Vitalik Buterin: How Ethereum Becomes The World Ledger

So what are your hopes and dreams and goals for Ethereum to accomplish over the next 10 years?

A future of computing where a trustful vision of security that is based on uh cryptography and verification of code. The era of trust me for security starts looking as uh archaic as uh the era of like not cleaning our water looks to us today. We've uh already gotten there with HTTPS. I think we need to get there with it with uh everything else. And I think uh Ethereum can be a huge part of making that happen.

Ethereum just turned 10 years old and we have back on the podcast Vitalic Buterine. Vitalic, welcome back to Banklist.

Thank you uh so much David and Ryan. It's great to be back.

So first happy birthday Ethereum. The Ethereum white paper was published all the way back in 2013. And then the Ethereum mainet launched in July 2015. So 10 years later, Vitalic, how has Ethereum turned out compared to what you envisioned?

I mean, definitely far bigger than I was expecting. I think that's uh the most important thing. Um, also uh you know, it's definitely taken longer than expected. It's definitely turned out to be more than I expected. I think uh when I wrote the November white paper, my plan was still that this would be a side project that I would quickly get done over a couple of months and then go back to university. And uh of course uh that ended up not happening. Um and then uh at some point we thought that you know we'd have four stages we get to proof of stake and then exactly at that time the foundational one ran out of money and then uh the project would just kind of sit on its own from there. That also didn't happen. Then you know of course all of the DeFi started happening and uh the various different waves of people launching different kinds of tokens started uh happening and uh a lot of that was uh written in the white paper. You know we had derivatives in the white paper as a use case though and uh that actually exists though of course know the words that people ended up using are often different uh in a couple of cases. Um ENS uh happened, uh stable coins happened, uh but uh at the same time, lots and lots of really fascinating surprises.

Now that we have just 10 years of Ethereum in our in our rear view mirror, there's a lot that more or less went according to plan. I think if you read the white paper and then you look at what Ethereum is, you're like, "Yeah, that actually kind of followed suit with what some of the original uh visions were for for Ethereum." Looking back, what has Ethereum uniquely contributed to the world that perhaps you are most proud of or most happy about?

You know, I think uh it has contributed to openness and decentralization just being a norm and a default mindset uh for a lot of people in a way that I think needs to be refreshed every generation. Right? So you know what kind of traditional free and open source software was in the 1980s and 1990s I think you know the the blockchain world is uh in large part meant to be basically that but for the 2010s and 20s and I think uh for a lot of people it has actually done that it's contributed to making a lot of things possible prediction markets are one of those examples um you know back in the early 200 2010s they were mostly an idea and I think Ethereum was the big experimental ground that really took them from idea to reality. Um the whole concept of uh DAO's of course lots of ups and downs in uh that space but uh the just generally taking uh governance of uh organizations and uh structures that control resources and uh turning that into something that's like much more hackable. Um I think uh very very proud of that and I think uh we're going to keep on seeing dividends from that over the decades. Uh, so a lot of different things.

Metallic, you mentioned some surprises along the way. I can imagine there have been a number of surprises. One of which, which is kind of fascinating trivia, is you expected this to be a side project and it's turned into a, you know, a 10-year uh more or less full-time engagement and um pretty massive in terms of scale. What What were some of the big surprises though along the way with Ethereum, things you didn't expect?

The Dow getting such a huge amount of ETH um and then of course breaking almost immediately. Um I mean I think in retrospect the first was like a bit more surprising than the second. Uh but uh but still.

Like what like that was like I guess a runaway use case. It was sort of an early DeFi use case in a way because it was all about capital formation and you like suddenly man I I don't recall but like suddenly it was like 5% of all ETH supply or something incredibly massive.

It g all the way up to 11%.

11% of supply which I'm trying to remember. Or was it 11% of all ETH or was it 11 million ETH? Cuz if it was the latter then it would be like 17%. But it was it Yeah, it was crazy high.

It was the first instance of like animal spirits kind of really rearing its head on Ethereum.

Okay, so that uh what else along the along the way?

Um, I mean, of course, etc., um, that was, uh, yeah, the hard fork war. And then I love how, uh, it was, uh, almost like a, uh, a TV series where just as the ETC chapter was winding down at that exact time, the Shanghai doss attack chapter began. You know, the the writers put that in at exactly the right time. You know, maybe it was the same writer. I don't know. Um but uh that was uh such a a fascinating series of technical challenges. Um NFTs were a big one. I was not really expecting anything like NFTs at all. I mean definitely just like the the scale to which DeFi grew once it uh actually started. Um going from just a uniswap barely existing in uh in 2019 to just like the really big boom that we had even only yeah a year and a half later. Um and other things the well proof of stake taking much longer than I expected of course. Um ZK happening like five times faster than I expected. That was good. Um the the sheer level of institutional and then even government interest that came almost from the beginning. Um like even in the 2010s there were lots of uh like a lot of big companies that were floating around that were really yeah interested in the space. A lot of governments were interested. But I think a lot of that early interest was like very abstract and I think just people trying to like either be innovative or show that they could be innovative. Um but uh you know even still it was uh not something that I expected and then now of course like we're seeing the institutional interest come back but in this much more like concrete form. Um other things.

One of the meta things you mentioned, uh, Vitalic, is that all of this took longer than you thought it would, at least when you published the white paper. Um, why why did it take longer? And when you say like take longer, are you talking about it's taking longer to kind of, you know, get to proof of stake in the first place to sort of implement the rollup road map? Like what specific pieces took longer than you originally thought and like why?

Part of it I think is just software being hard in a way that I did not have the experience to appreciate. Part of it was also I think us just setting higher and higher standards for ourselves, right? Like the version of Ethereum that we wanted to get out in a few months was actually uh what we would today call um a layer 2 uh on top of Primecoin. And then uh of course uh what happened was that we saw the amount of attention and interest that we got in January and we realized like this is something a lot of people were putting their hopes into. This deserves a much more serious job. And so we decided like, hey, we would actually make a proper L1. And uh I mean, of course, you know, at the time L1's where that like where it really made sense to build L2s on top of them were not really something that existed. What else? Uh yeah, I think it's probably a combination of those two things. Just like technology taking longer than expected and us just like continually raising our own standards.

In in Ethereum's history, you you talked about some of them. There have just been some of these huge challenges that were just totally unpredictable. The Dow fork being the first one, the Shanghai attacks. Uh but even in times of like Ethereum success, like the NFT mania in 2021, there were also challenges to the Ethereum project. And you know, the Ethereum project has just fa been faced with it's just a series of challenges over and over and over again. And I I want you to comment on like how Ethereum specifically, how that strategy has emerged as a culture, as a community, as people inside the Ethereum foundation, uh people in uh you know, Ethereum core devs in the Ethereum community, we've developed um responses, strategies, uh we have a particular strategy to overcoming challenges that is unique to Ethereum. And now that we have like kind of 10 years of data, how would you how would you articulate what Ethereum's unique strategy is for overcoming challenges that are inherently unpredictable?

And I think uh we do a really good job of uh approaching the problem as an ecosystem. Uh like there's always a lot of different approaches that get tried at the same time. There's generally an L1 based approach. There's some kind of application layer approach. Often there's multiple competing approaches in each category and like we I think actually are able to pursue a lot of tracks in the parallel. We're able to even get a lot of synergies between different tracks particularly in the way that like a whole bunch of different efforts in the space simultaneously contributed to making Z Snarks more mature that all helped each other. Yeah, I think uh like the the the style of collaboration that the ecosystem has developed I think has been has proven really fascinating and I think it's uh you know definitely it's not been perfect but uh you know t taken all together it's worked quite well.

If you could go back in time to a younger version of Vitalic or or a younger version of the Ethereum Foundation and teach them something that would help them in Ethereum's journey, when would you go back and what would you teach?

I mean, one answer that comes to mind is of course all the way back to the beginning and just everything we know about ZK Snarks. The like that just has been such a a powerful uh like game gamechanging technology in so many ways. Um like just for just in the sake of leaprogging Ethereum ZK technology 10 years.

Yeah, exactly. Like I think there have been a lot of these uh like technical uh wrong either wrong steps or like side roads that we've taken that we did not actually really need to take and uh like had we if if we were just knew what the end state actually looked like then like there were situations where we would have saved a lot of resources and a lot of cases come to things much more quickly. So yeah, I mean, you know, not being able to predict the future is uh definitely uh one of those annoying downsides of Ethereum. Um yeah, I mean it's interesting because people do ask me like what would I have like what time capsule message would I have sent to myself and uh like a lot of the time the answer just is I mean like one of these uh kind of just like just give myself the correct answers technically sort of things but then I wonder like what uh kind of other what other answers there even could have been other than just a big warning to be more realistic in terms of expecting timelines. Um there's like sometimes I uh think to myself like might there have been um ideas on the uh I I guess you could call it more social side or economic side that in retrospect could have made things quite a bit better. Um so like one of those examples potentially is you know should Ethereum have had a uh like timelimited I mean like portion of the supply given to public goods based on like even some crappy mechanism that we knew about back in 2014 right and you know the argument there would basically be then like we we could have potentially been able to have like no explicit premine but then have like basically something like miners voting based on you know like flags in the past 24 blocks on who gets the developer awards and it possibly would have uh led to very similar results or potentially even more funding for uh like both the foundation and other organizations but it could have bought us like more credibility in the earlier days. Um, one of the things I think about is also uh like could things have been done uh better in terms of the uh early relationship with Bitcoin? Like I think it's uh kind of always uh a bit sad that Ethereum was not able to kind of capture more Bitcoin momentum. Like okay maybe yeah like here is one of the crazy crazier hypotheticals like if for example Ethereum had like one done the issuance based on the formula that I said and then two like let's imagine if it actually had been a fork of Bitcoin and then on top like it just said basically hey we are switching to proof of stake we're going to start with some crappier proof of stake on day one uh but then like we'll basically issue the entire like an entire remaining 4 million ETH based off of like some developer formula, right? Potentially the the the like Ethereum could have just been the Bitcoin big blocker camp. And I mean I think I remember I imagine you guys have probably read, you know, the big the reviews I've had of the uh like the big and small blocker sides of the block size war. And I wonder if uh like basically if like Ethereum had just been the Bitcoin blockchain the whole time like there probably would have still been a fork. Um but like the whole thing could have potentially proceeded much more productively. Um so like that's one of those things that I sometimes think about but then like there but it's but it's easy, you know, there's unintended consequences and surprises in all directions, right? Like it's possible that if you uh drag an existing community with you, you have lots of stakeholders from day one and then there's just uh like a lot of things that you end up not being able to execute well on. So I don't know um like.

