0:00

Ladies and gentlemen, thanks for

0:02

tuning into the scoop. I'm

0:04

your host, Frank Chaparo. Day four

0:06

of, uh, whatever this is, influenza

0:08

or neurovirus, maybe just a man

0:10

flu, but I couldn't be happier

0:12

or more thrilled to have on

0:14

the other side of the mic

0:16

joining us, Kyle Samani, partner, a

0:18

multi-coin joining us to unpack everything

0:21

that's been shaping the market over

0:23

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going to crypto.fidelity careers.com. Kyle,

2:25

thanks so much for taking the time.

2:28

It's been way too long. How have

2:30

you been? Funny, pleasure to speak

2:32

with you. Good to be back on the

2:34

show. I couldn't even tell you were sick.

2:36

I thought you were about to go

2:39

get ready for your opera debut. I

2:41

mean, I'm still, you know, I've got

2:43

the Starbucks, I've got my bag of

2:45

halls, okay? And I've just

2:47

been extremely, a lot of turmeric,

2:49

a lot of hydration. So yeah,

2:52

most people probably couldn't tell, but

2:54

last night I did have a

2:56

mild, a mild fever. But this

2:58

morning with the grace of God and

3:01

a lot of Ivy Profin and

3:03

Dakewellam, I'm surviving, and

3:05

I made it to the office, so

3:07

everybody here's probably going

3:09

to get infected. So I've

3:11

been doom-scrolling Twitter

3:13

this morning, and I came

3:15

across this account, Defy Muchee,

3:18

or Mutchy. I don't know how

3:20

to pronounce it, but... He put out

3:22

a chart that shows VC funding,

3:25

dating back to 2017, and

3:27

it looks like this past

3:29

year, funding is dipping

3:32

below 2017-2018 levels,

3:34

despite the support

3:37

from government on legitimizing

3:39

crypto. This is

3:42

data from Defy Lama.

3:45

What do you think it's so slow out

3:47

there and do you think that the

3:49

recent like is it is it a

3:51

lag to is there going to be

3:53

a lag basically where the inflows into

3:55

venture funds? Will sort of

3:57

lag the regulatory green light

4:00

that we've received? Yeah, I

4:02

think the reason you're seeing

4:04

slowdown is kind of like,

4:06

I think, your recognition

4:09

of what is crypto useful

4:11

for. You know, I got into

4:13

crypto in 2016 and

4:15

Syria was my first true

4:18

love in crypto. And at

4:20

the time, I was real bought

4:22

into to defy to some extent,

4:25

but actually like

4:27

decentralizing the internet.

4:29

these kind of grand ambitions

4:31

of removing, you know, the

4:33

centralized power, Facebook, Google,

4:36

etc. And I no longer believe in

4:38

that part of the crypto vision.

