Full transcript: Professor Emin Gün Sirer on London Real
2:22 Brian Rose: This is London Real. I am Brian Rose. My guest today is… This is London Real. I am Brian Rose.
2:34 My guest today is Professor Emin Gun Sauer, the computer scientist, thought leader, teacher, and technology innovator. You are known as a pioneer of decentralized finance, designing the first proof-of-work cryptocurrency called the Karma System back in 2003, five years before Satoshi Nakamoto published his Bitcoin white paper. And for the past 20 years, you’ve been a professor in the Department of Computer science at Cornell University, researching and developing decentralized consensus protocols.
3:01 In 2018, you founded Ava Labs with the not-so-simple goal to address the combined but seemingly insurmountable issues of security, decentralization and speed in a single blockchain network. You launched Avalanche or Avax in September 2020, raising $42 million in just four hours through a public token sale. Avax is now valued at over $15 billion, making it the 14th largest blockchain by market cap and has been referred to as quote the Internet of Finance.
3:29 And you have stated that your goal is to digitize all of the world’s assets. Eman, welcome to London Real.
3:36 Emin Gün Sirer: Thank you so much for having me, Brian.
3:38 Brian Rose: Hey, it’s great having you here. I had a quick flashback to maybe 1992.
3:43 I was 18 years old and my mom took me on an East Coast college tour of where I’d been accepted. I went to MIT, then Cornell, then UPenn. and I still remember taking like a separate plane to get up to Ithaca and it was beautiful and it was picturesque but I had just come from Boston where I stayed at a fraternity house and I was in the underground and from a kid from San Diego, that urban environment, it was just too sexy. So I opted out of Cornell and went to MIT instead but I do appreciate it, it is beautiful up there.
4:15 Emin Gün Sirer: For sure. It is, it’s really pretty. Cornell’s a wonderful school And indeed, it’s a wonderful place to live. And we got a lot of mileage from our Cornell connection, actually. So we ended up tapping into a different base of developers thanks to the Cornell connection.
4:30 And our labs ended up boasting a very, very large number of PhDs as a result of that Cornell connection. It turns out that there are many MIT projects out there. There are many Berkeley projects out there, et cetera, et cetera. But there aren’t that many Cornell projects. That’s been a huge boost for us.
4:48 Brian Rose: So interesting. Ah, that’s fantastic. I didn’t think of it that way, but that makes a lot of sense, actually. So you can kind of pull in from that virgin ecosystem when it comes to talent, et cetera. Just to finish off my story, I graduated mechanical engineering, but I got kind of seduced by finance.
5:02 So I spent about a year at the Sloan School of Management, learning finance, went to Wall Street, and did the whole finance thing for about 15 years, came to London, did credit derivatives, fixed income derivatives. And then I’ve been broadcasting for the past 10 years. The first six months of this year, I actually ran to be the next mayor of London. We didn’t win. And when I looked at what was going on in DeFi, I mean, I was like, wow, how did I miss this?
5:26 I mean, I looked at the DeFi summer and I looked at some of the innovation in DeFi and it reminded me of what I was doing at Bankers Trust back in the 90s with, you know, fixed income derivatives and the options and the finances we were doing. And now, but it was being decentralized and be done by like, you know, 20 guys and a dog in Tel Aviv or 15 girls and a cat in St. Petersburg. I just thought, man, I need to be a part of this space. So that’s why I’m here.
5:51 I was actually sitting down with Stanley Kulichev right in the studio a few weeks ago, and I asked him, I said, I just saw this partnership with Avax. Why did you partner with Avax? How do you choose the next big thing? And he said, Brian, it was simple. We actually just looked at the product.
6:05 It works, it was fast, and not only were the customers using it, but the developers were using it. And he was like, end of story. So that’s why we wanted to have you on. Thank you for being here. Maybe we just start back in 2018 and say, why did you start Avax?
6:20 Why did you create Avax? It must’ve been because there was a need for it.
6:25 Emin Gün Sirer: Absolutely. So what we saw is exactly what you saw back then, which is the DeFi was just beginning to take off. Digitization of assets was just taking shape.
6:35 And you could have seen this maybe three years ago in the big boom cycle of 2017. You could see that people had a yearning for digital assets and they loved it. The experience is so much better than anything else that pertains to trading online. And yet, what we saw was essentially a sandbox. What we saw was a glimpse of the way things could be if only the underlying technology could scale.
