Transcription
Hey, Carter. Welcome. Um, this is a very special version of our chat. We usually have one of these at least a year. And, um, one thing that's different from my perspective is that there's a lot less t-shirts and a lot more suits in the room. I know I'm having trouble collecting t-shirts at different conferences. I'm running low.
And uh and one of the things that uh both of us have seen Ethereum from the perspective of is developers and uh a lot of that has been just let's build the infrastructure. Let's make sure we can support what we think um is needed in the space or how we can replace anywhere from existing systems or just add more efficiencies. And the thing I'm kind of curious about at first is we're nearing 12 years um in this space, 10 years of just Ethereum fully being on mainet. And I wonder from your perspective, do you feel like this is the regular pace of things or did you expect things to get here much sooner and was 2026 was the year that we needed these things or certain things had to have happen for us to get here? How do you think about are we on time or on track or off track?
Um, so I think uh when in the early days when we were thinking about how long this might take to really kick in, um uh some um optimistic of us uh felt, hey, this this stuff is so cool. Um of course people are going to eat it up right away. Uh and that was true and that was a small subset of of the population. Um uh but it it does take a long time for technologies to diffuse into the world. Uh AI is remarkable. Um it's just so powerful that it is uh it's the the fastest adoption curve uh to a billion users I think in history. Um there are some social media things that uh that took a few years uh before that. Um but I guess uh uh the question to ask is uh why should people care about this technology uh for it to actually gain traction?
Um, so it's it's easy to see why uh crypto nerds would care. Uh we like uh consensus algorithms and tokenization and things like that. Uh it was easy to see why uh certain uh DeFi nerds uh would care. Uh, so you've got uh finance people um uh joining up with the crypto people uh and building really interesting things. Uh it was easy to see why uh artists would care uh in control of their intellectual property and uh um do fun things, trade fun things, uh buy fun things. Um uh but in terms of the rest of society, uh why should people care?
So we've had wave after wave of innovation of these subsets, small subsets of the population who are really just building stuff and then kicking the tires on the stuff that they built. Uh so we've been spending 12 years roughly um building enabling technology for um for Ethereum and decentralized protocols to break into the mainstream. Um and so why should the world care? Why should governments care? Why should financial institutions care? Why should the general population care?
Um, it's essentially because the world is composed of platforms. Um there there's uh Facebook, Instagram, um I've been deplatformed from uh at least one or both. Um and um you know, Twitter, etc. Uh it's easy to get deplatformed uh from these platforms. Uh AWS is a platform. Uh you sort of need permission to to run your stuff on that platform. Uh the United States of America is a platform. Other nation states are platforms. You can get deplatformed from from those institutions.
Um and uh essentially the the world has been um top down command and control and platforms uh for thousands of years. Uh and that works really well for building civilization. Uh but it tends to not work out most of the time for 99% of the people in the civilization. So what we need are platforms uh from which we can't be deplatformed. We need a new form of trust rather than top- down command and control trust.
Uh and so Satoshi came along uh a bunch of years ago and invented decentralized trust. And Vitalik showed how we could um use decentralized trust in a a more expressive version of what uh Sat Satoshi uh brought into the world. Uh and so uh we're now at this point where we are scalable enough um and we're going to get massively scalable um uh very soon. Um we're usable enough. It's getting legal enough um so that uh and and there's a forcing function in the United States for for financial institutions to uh uh to be online 247 365 if they adapt or die >> if they can handle that. Um um if uh the president is tweeting something mean at 2:30 in the morning on a Sunday um and it might result in in you needing to hedge or or move move your assets around.
Um, the uh the retail brokerages and other um actors in the space. So Hyperliquid is is a forcing function for the whole financial world um to get online. uh and so um the people uh will now have to care because uh the world is getting increasingly complex and everything uh has moved online for quite a long time and now um tokenization is going to move everything onchain as well.
>> There's a whole set of categories here that you kind of unlock that we get to talk about. Um, I want to get to some of that, but it feels like one of the kind of themes here is that we kind of now have an alternate choice that wasn't necessarily there before and and it's getting bigger and bigger that people actually are choosing the second option. Um, and there you kind of have to force both sides to think about what does it mean to play anywhere from fairly to unfairly and just actually see if you can offer the same value prop uh really efficiently. Um, and that's kind of where the Ethereum as a platform sort of argument comes in. Um, I want to get to that especially kind of from the perspective of like how Ethereum the protocol is developing and just are we happy with the pace or things we would like to see.
Um, but to kind of zoom out a little bit, the thing I'm curious about is from your perspective, um, how do you think the Ethereum Foundation is evolving right now? Are there's been a lot of announcements around what, um, their focus should be? We've seen some people talk about their departures to exploring new things. Um, when you kind of read that as somebody who not only was part of that project at the beginning but also runs consensus, what are your reactions and and thoughts?