4:40

Multicoin has made a bunch of

4:43

investments to that effect over

4:45

the years. We've probably put,

4:47

I don't know, 20, 30 million maybe

4:49

a little more than that to work

4:51

in that things that would kind

4:53

of broadly fit in that thesis. And

4:55

we have since stopped. as we have

4:58

fundamentally recognize that these

5:00

systems are financial systems

5:03

first and foremost. And that, you

5:05

know, we need to be focused on investing

5:07

in things that are fundamentally

5:09

tied to innovations in

5:11

finance. Those innovations could be

5:14

mechanical, meaning like whorples,

5:16

for example, or MED

5:18

infrastructure. Obviously, that can be

5:20

derivative systems like drift or

5:22

communal and bar lens. you know,

5:24

stable coins, all of those things

5:27

are very explicitly financial in

5:29

nature. And then, you know, the other big

5:31

area we've spent a lot of time on is

5:33

deep-end, and, you know, the core innovation of

5:35

deep-end is one of capital

5:38

formation. So, yeah, although you don't think

5:40

about, like, helium telecom or hive mapper

5:42

mapping, you know, as finance, those, the

5:44

reason we were the first money in those

5:47

systems and the reason we continued to

5:49

be, you know, pretty meaningful

5:51

industries and deepen. is what

5:53

we're looking for new opportunities

5:55

and new markets where you can

5:58

leverage that deepening. capital

6:00

formation to, you know, solve the

6:02

chicken and egg problem in a way that

6:04

was not possible before. So that's

6:07

kind of how we evolved our thinking

6:09

around these systems. I actually heard a

6:11

blog post and I believe August of

6:13

23. It was kind of like

6:16

modulators that integrated something

6:18

something something something something

6:20

but the core premise of the post

6:22

was these systems are useful for

6:24

trading and payments and like

6:26

we're gonna you know, analyze that this

6:28

was more about like salonversity theory

6:31

and versus celestial, but obviously

6:33

the core premise of the log post

6:35

was these are payment systems and

6:37

trading systems, and, you know, fast

6:40

forward two years since then, and we

6:42

still stand by all those beliefs very

6:44

firmly, and those beliefs have guided our

6:46

focus in our investing. And sorry,

6:48

deciding back to your original question about

6:51

funding, I think I think a lot

6:53

of people were putting money into all

6:55

kinds of other stuff, you know, and

6:57

like decentralized signal and yeah whatever and

6:59

and I think a lot of that money

7:02

is starting to state out your point is

7:04

that to a large extent it doesn't

7:06

necessarily have to do with the

7:08

regulatory ire that existed that existed

7:10

for sure and that was an

7:13

impediment but I had more to do with

7:15

one cryptos inability to sort out

7:17

that chicken egg problem that you described

7:19

and also its inability to latch on

7:21

to the right applications and

7:23

use cases that fall within the buckets

7:26

you think are the most prime for

7:28

gross via payments and decentralized

7:31

financial services. Yeah, it was

7:33

like, you know, good money hitting bad,

7:35

good money hitting bad, good money

7:37

hitting bad time and time again.

7:39

And so that's created an

7:41

environment juxtaposed with what

7:43

has been a bad

7:45

regulatory environment up until the last

7:47

month or so. that's created this

7:49

sort of uneasiness for different types

7:52

of capital to enter the space.

7:54

I mean, just look at your average Canadian

7:56

pension fund. I mean, how you want

7:58

it, I think, was an... FTX, the other

8:01

was in a Celsius. I mean, they

8:03

couldn't catch a break during

8:05

the last cycle. Okay, so

8:07

in a sense, though, I think you

8:10

would argue or contend that

8:12

both of those issues have been

8:14

solved to a large extent. The

8:17

inability to operate as

8:19

a financial services or

8:21

payments crypto person has

8:24

been sort of ameliorated

8:26

and the. We've kind of galvanized

8:28

around the right use cases now,

8:30

whether it be stable coins or WWAs or

8:33

whatever have you, or or deep in which

8:35

is having a moment. Yeah, correct. We

8:37

have these areas now that, you know, there's

8:39

definitive kind of product market fit,

8:41

you know, deep in as one,

8:44

obviously kind of getting what I'm going

8:46

to call like stable point infrastructure, so

8:48

getting stable coins out to the

8:50

world, whether it's to be a

8:52

companies like bridge. or be it

8:54

companies like Eldorado or PDP or

8:57

Binance PDP or any of these

8:59

other systems. There's obviously

9:01

lots of groups now that

9:03

are doing really well, focused

9:05

on cross-border stuff. I think

9:08

Felix Pago is the one

9:10

I'm most familiar with. They're

9:12

crushing it in Mexico,

9:14

from what I understand, and

9:17

they're expanding in the

9:19

last couple of months, is labor

9:21

market places. and specifically

9:23

focus on super tight integrations

9:26

of finding those services into

9:28

labor marketplaces. So like the

9:30

kind of canonical example of this

9:33

would be something like deal or upwork or

9:35

these kind of things. I think there's

9:37

going to be some labor

9:39

marketplaces that are built that are

9:41

cryptonative in terms of these stable

9:43

coins for payouts, but also even

9:46

more than that, I think they will

9:48

actually provide full stack financial

9:50

services. to the supply side of

9:52

these different market places. So

9:54

we're pretty excited about that stuff

9:56

and then spending some time there.