7:00 And we could see that it couldn’t scale. DeFi, in fact, to date has mostly been relegated to a very small audience, was an audience that was there to understand the technology And also an audience that had the cash to be able to pay for the enormous transaction fees that it usually takes to interact with DeFi on platforms like Ethereum. So three years ago, what I saw was the Avalanche consensus protocol. And at the heart of all of these blockchain systems lies the consensus protocols, or a consensus protocol.
7:34 And the protocols that preceded us, the protocols that came before Avalanche, all were limited in how much they could support in what kind of scale they could get up to. And once you loaded them with millions of users, they started running into limits. And when they run into limits, the very first thing that happens is that the fees go up and the system gets bogged down and it becomes a network for bots and whales. And I saw in Avalanche a way out of this. Avalanche could suddenly give us scale so high that the fees would be in the sort of flat portion of that hockey stick.
8:09 They would not balloon up. And I saw in Avalanche, a network architecture that could accommodate many different kinds of assets and allow us to take the technology out of the sandbox and bring it to the masses.
8:21 Brian Rose: And so a lot of that really comes down to that different consensus protocol, which I mean, we don’t have to go too deep into it, but everyone knows the proof of work consensus with Bitcoin, but you saw a new way of doing it that would ultimately allow you to scale while we’re waiting for potentially this proof-of-stake consensus to come in for E2.0, et cetera, but we’re all still waiting.
8:43 In the meantime, the single biggest complaint that I get from my students in the DeFi Academy is gas, gas, gas. It actually stops them from even wanting to be involved with the protocol. They even say, Brian, I thought you told me DeFi was gonna change everything. This stops it from being changed. They’re so frustrated.
8:59 Emin Gün Sirer: Yeah, on the retail side, on the user side, that’s absolutely the number one complaint, which is as the network gets popular, the fees start going very, very high. The gas costs are very high and suddenly the network becomes unusable for people like you and me. If you have a bot farm or you’re a whale, then it’s a different story. Then you can afford to interact and pay for $500 uniswap fees because you’re doing trades on such bulk that that’s reasonable. That’s one.
9:30 There’s another issue as well, Brian, that is kind of overlooked. If you look at it from the point of view of somebody who wants to digitize their assets. Suppose you’re an enterprise and you want to put your whatever you’ve got on a blockchain. Well, you’ve got some concerns that other people don’t have. You got to do it in a legal fashion.
9:49 You got to be able to predict what will happen in the future and build some controls to be able to accommodate changes in the future. You got to be able to respond to legislative changes. Things can change in a way that you did not even expect. You have to have full control over the full lifecycle of whatever asset you’ve digitized. This was a number one requirement for us from enterprises.
10:11 Another issue at the intersection of these two is suppose you’re a company that wants to put IoT devices on a blockchain. Well, you want to shield yourself from other traffic so that people can, for example, open their garage doors when it’s time to interact with their garage door openers or whatever it is that you’re putting on there. You wanna be able to have performance isolation from the rest of the blockchain. Just because there’s some ICO happening somewhere in the world doesn’t mean that your IoT devices have to now pay very high fees or they will be unable to interact with the change.
10:43 So you got to be able to accommodate specific use cases in a fashion that is firewalled, isolated from other players on the network. So to that end, you need a couple of things. You need a very fast substrate. You need a very fast way to make decisions or a very fast way to achieve consensus on your network. That’s one.
11:02 Second thing that Avalanche brings is a notion of subnets. You need a way to isolate unrelated use cases, you need to give people a way to shield themselves from other projects online or other projects that are sharing the same chain. That’s exactly what Avalanche does. And it does all of this with an eye towards one singular goal. And I haven’t heard this goal enunciated by other people. I’m glad you said it at the top of the show. But let me say it again, Bitcoin is trying to be digital gold is trying to replace dollar, euros, et cetera.
11:34 Ethereum is trying to be some kind of a computer in the sky, a global network computer. Those are fine use cases. That’s not our use case. We’re drastically different. My goal is to digitize all valuable things.
11:47 My goal is to put everything on a blockchain. And to that end, we designed the entire system to have the scale and the structure necessary for digitizing all things.
11:56 Brian Rose: I have a quote from you that you said in the same way that Ethereum opened up the programability of the asset, we opened up the programmability of the network. You say that’s incredibly key and I think it’s something a lot of people don’t understand how important that is. When you look at the other, the top 25 market caps, what do you see?
12:16 You don’t see innovation, do you? You see people that are maybe, what do you see? Tell me and be honest.
12:23 Emin Gün Sirer: Yeah, yeah, let’s go through this. So what I see at the very top is Bitcoin, and what I see there is the crux of a vision so compelling, so amazing that it begat 8,000 copycats.