I mean, it's always struck me that the uh the Bitcoin kind of religion or philosophy is has somewhat evolved into monotheism. And so I I wonder if um any kind of split coin would have always been destined to divide that community and um and splinter them in some way.

But we're we're 10 years in now, right? And Bitcoin is what u or 16 something like that.

Yeah. 15. Well, 16. Yeah. Okay. So, you know, we're we're all kind of grown up together, I guess. You know, Ethereum's entering its teenage years and um I guess um Bitcoin has just learned how to drive, something like that. Do do you feel like the uh the relationship is improved between Bitcoin and Ethereum or is that just the ratio? I I feel like Bitcoiners are always nice nicer to Ethereum folks when um you know ETH is suffering on the Bitcoin ratio. So they're kind of quiet now. But when when price direction changes, maybe maybe things will will change. But I I feel like there's less hostility maybe between the uh the newer cohorts of Bitcoiners and Ethereum. Like how would you characterize the rel the relationship?

Depends what you mean by the the new cohorts, right? Because I think there's like different types of new cohorts. There's the people who are trying to be technical and trying to do BitVM and Taproot and C Ocad and all of that stuff. And then there's the sailorists and uh like I don't really expect the Sailorists to ever be particularly friendly or to have like any especially aligned values with Ethereum. Um I uh it's and on the technical side I mean I think um you know there's uh definitely uh I mean the the smart ones you know I think there's they have a lot of respect for the things that Ethereum is doing in terms of uh like both the technical progress that that it's made and uh increasingly the way the ecosystem is standing up for privacy. I think uh both more and more openly and more and more in a way to where like we're not we're not just bringing vibes, we're actually bringing results. Um and uh on the at the same time I think it's uh you know a lot of people respect how uh like people in Bitcoin actually are really trying with uh like Obcad and some of these like new Bitcoin layer 2 ideas and there is quite a bit of uh like really fascinating uh technical work there. Um, so no, I think it's uh definitely more positive in that way.

When you see people building on Bitcoin in like the technical way, like people building on the BitVM trying to make Bitcoin more expressive, do you ever think, man, you guys are just wasting your time? Just come build on Ethereum. That's what we build Ethereum for. That's what it's for. Or do you think do you actually look at it with like curiosity and and like optimism for what they can do there?

Some of both, I guess.

I want to ask about the current moment of time that Ethereum finds itself in. Um, re, you know, recently with the election of Donald Trump, we've seen a social trend shift both inside of crypto and outside of crypto. Um, and maybe just to kind of name this social trend shift, I'll describe it as a feminized WEF soy boy mentality shifting to a bronze age mindset to quote um, someone on Twitter. Kind of like, you know, out with a woke, in with a based. This is kind of the the current zeitgeist of of culture in this time. And we saw this in crypto, too, where many projects just kind of like jostled to position themselves as like USA based projects. We had that infamous like Salana marketing video about wanting to invent technologies, not genders. And now we're seeing this still today in the cultural debate that's like spawned out of like Sydney Sweeny's jeans.

Notably.

Oh god. Has that infected crypto yet, David? Oh, I mean I see I see it on my.

It has now. Congrats saying you know the the this episode is the mimemetic super spreader event.

Yeah right. Exactly. So notably Ethereum has not participated in this trend shift. What if whatever by the way I want to publicly thank Sydney Sweeney for not making any NFTts hopefully or me.

We've also given her an idea so watch out. So I want to ask about like you know whatever Ethereum was before this cultural trend shift it still is today and I want to ask is that by design? Is Ethereum supposed to be this bull work against the changing like zeitgeist the changing fad of the times?

I mean, Ethereum is I think supposed to be a pluralistic ecosystem that incorporates a lot of different people and a lot of different viewpoints though at the same time especially in a world where there's uh many different cryptocurrencies and many different ecosystems you know you are going to get like different levels of drift um or kind of you know like self- selection happening organically. I mean, even if Ethereum was the only cryptocurrency, like I think you'd expect to see like differences in cultural veilance between Ethereum and AI, for example, right? Um and I mean I think uh it's uh the duty of each project to just try to make the best and most uh upstanding version of the philosophy that is uh that that its members are of most uh like enthusiastic about and comfortable with. And uh like hopefully we uh you know you know the result of all this is that we get things that are productive and that uh improve the world across a lot of different directions instead of just like projects that fight each other in uh like either fight each other or that uh like basically get stuck in this mentality where all that they do is just kind of shout vibes and then you just have like one group shouting one vibe, another group shouting another vibe and they you know feel very righteous, but then you come back in 3 months and you realize they haven't actually made any progress. Um, and so like I think like personally I yeah like there's definitely things that uh worry me about you know quite a lot about various cultural shifts that we've been seeing in the world. But then you know if you just worry then ultimately you know you're just one of the vibers. And so I think uh the practical question is uh you know like what how do we actually advance and respond and actually you know create the next and better version of uh a competing alternative right and so uh I think uh in that regard like the couple of new themes this year have been uh and so one of them is that I've tried to kind of say and do things uh to sort of reset the conversation on uh public goods funding in Dows, right? because uh like I do think those are important topics and I do think that uh you know if you just uh give up on funding public goods, if you give up on like basically any form of governance other than uh founder dictatorship like that still has a lot of quite negative consequences and uh you know the the end state of that is that you just sort of get back to like essentially trust me land. Um and uh but at the same time like quadratic funding has actual problems. Uh like token voting delegation dows have really big problems. And so I've been um you know trying to be supportive of prediction market based funding uh and and prediction market based Dows. Um I've been working with Devanch quite a bit. You know, he's been doing deep funding and uh he which is like public goods funding and there's a a version two which is pretty directly based on prediction markets uh basically combining together like prediction markets with this uh jury mechanism that's uh like basically the idea is that if you have a gadget that can give an opinion of uh like a high quality opinion of how valuable something is but it takes a lot of effort then you can use prediction markets as a way of scaling it. But for the public goods funding domain, right? They'll create, you know, an open well, what political scientists call an open access order, like a game where anyone can come in and if they do a good job, then they can feel succeed and they can feel like they have a fair chance uh then something that doesn't devolve into being a social game, something that doesn't devolve into being a game of convincing a few a few central actors. Um and then trying to like actually push that into into some actual experiments. So, Divine and the Quer team have been doing some quite a bit of work there. And then the uh other big thing uh that I've been uh like really trying to push is this greater focus on privacy, right? And I think you know the reason why is because first of all privacy like it has been a core part of the cipher punk spirit since the beginning right like if you remember and ecash from 1982 and e-cash was actually not decentralized right like it had a central operator that all of the transactions went through but it was private and it was private from the central operator right cuz that was those were the properties of the technology that we could actually do and it because of technological limitations that we flipped over and we went to Bitcoin which was uh decentralized but it was not private but now of course we have ZK Snarks those technological limitations are gone and we actually can be decentralized and private right and so we actually should be and so there's been some uh really interesting work that's been starting to happen in terms of uh like really standardizing uh kind of railway privacy pools type of things making it easier to incorporate privacy protocols looking at privacy of reading the chain. So basically uh like if you're an ordinary user and you have a browser wallet and you don't have two terabytes to spare then you know what is a way for you to access Ethereum without just revealing all of your data about everything you're doing to Infura. Um and so there's been some really fascinating crypto cryptographic and academic work that's been uh happening there. And uh like I think there like it's uh I actually like I think in terms of cultural triangulation my role model there is Malay right because if you look at what Malay did I think it's actually kind of brilliant which is that he basically had like he has bronze age vibes but his substance is actually the same basically the kind of stuff that I think all three of us support and would have supported at any time in the last 15 years, right? You know, he he has made markets more free. He has made the government more efficient. He has uh really reduced inflation. He's uh simplified a lot of a lot of things in housing markets. He he has done he has done a lot, right? But and he's also he's reduced tariffs. Uh he's uh he's made the country more uh more open. Um he is uh I mean his government even like has like worked with us to make it easier for people to get visas for Dev Connect. Um so actually like in a lot of ways I mean like on the substance he is like very not uh like that kind of substance but at the same time you know he has the vibes of the other side and so he manages to appeal to a lot of people very successfully and like to me privacy actually has a lot of those same properties right because privacy privacy is freedom privacy is a very important right that we're all here to protect privacy is something that's uh that just has to be built technologically speaking. If you have privacy as a focus, then it is a uh what the game that you're playing is a game that's about doing and it's not and it's not about talking. But at the same time um you know where what privacy is not is privacy is not um like multi-billion dollar grifting. Privacy is uh not um you know people ripping off t-shirts and stomping their chests a lot. Privacy is uh not uh you know um colluding with uh all politicians u like and so it's one of those things that I think really everyone in the Ethereum ecosystem should be able to get behind and so I think it's uh something that we just uh have to really keep pushing forward on.

Well, let's talk about it some more because I think that's like a interesting cultural component of how we balance kind of Ethereum values versus like this mainstreaming moment with tradies to talk about privacy. So, I guess Malay you're saying is he's got he's he's sporting the the bronze age uh mullet, let's call it, where you know it's it's bronze age in the front, but it's good sensible policy and getting things done in the back. It actually works. And so, how do we bronze age mullet our way to privacy on Ethereum? I mean, it does seem like um it seems like in some areas we've made tremendous progress on the cryptography side of things. Like we have ZK technology that's just like incredible. Um but times where we've tried to implement privacy, I mean tornado cash, we've got the live court case going on. We don't know yet the verdict at the time of recording of of Roman Storm. And so anytime you get into financial privacy, you get nation state push back. And there's there's an argument that I've always thought was somewhat valid that if Ethereum or Bitcoin for that matter shipped privacy uh you know on layer 1 from the very beginning and it was all private we would have never gotten this far in terms of broad acceptance because there are forces out there that would have strangled this technology in its crib and so how do we b I guess what's a realistic way you think privacy can evolve right we've got these very niche applications I would say still like tornado cache and even things like rail gun they can do some things. It's not user friendly. It's not broad. It's certainly not privacy by default. You got things like Aztec that are spinning up. They're going to be in mainet, but that's going to be its own separate rollup. How do we balance all of these things and get to a place where we're happy and we're content? And I guess maybe nation states that try to preserve some level of freedom also feel fine with letting this move forward. Like what's a realistic privacy road map here?

Yeah. Okay. So, I think there's two parts to that. One part of that is just uh can like how do we get from privacy being very niche uh to privacy being a default part of the experience. And uh question two is how do we make a critical mass of uh governments and regulators okay with that? And I think for question one um so the reason why I have not supported uh like literal onchain layer one privacy yeah like 7503 and like wormhole type of stuff uh so far is not because I think it's fundamentally wrong but because I think uh like it's basically too early technologically to make that kind of commitment and what I mean by that is that one we do we don't yet know exactly which technologies will be optimal and if we put a technology in as layer one then we could be locking ourselves into something very suboptimal right and this is obviously a concern uh with any EIP that we make but with privacy because like the data is inherently private like you can't just kind of muck around and uh basically replace the tree and like and like search and replace one thing with another if you really have to and so it's like it's harder to upgrade.