9:59

So you know. Those are the kinds of

10:01

areas that we've kind of focused

10:03

our venture investing and I

10:05

think the challenge for the market

10:07

has been there's way over funded

10:10

given the use cases. People, the

10:12

LPs have funded crypto venture

10:14

funds with the implicit implication

10:17

that crypto will like touch all

10:19

parts of the economy in some form

10:21

or fashion. Touch is a weak word. Will

10:24

like substantially impact all

10:26

parts of the economy all parts

10:28

of the economy. And I have

10:30

a narrower view, which is I think

10:32

it will add a very

10:35

high impact in financial services,

10:37

and otherwise I generally

10:39

am not, I don't care. And

10:41

that would explain, you know,

10:43

the chart and mentor funding

10:46

that we open up the

10:48

conversation talking about. So

10:50

when you hear things like, you

10:53

know, coin bases building for

10:55

the future of the, the

10:57

crypto economy or sort of

10:59

this idea that everything within

11:02

our sort of commercial

11:04

world will touch crypto to

11:06

use that word. Do you do you

11:08

would you argue that it's

11:10

really just going to have

11:12

that high impact within the

11:15

financial services of commerce

11:17

so excluding like you know

11:19

logistics or shipping or

11:22

trucking or real estate, I

11:24

guess real estate sort of falls

11:26

into like real world assets, but

11:28

where do you sort of draw

11:30

the line in terms of what fits

11:32

in the scope? Is it, is it

11:34

just what we think of what Wall

11:37

Street firms do or are there

11:39

other sort of edge cases? Yeah, I

11:41

mean, I mean, the area that is like,

11:43

most interesting that is

11:45

not strictly fan of Fanta

11:48

services that we have invested

11:50

in is deep in. And, you know,

11:52

that so far, you know,

11:54

Multicoin has made bets in

11:56

Helikom, Helium, I've mapped

11:59

Earth mapping. We just announced double

12:01

zero and piped, so those are

12:03

the kind of sector, the D-0,

12:05

we just announced that recently, which

12:08

is like hyper-dited D-P-S. So those

12:10

are the kind of sector of

12:12

the D-pin we've done. And we

12:15

just announced double-0 and piped, so

12:17

those would be out of bandwidth

12:19

marketplaces of different forms. So we've

12:21

done five or six different areas

12:24

of D-pin. None of those sectors

12:26

I just named have really anything

12:28

to do with one another. The

12:30

commonality across all of them is

12:33

using this deep and native capital

12:35

formation to bootstrap these networks. We

12:37

continue to believe there's going to

12:40

be a lot of other areas

12:42

of the economy that this deep-end

12:44

model can apply to. And so

12:46

we continue to look for them.

12:49

Actually, I'm glad you mentioned shipping

12:51

and logistics. We have not placed

12:53

that there, but... It is an

12:55

idea that we've talked about internally

12:58

and we almost got to a

13:00

deal in 2021 with a team.

13:02

They end up not pursuing it.

13:05

But we spent a lot of

13:07

time with a team in 21

13:09

talking about the opportunity for like,

13:11

could you set up a mini

13:14

3TL warehouse in your garage and

13:16

your like standard vanilla neighborhood in,

13:18

you know, Athens, Georgia, or Austin,

13:20

Texas or whatever? We obviously don't

13:23

know if it'll work. I'd say

13:25

most logistics experts will probably tell

13:27

you that's insane and it could

13:30

not work. But like it's an

13:32

idea that is like you know

13:34

very intellectually interesting and you know

13:36

I'm optimistic that someone's gonna spend

13:39

out of FedEx, UPS, DHL, Amazon

13:41

at some point and hopefully will

13:43

call us and like you know

13:45

try and make that happen. That's

13:48

like that's the kind of thing

13:50

that we continue to look for

13:52

in our venture business. Washington. Obviously

13:55

we've put a lot of money

13:57

into a lot of campaigns in

13:59

2024 vis-a-vis. fair shake and other

14:01

efforts. So in that respect, it's

14:04

not surprising that they're giving us

14:06

reverence and deference as it were.

14:08

Yeah, so I have the, your

14:10

President Trump invited me to come

14:13

to the White House last week.

14:15

I was incredibly honored for the

14:17

chance to go. I got to

14:20

sit down with about 25 or

14:22

so other leaders in the industry.

14:24

You know, Brian Armstrong, Chad Castorilla.

14:26

Wenga Vos twins, a whole bunch

14:29

of others, were there. And we

14:31

had a great roundtable session that

14:33

was organized by David Thacks and

14:35

Bo Hines. And you know, my

14:38

biggest takeaways from the event were

14:40

a few fold. One was that

14:42

Secretary Besson, Secretary Lutnik, and Administrator

14:45

Loeffler of the SBA, were all

14:47

in the room, and they were

14:49

there for the entire time. And...