12:35 So let’s first start with that. Satoshi had an amazing vision, and the technology is fantastic. But at the root of it all, it’s a hard-capped asset that has great brand recognition and great liquidity, but the technology does not scale as is. It needs layer two solutions to be able to accommodate things. layer two solutions have been a long time in the making, and they just aren’t there.
12:56 If you want to send real money over the Lightning Network, for example, it’s just the capacity isn’t there. So if I go down the list, I start seeing Ethereum, very fantastic idea. It has one addition to Bitcoin, which is it ends up making the scripting language Turing complete. So it makes it more flexible. And that’s that’s the main thing. It changes everything else. It inherits from Bitcoin. Then you go down that list, you see stable coins, I’m not going to get into DeFi coins.
13:25 I think they’re special and different. They each have their own uses, but all of the layer ones are essentially copycats of these two ideas. They’re either a copycat of Bitcoin, with just some parameters tweaked, or they’re just a cheap copy of Ethereum with essentially not all that much change. It’s just, it’s exactly like Ethereum. It runs elsewhere.
13:46 It runs in a more centralized fashion. So that’s what I see in the top 25. There’s scant innovation there. Nobody has really looked carefully at changing or giving programmable control over the network. So at least nobody had when we were looking into this in 2018, there are only a very few set of coins, us Cosmos and Polkadot that are even thinking about it.
14:14 But if you look at what they have implemented, they actually typically fall short of what they advertise. So Avalanche has drastically revolutionized this space in bringing a new consensus protocol. And let me just maybe go on a slight tangent here and talk a little bit about this. Some people have the notion that there are only two kinds of consensus protocols, proof of work and proof of stake. That’s not correct.
14:40 Proof of work is indeed one class of consensus protocols. It refers to Nakamoto consensus, which is intimately intertwined with that mining process. that electricity consuming process that your audience probably knows incredibly well. Proof of stake refers to how you secure the network. You secure it not with mining, but with stake.
15:01 So, but that doesn’t really define how you achieve consensus. We achieve consensus by sending messages in a certain way. I send a message to you, I get a signed response from you. That’s not sufficient, of course, for me to make a decision. I need to hear from some large number of people and there’s a messaging pattern.
15:18 Every one of these protocols differs a little bit on how they do that messaging. If you look at all coins other than Avalanche, I mean all of them, all proof of stake coins other than Avalanche, they do at the end of the day, they do all to all messaging. So there’s a set of validators and a given validator talks to every other validator. So that is an incredibly slow process. And that is an incredibly unscalable process.
15:45 That’s why other proof of stake protocols don’t scale. Avalanche uses a different mechanism. I’m not going to get into the technical specifics, but I will simply say it uses repeated subsampled voting. So I ask a small set of people, you ask a small set of people, and the math works out that after a small number of rounds, I can safely commit a decision if certain conditions are met. So that is what makes it so fast.
16:10 Brian Rose: And I’ve heard you describe this consensus and maybe I’ll butcher it, but it’s almost like you do a quick straw poll, and again, most transactions are legit between the buyer and seller, and most of them will pass that quick straw poll, and then you do a few more of those, and if it needs to, you can kind of go deeper on that, but in that way, it kind of speeds it up. I think you kind of did it as if a bunch of people in a stadium choosing one core or the other to watch how that dynamic plays out, and this is something you thought hard about with your co-founders, and this is really at the very core of Avax,
16:43 Emin Gün Sirer: And it’s exactly that exactly right. So other proof of stake protocols would have all to all messaging.
16:48 If they’re kind of like the protocols you might use in a Senate and, and they, you know, as a Senator, you want to make sure that two thirds or more of the Senate or supermajority in the Senate agree with a new bill that to be passed and to do that, they do messaging from every Senator to every Senator or every validator to every validator. And that is what we call an N squared operation. If there are a hundred of these nodes, well, then there are 10,000 messages, a hundred square, you know, 10,000 messages.
17:15 If you have a thousand of them and there are a million messages, that number grows really fast. And at some point it becomes untenable because there are too many messages flying around. The latencies are far too high. That’s why you don’t see proof of stake protocols where the number of decision makers involved in each decision is over a hundred or 200. That’s about the limit.
17:37 And the best proof of stake protocol other than Avalanche is a protocol called Hot Stuff. It is used by Facebook’s Libra, which has been renamed to Diem. And that was designed by a student of mine. I sent him to the West Coast. He worked for three months, came back and said, hey, I did something, it’s pretty cool.