Vitalic, does this imply that you believe privacy on the Ethereum layer 1 is fundamentally correct?

Um, I uh I mean I think in the long term I'm very open to it. Right. So one argument is that right? It was I mentioned like future compatibility. The other argument is security. Right? Because uh like you have to remember that uh a privacy gadget on L1 breaking would be extremely bad because someone would be able to steal an unlimited number of coins undetectably, right? And I think like eventually the tech will be good enough that I think we will be able to make that jump right like I you know I am serious when I said in my uh recent blog post about two weeks ago that uh like there is a trend line that the number of bugs in code actually is trending down to zero. And so uh we will get to the point where we're going to have be able to have very high levels of uh trust in code to the point where like security researchers who have been trained on the past the past 20 years will find it unimaginable and I think AI will accelerate that. Um but uh like before that h and also Zcash to their credit like they've been brave and they've just like gone ahead and done it right. Um so but even still like that's a high bar right and so the question is can we make privacy as default as possible without making it layer 1 and uh to me the medium-term target is to make privacy default in wallets right and the way that we do this is basically that I think uh the biggest mistake that we're making as an ecosystem right now is that we came up with this concept of a privacy wallet right and like we should not have privacy wallets Privacy should be a feature of wallets, right? Like you know, you should uh like privacy features should be something that can be incorporated into existing wallet.

What are you talking about? So if I'm in my existing crypto wallet browser extension, let's say on mobile, there's an option like I can send a transaction normally or I could send a private transaction. That kind of default.

Exactly. Like you have private a private balance and a private send button and it's all like part of Metabas or Rabby or Amire or whatever.

And can we do that now? And why don't we do that now?

Yeah, I mean um there's actually some work that's starting inside inside the EF to try to move move things in that kind of direction already. So uh hopefully yes, some of that should come out over the next few months.

What about the other part of that question which is how can we get nation states like obviously projects like Ethereum want to push the overton window towards more privacy, more open source, more decentralization, right? And so, you know, to some extent that will be anti- some, you know, governments, some cultures that don't embrace that, but we want to push the culture over and also we want mainstream acceptance of this thing, right? We can't have it illegal in all of the countries of the world. Is there some sort of balance we can like get to get some of the nation state concerns around criminality and moneyaundering and also balance the the cipher punk values here or are these just incompatible?

Yeah. So I think uh first of all like all of the progress that we've been making on like the privacy pools concept over the past couple of years has been very good right like now railway yeah like rail gun exists and you can use it and there's successful cases where we can point to where it's actually prevented people who have hacked large scale DeFi contracts from uh putting their funds into it privacy pools doing very similar technology. So like that whole concept is starting to be more battle tested right and uh like the thing to realize so far right is that in terms of illicit funds that pass through privacy protocols like by far the largest portion of it is people stealing from DeFi protocols or possibly people some cases stealing from individuals right and in both of those cases like both of those are actually very aminable to this kind of like like privacy protocol level blacklisting, right? Because uh you know if your money gets stolen then uh like there's just presumably there will be just an API where you can just like basically flag your own coins as being suspicious, right? And if a DeFi project gets hacked then it'll do the same thing, right? And so I think uh like that already is uh something that uh can uh really yeah push things push things forward quite a bit. Um, in terms of like how much more we can or will need to do, I think uh the thing to keep in mind, right, is that uh like the fiat eco ecosystem is definitely not a paragon of bad actor resistance, right? Like there's all kinds of bad actors that have all kinds of ways to move money around to um like anonymize themselves to avoid detection. I mean like the the equivalent of you know like seven proxies and all of these things like well what there are ways and they get and they know how to use them right and given that uh you know funds are uh trans like transparent on a public blockchain at least in the sense of like you can point to transactions that are happening and you know if you're if something happens to your money like you know you know when it's uh it's getting moved like I actually think that uh getting to a level of like bad actor resistance that or unfriendliness that approaches the fiat ecosystem but at the same time giving people much more actual privacy is like probably quite doable right um so I think to me that's like one part of those prongs and I think the second uh prong is that uh like we do just need to make the positive case for why greater levels of privacy are important and uh including being important from the uh perspective of law enforcement type objectives, right? And like for me the uh motivating example of this is that uh like there's been a couple of these cases like it actually happens all the time now. Most recently there was uh like telecom wiretap data like the type of data that uh basically telecoms are required to collect and give to the government under the uh communications assistance to law enforcement act. A bunch of that got hacked and I believe um like it's the the the evidence is leaning that it got hacked by China but or some China affiliated actor but like actually yeah like I have no idea like all of these things are probabilistic and like this is like that's just one example and like actually you know like this happens in all kinds of directions among all pairs of uh nation states all quite a lot recently right and so like a world where um like every basically yeah a world where you you have this kind of centralized data uh collection running rampant is a world of fragility because if those databases get hacked then data that you think might be contributing to national security just in case will will actually end up contributing to national insecurity right and I think uh like that just is a case that needs to be needs to be made much more strongly. Yeah. I mean, look to lawmakers to the to to the public in general that aggressively minimizing data collection is actually the uh safe thing to do and this is uh the thing that we should be moving toward and uh privacy preserving finance is part of that.

So, I think you're you're signaling that you at least would like to hold firm uh in crypto and Ethereum on on privacy, right? And it's like this goes back to a broader uh culture question I guess I want to ask about Ethereum. It's been my observation over the last you like 10 years that uh some of the cipher punk things that we've tried um have worked but not in their idealized version if that makes sense. And so right now we're at a moment very much in Ethereum's history where uh we are on we are actually onboarding the world. I mean mainstream is coming like Robin Hood doing a layer 2 and JP Morgan talking about doing stuff on chain and Coinbase getting larger and larger. They're all coming to Ethereum and so there's kind of a question here about when you get some of that traditional finance and mainstreaming who don't have cippher punk values right and you were talking about Ethereum pluralism. Okay. So we we let more people into Ethereum but with this pluralistic idea but they're less cippher punk. They care less about the values that uh that maybe we care about. And so there's a question of like where do we draw the line? Because I think about something like stable coins. My idealized version of a stable coin would probably be something like Rye. Do you remember that project rye? Okay, so it was all ETH. It was all completely decentralized. It was all cryptonative. Guess what? That didn't work. Like no one wanted it. There wasn't product market fit in the in the Silicon Valley parliament. And what has worked? Circle, tether, these other less idealized cipher point uh punk stable coins. But they are helping people. I mean go to emerging countries and this is exactly what they they sort of use. I guess the the question is broad. How do when should we hold fast on cipher punk Ethereum type values and when should we adapt to the world around us and really prioritize product market fit and actual usage?

Yeah, I think uh there's a couple of places that are like really the most key in terms of uh prioritizing privacy and cyberpunk values. I think one is uh of course the low-level protocol right because uh you know you can build a uh a centralized or decentralized application on top of a decentralized backend but you can only build a centralized application on top of a centralized backend. And uh for I think similarly like there are places where if the blockchain is fundamentally not at least friendly to uh privacy and friendly to dis like um intermediaryfree ways of accessing it then like that just does not create space for the yeah privacy friendly yeah things to happen on top of it right um so like one of the examples is uh this is the reason why I've been continuing to work on account abstraction and continuing to improve EIP7701 uh basically because I think if we do not do that then any uh smart wallet use cases um or any yeah like multiigs, quantum resistant things and also privacy protocols, they will only be able to function through an intermediary ecosystem, right? And the thing with intermediary ecosystems is that that's like exactly the sort of thing where like they work until they yeah they don't work for you, right? And so, you know, there like there does needs to be some constituency that's uh like really watching out for these kinds of things and just making sure you know is it at least possible to interact with Ethereum in a way that is privacy preserving. Also, for example, in a way where um you're not depending on a central a centralized intermediary to do your basic things. Um if um any servers that you talk to disappear like that does.

Not lead to any of your funds getting stuck. And so, like, especially at the lower levels, these are things that need to be really watched out for. And then, I think the second, um, aspect of this is that the, uh, the strong privacy-focused and, uh, I would say intermediary minimization-focused, like, way of doing Ethereum, like, it needs to at least be possible. And part of that is the protocol layer. And I think to me, it's fine if the majority of people do not take that option. But what we do not want to see is, we don't, we don't want to see a world where the infrastructure to do that does not exist. And we do not want to see a world where the top-level protocols, like ERCs and standards, are like, just in some structural way hostile to it, right?

So, I mean, maybe one analogy to this is, I think email is like, actually a really great analogy to mine, right? Because theoretically, email is an open protocol. Anyone can make an email server. Like, you can go get a VPS, you know, you can get, uh, a DNS account and like, you can set up, you know, david, uh, like Ryan and David.com and then give yourselves, you know, Ryan Ryan and David.com, davidyanddavid.com. If you want, you could even write all the software yourselves and like, the, uh, you know, LLMs make that like, actually way more practical for you guys than you might have ever imagined. Uh, but at the same time, you know, the problem you run into is basically, okay, you've got your own dinky little email server, but then by default, all the big providers blacklist it. And they're blacklisting it because of like, basically spam, right? And so de facto, email ends up relying, like, being much more of a centralized and and permissions thing than it could have been, right? And so then there's a question of like, well, you know, what things could have been done with email to to try to preserve its, uh, its openness better, right? And I think, uh, like, basically, like we want to ask the equivalent of that type of question, but then for any particular standard that comes up, right? So for standards for moving tokens from one layer two to another layer two, right? For, uh, like intent-based standards, right? Like, one of the things they've been making sure is that for some of these like intent-based, like trade token tokens on Optimism, for tokens on Arbitrum, approach is like, make sure there is a way to do it without talking to a server, right? And, uh, like, it is totally doable, right? And the challenge is that, you know, if you, uh, if you don't think about it, then like, all the standards end up kind of assuming at the lower level that there's servers that you talk to. And then like, you just get privacy leaks, right? And so I think, uh, like, having people in the right places that are just watching for these kinds of things and that just, uh, make sure that, uh, like, privacy-friendly, intermediary op-minimized, like, more self-sovereign ways of doing things actually exist and, uh, don't have at least like a needless performance penalty to them is important. And if not everyone takes that option, then fine, right? Like, if, uh, a bunch of people like start, uh, like, continue to hold their coins inside of Coinbase, then fine, right? If a bunch of people continue to use, uh, MetaMask that directly, you know, like, fully trusts Infura without any protection and they decide not to add any of the any of the protection based on, you know, like either Helios or some of the private RPC stuff that we're starting to do, then like, fine, right? But, uh, like, the the place to start is just the option existing and the social norm that, uh, a, like, a pro protocols and standards that get built have to take into account the need to be at least accommodating of people who take that option.