14:51

You know they, whenever we all

14:54

sat down with their ideas, notepads

14:56

and pens so we could take

14:58

notes on stuff. And I was

15:00

very fortunate that I was seated

15:03

at an angle where I could

15:05

very clearly see Loeffler, Besson, and

15:07

Lutnik, and all three of them

15:10

had their notepads out, they had

15:12

their pens out, and they had

15:14

their pens out, and they were

15:16

taking down notes. And like, you

15:19

know, whatever complaints and suggestions we

15:21

all have. Those guys, you know,

15:23

David and Bo know all that

15:25

stuff. But, you know, the cabinet

15:28

members are just less likely to

15:30

be in the weeds on all

15:32

of these issues, but they're not

15:35

going to take one-on-one conversations with

15:37

everybody. And so it was really

15:39

awesome for me to see that

15:41

they committed two hours. They sat

15:44

there with us, they listened, they

15:46

took notes, and they were asking

15:48

really good questions. That to me

15:50

was like a very underreported win

15:53

for the ecosystem. If you didn't

15:55

really watch it. You maybe didn't

15:57

get a sense for the conversation

16:00

that this was like an actual

16:02

sort of. discussion and questions were

16:04

asked and, you know, issues were

16:06

raised. What was the most interesting

16:09

question that you think was posed

16:11

to the group? I mean, the

16:13

press was not in the room

16:15

for, you know, 90% of it,

16:18

the press came in for like

16:20

the last 10%? So some of

16:22

the stuff was like Chatham House

16:25

rules. Correct. I don't think I

16:27

can refer to specific questions that

16:29

people asked other than I can

16:31

tell you that, you know, Ludnick

16:34

and Besson and Lothler. We're all

16:36

asking very good questions. Yeah. But

16:38

that was really awesome to see.

16:40

You know, I think the other

16:43

thing that really stands out to

16:45

me is, you know, the president

16:47

went out of his way to

16:50

show the world that he cares

16:52

about this stuff and that he's

16:54

committed to making it happen. Obviously,

16:56

the appointment that's kind of started

16:59

with the appointment of SAS in

17:01

his role, but now we've seen,

17:03

you know, multiple EOS. and you

17:05

know organizing all these people to

17:08

get together and like he wants

17:10

to hear from from everybody directly

17:12

I don't know you know what

17:15

more you could ask for than

17:17

that. Yeah I mean that's what

17:19

everybody's been asking for basically is

17:21

just the ability to have some

17:24

form of a dialogue with Washington's

17:26

key stakeholders and we had a

17:28

lobbyist on the show yesterday and

17:30

this was the The core thing

17:33

that folks wanted was parody with

17:35

every other industry that's regulated in

17:37

this country, whereas the former administration

17:40

painted this brush of crypto as

17:42

just being this bastard child that

17:44

had no interest in ever being

17:46

regulated in any form, rather than

17:49

just wanting to have parody. So

17:51

I guess to sort of round

17:54

out the topic of regulation. Again,

17:56

going back to the top of

17:58

the. conversation, to what extent do

18:00

you think? I think there's a

18:03

lot of folks who are a

18:05

bit dismissive or wanting to wait

18:07

and see what actually happens before

18:09

making any big moves, but in

18:11

terms of capital, in terms of

18:14

capital flowing into crypto, for a

18:16

venture and liquid perspective, maybe more

18:18

so the latter, does this move

18:20

the needle in the short to

18:22

medium term? You know, I can't

18:25

really comment on what traditional VCs

18:27

are going to do or not

18:29

to. I really don't know. My

18:31

general sense is they're sniffing around

18:33

more than they were two years

18:36

ago, but you know, I don't

18:38

know if they're coming back in

18:40

force. I think the more important

18:42

question is a lot of the

18:45

capital that was invested in crypto

18:47

venture starting to look at crypto

18:49

hedge funds. In our LP base,

18:51

we have had three of our

18:53

largest LPs who were only invested

18:56

in our venture funds have all

18:58

called us since the election and

19:00

said, hey, we would like to

19:02

explore, you know, your liquid-fund product,

19:04

your hedge fund product. And I

19:07

generally think all three of them

19:09

are going to come in here

19:11

in the next month or two.

19:13

So we feel pretty good that

19:15

the ties are shifting. My co-founder

19:18

Tushar went on a podcast with

19:20

Ray Hindi at L1 Digital about

19:22

nine months ago. And... They were

19:24

very clear at the time that

19:26

where two char said, we believe

19:29

that there's a better risk adjusted

19:31

opportunity in liquid markets than private

19:33

markets. And nine months later, we

19:35

still believe that's the case. At

19:38

Multicoin, we've been calling all of

19:40

our venture fund OLLPs and telling

19:42

them that. They have historically not

19:44

really listened to that, but they're

19:46

starting to come around to it.