17:55 And it’ll probably go somewhere, but I want to work on something really revolutionary. And ever since that date, he’s been working on the Avalanche protocol. So the really truly revolutionary thing in Avalanche is the fact that the protocol ends up being incredibly efficient because of that repeated process. And as you said, in most cases, there’s nothing being contended. So you simply do some small number of repeated checks to say, hey, guys, I’m about to commit this. Are you good? Are you good? And everyone’s doing the same thing. There’s a particular mathematically computed decision point that you can reach. If you can get to that point, then you can commit that decision. And it’s a very fast process. It happens currently our latencies are 750 milliseconds. So that’s less than a second and no other chain can come close. And if you really want to tackle Wall Street, if you really want to re-envision how the financial infrastructure of the world needs to be redone, well then this is the kind of speed and this is the kind of scale that you need.
18:57 Brian Rose: Yeah, and that’s the key message here. Everything else is just pieing this guy in dreams because if you don’t have the transaction speed then we’re gonna just still be talking about this for another three to five to ten years. You know when I watch you and listen to you and then I feel like you’re the Conor McGregor of the blockchain industry because some people are out there lauding all these top 20 market caps for their innovation and you’re up there with the belt saying you’re all bums maybe that’s a little too far but you’re like but you really call people out you say where is the real innovation we’re actually out there changing something that’s gonna make a real difference is that a fair comparison, are you the Conor McGregor of the bottom line?
19:35 Emin Gün Sirer: Conor is different. All I can say is I’ve taken a lot of blows. And my strength is science. As you know, I was a professor for many, many, many years. And I do call it out like I see it. And we have true innovation on our side. And there’s a bunch of copycats and a bunch of hype out there. And I’ve made my career essentially calling it out of hype whenever I see it or false narratives when I see them and as a result, I’ve taken a lot of blows as well.
20:05 So people love to go after the guy in the room that’s the Ivy League guy and they’re like, hey, I’ll take you down. And there have been all sorts of funny things. People have gotten death threats up to Wazoo for sure. I have had at least three different crowdfunded projects designed to prove that my work was wrong. every case the crowdfunded projects leader worked on the project and at some point flipped and said you know what he’s right we give up everything he said was correct but you know they end up doing some simulation they end up building some infrastructure and at the very end of it they say yeah yeah no we can’t disprove what he said because he’s got the equation that’s correct so yeah no i’ve taken a lot of blows um and uh and i do call it out like i see it’s a quite a trouble space
20:53 Brian Rose: so i’m not surprised but i really appreciate you calling this out because we’re in We’re in this big wave of innovation and when you stick a new name with a new logo and a new token that pumps and spikes with a charismatic CEO, it is very hard for the public and even VC to discern what’s real and what’s not.
21:12 And again, until you start seeing the users and you guys have some pretty fast growth numbers going from even August to October when it comes to total value locked and wallets and users. I mean, you guys are going up, you know, factors of 10 there. You know, that’s real. The proof is in the pudding. It must feel good to be able to show those numbers after the last couple of years have been talking about these ideas. Has that been important the last few months?
21:38 Emin Gün Sirer: Absolutely. So we had tremendous growth in the last few months. We went from, you know, a few months ago, we had about 300 million TVL and we are currently sitting at 13 billion We have a bridge from Ethereum to Avalanche. There is 5 billion of assets that people took out of Ethereum brought over to Avalanche because the experience on Avalanche is so much better. It’s cheaper, it’s faster, it feels like a natural way of using an internet service and they get just as good service on Avalanche if not better.
22:16 And the number of users has been going up exponentially as well. So just this month alone, our monthly active users are far, far, are about factor of three higher than last month. So it’s been a fantastic, fantastic wave of growth. And I’m really proud of what’s happening. There’s so much more to come.
22:35 So keep in mind that we are still a young chain and we’ve been around for only about a year. And in that year, we did so, so much. So both like at the very lowest level, we innovated at the protocol level, we innovated at the network level. But we’re also doing new things at the business level. Our partnerships with Blue Chip, DeFi projects like Aave, Curve, et cetera, that has been a big driver of growth.
22:59 And we’ve been doing a lot of NFT projects with people, with tops. Major League Baseball is issuing NFT cards on top of us. So that’s been wonderful. And there’s also all sorts of exciting new directions that we’re exploring with our business team, creating new digital assets that nobody has even thought about. So very, very soon, you’re going to hear about ILOs, initial litigation offerings, and people will be able to buy into lawsuits, essentially, will be able to support lawsuits using tokens. And that’s, this is all new. It’s because we have this holistic approach. We want to make the space much bigger. It has much more potential. There’s about 700 trillion of assets out there, not in blockchain form, financial assets, not in blockchain form.