Yeah, great news for for David and I too is Ryan and David.com, email.com is available right now. So we could just go spin up a VPS and, uh, send email now. Yeah, I, I wonder if any agents have already registered. David and Ryan.

Good question.

We, I want to get into some more narrow topics about Ethereum in in more recent times, but in order to get there, I kind of want to ask one last zoomed-out question to really kind of frame the stakes of, uh, some of those incoming questions. And so I want to present the future. Uh, there is, there are particular versions of the future that we know are coming our way. Uh, we know AI is going to define the future and we can know we can talk about the different ways that that looks.

There are also geopolitical tensions that seem like they're on the horizon. There's seemingly an increased Balkanization of the world. Uh, there are just possible versions of the future out there that are like, kind of scary. And, you know, there's other possible, you know, there's other things to talk about that are also kind of cool, like gene editing and all that kind of stuff. There's just the future is coming. What role, Vitalik, do you think Ethereum has to play in the future that we know is coming our way?

By the way, I'm glad that we're on the same page that gene editing is the exciting thing and AI is the scary thing. Right. I think, you know, there, there are plenty of people that like have that flipped and I think like the, the version that you described is the correct one. Um, but, uh, yeah, what role can Ethereum play? I think, uh, to me the answer has always been in, uh, two parts, right? So one, like the fundamental product, I think that Ethereum offers is, uh, you know, protecting people's, uh, freedom and self-sovereignty and ability to organize in a way that does not depend on or is, you know, like any kind of mask for any individual, you know, like person or company or a nation state, right? And I think in a world that is more Balkanized at the physical layer, like that's a very valuable thing and that's an increasingly rare thing, right? Like if you, if you turn back the clocks, you know, the clock 15 years ago to like Facebook, like I think basically there were a lot of people who were willing to give Facebook the level of trust that, uh, today we will like, we pretty much all agree that is a level of trust that is only really deserved to give to something that's like a blockchain, right? And so 15 years ago, I think, you know, the, in that sense, sort of the market was not ready, right? Because, uh, like the, the whole idea that trust issues are something that you have to worry about was not really there. Um, like famously it was, uh, the era of privacy is over. Um, I, uh, remember, you know, there were a lot of people, know Mark Zuckerberg's real name policy, famously, um, more than, uh, you, I personally remember hearing people like basically saying like, privacy is over at cloud computing conferences. And then of course, you know, fast forward 10 years and then, uh, like even those guys are starting to talk about things like TEEs now, and so I think in that sense, uh, you know, the, the market for trust technologies is, uh, something that's ready. Like, it's, and I, and I mean market in like a very expansive and metaphorical way, right? Like, there's people who are willing to pay money for these things and then also there's, uh, people who have like, say, social, uh, problems that they care about, um, who are willing to embrace these kinds of technologies as a part of the solution. And I think that's that, like, that exists to a much greater extent than, uh, existed 10 years ago. Uh, so I think that's part of it, right? Which is just building the technology that actually is able to do those things. Um, and, uh, the second part is, uh, like, I think there is an unavoidable aspect of this, which is global community building, which is basically that Ethereum is this powerful intellectual attractor for people who care about, uh, decentralized finance, for people who care about new forms of creating organizations, for people who care about things like prediction markets, um, increasingly for people who care about privacy, for people who care about, uh, making like democratic modes of organizing actually work in a technologically advanced society. Like, there's a lot of these different topics that Ethereum ends up being adjacent to, where I think like the community itself is a valuable good, even in a hypothetical world where, let's say tomorrow, we discovered that, you know, P equals NP and we all had to pack up our bags and go home in terms of block, in terms of blockchains, because cryptography can't exist anymore, right? So, I think that's also something that's really valuable to continue building on.

In the early days, there was this meme of Ethereum as kind of a a world computer that has kind of ebbed and flowed as as a meme that's worked. In your May post earlier this year, you called Ethereum a a world ledger, which, uh, I think that resonates with me and feels less abstract, a bit more concrete. Maybe to some folks it won't, but to me it sort of implies, okay, it's a, it's a world ledger that I can use to register things like property, for instance. And another thing I keep coming back to of like, what is Ethereum? It's a decentralized property rights system. I, I get for many normies that's still a bit too abstract, but, uh, to what extent do you think that encapsulates what we're trying to do here, Ethereum as a world ledger?

Yeah, I think, uh, to me the really, uh, valuable thing about, uh, Ethereum as a world ledger is, uh, it's like the problem with the world computer is that a computer is like an inherently super expansive concept, right? Like, computers do everything for you. Like, computers generate your cat pictures now. They, uh, you know, they used to look at your cat pictures. They can convert your cat pictures into videos. Uh, they can translate the thing that the cat is holding up on its sign into German and then, you know, do a video into video for that. Um, okay, I have lots of cats, um, and AI examples clearly, but, you know, the point is they can do lots of things for you, right? They, um, they can categorize your life. Okay, how about that? Um, but, uh, you, the, like, basically they do lots of things that are just obviously totally inappropriate for, especially the Ethereum L1, right? Um, and so the nice thing about ledgers as a word is that it feels like it encompasses the subset of a computer that's like, really highly economically valuable. And I think, I mean, obviously the word ledger has these very financial connotations. And so it's also very clear to see what it implies in the context of DeFi, but then it's also, I think, very easy to see the metaphor for like, what the equivalent of a ledger is for something like ENS, right? Uh, so and then the, uh, nice thing about that term is that then it starts to like, I think the thing that I specifically said is that the Ethereum L1 is the world watcher, right? And, and so I think it also at the same time tries to make the relationship between L1 and L2 more clear, which, um, I think is one of my explicit goals and I think, uh, I mean, to the extent that people picked up on the phrase, it's definitely been successful at those things.

If Ethereum is the world ledger, what does that make ETH?

Okay, great. Now we have to figure out what is like the ledger equivalent of gasoline. I mean, I guess it's ink. I mean, okay, fine. Ink is a layer two. But like, if if ink has the TM symbol beside it, it's the layer two. Without the TM symbol, then it's like, yes. Is that okay?

Works for me. I want to zoom into some of the conversations that was ongoing in the Ethereum community in in 2024. Uh, I'll just kind of say I'll define 2024 as like hard times for Ethereum, mostly just due to the decline of the relative ETH price and it kind of created a bunch of infighting and what to do about that fact in the Ethereum community.

Uh, did do you think Ethereum had a rough 2024? Is that, is that what you felt?

I definitely think so.

How do you account for that? How do you explain like the the story of Ethereum in 2024?

Yeah, I mean, I think, you know, the the low ETH price was, uh, definitely one of those, uh, very, uh, big, uh, aspects, uh, that that led to a lot of things. I think, uh, a big part of it for a lot of people was also that like, some storylines were ending without other clear storylines replacing them, right? In the sense that I think, uh, there were definitely people who became kind of quietly disillusioned with Dows, but like, it wasn't clear, you know, if you're, if you're the sort of person who likes Dows, but then suddenly Dows don't work, then like, what else do you do? Then in NFTs, um, were also kind of dying down in 2024. Meme coins were definitely on the rise in 2024, but then at the same time, I think, uh, you know, Ethereum people, just by nature, sure wants to, you know, make a serious difference in making the world a more free and open place. And, uh, it's kind of harder to see how meme coins contribute to that. And also, of course, you know, the, the largest meme coins were all happening on Solana. Um, so what other, I mean, there were like, a lot of these, uh, I mean, also I think another big part of it was, you know, the whole like layer 1 versus layer 2 thing and how kind of post, uh, and people sometimes like pin it on 4844. I'm not sure to what to what extent that's actually true. Not 4844, but, uh, actually yes, 4844 and like having an independent fee market, uh, for for blobs and like, basically the question of like, well, are L1 and L2 actually like cooperative? And then like, once there's a realization that there's these like more misaligned incentives, like that naturally like leads to infighting. More so, I think it's a combination of all of those actors, right? Or all of those factors, right? Like, it was a moment where, you know, the price was falling and at the same time, it felt like, uh, you know, there were a lot of storylines were kind of meeting their, uh, natural end and it wasn't quite yet clear what is the new thing that would actually come and replace them, where that I think that new thing has to be something that both is a money maker and that the Ethereum community could get behind intellectually. I mean, I actually think in, uh, 2025, we're like, actually starting to see answers to some of those, uh, trend, uh, some of those questions. Uh, so I think that's like one of the the reasons for the the positivity that we're seeing now.

Yeah. I mean, there's still debate in Ethereum today about how much of the story of 2024 was just narrative scope versus actual real problems that needed to be fixed. Like the story, one of the big stories was that like the Ethereum rollup-centric roadmap would just became not what we thought that it would be. The fragmentation between chains was pretty bad. Every chain, every layer 2 feels like a brand new chain. And in contrast to that, the layer one was just trying to not wasn't really trying to scale. And it just kind of felt like there was the story out there that the Ethereum roadmap just felt incoherent to what its like endgame was supposed to be, which is this global unified world computer.

And then, you know, downstream of that, there were there were changes made at the Ethereum Foundation or or perhaps not downstream of that. Maybe that's part of the scope. Maybe you could actually kind of just fill us in and illuminate in the the parts of the EF that many people aren't able to see. Why were there changes made at the EF? What needed to change and and where is the EF today?