19:49

I think time is back to,

19:51

you know, the very first item

19:53

we talked about of like... The

19:55

focus area of crypto and what

19:57

crypto is useful for and how

20:00

that impacts funding opportunities. My general

20:02

belief today is the easiest

20:04

money to be made in crypto is

20:06

buying liquid names that are the

20:08

winners in their respective areas. And

20:10

I'm going to ignore Bitcoin

20:12

because the coin is kind of

20:14

a ton of special snowflake here.

20:17

But you look at core

20:19

L1 infrastructure. Salonated the fastest

20:21

horse today. And then, you know,

20:23

I look at all of the infrastructure

20:25

built on top of that. Pomino, drift,

20:28

Gido. Piss, these kind of teams,

20:30

they are all in the poll

20:32

positions in their respective

20:34

areas. And I think

20:37

that there's really asymmetric

20:39

opportunities to be

20:41

had. Investing in liquid names

20:43

that, you know, are in first place.

20:45

We have not seen in the

20:47

last seven years anyone

20:50

come up with a coarse set of

20:52

thought of requirements for

20:55

financial infrastructure other

20:57

than cheap, fast high throughput. Like,

20:59

those are the three things everyone wants.

21:01

And you can argue over, like,

21:04

security bottles, the programming

21:06

languages, and other stuff. But,

21:08

like, those are the three things people

21:10

care about. And look, I've heard every

21:12

one of the world pitch, why they're L1,

21:14

L2, L3 is better, but have not been

21:17

convinced that, forget about technical.

21:19

Just, like, what do people want?

21:21

I've not been convinced that there's

21:23

anything else in the world people

21:25

want other than those three things. And

21:28

assuming that, it needs to be the

21:30

case, then, you know, betting on the guys

21:32

who are the winners today, and liquid

21:34

liquid names is going to be

21:36

the best risk reward. And that's

21:39

exactly what we do in our

21:41

hedge fund. And, you know, that's what

21:43

we tell the altis. Was it that

21:45

liquid was more unattractive or

21:47

was it that venture was purely

21:50

just more attractive? The reason venture

21:52

has got an overallocated too

21:54

is because as far as I

21:56

can understand. 98 to 99%

21:59

of institute. indicators. They had

22:01

teams segmented between hedge fund liquid

22:03

market teams and private market teams

22:05

and the private market teams kind

22:07

of specialized between like traditional private

22:09

equity and venture and the people

22:11

who and basically every single institutional

22:13

firm that got interested in crypto

22:15

with venture people and the venture

22:17

people you know want closed and

22:19

the venture funds and the venture

22:22

funds and so it's just been

22:24

I guess the primary reason why

22:26

capital is flown into these closed

22:28

and the venture structures. That

22:30

makes sense. It's as simple as

22:32

just who was who was on

22:35

first. So let's go back to

22:37

what you're bullish on and unpack

22:39

your Solana thesis and what it

22:41

makes what makes it best position

22:44

to be the chain for a

22:46

more internet native capital markets. How

22:48

is your thinking on Solana evolved

22:50

over the years? Is there anything

22:53

different about how you view it

22:55

today than you did? three years

22:57

ago or four years ago now

22:59

I guess. I mean the salon

23:02

on main net is five years

23:04

old actually is approximately as of

23:06

today salon on main net is

23:08

is five years old. You know

23:11

I think the biggest thing that's

23:13

changed in our thinking is you

23:15

know we've gained clarity on on

23:17

the use cases. We've also gained

23:20

clarity on. do actually, quite rightly,

23:22

the challenges of doing an on

23:24

chain order book. We wanted an

23:26

on-chain order book from the moment

23:29

we invested in May of 2018.

23:31

And, you know, when people started

23:33

building for real on salon in

23:35

2020 and 2021, the first thing

23:38

that a lot of people kind

23:40

of wanted to build was an

23:42

on-chain order book. And quite frankly,

23:44

the tech wasn't there. Laincy, it

23:47

was not low enough. You know,

23:49

chain would fall over. You'd get

23:51

you to get... What's it called?