23:45 And we want to get them onto our network.
23:47 Brian Rose: Just to quickly finish with the ILO, you’re looking at the world’s assets on the blockchain. Why grab that one first? Was it just low-hanging fruit that was really obvious to you where we could actually take this piece of real future value and just tokenize it?
24:02 Emin Gün Sirer: Absolutely.
24:03 So a lot of people expect some… They have funny notions about how change happens in the world. They think that blockchains will someday suddenly take over you know, Wall Street, like people will suddenly convert Apple stock into Apple stock on a chain. That will happen. But it’s very hard to have happened because there are so many incumbents in your path. And it’s really difficult to go up against them. And they have all sorts of regulatory modes, as well as many other practical modes for for you to surpass. So that’s, that’s the reason why we started looking into alternative assets, things that people hadn’t digitized yet, that are up for the taking, and we’re one of the few projects that are doing this, by the way.
24:46 I don’t understand why everybody else is fighting over the same pie and trying to grab market share from Ethereum, and Ethereum is fine, it’s perfect. I want to grow the entire space, as I said, and ILOs were there for the taking, lucrative space, huge returns historically, about 30% per year for litigation financing, and popular appeal, very, very popular. I know there are lawsuits that I want to put my weight behind. It appeals to an innate sense of justice.
25:16 I know when I see injustice, when I see it, I know when I want to step in. So it’s got all the right elements for blockchain engagement. And we thought, hey, this is something that would be wonderful if we opened it up. And so that’s the first one that’s coming up very soon.
25:33 Brian Rose: Nice. You mentioned Ethereum. What do you say to people that say you’re an Ethereum killer?
25:38 My question is is that what you’re doing isn’t that what aetherium 2.0 is going to do and just to put it in context when standing Was here who by the way asked 23 billion dollars locked up. We used to be on aetherium I’m sure a lot of that’s moving to a Vax as we speak Yeah, and he said he said Brian sometime in the next decade and he laughed and this is a guy who uses this network What do you respond to when people say are you an aetherium killer? And what happens to 2.0 and didn’t you guys just do what they’re trying to do?
26:05 Emin Gün Sirer: We did indeed do exactly what they were trying to do. They got stuck. So I have a lot of respect for Ethereum. I come myself from the Ethereum community. Vitalik is somebody that I consider a close friend, somebody I really love dearly.
26:17 And the last thing we want to do is take market share from Ethereum. Ethereum does what Ethereum does incredibly well. It’s a very nice sandbox. It’s an expensive sandbox now. And sadly, it’s been relegated to a bunch of rich whales and a bunch of bots.
26:34 Bunch of bots. It’s just very hard to use without bots jumping ahead. And that ecosystem is going in a direction that from long ago I thought, hey, this is not going to pan out. Their ideas about sharding are bad ideas. They don’t quite understand. And I tried to convey this to both Vitalik and Vlad Zamfir, et cetera, who were all working on Ethereum 2.0 at the time. This was maybe four years ago, four or five years ago. The difficulty bomb was in place, right? So, you know, Ethereum 2 was just around the corner, and we were all expecting it to happen within nine months and so on. But I could look at this and say, so A, they are nowhere near ready, and B, this is not the way to do it. But it was very hard to sort of steer that train away from wherever the rails it was on. They were committed to the form of the solution without having the solution. They were like, it has to be sharded. And, and every little shiny crypto, crypto, cryptography concept that they saw, they tried to add in, we had VDFs, verifiable delay functions, VRFs, verifiable random functions, all sorts of complexity was part of that solution. And so as a technologist, who has built a bunch of things, to me, it sounded like this will never happen. I don’t think this is a good strategy for building things that work. So when Avalanche came about, I thought, okay, I can try to bounce this off of the Ethereum folks, but they were not quite ready to go in that
28:08 Direction. They have committed to their current solution. And here we are. Ethereum 2.0 is perennially around the corner. It will always happen within six months. Exactly a year and a half ago, I was talking to Joe Lubin, and he was saying, look, Ethereum 2.0 is going to happen within six months. So that was a year and a half ago. And every time I talk to somebody it’s imminent, it’s coming, etc. But at the end of the day, it doesn’t exist. Ethereum 1.0 is a proof of work system. And it’s got all the downsides of proof of work. It’s also helping contribute to things that I personally find, you know, not abhorrent to be used as the word, which is melting down the poles causing climate change because it is so consumptive of electricity and power.