I think this is one of those cases where there were a lot of things that were coming for a long time. Um, but, uh, like, you just needed any kind of trigger to like, make them actually happen, right? Um, so I mean, the the change in leadership was one of those examples, right? And, uh, I think, uh, like Ya has, uh, actually, I think feeling happier in the, uh, her current president of board role and she, you know, continues to be active in some, uh, some projects around, I think adoption in Bhutan was was always like one of her, uh, kind of interests and on there are some other things on the on the financial inclusion side that like she has been spending more more time on. Like the executive director job is definitely not something that any one person should be in forever and I, you know, like lasted longer, longer than, like, basically everyone else at the EF combined. Um, so that was, uh, um, and then, uh, I mean, there are also, you know, like new voices that have kind of new, um, emphases. I think, I mean, you know, Tom and Shel are both very strong technically in, uh, their own different ways. At the same time, there's been a lot of new people who are leading, like different parts of the, uh, foundation and, uh, different and different initiatives. Um, so one, like, kind of organizing the, uh, the effort around scaling and UX was one of those parts. Um, I think, uh, now one of the things that I'm focusing on is also kind of better organizing the, uh, like censorship resistance and privacy side of things, right? And so, uh, like, basically, there's a lot of things that are happening in terms of making PSE a more, kind of focused team that's, uh, like, basically moving from being about, uh, privacy and scaling exploration, to about, like, bringing privacy ideas into production. Um, so there, like, there's a lot of a lot of interesting new initiatives that have started and, uh, I mean, I think, uh, like, these are things that, uh, like, I think would have happened at some at some time anyway, but, uh, like, sometimes, you know, these kinds of extreme moments, like they, uh, they serve as triggers and often kind of accelerate and bring forward things that are things that are coming and, um, like, make them all happen at one time. Um, so that's one part. Um, on the L1 versus L2 thing, I mean, I think the interesting thing there is how that's, uh, like, I think a relatively disconnected topic from the EF. Um, I mean, obviously the work that's being done to increase the L1 gas limit is very much an EF topic. But, uh, well, and then also the other big thread that we've been working on is, uh, the thread, the improving interoperability between L2s. So that's, I mean, it's actually an initiative that started all the way back in mid-2024, but it just, uh, uh, and I think that's like a good example, right? Of how like, there, there are a lot of things that happens that weren't just, uh, like, all caused by everything that happened at the beginning of 2025. They kind of were happening already, but then, uh, got accelerated quite a bit and there's continuing to be good work happening in terms of the, uh, in terms of the L2 interop stuff. Um, a lot more L2s have become stage one. I think, uh, the next priority after stage one is going to be like, so I actually think higher priority than stage two is getting to one hour withdrawal times. Or actually, like, It doesn't even have to be one hour. Like, like, there's no reason it can't be like, one minute or 12 seconds. Like, the fundamental limitation is just how much gas you're willing to pay. And the reason why is basically because if withdrawal times take an hour, then, or if withdrawal times take a week, then it's just too capital inefficient to use, uh, like native depositing and withdrawing for a lot of applications. And so, like, sort of trustless and L1-based ways of issuing assets are just not going to win in the long term, right? And, like, what is going to win is basically all kinds of like custom mint and burn bridges that end up concentrating power and control in a multisig, right? And so the thing that we need is, uh, for the L1-based approaches to actually be viable. But, uh, for that to happen, uh, like, basically, yeah, you have to bring that one, that one hour time down, right? Or that one week time down, right? Because for that, one, that one week time, it's just, uh, if you want to move assets from one chain to another, like, you don't want to make people lock up their coins for a week, or even pay someone else to lock up their coins for a week. Like, even the capital cost of that is too high, right? But if you, instead of one week, you say an hour, then suddenly, like, the liquidity for intent-based opting becomes like, very cheap, potentially free for a for a lot of cases. And then of course, uh, if it goes all the way down to 12 seconds, then, like, potentially you could see a world where, like, uh, withdrawing and depositing through L1 just becomes the natural way for a lot of people to move their assets between L2s. Um, so, you know, but, and like, these things, they require a lot of movement from a lot of different actors of the ecosystem, right? They benefit from the EF2s themselves. They benefit from work being done by people like Succinct. The whole ZKVM effort, you know, like Risk Zero, all of the other different ZK providers. So, it's, uh, one of these, like, big things where there's just a lot of these moving parts in the ecosystem and, uh, like, it just has to come together and, uh, like, really turn into a concrete solution. Um, so I'm definitely more like, quite optimistic now that we're on a good path to getting all of those issues resolved and, uh, you know, both having a strong L1 and having L2s with a much clearer relationship with the L1. Um, but, and so it's, it'll still take time to finish all the different technological steps, but, uh, in general, I think we're in a good place.

Here's a take Vitalik and Dave and I have discussed kind of the 2024 Ethereum malaise a little bit, right? All these concepts of L2s being parasitic, you know, and what should be done. It is true that I think David and I, most people in Ethereum feel much better about the current state of the Ethereum roadmap with some of the new leadership at the EF and also some emphasis on scaling the L1 and in particular a strong L1. But I wonder about kind of the the the rollup roadmap. There's of course a lot of things that have worked spectacularly about it. You know, Base deploying a rollup, you know, Robin Hood more recently, more traditional adoption on that side. But sometimes, uh, I, I wonder and have been concerned with the fact that we have emphasized, you know, the different stages of kind of property rights, basically user property rights on Ethereum layer 2. And we, you made some progress in getting to stage one and I think we will stage two. That's that's going well. We've had less emphasis on sort of the economic alignment, if you will, and the coordination across these layer twos. There are some things tactically that can be fixed fairly easily, I feel like, with UX and standards where you can get assets from one chain to another. I'm not so much worried about that. What I am worried about is lack of economic coordination between all of these actors. And so if you get into a state, I remember your 2021 endgame post, which goes through conceptually a state where you have like, basically Ethereum that's decentralized and Ethereum layer one that's decentralized and then you have maybe there's a world where you have one big rollup that has all the execution state inside of it, right? And you still make the argument, hey, that's that's still fine because you can have big block production that could be centralized. We'd still validate and verify things coming to the chain and that could be an okay state. Maybe not ideal. What I worry about in that scenario is what happens if we get layer 2s that become so much stronger than Ethereum layer 1 that they essentially get to dictate the rules. Okay, they could break away from Ethereum at some point in time. That just doesn't seem like a good economic balance. And this, what it felt like with different chains and their own brands. They just, they didn't feel as Ethereum as Ethereum layer 1 did back in the day. So, what do you think about this economic alignment piece? Do you think we can get that right? Is that still off?

Yeah, I agree with that. Um, and I think, uh, like, you can look at the economic alignment issue from two different angles, right? Like, one of those angles is basically like, hey, um, L2s are not paying enough fees and, uh, like, I think, you know, we should have a higher min base fee and if we just set, or min blob fee and if we set the min blob fee all the way up to one Gwei, uh, then like, I think it would, uh, make a lot of things better and I think that's good. But then a lot of the time, I'm also not sure if like, fees are even the right, like, primary variable to be focused on, right? I think, uh, the right primary variable is more network effects. And then, okay, okay, maybe I guess this is here, like, a place where I should kind of explain the reasoning behind this, like, focus on one hour withdrawal time a bit better, right? Because to me, like, that actually, yeah, like, the thing that you say is exactly what motivates my, uh, goal of focusing on that, which is basically that, like, if you have the thing that is, uh, likely to lead to L2s, sort of de facto spinning spinning away is, uh, basically if all of the assets are issued on L2s and, uh, like the assets are, and then people move them through mint and burn bridges and then basically the L1 is not actually involved at all, right? And, uh, the thing that keeps the L1 relevant is where assets, even if most of the activity happens on L2s, um, are issued on the L1.

And the reason why I think that's, uh, important is basically, it's much better from a trustless perspective because all of these L2s, you know, they still have governance, they still have upgrade issues and so on. And so if, uh, you have the asset issued on the L2, then basically no matter, you know, where you move it, like, you, you have to trust that L2, right? Uh, but on the other hand, if the asset is issued on L1, then like, you, you can actually natively use the withdrawal functionality and then, uh, like, the L1 actually is this, uh, kind of ultimate decider, right? So it makes the security model clear and it also makes a lot of, uh, these, uh, like, it, it makes things much more permissionless because activity can more freely migrate from one L2 to another L2. It becomes more viable to have like applications that just natively do things across different L2s. Like, basically, if, and then also, of course, then any kind of technology that becomes developed for doing DeFi operations, like synchronously between L1 and L2 will just like naturally be much more able to work with all of those assets, right? And so I think, yeah, like encouraging assets to actually be issued on L1 and making it economically viable to do that and then just like using the standard deposit and withdraw rails for doing that, like, that, like, that to me actually is one of these really important pieces in terms of, uh, keeping the L1 central. And so I think we should do that and I think, uh, like, I personally think also again, you know, increasing the, uh, the min blob base all the way up to something like one Gwei is good and, uh, like, we should do, um, we should do both of those things. Um, continuing to figure out some of these, you know, like, synchronous composability blocks, like, can you make it possible for L2s to have blocks that synchronously do things between an L2 and L1? Um, I also think that's good. We definitely do need to keep, uh, like, pushing forward on these things. And I think we do need to keep, like, pushing that vision that the point of an L2 is something that gains value from interacting with the L1 and from being able to offload a lot of things to the L1, instead of an L2 just being a chain that, you know, like, happens to have a bridge somewhere.

So Dave and I very much operate on the layer zero, which is the social layer. And one kind of conclusion we've come to is that in order to sort of, um, speak softly but carry a big stick and increase Ethereum's layer 1 soft power, you have to have a scaled out L1 that scales, maybe from a transactions per second perspective, but is also the home for DeFi. It's the home for liquidity. It's the home, a subset of that is for minting of the assets. And the stronger the L1, the more that you have the ability to kind of, uh, corral the layer twos essentially. You give them the carrot, which is you get the liquidity of of Ethereum essentially. That's why you're attached to this. And that's why we're excited about, I don't know if you'd use the P word, pivot. There's been some debate about the semantics of this, but we're excited about the the initiative to scale the L1. We're also, by the way, excited. We, we think that, uh, a higher value ETH is essential in that conversation because ETH is a store of value asset and that the the larger ETH gets in terms of price, the more kind of liquidity and command you have over, you know, the L2s if they decide to to get a bit, uh, rowdy. Anyway, can you comment on the scale the L1 path? So, it's always been in the roadmap somewhere, maybe when ZK technology evolves to scale the L1. So from that extent, it's not a pivot, but there has been some recent reprioritization it seems like and it, it does seem with with the new EF leadership that's like number one, it's scale the L1, scale L2 blob spaces, what as well, but scale the L1 is a here and now thing. What's the case for scaling the L1 from your perspective?

