which compromised on decentral- In the hopes of gaining it later will look like a system that compromised on decentralization and tried to get it later.

• 29:29David Hoffman?

  Ethereum is a system that did not compromise on decentralization, but tried to get scalability layer and later. And then in the fullness of time, it will look like that. And maybe these systems really look very similar to each other. But the path dependency is critically important. Right now Ethereum has to like figure out bridging and a chain abstraction. Solana doesn't have to do that because it's monolithic. Solana has to figure out decentralization. The problem that I see Solana running into is it's got its high inflation rate of Solana. At the same time that it's in a network infancy phase. I would prefer a network that would have a higher inflation rate. While it didn't have a smaller set of actors than it would once have in the future.

• 30:11David Hoffman?

  Because if you combine high proof of stake inflation with a low set of ecosystem participants. Then you have the inflation going to an early set of adopters that become difficult to unentrine. You're accidentally formally enshrining the early set of people because you compromise on decentralization. So I guess really the conversation is like, which is the easier problem to solve? Ethereum has decentralization solved. Solana doesn't. Solana has UX solved. Ethereum doesn't. Which is the easier problem?

• 30:39Ryan Sean Adams?

  I think that I agree largely, but also like we run the risk of like someone hearing that and feeling like there's some hyperbole there. I wouldn't say that Ethereum, for instance, has decentralization solved, right?

• 30:52David Hoffman?

  It's comparatively solved.

• 30:54Ryan Sean Adams?

  There's things like Lido, for instance, there's like, and this is the case that.

• 30:58David Hoffman?

  Yeah, but like again, like we call Lido, Lido is a problem, but also just like in the grand scheme of things. We have to also parameterize how big of a deal that problem is. It is the next biggest problem for Ethereum decentralization. It is not the problem for Ethereum decentralization.

• 31:12Ryan Sean Adams?

  Here's, here's the thing. What if the market doesn't really value decentralization? Or what if it doesn't value the type of decentralization that Ethereum is putting forward? And I think this is Bankless Citizen Scott Connor, who we're talking to in Discord, made this take on Twitter. What we are market testing now is how valuable decentralization actually is. Goes on and says Ethereum has one definition of decentralization. Solana has a slightly different definition of decentralization. This goes to the point that we were making the other episode where like to me, it's not so much about like the feature set of decentralization. We can now move towards how coercion, corruption resistant is your protocol. Look at, you know, do you sanction transactions actually make it through?

• 31:56Ryan Sean Adams?

  But I think he has a valid point here. It's like, how much do users care about decentralization? And that, that is the, at some level, that's the meta test of crypto. Right? Like, what is Bitcoin? It's a big decentralized consensus database. How, how much do people care about that? Well, what's the value of Bitcoin right now? You know what I mean? Like, the entire crypto experiment is finding out some value proposition for decentralization. And like, you're letting the market to, so at some level, it's not about you and I saying like,

• 32:32Ryan Sean Adams?

  we'd prefer that Solana did it this way, or some other chain did it this way. And like, that, that's the way Ethereum is doing it. It's not up to us, it's up to the market. And I, I recall a conversation that you and I had recently with, with Chris Bernuski. And he was basically like, guys, you have to be comfortable with the new cohort of people that join crypto not sharing the values that you have. And I,

• 32:55David Hoffman?

  Which sums up the fight between the Solana community and the Ethereum community so well.

• 33:00Ryan Sean Adams?

  I, I remember hearing that and just being like, yeah, yeah, but I want to convince them.

• 33:04David Hoffman?

  Right.

• 33:04Ryan Sean Adams?

  And he's like, no, no, no, no, no.

• 33:06David Hoffman?

  The kids, they need to appreciate centralization.

• 33:10Ryan Sean Adams?

  He's like, he's like, no, just, I mean, you'll run your, you'll exhaust yourself doing that. You'll start to sound like shrill. You'll start to sound like okay boomer if you try, if you overextend that.

• 33:22David Hoffman?

  Which is definitely the reaction that I tend to get when I give out my Solana hot takes on Bankless takes episodes on Twitter.

• 33:28Ryan Sean Adams?