23:53

Like micro forks and stuff? It

23:56

just... Yeah, you have to turn

23:58

the crank and old serum and

24:00

stuff. So it was just not

24:02

quite ready for rhyme time. As

24:05

the chain has gotten more stable,

24:07

as latencies come down, as droopits

24:09

increased, that's made it more usable

24:11

for on chain order books. We're

24:14

still not quite there, but I

24:16

think we're getting really close. I

24:18

think kind of the last missing

24:20

piece that we really need for

24:23

on chain order books to thrive

24:25

is this idea called conditional liquidity

24:27

that we heard about in a

24:29

recent blog post called. internet capital

24:32

markets. And, you know, I think

24:34

as this all of this infrastructure

24:36

has now really come to be

24:38

there, I think we're in a

24:41

place where on-chain order books can

24:43

work. They're never going to outperform,

24:45

you know, by an answer to

24:47

point base. But I think, you

24:50

know, there's kind of an S

24:52

curve here in terms of the

24:54

performance and value. And I think

24:56

in the next three to six

24:59

months, it'll be generally accepted that.

25:01

you know the on Jane order

25:03

books are now kind of going

25:05

over the the top of the

25:08

that curve and the yes curve

25:10

and at that point I think

25:12

they will be functionally usable for

25:14

both makers and takers comparable enough

25:17

to you know finance coin this

25:19

so I think that that's probably

25:21

been like our biggest way we

25:23

had to evolve our thinking is

25:26

just like we underestimated the difficulty

25:28

of on chain order book but

25:30

we never gave up on it

25:32

and I think we're pretty close

25:35

now. How do you think about

25:37

these elements or these features or

25:39

these these financial primitives? That's a

25:41

lot on locks. How do you

25:44

think about that relative to Ethereum

25:46

and what's possible there? I mean,

25:48

the Ethereum core problem is they're

25:50

not optimized for anything. You know,

25:53

Ethereum is going to turn 10

25:55

years old here in about three

25:57

months. I still to this day

25:59

have never heard a single person

26:02

at the Ethereum Foundation. say, hey,

26:04

we've looked at all of these

26:06

things we theoretically could use the

26:08

system for, and we are going

26:11

to focus on X or Y,

26:13

or maybe X and Y, but

26:15

more importantly, we're actually going to,

26:17

you know, optimize for not A

26:20

and not B and not C.

26:22

The definition of focus is saying

26:24

no to things. And they absolutely

26:26

refuse to do so. And so

26:29

like... Now your question is what

26:31

can Slaata do to the theory

26:33

and can't? I mean, the answer

26:35

is quite frankly on-change finance. Nadi

26:38

and NASDAQ have been running at,

26:40

you know, micro-second scale for decades.

26:42

And like, that is the expectation

26:44

in finance is that the order

26:47

book is operating really, really fast.

26:49

Slaata is obviously not going to

26:51

get the microseconds. But, you know,

26:53

I think we have a path

26:56

in the next, you know, a

26:58

few years. to get from 400

27:00

milliseconds down to maybe 100 milliseconds

27:02

and be 150. And like that

27:05

is good enough. Again, it's never

27:07

going to be as fast as

27:09

90 NASDAQ, but you can run

27:11

finance at the 100 millisecond timescale.

27:14

You can't run finance at a

27:16

10-second timescale. That's just an on-starter.

27:18

And like that's the core of

27:20

it is you have to be

27:23

focused on latency and gas cost.

27:25

And you know, it shouldn't be.

27:27

You shouldn't approach the business for

27:29

a position of scarcity or a

27:32

framework of scarcity. Bitcoin is in

27:34

theory, I'm from inception, we're always

27:36

like, oh my God, scarcity, there's

27:38

a living out of block space,

27:41

and we're going to price the

27:43

block space, and Solana's perspective has

27:45

always been, hey, let's have the

27:47

software in place, let's let Moore's

27:50

law do its thing, and run

27:52

a billion transactions in parallel. And

27:54

it is a fundamentally different frame

27:56

of reference for, you know, supporting

27:59

global finance. So obviously

28:01

you've heard this argument, I'm sure

28:03

a thousand times, point out the

28:06

fact that Ethereum roll-ups,

28:08

or the roll-up-centric model

28:10

provides more security, more

28:13

long-term decentralization than Solana. Why

28:15

do you think that this

28:18

monolithic approach is superior?

28:20

Is it just boiled down to

28:22

what people want and how people

28:24

want to engage with financial

28:27

markets? Is it to... work and be

28:29

relatively fast and be cheap

28:32

and be cheap. A latency. Yeah, I

28:34

mean, the the roll-up, presented

28:36

roadmap has a few problems.