Yeah, I think, uh, the big question is always like, how do you scale the L1 safely? And, uh, like, safely means not breaking the network, safely means not, um, completely centralizing node operation, safely means, you know, being not breaking the staking ecosystem. And I think we actually have technologies to do that that did not exist years ago, right? So the big one, of course, is ZKVMs, and ZKVMs are like almost production ready this year in a way that was totally not true, I think, even one year ago. And so that's one thing that a lot of us are leaning in on explicitly. Like, I, there's willingness to explicitly say, like, we're going to increase the block gas limit by like, three to five X. And then if that, um, ends up eliminating the bottom 10% of solo stakers, we're not telling the 10 bottom 10% of solo stakers to go screw themselves. Instead, what we're saying is, well, uh, the bottom 10% of solo stakers can use the ZKVM approach to validate the chain instead of re-executing everything manually. And like, that's actually safe, right? Because, uh, well, 10% of the network relying on ZKVMs is like, like, basically while the technology is at this medium level of maturity, like, it's actually fine as long as it stays under a third, right? And so it's like, the ZK is at this level of maturity where actually can start strategically relying on it partially, various in various ways. Like, you can think of it as the equivalent of sort of the, um, L1 itself going into stage one in a certain sense, right? Um, and then at some point, once, uh, security goes, uh, of technology goes up more, then, you know, L1 goes to the equivalent of stage two, and then you can start relying on the majority of the network using this kind of stuff. Um, so that's one part, but ZK is definitely not the only technology for this, right? So the two other examples of technologies, one of them is, uh, history storage, right? So a big problem, um, has been that, uh, nodes take up a lot of space. And now we've recently finally implemented the most basic form of history expiry, which expires history from before the merge. And so basically, every Ethereum node has, uh, shaved a few hundred gigabytes off of its storage requirements. And then the plan is to keep on going further, like eventually get to, um, expiring after one fork and then, like, I think the long-term target should be expiring after 36 days. And then for that to work well, you need to have some kind of peer-to-peer, like, torrent network type of distributed storage so that we make sure that, uh, the chain actually does become fully access, like, fully accessible and fully verifiable, right? So that the chain doesn't disappear, right? Like, we definitely do not want to become like Ripple, where like, there's weird things that, uh, happened because, like, the, I think the first 35,000 blocks, like, disappeared and they were just not able to find them ever, right? Uh, and so that, like, like, so, like, the distributed history ideas from Portal, like, those are actually making their way into production. That's another example. Um, gas repricing is another example. Block level access lists, I think, are another one of those really powerful examples because what block access lists let you do is they basically say, every node except for the node that creates the original block can execute the block with maximum parallelization. Like, it doesn't freaking matter of like EVM versus UTXO versus Solana, whatever, right? Like, basically the block has to execute sequentially, but it can, but it generates hints, right? And the hints are basically intermediate states after every transaction. And then if you have those hints, then you become able to verify and re-execute the block by running every single transaction fully in parallel. And you can even parallelize between the execution and the IO, right? So you can have like, the IO itself is actually much more efficient if it's massively parallelized and then that goes into like some threads and then in other threads, you basically parallelize, you know, like, you break up the block into different transactions and then basically you have like, a massive level of parallelizability that's completely independent of like what the underlying virtual machine model is, right? And so that also is a thing that makes it safer to run Ethereum at much higher gas throughput levels, right? So, basically, there's a lot of these technologies that just did not exist and now they, they do exist. They, they've been really refined and really optimized quite a bit. And because of that, we have a lot more options than we did before, uh, to get to really get the best of both worlds.

Do you think with this combination of technologies, we can keep the quote-unquote same level decentralization that Ethereum has while doing what what Donrad proposed, which is like aim for a social commitment of 3X per year in terms of scalability? I don't know. Ethereum right now is after the the recent, uh, block, uh, size increase. I don't know where 20 transactions per second.

3X per year is what Donrad says. And then Justin Drake thinks a, a, you know, longer term resting point, maybe five-year time, three to five-year time, something like that is gigas on Ethereum layer 1. So 10,000 transactions per second. Do you think that those targets are realistic here?

Uh, I mean, I'm, I definitely become kind of less sure of the higher end of some of those. Although actually, I think like my, yeah, my skepticism is probably more on short slot, like ultra short slot times than it is on ultra high TPS. Like, actually, if I had to like, like, if I had to choose one between, you know, like, um, give one second slots and 10,000 TPS, like, I think, uh, like, in terms of, uh, which one is safer for Ethereum, I think 10,000 TPS with 12 second slots is far safer than one second slots with, uh, current level TPS because, uh, like, at those levels, we just run into, you know, like, speed of light, very fundamental decentralization type of stuff. Um, so, like, I personally believe in caution at the higher ends, but I definitely think there's a lot of headroom to optimize and, uh, like, I definitely think we're going much further than the current 45 million level.

Yeah. And then in terms of like keeping decentralization, I mean, I think we're going to be at this, uh, interesting place that's hard to judge where, like, actually, I'm hoping that in a lot of important ways, decentralization is actually going to increase. And I can give an example of what I mean by this. So one of the things that I think everyone kind of quietly complains about is the fact that like, basically no one is actually running nodes and everyone is trusting RPCs, right? And I think now actually for the first time in a while, like, I feel confident that we have a very solid roadmap to not needing to do that anymore, right? And so one part of this is of course, Helios, right? And, uh, like, being able to have a light client inside of a wallet and the efficiency of that continues to improve. But then, uh, one other big reason why the Cypherpunk types tend to value personal full node operation, and this is something that, uh, like, I actually, yeah, did not even realize until, like, I personally, yeah, spent more time to, like, actually going out and talking to some of them, right? Is, uh, run the, the ability to run a personal node for the sake of privacy, right? Because, uh, like, imagine if, you know, you're someone who is using these Ethereum privacy protocols and you are, you're using many accounts to do many different things and, uh, you really care about your privacy not getting compromised, but then, like, you're still pinging Infura about every with every single one of the addresses that you're calling get balance on and so still knows all of your links to everything, right?

Now running your own node is this incredibly powerful way of not having that problem, right? Because if you run your own node, then, you know, you actually are just downloading the whole chain and, like, nobody knows what your reads are because your reads are entirely local, right? And so the question is, well, how do we get the best of both worlds? And the answer is that we actually will be able to, and quite soon, right? There's two different, uh, tracks, uh, for achieving this. So track one is, can we start from the current concept of an Ethereum node and can we make it much more efficient? And so here's how you make it much more efficient: you say, one, you do aggressive history expiry, you do aggressive expiry and not storing of everything. In fact, you even don't need to store the the the branches of the state tree. All you need to store is like the table that just is the state. That table is 80 GB. And if you have block level access lists and if you have zero knowledge proofs, like ZKVMs, uh, to verify that the block level access list is correct, then you're able to stay up to date on the current Ethereum state doing basically no local compute and only maintaining an 80 GB database locally. 80 GB is tiny. 80 gigabytes is the size of like three or four different LLMs, right? But like, like locally running LLMs, like everybody has 80 gigabytes. Like, even my phone has 80 gigabytes. And so 80 gigabytes storage, very low compute, still medium bandwidth, but that's fine, right? So that's kind of what, and then if we decide to scale L1 by, let's, uh, like, be medium conservative, let's say, yeah, we're scaling L1 by 30X, right? Then obviously 80 gigs is going to turn into 2.4 terabytes. Then 2.4 terabytes is still, it goes back to being a lot, right? Actually, it goes back to being like, basically the amount that you need to run a full node today, or like, basically pre, uh, the, uh, pre-history expiry. So actually with, uh, like, we've effectively given ourselves that 30X of headroom already, right? But if you want to go further, there's this concept of a partial state node. Partial state nodes basically say, uh, well, you just store all of the state except the junk. And there's a lot of junk and then there's a lot of like complexity lying there in terms of, you know, your definition of what the junk is. But like, really, if you just say, store state that's relevant to the top 100 applications and store all, uh, EOAs and all smart contract wallets, like, that's already going to be like, massive, uh, shrinkage, right? And so, so that's like one direction. The other direction is to say, well, let's start from a browser wallet and let's add guarantees to it, right? So part one is Helios, and so like clients, you can verify the chain. Part two is, um, you can use technologies like, um, in the short term, it's TEE with OAM, in the longer term, PI, which has cryptographic level trust properties, where you can make requests to a server without the server knowing what you requested and, uh, like, the server gives you a response, but the server has no idea what it just responded with, right? And so if you make that kind of thing the standard, then like, you're actually able to have this kind of strong privacy guarantee. Like, you're basically able to have a light client where the light client is not just giving you the security property of a full node, it's also giving you the privacy property of a full node without actually needing to have a full node, right? So, like, basically, we have like a couple of different paths from which we're actually able, we are going to be able to give people decentralization properties that they did not have even back in 2017, right? Like, even back in the days before L1, like, basically started significantly scaling at all, right? And so I think on a lot of dimensions, we get more scale and more decentralization and more privacy, more censorship resistance at the same time. There are places where I'm worried, like I think, uh, like continuing to make sure proof of stake stays decentralized and block building stays decentralized is like one of those points where I think we need to watch out for and, uh, like, I think having many different high-quality research teams that have different focuses and approaches is going to be really valuable there. Um, right? But, uh, no, on average, I think we have like, actually a very good track for, uh, increasing decentralization and scale at the at the same time, and we have to just take it.

I was listening to on a recent Epicenter podcast and there was a quote that stuck out to me that I want to get you to double tap on. Uh, the quote was, if Ethereum gets sucked into directly playing the HFT game, the high frequency trading game as a layer 1, then to me that will just fundamentally destroy Ethereum's soul because getting into the HFT game does destroy your soul. Uh, I, I didn't quite follow that that, uh, conclusion. I'm wondering like, why does, you know, layer ones that play the HFT game destroy your soul? What do you mean by that? And how is Ethereum's layer 1 scaling strategy different from that?

Yeah, so I think, uh, the core principle here is basically that if you optimize for one thing very aggressively, then the end state of that is that you end up anti-optimizing for everything else to a potentially infinite extent, right? Like, it's actually the exact same arguments that you hear from people like Eliezer Yudkowsky about AI safety, right? And, uh, like, it's just a general principle of optimization. And the thing with, like, very low latency HFT type finance is that there's always, like, a lower latency that you can go, right? And, uh, if you want, and then the further you go into, uh, into lower and lower latency, the more that increases the incentives for ecosystem actors to go in that direction. And, uh, like, there isn't really a natural stopping point, right? And, uh, it's a very easy route for just, uh, progressively giving up on more and more, uh, global decentralization and and so at some point, you get to things like, I mean, I can, uh, make some of this concrete with numbers, right? So, like, for example, let's take a one

Second slot time, right? And like, if you try to analyze what that means, right? So, first of all, to have a slot time of 1 second, you have to break that up into two parts. There is block propagation, and then there's at the station, right? And then each one of those has to take 1x network latency. 1x network latency is 500 milliseconds, right? Then average ping time, uh, from one, uh, one part of the world to another part of the world is somewhere in the low hundreds of milliseconds, right? And so basically, yeah, to even be like, even being able to do that at all is like a challenge that requires some pretty aggressive peer-to-peer optimization. Like, you cannot have any redundancy in there. Like, you have to have very direct broadcast.