28:54 So we’re not Ethereum killers at the end of the day. We are not trying to compete with Ethereum. We’re just trying to show the world a better way to do DeFi, a better way to do blockchains. And I think the space is so big and the potential for growth is so huge that Ethereum can grow an avalanche can grow far faster because of its different architecture and and two things can happen concurrently. We don’t have to compete. It is not a zero-sum game. I’ve said this for many years. Even five years ago I was saying it will be a multi-chain future and there will be multiple solutions and you know I wish Ethereum much success. I wanted to succeed and we’re doing our own thing. We’re bringing new value into the space.
29:39 Brian Rose: No good answer. Let’s talk about Cardano Because again, Charles came as a co-founder with Vitalik.
29:45 I think they would both agree that Vitalik is the ship it and let’s see what happens. And Charles is the let’s white paper it to death. And they’ve just come out with a smart contract in the last month. A bunch of my team were asking me about you today and I was trying to think that maybe Emin is somewhere in between. He’s got kind of engineering sensibility but still the science base but he also knows how to ship a product.
30:07 Is that fair when I put that in there? And again, talking about the top five if Cardano is still number three, is it going to end up being a threat to Ethereum and potentially you, or is that something that’s just too far out in the distance?
30:24 Emin Gün Sirer: So for the first question, you were exactly right. I’m exactly in between Vitalik and Charles. So I do not ship things unless there is a proof of correctness for them.
30:35 I find a long time ago, I decided there are many different kinds of builders. It could be a person who builds things and ships them, or it could be somebody who proves things about them. I decided that I needed to be a principled builder. I want to be able to sleep well at night knowing the conditions under which my solutions work well. It’s like when we build trains, we know exactly what the angles ought to be, how much the rails can be off by, et cetera, and still have these things running exactly as we planned.
31:04 So that’s been my characterizing the key differentiator. And when Avalanche, for example, the first idea came to us, we didn’t even talk about it publicly until there was a proof of correctness for the Avalanche consensus protocol. It took two years. I could have gone out two years earlier, but I decided not to until I had the proof in my hand that allowed me to sleep well at night. And going forward, how is this gonna shape up?
31:34 Cardano is a system that is backed by many, many, many pages of white papers. So there was a big meeting of cryptographers about three years ago in Crussell. It was a big table of all the world’s crypto people sitting around. And someone said, look, you know, this stuff has been around for such a long time. Why is it that only two people understand it?
32:02 And the one person who wrote it thinks the person who did the other group has a bad solution, and the other group that understands that this other solution thinks that’s bad. So I don’t quite understand the Cardano solution. I do, I will grant that it’s in existence. The proofs I find very, very complicated. And if something requires 60 plus pages of a proof, then something starts tingling in me that says, hey, this is probably a fragile solution.
32:32 And there’s probably something that we don’t quite understand about the assumptions that go into it that haven’t been worked out. And then the style is kind of interesting too. As you know, there was a Cardano smart contract solution. It achieved 0.5 transactions per second. It’s incredibly slow.
32:52 You can have only one transaction per block essentially. And so that’s not a good solution. And on the white paper, it might look good, Well, you know, there was a hidden assumption there that there was no contention. So the moment there’s contention and suddenly it doesn’t work and you don’t really understand the limitations until they’ve built it. And that’s why they’re so, so late.
33:15 Going forward, what’s gonna happen? I’m not sure, but it seems like there is a big gap between how Cardano is marketed and what it achieves today. And it’s not a really usable platform. And yeah, so we’ll see how that pans out. The market in the short term has a lot of inertia in it.
33:34 Systems that have been around a long time end up developing big cult followers. And these people hold, et cetera. There’s a whole bunch of market dynamics that you know very well that cause the market cap to take some time. In the long term though, the true value is always reflected in the market caps. So if you have true innovation, then you jump ahead.
33:55 So we are just sort of not competing with anybody. We’re just letting the whole process shake itself out. And it’s very clear when you look that there’s a usable system and there’s other stuff. I will give you one interesting tidbit though. This kind of got me cracked up a little bit.
34:13 So Charles was asked about, you know, so he said something like, well, I’ve just solved this whole problem and of doing smart contracts with the UTXO model. So Cardano has a UTXO model, he needs to add it in there. And so, you know, I’ve cracked it. And they’re like, okay, so when is it gonna be out? And he says, well, in three months or so, we plan to have the peer-reviewed white paper.