28:39

I'll touch on the intro roll-up

28:41

problem and there's the

28:44

inter-rollup problem. Intro-roll-off,

28:47

you know, there's as far as I

28:49

can tell, no substantial progress

28:52

towards any meaningful

28:55

decentralization for a given

28:57

roll-up. There's been lots of discussion

29:00

about it. I know a bunch

29:02

of teams like Espresso and Astria

29:04

raise money to do the stuff. As far

29:06

as I can tell, no one uses

29:08

any of that stuff. And all

29:10

of the roles we have today

29:12

are all entirely centralized in their operations.

29:15

And so like, it just kind of strikes

29:17

me as bizarre. It's like, if

29:19

the Koreans started off maximum

29:22

decentralization, you know,

29:24

and... then like our path

29:26

to scaling is to centralize

29:28

and then re-essentialize. It's just

29:30

kind of bizarre. And you know, Vitalic

29:33

wrote the canonical roll-up-centric

29:36

roadmap blog post in October

29:38

of 2020. That's one of those

29:40

Polish. And I'll have to be him and

29:43

Kordiafti, but we're thinking about

29:45

those ideas for probably the 18

29:47

months or so preceding that.

29:50

And so it's been four and a

29:52

half years since then. And like,

29:54

where is our, you know, in

29:57

production proof that...

30:00

you're going to re-

30:02

decentralize. So like at this point,

30:04

you know, don't tell me, show me. And

30:06

like, I just quite frankly

30:08

don't believe you, you know? It's

30:10

been four and a half years. Like,

30:12

this is a lot of time. And like,

30:14

the data is just not there

30:17

to support the theory. So, and

30:19

look, and like, if you're the

30:21

market leader, like, you have to,

30:23

you can't just talk. Look, startups

30:25

are famous for, like, like, say

30:27

you make it. That's like classic

30:30

startup shit, fine. Dude, it's a

30:32

300 billion dollar asset. You are, you

30:34

are, you know, the market leader. Like,

30:36

you know, you can't, you can't just

30:38

make all these promises and then

30:40

not deliver. And like, they just

30:42

haven't delivered. That's

30:45

just indisputable. Do you

30:47

think there's a cultural problem under

30:49

group? Yeah. Oh, I mean, there's

30:51

a lot of cultural problems

30:53

underneath. The most important

30:55

of which is they don't care about

30:58

users. And maximum inclusivity

31:00

is at odds with focus. And, you

31:02

know, Ethereum has always been like

31:04

rainbows and unicorns and everything was

31:07

welcome and we're here to decentralize

31:09

the whole internet. And it's like,

31:11

well, cool, fine, but that also

31:13

means you're just going to fucking

31:15

suck because you're just not going

31:18

to do anything correctly. And like that's

31:20

why they are where they are. And

31:22

that culture is certainly pervaded,

31:24

not only Ethereum foundation, but

31:27

also, you know, the L2s. issue with the

31:29

roll-ups is that they're not actually

31:31

scaling the thing that matters,

31:33

which is the core execution

31:35

in these respective systems. The,

31:38

look, I'm no expert in like virtual

31:40

machine design, but like at the

31:42

highest level, you know, there are there are

31:44

two ways to process transactions

31:47

either serially, meaning one at a

31:49

time or in parallel, meaning, you

31:51

know, I mean, using a multi-core

31:53

processor to do multiple things

31:55

at the same time. And the heating

31:58

is 10, you know, nine and a half.

32:00

years old at this point, and

32:02

it's still a single-threaded system. And

32:04

there's been lots of talks about

32:07

parallelizing the VVM since 2015, and

32:09

I haven't done it. I can't

32:11

tell you exactly why, but as

32:14

a fact of the matter, they

32:16

have not done it. And like,

32:19

if you look at how Silicon

32:21

and Scaled in the last 20

32:23

years, the vast majority of aggregate

32:26

computational gains have come not from

32:28

improvements in parallelism. And so, and

32:30

like that's why today, CPUs are

32:33

all, you know, 13, 24, 30

32:35

core, GGE, modern GPUs are tens

32:38

of thousands of cores. And like

32:40

they're not taking advantage of that.

32:42

And so, you know, they say

32:45

we're going to scale via Erolos.

32:47

And I'm like, okay, well, you

32:49

know, here's what the silica is

32:52

doing. Like, the software is not

32:54

taking advantage of it. That's been

32:57

true for eight years and still

32:59

as sure today. the interroll-roll-up problem.