And what this ends up leading to is, uh, like the basically the challenge is like the bar that we have to meet is not the bar of like, of of capability of participation. The bar we have to meet is the bar of not having, um, strong incentives to colllocate. Right? So it's not about non-collocation being possible. It's about non-collocation being at worst only a little bit less viable than every than collocation. Right? And then if you colllocate, like, basically, if you collocate with a proposer, then effectively, instead of having 200 millisecond latency, you have zero latency, right? And, uh, like that's a really huge boost. And so if we go into the like, that direction, then like the collocation incentives end up being everywhere, right? Because, you know, if you're a DeFi, uh, participant, then, uh, you know, you'd want to be able to send your transactions in knowing all all of the latest information as much as possible. Then, uh, if you're a builder, then like you actually have, like, every 5 milliseconds of latency that you get is, uh, gives you, or that you remove, gives you an ability to send out your block 1% further into a slot. And so potentially, like, that even gets you, like, I'm not sure the exact mathematical details, but like close to 1% more revenue, right? And so, uh, you know, we see what HFT systems are like in reality, right? And they're like, basically a bunch of collocations of servers, like everyone tries very hard to get like, to get like very close to each other, right? And so there's this like type of activity where like, I actually think like this is Ethereum's barbell strategy, right? Ethereum's barbell strategy of L1 and L2 was basically that L2s do the thing that that requires centralization, and they actually get the benefits of centralization, which includes the ability to do HFT, but at the same time, they, um, like they benefit from L1 providing security and censorship resistance, and then they give L1 the benefit of contributing to this shared pool of activity, but also sort of quarantining the L1 in terms of, uh, like concentrating, like making sure that some of these, uh, collocation incentives end up not affecting the L1 directly, right? Because L2s are independently sequenced.

So actually, this is also one of the reasons why like recently I have pivoted somewhat to being like less enthusiastic about based L2s and more enthusiastic about L2s that just say like, hey, we're a sequencer, and, uh, we're going to get the benefits of that, right? And like, you could do lots of things in that configuration, right? Like you can even say, you know, you can have decentralized governance for kicking out the sequencer, and like that might oft, might actually be a very good approach, right? And so I think L2 does a good job, like L2s are the right structure that does a good job of absorbing some of that demand. Um, actually, if you fast forward even further, right? Like we can talk about the AI economy, right? So AI, like think a thousand times faster than we do, right? And so if you, if an AI thinks a thousand times faster than a human, then what from the AI's perspective, the subjective speed of light is only 300 km a second, right? So subjectively, it takes only a second, it takes an entire second for a light to get from one city to a neighboring city. And so from the AI's persp, once you have an entire economy of AIs, which, you know, we're definitely going to get quite soon, then, uh, effectively the concept of a global financial ledger doing everything actually stops making any sense, right? Like at that point, you actually need like, basically city ledgers, and like what is the right structure for city ledgers to be part of the Ethereum economy? Like, I think L2s are just the, a very natural answer here, right? And so I think, like, basically, if the L1 starts going in this direction, then, uh, a lot of centralization incentives end up end up piling up. And also, if we commit to being competitive, then like we commit to be like, if we commit to being competitive in the HFT game, then we're committing to being competitive in a game where like everyone else is very aggressively optimizing while caring about decentralization much less than we do, right? And so I think, uh, like this is why like I think the barbell strategy is the right approach, right? Where basically like L1 does needs to improve, and I think L1 does needs to have like pretty good, uh, low latency from a human perspective, right? Like, I think Bitcoin with 10-minute block times definitely gets it wrong, right? And, uh, like actually mode, if Bitcoin had a say, a 20-second block time instead of a 10-minute block time, like I could see that, you know, significantly, like making this whole kind of trend, you know, like Michael Sailor style self-custody doesn't matter, like basically like happening quite a bit less, right? I mean, it's only one of the 10 factors, but, uh, it's still important, right? And so, >> like one having somewhat somewhat lower times is good, but, uh, like I do think that, uh, like this sort of market separation where if you want, uh, kind of like decently low latency, then you do L1, but if you want aggressively low latency, then, uh, L2 is the place to be in. We actually like do the work of, uh, figuring out how to make that synergistic is likely to be better for us.

I I hear in your answer something that I hear pretty frequently, uh, which is downstream of probably what is your most cited blog post between me and Ryan on this podcast, which is the, uh, concave versus convex, uh, dispositions blog. >> Uh, and like what I'm hearing is like, for example, Bitcoin, which is a convex ecosystem. They're a maximalist ecosystem. They focus on the 21 million hard cap and the Bitcoin ecosystem and the Bitcoin culture downstream of that is all focused, is all centered around the 21 million hard cap. And you can look at Solana and you can make that same comparison. Solana is centered around the IBRL meme, like the reduced latency, high frequency trading focus. That's what that's what Solana focuses around. And Ethereum tends trends to be more concave. It tries to keep all possible doors open. It tries to be more balanced, uh, and it tries to be just a little bit middle of the road. But Vitalik, there's also that line out there, uh, that I also kind of like, which is everything in moderation, including moderation. >> And if we follow that that meme, that logic, that means that like, you know, Ethereum should be balanced about many things, but some things it should not be balanced about, some things it should be convex about. Uh, and like Ryan, my partner here, he's actually trying to, you know, beat his chest as an Ethereum person and become like an Ethereum nationalist and promote Ethereum nationalism and kind of like Ethereum pride about the things that Ethereum stands for. >> Uh, if you were to have your definition of Ethereum nationalism, what what would it be? What what should Ethereum culture and Ethereum values be convex about?

H no, it was interesting because I I started thinking about an answer, but then you kind of pivoted into this, uh, sort of Ethereum as a nation discussion, which is sort of fascinating in its own way. Um, but I think maybe okay, maybe we'll start with my, uh, kind of the answer I was planning, right? Which is that I think, uh, one of the other like really important points here is that, uh, like actually the world is more complex than choosing one point on a slider, right? And, uh, like Ethereum benefits a lot from having a multi-layer structure, right? Because if you have a multi-layer structure, then often you're actually able to get the best of both worlds. Um, I mean, actually, I can give a nation-state analogy here, right? Because, uh, recently, you know, famously there have been quite a lot of people arguing that it might be better to have nations that are run by dictators, right? You know, you have Curtis Yarvin saying America should have a king. Um, like this is a common viewpoint that lots of people have, right? And they say things like, oh, you know, dictators can, uh, kind of, they don't need to negotiate with people. They don't have political costs. They can just do all kinds of things just very efficiently, and they can direct big projects that make society better at scale, right? Now, one of like, there's lots of reasons why, you know, this is like, like I'm not pro-dictator, obviously, right? And there's big downsides of dictators that I think more than outweigh dictators, right? Or that more than outweigh the benefits, but what's interesting is that the benefits of dictators are real, but like I think democratic capitalism has bas, like you can think of it as actually being a way of like basically, yeah, kind of putting dictators in a box and getting their benefits without suffering their costs at the same time, right? What is a dictator in a box? It's an entrepreneur, right? You know, you have these big titans like, uh, you know, Jensen Huang and, you know, the various AI people and whoever else, and, uh, you know, they're a like they command significant amounts of resources, and then they, as that layer of the stack, their goal is to kind of move around these, uh, large, you know, quantities of re of resources and these large objects and to try to produce outcomes, and, uh, like, I mean, they do have to negotiate with people, but definitely, yeah, much, much less than if you tried to allocate the same amount democratically. But at the same time, you know, you have this other layer of the social stack that's supposed that that actually is much more democratic, that's supposed to decide on these systems of rules and incentives where if Jensen Huang makes the world better, then he's able to get a lot more money, and he is able to play the next round of the game with even more resources. Or if Jensen Huang makes the world worse, then lower, kind of case, he makes less money, or, you know, maximally low case, he goes to jail, right? And, uh, basically, I mean, of course, I know this is something that has to be maintained carefully, right? And, uh, if you get into a world where like, basically the, uh, the entrepreneurs sort of escape the box and then they start like effectively writing their own incentives, and like that whole model breaks, and then, uh, effectively, yeah, you risk getting the downsides of, you know, the Curtis Yarvin world without the upsides, right? Uh, but, uh, like I think there, there is an analogy here to, I mean, L1s and L2s are one of those examples. The even on the application layer, there's a lot of examples, right? And, uh, the, uh, analogy here is basically that a lot of the time these things are much more centralized than Ethereum. A lot of the time these things make UX tradeoffs that are kind of much more, sort you might say normie favoring than the Ethereum one. Um, a lot of the time they, uh, care, they care less about various cypherpunk values than Ethereum, but at the same time, if built correctly, you can have structures on the L1 whose job it is to hold them to account, right? And so one example of like the most basic example is the proof system, right? Because the proof system prevents the L2 from claiming that something false is true, and it prevents the L2 from stealing people's money, right? Another example is like the bypass channel, right? This is the mechanism where if the L2 starts censoring you, then you as a user can like send your transaction, and then your transaction like is just forced to be included in a block, and then you're able to get your assets out, right? And like there, we actually saw, I think, interesting examples of these bypass channels actually being used in real life, right? And, uh, another example is like this, uh, idea that I briefly mentioned where if you have a centralized sequencer, like you could have a gadget on chain for first switching the sequencer, right? If people vote that like, hey, we have off-chain evidence that this sequencer is like abusive in some like extractive mer running sense, or they're not responsive enough, or whatever, then people can vote, and, uh, and then that vote needs to be censorship resistant, obviously, so it happens on L1, and so you replace the sequencer, right? And so this gets into the discussion of like what I think Ethereum's strength is, right? That we are this ecosystem that has different, uh, different actors. And so I think we as Ethereum, like we have to figure out like what is this, uh, this right set of, uh, incentives, and, uh, I mean, I think as you guys said, right, I think like a strong L1 that's actually able to run all of this machinery is, uh, a really, uh, important part of these incentives, right? Because if you don't have a strong L1, then effectively you're, uh, you end up letting the entrepreneur out of the box, right? Uh, like you end up, like for example, you know, a proof system that works in theory, but then like you start doing the fine print and you realize like, actually, there isn't enough space on the L1 for everyone to exit at the same time, and so like the whole thing is kind of alarm, right? And so, you know, like strong L1 is part of this, right? And, uh, basically, yeah, you know, the, uh, L1, like part of its role is to create these, uh, these boxes, and, uh, like a, and then like actually like make things on the, uh, the full spectrum of like different types of, uh, you know, centralization tradeoffs, like rapid, uh, like low latency UX tradeoffs, and all of those things, uh, actually accessible to users. So that's kind of how like that's what I think Ethereum's like answer to the question of where the slider should be, right? Like, to me, Ethereum is the, uh, this kind of, uh, sandbox where the, uh, like it's supposed to let people build on as many positions on the slider as pos, um, as possible at the same time. And I think that's, uh, one of its most valuable traits. And, uh, yeah. Okay. I I I feel like I've taken the nation analogy in like probably a totally different direction from what you guys expected, but >> not at all. I mean, we could continue expanding. We love talking nation analogy for Ethereum, but to one one area maybe we could extend that is, um, ETH, the asset. So all nations have their own currencies, and some have world reserve assets, and so, you know, the the social layer, let's call it, uh, in Ethereum, and part of Ethereum nationalism, and kind of the the the way that I use it is, using ETH, the asset, as kind of a shelling point. And so let's talk about a few concepts here. One question I have off the bat though is, what do you make of these ETH treasury companies that are springing up, right? So, we just had Tom Lee on the podcast. He says he wants to go acquire 5% of all ETH supply. All right. So, you have a hard time doing that without bidding the price up. >> Um, what what do you make of these >> vehicles? Are are you think they're good? Do you think they're bad? Are you somewhat indifferent to them? >> Yeah. So I think like the first on the first question, like the value of ETH, I mean, I think, uh, ETH is the the biggest thing that everyone in the Ethereum ecosystem is economically aligned on, and and so I think maintaining a strong role for ETH is, uh, importance, just for that reason. Like, if we had a world where, you know, the, uh, incentives of base, and the incentives of bankless, and the, uh, incentives of the EF, like went off in three different directions with zero overlap, like Ethereum would break as a community, right? And so >> yeah, I think, uh, that kind of core of, uh, like that economic core that ETH creates is something that is, uh, really, uh, important, right? And, uh, I mean, I also, you know, I have like many different theories of like where the value of ETH could come from. Like, there are many days when I realize that like it's actually hard to, um, outperform the theory that the set of price, the the price of ETH is set by a cabal of of 14 demons who live on the moons of Jupiter. And, right? And like, basically everything that we're doing is just a a competitive game of who best gives the the the demons on the moons of Jupiter the best show. Um, but, uh, it's like even from that perspective, like actually, you know, making ETH, making Ethereum a more relevant and and more central ecosystem to, you know, global applications and finance is still the right thing to do, right? Um, so I think, you know, there's transaction fees, there's network effect arguments, and I think, uh, the best things that we do are things that are kind of supportive of ETH from all of those perspectives. Um, the, uh, yeah, the the treasury company is, um, I this kind of puzzles me sometimes, right? Because, uh, like to me, I think of this as, uh, I mean, first of all, you know, they're they're not operating with their own money, right? They're primarily, like the point is that people buy into the treasury companies, and the treasury companies use this in order to buy ETH, and so they're effectively creating this kind of interesting leveraged financial product on top of ETH that's like somewhere in between an option and a derivative, and, uh, you know, there's clearly a lot of people who, uh, who buy it and who value this, uh, this kind of thing. >> Which one's your favorite? [Laughter] >> You don't have to. >> Who's my favorite ETH treasury company? I mean, >> I guess, uh, I mean, you know, the the US government that keeps confiscating from hackers is kind of cool. Um, >> let let me maybe make the case for for for ETH treasury companies, and and this is a case of moderation. Okay, so there's obviously a world where ETH treasury companies go too far. There's too much and it's custody and it's not bankless. A case for them act a shelling point coordination mechanism for the asset itself and propagating that story into mainstream in some ways, to a lesser extent, but in some ways the way Bitcoin has done that successfully now can always go too far, overleveraged, like more in custody than you want, but it feels to me like in entering 2025 versus now, ETH is healthier in a place and Ethereum is healthier with a strong ETH. When you have some of that activity, and there's some representation of it in traditional finance, you get some of those capital inflows. What do we get from that? More economic security and more economic bandwidth to go create the cypherpunk things we actually want. So at some level, in some moderation, we had 0% now we're at like 1% of ETH supply. >> Like this seems to have a good effect. That that would be my case for why ETH treasuries equals good. >> Yeah. Yeah. I mean, I agree, and I think, uh, yeah, like the the social aspect of coordinating around ETH just being an asset that companies can have as part of their treasury is, uh, is good and, uh, valuable, and, uh, like giving, uh, having different vehicles for people to have access to ETH, which is, I think one of the, um, reasons why, you know, like people are buying into treasury companies instead of just huddling ETH directly, is, uh, also good, like giving people more options is good. There's always people in all kinds of different financial circumstances that put all kinds of, uh, like requirements or incentives or properties on, uh, like what formats of things that they participate in. And so, no, I think there's definitely valuable services that are being, uh, provided there. Um, and yeah, like, uh, if you woke me up, uh, three years from now, and told me that, uh, you know, treasuries led to the downfall of ETH, then of course my guess for why would basically be that somehow they turned into an overlever game, and then, uh, at some point, you know, like they, uh, a 30% drop turned into forced liquidations that turned into a 50% drop, and then a 70 and 90% drop, and then that got compounded with a loss of credibility, and, but, I mean, I think the, you know, people in Ethereum in general, you know, even including the people doing finance in Ethereum are responsible people, like, you know, these are not Duke one followers that we're talking about, and so I think, uh, like, yeah, as long as, like, leverage doesn't go too high, and these things like don't start getting into those those kinds of mechanics, like, know, I mean, like derivatives of ETH existing are like a fundamentally fine and, uh, and stable thing. So, you know, good for them.