34:37 And so that struck me as odd. And you know why? Because, so first of all, he’s not trying to ship or build a system. He’s trying to write a white paper. And so that’s not what his community wants.
34:49 So there’s a disconnect there. And then the second thing that really had me laughing was, wait a minute, somebody has to peer review that thing. Who’s that person? That’s me, so suddenly, suddenly I’m on the path to Cardano’s success. So that’s, I think, kind of fun.
35:07 Brian Rose: That’s funny. I appreciate you giving us that insight as well. And I know you haven’t really commented about that much in the past. Talk to me about layer two solutions. Everyone says they’ll save the day.
35:16 Layer two will make Ethereum faster. Lightning will make Bitcoin faster. I think I know what you’re gonna say, but what do you say to those people, especially people new to this space, that are maybe regurgitating something they’ve been told? What do they need to know?
35:29 Emin Gün Sirer: There’s a lot to say about Layer 2s.
35:31 Let me try to summarize them. And let me come at this with some credentials. So I built the world’s fastest Layer 2 system, the Skool T-chain, T-chain. And it still is the world’s fastest. It uses hardware support.
35:43 That’s where it gets the speed from. So I know a lot about Layer 2s and I’ve thought a lot about Layer 1s, obviously. Layer 2s are what you use when you run out of all other options. When you are giving up, when you’re throwing the towel in, that’s when you pull out the Layer 2 Turk. So it is essentially a way of saying, I have failed to innovate on my chain, and now I’m going to go to Layer 2.
36:09 There are lots of downsides to Layer 2 solutions. First of all, if you’re trying to use them for payments, they are limited in capacity and they also have privacy issues. If you’re trying to do Layer 2 for smart contracts, then you’re giving up a lot of value to some centralized party and that’s a huge problem. So whoever’s operating that layer two solution needs to suddenly or is in a position to order transactions and they can take transactions from you and can start doing things like jump ahead of you, jump, you know, whatever else.
36:42 So there are techniques to mitigate some of these but it’s a very difficult technical challenge. The other thing about layer two solutions they do not compose. That is, if you are using one solution, then I need to be using that exact solution. So suddenly, we used to have just a common base, a common foundation on layer one, and now we added something else that everybody has to use. So it’s like I ditched my layer one, and I now have something new called layer one plus layer two, that layer two, that specific one.
37:16 The more of these solutions you have, the worse you are, because your liquidity, your infrastructure ecosystem gets fractured. And so lastly, I think the reason why all layer twos are fundamentally destined to fail. And the reason why many technologists don’t understand why they’re destined to fail is the following. They overlook a fundamental feature, a fundamental service that layer ones provide. And that is the rendezvous service.
37:47 I can interact with you without knowing who you are. Layer 1’s purpose is to bring unknown parties together. Layer 2’s don’t achieve that property. They’re discombobulated. They actually, it’s hard to find your counterparties.
38:02 It’s hard to find what it is that you seek because there are so many of them and because they fracture the space. So if you mess with rendezvous, you take away from the fundamental value proposition of blockchains and therefore they’re undesirable. So that’s my short series of grants. I tried to make it as concise as possible, but they’re not here. They’re gonna be here to stay, but they’re not here to solve a problem in any longstanding fashion.
38:29 Brian Rose: Right, they’re bolt-on short-term fixes. I love this concept of rendezvous. I’ve never heard anyone talk about it but you, but it’s a great point. When you start bolting things on to make them work better, you forget about the fundamental reasons we’re on the chain in the first place, that right now might not seem important, but later you’ll realize that’s missing and that will kill a lot of the innovation, the liquidity, et cetera, going forward. Can we just speak on Lightning Network and then might as well talk about the Bitcoin maximalist while we’re at it.
38:55 I had Max Keiser on this show in 2013 telling me about Bitcoin. I just bought one for 85 pounds and we were talking about all sorts of things, but he is a maximalist. His name is Max as well. And he’s gone all in on this and all the maximalists tell me that Lightning is gonna replace everything, all of the smart contracts, all that stuff. Can you just address if they’re right or if they’re wrong?
39:17 Also just the concept of Bitcoin maximalism. I think you’ve even go as far to say that Bitcoin might not even be around in 10 years and that’s okay. So tell me what you’re thinking.
39:28 Emin Gün Sirer: Okay, so first of all, I think the maximalist thesis that there will be only one coin has been disproven in every single fashion imaginable. We have 8,000 coins.