>> Uh, so rumors of the demise of the Ethereum Foundation are greatly exaggerated. um they're understandable uh because uh there have been announcements that that people are taking time off that people are leaving the Ethereum Foundation and some people are taking time off. It's been it's been a long slog and uh uh and they want to clear their head. Um I don't think these people that are taking time off are are leaving the Ethereum ecosystem, but a very small number are actually taking time off.
Um, so the Ethereum Foundation, um, has a mandate to focus on on cipher punk ideals, and I think that's great. I think that's totally appropriate. Um, so they're going to focus on the crops components, and that's going to be a whole bunch of the core devs, um, researchers, etc. Um uh there is I think great respect and appreciation for the initiatives that Tomas Stancheek um brought in um and there's been a lot of work to try to figure out how to preserve um that great work um but also uh set up the Ethereum foundation and the Ethereum ecosystem properly.
Uh and so what I mean by that is that uh if you look at a lot of these uh sort of challenger uh decentralized protocols, they look more like slightly decentralized companies uh than a credibly neutral um decentralized platform uh for the world to build on. Um uh so you have you often have a labs company and a foundation and foundation's supposed to be slightly pure but uh they're under the same roof as the the crypto bros who are doing the bisdev and they're paying people to uh uh to land their application on their network and uh um so it's uh um there's not a lot of credible neutrality uh in those projects and uh um that in my opinion that's why our ecosystem um was developed uh for for Bitcoin and uh and Ethereum to to bring credible neutrality into the world.
>> Do you feel like that's at odds or creates a conflict when you have to maintain that but you also have to think about how do you satisfy customer demand and institutions here are saying hey we are used to XYZ or we would like to see these features but you're not even engaging with us or you're not talking or we don't know when this is going to be prioritized. How does that actually affect being neutral while still losing the customer to someone else?
>> So, there have been a bunch of things going on uh over the last few years at the Ethereum Foundation. Um and uh what's happening now is is it's getting explicit about uh where certain things should be focused on. Uh so, Ethereum Foundation focus on the crops components. Uh there's another group of Ethereum core developers that are organizing themselves in discussions with the Ethereum Foundation uh to focus more on platform like the coherent platform scalability usability.
Um, uh they might have discussions with D5 developers to to understand the forcing functions uh potentially. Um there's a second group um and this group has been talking to somewhere around 200 uh different financial institutions and governments around the world. Um so they're the going to be the legitimate the authorative uh sort of user interface to the platform uh or institutional uh education >> product manager for the >> Yeah.
Um, so so they're going to uh take any sort of queries uh interest in getting something developed and uh this is this will be a nonprofit organization also um but they'll be able to route uh information of educational seminars, certifications, they'll they'll throw conferences probably um so that group um will announce itself at some point soon. Now there's another group that's been working with institutions the uh institutional privacy task force. So they're also in the process of of finding their right focus place.
Um, and so what we're what we're looking at is instead of having um conflicts of interest under one roof uh as as other ecosystems do um we're going to really cleanly uh separate um a couple of nonprofits uh from um from profits >> forprofits and we will think of all these organizations and I would include consensus as one of these steward organizations and sharplink and BMR, uh, Ethereum Foundation, these other organizations. So, they're going to be a a sort of decentralized, uh, stewards of Ethereum group.
>> Does that make coordination messier? Like, would you rather have everybody under the same mission and KPI versus >> I think I think maintaining credible neutrality. can't build a platform that's supposed to be the credibly neutral application platform for the world um if you don't have a a credibly neutral foundation that that's u beyond reproach.
Uh, and so um it's not going to be that different in terms of how the protocol gets built because many other organizations already build the protocol. Um so the process will be exactly the same having a few core devs move into another group um and with slightly different focuses. A it gives them the ability to um save money for the EF. Uh they'll get funded in other ways. Uh but also it'll it'll have a different vibe. It'll bring in a different group of developers potentially who might not have been attracted to building the crops components. So um I think it's the right architecture.
>> That's awesome. And I guess we get to see that very soon. uh in in public on just kind of what the initiatives are and and how they're working. I hope um one other kind of question I'm curious about is in this world where you have specialized institutions coming in and primarily they're looking at it from the point of view of stable coins and just kind of how they can um think about transfer of of funds uh between anyone from different parties to entities.
Um, how do you think about the value acroal of Ethereum and just in in this space like is it going to be the app layer again? Is it going to be the chain at the base layer? Are we still thinking about L2s coming into play or will be something else and it's just fee uh kind of base models of any inflow? What changes in that version of kind of how you think about ETH cruel?