  There you go. That's, that's it. And that's what, that's what I think the Bankless community is saying to us and what some of our listeners are saying to it. And what I would say is, is message received. So here's Alchemy Greg here from the Bankless Discord saying, I'm honestly getting Pretty tired of all the dunking and stoking the fire about Solana from the hosts, that's you and I, David, on crypto Twitter and in the show. I know they get triggered and are ETH maxies for life, but it's coming off pretty unprofessional and childish. No reason both can't exist and succeed in their own right. We all survived the last bull. Let's try to bring more positivity into crypto. I appreciate more coverage of Solana on the pod, but it seems impossible for either of them to just say any positive, anything positive. Y'all talk smack, basically, is it? Let me, let me just say something positive about Solana.

• 34:11Ryan Sean Adams?

  More private keys and more hands. Fantastic. Fantastic. Better user experience, onboarding more people to crypto. Fantastic. Many of the builders I've met in this space are absolutely fantastic.

• 34:24Ryan Sean Adams?

  And, you know, I would, I would say to Alchemy Greg, you know, message received. Okay, so I think we could do.

• 34:34David Hoffman?

  It goes back to one of the original things I was saying. It's like, well, we come in with a bankless takes episode. We've got our foundation. We've got our theses and then we export them in a podcaster, YouTuber fashion, out of our mouths into the microphone.

• 34:46Ryan Sean Adams?

  Yes.

• 34:47David Hoffman?

  And we're sometimes like YouTube dance monkeys in order to like, you know.

• 34:51Ryan Sean Adams?

  Well, I mean, those are, those are like real, like, those are my takes.

• 34:55David Hoffman?

  Those are, those are our takes. The delivery of them is sometimes like, we just get riled up. You and I believe in stuff. We really believe in stuff.

• 35:05Ryan Sean Adams?

  Yeah.

• 35:05David Hoffman?

  And that comes out by default. Like it's kind of just like who we are. Yes.

• 35:11Ryan Sean Adams?

  Was it, but, but I think as, as investors, we definitely have to be strong conviction, but like weekly held as well, right? You have to, you have to be ready to kind of, you know, change things up.

• 35:22David Hoffman?

  Survive in crypto, you need to be able to call bullshit. And perhaps our bullshit senses are not appropriate at this phase of the market because everyone that, like, we are right now in the inflection point between bear and bull. And according to like the words that we've used previously on the podcast before, all the tourists are gone, all the settlers are here, the people that are clearly in it for the tech are here, right? At the, this is the, it's right now in the market is going to be when that's the most true. And sometimes we still have our walls up as if this was, we were still getting attacked by like the Terra Luna frog army. Which, by the way, sometimes I do get like harassed by the Solana community and like, oh, you guys remind me of like getting the lunatics army on me. And so like, like we also, we need to do better

• 36:06David Hoffman?

  in our reflections and statements about Solana. And it's impossible to ask like the Solana community homogeneously to do the same. But like, yo, sometimes, just like being on Twitter and then having takes about like an antagonistic tribe, you attract some people who are just insane people. And then the same kind of thing with the Bankless DAO incident. Like, there's like real signal and then it just gets lost to like the lunatic margins of every single tribe.

• 36:32Ryan Sean Adams?

  Yeah, well, what I would love to hear from Solana as it matures. And by the way, Ethereum, if you go back to like the beginning of the last cycle, Ethereum was pretty shit at like talking through how you value ETH. But there like wasn't a good framework, there wasn't a good kind of understanding of it, there wasn't a good narrative of it. And like, I think we helped with that in trying to like, understand it. I would love something similar through this. It would be a bear, it would be a bull market success story for me if we came out of this and we had something a bit more substantive for value accrual for the sole token. All right? So your network can have millions of users and that can all be fantastic.

• 37:17Ryan Sean Adams?

  And I would just love to see the early signs of how that accrues back to the sole tokens. Maybe it's MEV, maybe it's monetary premium. I don't know, like some bridge to help speak the language of things that I feel are more grounded in crypto and what I call fundamentals.

• 37:34David Hoffman?

  For like this entire time. Give me the triple point asset thesis for Solana. To which some people say like, the Solana asset thesis, the Solana investment thesis is a triple point asset. It's just at different levels of parameters.

• 37:48Ryan Sean Adams?

  I totally, then that's fantastic.

• 37:50David Hoffman?

  Then write that, somebody write that.

• 37:52Ryan Sean Adams?

  Well, anyway, we'll be on a quest to continue to understand it. And yeah, I guess those are the takes on the takes episode. I don't know where we're gonna release this episode.

• 38:00David Hoffman?

  We just gave the takes on a takes episode. Here's our takes about the takes episode we just did.

• 38:04Ryan Sean Adams?

  My god, anyway, if anyone appreciates this, you know, here you go.