>> Zooming back out, uh, you know, some one of these ETH treasury companies, maybe two, will definitely be around in 10 years. I think that's kind of why people are excited, uh, is that these treasury companies can stand the test of time if they do things right. But I want to zoom back out and just talk about the next 10 years of Ethereum. Uh, so, when Ethereum is 20 years old, and we hope to bring you back on the podcast in that time, uh, to talk about >> We're going to be old, David. But that's fine. And but Ethereum will be young. Ethereum will be nearly 20 years old. >> What Vitalik, because Ethereum is an ongoing project. The job's never really done. I think like the job can become more done, but I don't think it'll ever be 100% done. >> So, what are your hopes and dreams and goals for Ethereum to accomplish over the next 10 years? If the job's not done, what do you want done in the next 10 years for Ethereum?

Yeah, I think one is, uh, like the technical road map, like basically being at at least some kind of, uh, like you could call it finish line, you could call it maintenance mode. Um, so like I think to me, this includes one, ZK snarking everything, to replacing any component that's not optimized with a component that is optimized. Uh, so, uh, you know, replacing Kjac with Poseidon or something better, replacing EVM with, uh, RISC-V or something better, at the very least as an option. Um, making all verification happen through ZK Snarks, uh, or I guess it, it would have to be Starks, um, making, uh, making every node ultra light and verifying it, verifying, making privacy a default part of the experience, starting with payments, and, uh, increasingly getting into, I think, more and more sophisticated forms of DeFi. Um, um, also, uh, some form of, uh, self-custody that is both self-sovereignty friendly and friendly to normal users, like I think it actually can be done, and I hope that we get there. Formal verification on everything, um, I mean, it would be lovely if we could have a formally verified secure open-source, uh, chain all the way down from, uh, you know, top levels of the stack, like DApps, um, and, and then you get into the Ethereum M clients, and then you get even lower down to the operating system, and then ultimately to the hardware. I think, uh, that would be really cool. Um, then in terms of, uh, like impact on the world, I think, uh, I mean, finance happening on Ethereum by default would be, uh, amazing. I mean, like if we, uh, actually get to a world where the financial infrastructure is such an infrastructure that if a user wants to, you know, they actually can kind of open up developer mode and, uh, like take their assets out of one application and then start to use another, use other applications instead. Uh, be able to permissionlessly go and, uh, connect different things. Um, make sure that people have strong options for preserving privacy. Um, I think, uh, being able to take their funds out of one wallet and, and move them into a different wallet, and all of these things. I think that's all, uh, really, uh, important. Um, in general, a, uh, like a future of computing, uh, where a trustless vision of security that is based on, uh, cryptography and verification of code, uh, being a societal default, and us getting to the era where we are using things where we have a strong assurance that they are secure, and, in, and the, uh, the era of trust me for security starts looking as, uh, archaic as, uh, the, uh, the era of, like, not cleaning our water looks, uh, looks to us today. Um, I think, uh, that would be amazing. Um, you know, we've, uh, already gotten there with HTTPS. I think we needs to get there with it with, uh, everything else. And I think, uh, Ethereum can be a huge part of making that happen.

>> Vitalik, um, you wrote the white paper in in 2013. You were still a teenager at the time. And so now maybe a personal question as we, uh, wrap this up. Um, it has since grown over the last 10 years into a network that hosts almost $1 trillion in assets. And it does seem like increasingly the entire world is building upon this world ledger. But over the next 10 years, what do you see as your role for Ethereum? Are you sticking around? Are you gonna finish this vision? What does this look like for you?

>> Yeah, I think, uh, continuing to, uh, do everything that's needed in Ethereum is definitely a big part of it. Um, I mean, I think, uh, over the last few years, I have been, and I expect I continue to be involved in like some of these broader DAC, uh, efforts. Um, so, you know, we've talked about bio defense, we've, uh, I think before, um, like security at some of the lower layers of the stack that we've talked about, I think is, uh, also going to be important as well. Um, so basically, yeah, you know, like making this, uh, kind of full stack, uh, open, secure, and trustworthy world actually, yeah, become a reality in, uh, in ways that include Ethereum, and also include a lot of other things. I expect will be a big part of my, uh, my focus over the next 10 years as well. I mean, I think it's, uh, basically, yeah, you know, it's, it's the same goal that, uh, or I've had all the way since, you know, even joining Bitcoin back in 2011. And I'm just excited that we can make it happen.

>> So, Vitalik, Bankless has been around for about half of Ethereum's lifespan, five, five out of the 10 years of the blockchain. Uh, knowing Ryan and I were probably gonna just keep on doing this. Uh, right, Ryan? Sure, David. >> What do you have any, uh, requests or guidance or, uh, uh, advice for how Bankless, uh, should be with Ethereum for the next 5 to 10 years?

>> No, I think I know you guys have definitely done a good job just like being consistent this whole time and, uh, covering all all of these really different and valuable parts of the, uh, Ethereum ecosystem. I think, uh, I mean, continuing to do that is, uh, important. Um, I think, uh, also, uh, especially some of these, uh, like, there will definitely be a lot of newer things that, uh, need to be covered and, uh, supported, uh, whether it's the things that are happening on the privacy side, or even some of this newer wave of Dow of Dow stuff that is coming, or I mean, potentially even all of these, uh, you know, various different ideas of making Ethereum into something more like an actual nation. Um, so, no, and it's a, it's a big space, and, you know, appreciate all of the the work that you guys spend uncovering it.

>> Well, Vitalik, thanks for joining us today. Happy 10th birthday to Ethereum. That's a belated birthday, but, uh, we're we're still around that mark, and it's been great having you on. Thank you so much.

>> It's been great to be here too. Thank you guys.

>> Got to let you know none of this has been financial advice. You guys know crypto is risky. Could lose what you put in, but we are headed west. This is still the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot. [Music] [Music]