>> Okay, so here's one take on it. Uh, this is my take. It may be shared by some people uh that I work with but uh um value will acrue to all three uh of those layers applications layer twos layer threes um not so much at layer three um and layer one definitely um so the ether token um in order for so Ethereum has always been focused on some future uh where it would become necessary where where the world would um where it gets scalable enough and just ready for the world to uh make use of it.
Um, and I think we're there now. Um, uh with an agentic human hybrid human machine economy coming online pretty quickly um and with traditional finance uh starting to use our technology quite significantly or or build on it uh and launch soon. Um, and so um building for the future meant that uh that we pursued the rollup ccentric roadmap that we seeded pricing power to the layer 2 so they could just establish themselves and and flourish um so that we could build enabling technology uh so zero knowledge proof technology um was built or accelerated uh simply because the layer 2 rollup centric roadmap um offered an opportunity for for it to become uh the obvious dominant technology um at layer 2.
And so um it's easy to see app chains um doing well. Um some layer 2, some general layer twos will do really well. Um and uh layer 1 is going to get very very busy. Um it's very cheap right now. Um but I anticipate that uh not just a lot of layer 2s but also private permissioned blockchain systems. So uh Daniela and John just spoke about the Basu client. So the Basu client uh consensus built that. It's our execution layer client. TechU is our consensus layer client.
Um, and we contributed it a long time ago to the Linux Foundation or Hyperledger Foundation back then. So that it could be the enterprise friendly version of Ethereum. Uh and that's that's been remarkably successful. So most major financial institutions run Ethereum internally. Huge business. at city token services that's on basu Janna talked about their collateralization app chain and you know BNY and many others make use of the technology.
Um, so our linear team um has built uh and also ZISK Jordi Bina and the Nosis people have been building synchronous composability technology. So what you can do is you can have a bunch of layer 2 linear networks for instance and even some private permission basu networks that are enhanced by zero knowledge proof gadgets. And you can do zero knowledge proofs on each of these networks. And then you can aggregate those proofs in a block on on say linear mainet or Ethereum mainet.
And you can create this atomic execution context >> a singular interface to everything. >> You can unify in real time all these all these fragmented liquidity pools. Um, and um, so to answer your question more directly there will be a lot of new networks um a lot of corpo chains that will be L2s or private permissioned networks. Um, and if you're uh so linear chains already burn ether and to the extent that we can um cause that to proliferate we will um and whether a linear chain coordinates all that activity or is coordinated on mainet um there will be a lot of ether required um to coordinate a whole lot of transactions across a lot of different chains.
That's exciting. And I think um I'm actually happy to hear that you don't think it's one particular place and you kind of do feel like it's a lot of places, but it still behaves like a funnel.
>> Yeah. So if if layer 1 is sucking up too much value, you're going to get a a whole bunch of app chains, right? >> Exactly. This is kind of the the efficient hypothesis of uh people kind of wanting to make sure that they're managing this whole infra. um you kind of said something super interesting and uh and actually we're going to talk about a lot of the general Ethereum feature, but one interesting thing that came out today was a new product launch MetaMask.
I'd love for you to tell us about what just launched today and uh and what made you bring that out as a product.
>> Sure. Yeah. So, we uh we constantly do analysis on who our users are and we have to do a lot of work on that because MetaMask is a privacy tool and uh we respect that. So when we're trying to understand the different cohorts, we have to, um, do complicated things to make inferences on on on who's actually using it. And it turned out that, uh, a lot of the people, uh, that were using it, uh, look looked more like machines than people. Yeah.
So, so there were people behind the machines, but but a lot of usage of of actually the user interface uh, um, by machine intelligences. And so, uh, we are announcing, um, today, um, uh, the MetaMask agent wallet. It's coming out in a command line, um, version first. Um, we're actually announcing an early access program. So, so we're working really closely with, uh, uh, with 200 humans, um, who, um, use it, use it, uh, for their trading systems, for their agents, etc. And so, um, we still need to learn a bunch more about, um, how they want to use our technology.
So, they'll be hitting APIs, um, and they will benefit from, um, our best-in-class security. Uh, so we'll be doing simulation and analyses um on all the transactions. Uh, there will be policies. Uh, if you put it in beast mode, you can sort of get around the policies. then you'll have to twofactor thumbs up if we give you a warning and and uh um and you choose to ignore it.
Um, uh we're offering insurance uh well >> so please please >> so um if uh if anything unourred happens uh within our security framework within uh policies uh if you haven't um overrided the policies um then uh we'll cover any sort of uh losses up to $10,000 per transaction. Yeah, >> it's amazing. >> And you can do basically anything in your MetaMask. You can uh access per swaps, prediction markets, you can LP into things.
>> So the thing I was curious about is so is this meant to be an extension to the wallet for developers or is this meant to be a separate line of product with the same features as a MetaMask wallet, but you kind of want different audiences and different users to uh different user profiles for both of these things.