33:01

And, you know, it really sucks.

33:04

You move east from roll up

33:06

A to roll up B, and

33:08

assuming you want to do it,

33:11

you know, approaching instantly, you know,

33:13

instantly may mean one or two

33:16

or three seconds. But if you

33:18

want to move east from base

33:20

to arm drum, you have to

33:23

pay some slippage to do that.

33:25

And like, that really sucks. Like

33:27

you're really telling me that's the

33:30

future of finance. Slippage is, you

33:32

know, when I send $10, the

33:35

other guy gets $9.99, it's, you

33:37

know, it's just, I just don't

33:39

think that's an acceptable configuration for

33:42

the future finance. And so, um,

33:44

I really don't see how they're

33:47

going to win. The abhorrence in

33:49

your tone over the unbridled flimsiness

33:51

of Ethereum's vision really ties back

33:54

to your core thesis of crypto

33:56

being... relatively structured and more narrow,

33:58

which is an interesting sort of

34:01

way to kind of tie a

34:03

whole bow over this conversation. you're

34:06

doing not necessarily mine. But I

34:08

would like to close with just

34:10

one more question being thoughtful of

34:13

your time. Looking towards the next

34:15

12 to 6 months, what is

34:17

the biggest signal you're looking for

34:20

or internally that will validate your

34:22

thesis on Solana's dominance? Oh, I

34:25

mean, the leading indicator here is

34:27

probably trading volumes. And then that's

34:29

like very public and and legible

34:32

because we've already because we've already

34:34

we've already sort of we've already

34:36

sort of matched on most metrics

34:39

right so does salana need to

34:41

get to we're at parody so

34:44

to sort of prove out your

34:46

thesis do we need to be

34:48

at 2x on y metric or

34:51

3x on z metric yeah does

34:53

that make sense I don't know

34:55

if you're necessarily looking at that

34:58

way but but like what sort

35:00

of signal in the market will

35:03

like. I mean, maybe you already

35:05

have gotten that signal, but what's

35:07

amends it, I guess? Yeah, to

35:10

me, what's amends it in the

35:12

eyes of the public is probably

35:14

not a single, very visible, legible

35:17

metrics, such as trading volume or

35:19

REV. To me, it's capitulation of

35:22

developers, and that's not a lively

35:24

legible signal. And it requires like

35:26

some willingness to dive into things

35:29

and perceive what's happening on the

35:31

ground. It is my assessment that

35:33

the capitulation of Ethereum developers started

35:36

somewhere around October, November. Like really

35:38

in earnest. Yeah, well you saw

35:41

a lot of the dot eats

35:43

removing it from their... That's sort

35:45

of like in January, I think.

35:48

Actually, in my an adult conversation

35:50

to the VC with entrepreneurs. It

35:53

started actually a little before that.

35:55

And you know, I'd say the,

35:57

the, you know, consensus assessment. of

36:00

East Denver was capitulation

36:02

of Ethereum-des, we've moved

36:04

into Slana, anecdotally, I

36:06

can tell you that the intellectual

36:09

capital that's building net

36:11

new ideas is predominantly

36:13

on Slana. We have a very biased

36:15

deal flow funnel, given that we are.

36:17

So take where I stay with the

36:20

grand assault. But I don't, I no longer

36:22

believe that is anecdotal to

36:24

Multicoin. I believe if you

36:26

call every VC, you can ask them.

36:28

What chain is the

36:30

leading intellectual capital building

36:33

on? I believe the overwhelming answer

36:35

will be Solana. And so I

36:37

think that right now there's kind of

36:39

a very nice arbitrage where if

36:42

you're on the ground and you're

36:44

looking at what people are doing,

36:46

I think that will inform the future.

36:48

I think that that will become

36:51

increasingly obvious to the public

36:53

at large over the next six

36:55

months. But eyes wide open like

36:57

there's no... easy, line graph, you

37:00

know, line graph way to

37:02

just like understand that. That

37:04

really requires kind of deep, odd

37:07

research. We shall see. Well,

37:09

thank you so much for taking

37:11

the time. We'll talk to you

37:13

soon. We'll have you back

37:15

in six months once all those

37:18

dot eets have switched over to Dot

37:20

Souls, which, you know, what's the beat?

37:22

I just think they need to be

37:24

a little less self, right? I think

37:26

they need to be a little less

37:28

self-interest. Yeah. They've been able to have

37:30

a lot of problems.