>> So it's the same product. Um, it's a different interface in a sense. Um, um, we're worried that uh at some point in the future unless we're really careful um with our offspring that uh uh some people might not appreciate the the machine intelligences and the robots and and we don't want a a class war to develop. So we're trying to make it uh uh just as usable for the humans and the machines. So basically the same thing.
>> That's great. Does that mean you directionally are taking the bet that UX and UIs won't matter as much in the future?
>> Um, that's a good hypothesis. Um, and I think you may be right. Um, so I think uh voice is going to um saturate um user interface for a long time. I think we're going to all get really good at subvocalizing things. Uh, so just the same way that it seemed really bizarre when people were walking down the street talking to themselves and now that that's just perfectly normal. I I think uh uh you and I might be sitting um at having lunch and and meeting and I might just subocalize to my AI uh in the middle of a sentence to you and so it's going to get very bizarre. But uh yeah, I do think that um that crypto wasn't really made uh for people decentralized protocols wasn't really made for us to interact uh deep in the guts of the machines like uh fiddling bits and and uh um use side effects in general using protocols manually.
So that it's great for um smart humans that are capable of those things to to construct them to make them available to the extent that we can put um easy to understand easytouse interfaces graphical interfaces in front of these things that's great. Um, but uh you know when's the last time you read terms and conditions on on a web two product or or >> increasingly I have a better incentive to now say summarize this for me and flag what's really off. But yeah, >> exactly. >> I can't tell you an exact time.
>> I I just opened a a traditional brokerage account. Haven't had one in years. And the amount PDF documents, >> it's just it's ridiculous. So, but um now what I can do is I I can ask uh machine intelligence to summarize this thing um which I do often when I sign things now and uh and you know, it's going to be an intentric world. So we are going to um rely on our digital twin agent um that will have our back that will um be a neutral or biased in our favor um interface to the world. It'll um depolarize um news sources etc.
It'll go out uh in a sort of pub subl like fashion >> reality of uh optimized bias preferences. Yeah, I mean uh some of the good stuff too. It's the way it should be. We should uh we should not be um controlled um by large corporations. We're building web 3. It's the user centric worldwide web. And so people should have financial, economic, social, political agency in their lives. We should be empowered by machine intelligences. So that's how we uh we get through the the current mess uh that we're in. Um, and the user interfaces will uh uh will be delightful and educational um and easy to use.
>> I think that'll be an awesome world where uh we kind of just simplify what our day-to-day looks like. Uh my final kind of question to you before we sort of kind of wrap things up is coming back to how we think about the future of Ethereum. Um, what would you say is something that Wall Street still misunderstands about Ethereum? And if you have any advice for the institutions that are paying more closer attention, really trying to get the pilots going and getting those products in the hands of their own customers.
Uh, what would you say they should think about or re kind of realign on and um maybe just clarify that something that they can use now to uh not go back to five years ago and restart those learnings and lessons again?
>> Sure. So, Wall Street is not a monolith. Uh there there are many different uh uh actors with different agendas and different capabilities. So, some uh major financial institutions um have been using Ethereum technology for a long time. I mentioned City token Services, a giant business. It was built on Basu. JP Morgan has been building on Ethereum technology primarily um since maybe the end of 2014 or or 2015.
Um, and uh I guess what uh what has become real for them uh a they were I I've heard the story that they were visited every year by the SEC chair Gansor's SEC and they asked what they were doing with crypto and they said well we're doing nothing and they said good keep it that way. Um but now they can't do that. Um that there are forcing functions. It's getting more legal. The world's getting more complicated.
And uh um institutions have to be online, people have to be on on chain. Um and um organizations are going to have corporate chains. Uh financial institutions will will have their own chains. Companies or financial institutions will want to issue their own real world assets. they'll be able to do that on a layer two even on their own private chain which will be composable with other chains. they'll probably want to do it on Ethereum layer one because even if you're a significant bank, we've seen significant banks die in the past.
And so if you're if you're issuing an instrument that could operate in a in a sort of bearer context um you don't want it to be on your corpo chain because you want something that that's going to be much more. Exactly.
Um, uh so um all these institutions uh need to get onchain really fast and many of them don't know how to do that and are afraid to do that. They're afraid to um um to be responsible for custodying assets for their users. And so, uh, consensus is, uh, um, is in early stages of working with, uh, lots of institutions, FMIs, FIS, um, to help them set up their own settlement layers, to help them with wallet components.
And, uh, um, they're moving fast, but, uh, uh, as I've, uh, I've said elsewhere, they they don't, uh, announce that they're about to announce something. that they just they check every box three times and then they they launch because they have real customers.
>> Amazing. Joe, as always, thank you. Thank you so much for an amazing discussion and uh please give him a big round of applause.