39:37 They operate. They’re not gonna die. Even the dead ones fail to die, right? Ethereum classic is still around and I could name a bunch of other coins. They just kind of flounder around, they don’t go away.
39:49 So it’s not going to be the case that there will be one coin. So that whole maximalist thesis at its core is flawed. That’s all I need to say. I don’t need to actually go into any other details about anything else. Is Bitcoin going to be around?
40:04 Is it not going to be around? I don’t know. Maybe it’ll be around. I hope it’ll be around. After a few more halvenings, it’s going to be a little tough to keep the Ethereum, security budget diminishes over time. So as the security budget diminishes, it’s going to be hard to keep that system going. So, you know, after two or three havenings, it’s going to be a different story. But, you know, it might be who knows, but but the core thesis is wrong. And these coins do different things. What maximalists fail to understand, they’re kind of like those people, you know, like your uncle, and, you know, he figured out how computers are, but then he stopped as soon as he figured out Excel. And he doesn’t really understand the other things that computers could do for him. So it’s kind of they’re kind of like that, they discovered a new something brand new, something amazing, something really wonderful, they got a glimpse of it. And then they shut their minds down. They decided, okay, this is enough. We don’t need anything else. And now I’m going to go on a on a crusade against everything else that’s trying to innovate. That’s not a good approach to life. I find that really, really confining. And I would hope that they would sort of stick their heads out of the sand.
41:14 Look around, DeFi is such an exciting space. And anybody who was a maximalist, they’re on a very slow path. Yeah, their coin is going up, that’s wonderful. But the other coins are going up far more. They have far more upside potential.
41:27 They have many more uses. They bring solutions to people that need solutions. They bring solutions that reimagine how finance is done. It’s a very different universe. So, you know, that’s all I have to say about them.
41:41 Lightning is a fine technology. Layer two’s for Bitcoin are sorely needed because layer one for Bitcoin is so slow. You cannot use it for payments in any reasonable timeframe. And I wish Lightning much success. I’ve been holding my breath.
41:55 And I hear another 18 months will make Lightning highly usable. So I will wait another 18 months. I’ve been waiting 18 months for about three, four years now.
42:04 Brian Rose: All right, thanks for putting that in perspective as well. Layer ones, can we just talk about those quickly?
42:10 Because sometimes you say, first of all, with layer twos, people create a node and then they call themselves a layer two. You also have argued that sometimes layer twos are layer ones in disguise. Recently we saw someone like Solana kind of really explode and then NFTs on the back of it and they’re providing a faster solution would probably be very different science than you. Terra and Luna, there’s a lot of them now that are kind of top 20 market caps and kind of hot.
42:34 How do we look at those and judge them in comparison to say an Avax?
42:39 Emin Gün Sirer: So, it’s very easy to come up with solutions that are centralized. So the science behind centralized coins is trivial. Anybody who’s listening to me who’s ever taken a CS course could build a centralized coin. You could run it on your laptop and you could get amazing numbers because you’re running it on a single machine on your laptop.
43:02 Now, you could go one notch above that, and you could run it on a small number of machines, and still get pretty amazing numbers, and we see that, and that’s fine. It’s just to a technologist, I think anybody who understands the true technology behind these systems, they’re going to see this and say, look, that’s a cop-out. These things are just, they’re just tradable tokens. Their market cap can go up and down. There might be a lot of money to be made off of them.
43:28 A different story. But deep down, they’re not delivering the blockchain vision. You want a decentralized, a fully decentralized system. And you also don’t want a coin whose value proposition is, there’s a big whale out there who’s helping us. That’s called market manipulation. And that person isn’t some altruistic person. If they are manipulating the market, well, they’re doing it for a purpose. And at some point, they’re going the pull out. And so, so it’s, it’s a very funny, funny game to play. And, but it is appealing to people. So we have to recognize this, you know, people want manipulated markets, and people want to hitch their horse to a big thing saying, Oh, yeah, this is, you know, so and so’s cart, I want to hitch my horse to it because so and so is as a big cart or shiny cart or whatever. Well, so and so built that shiny cart by taking other people’s horses. So you got to be careful. And so, you know, that’s my sort of short take on some of these coins. Be careful out there. You really want a truly decentralized solution. One of the core value propositions of our community and everything I’ve ever done for Avalanche is that we chose to build decentralized solutions controlled by people, not manipulated, whatever else centralized things that are that that are in the hands of a small number of people.
44:52 So that’s one of the differentiating features for Avalanche, and if people can see that as part of the value proposition, then they know what to do.
45:00 Brian Rose: You know, I think we kind of agreed now that you’re in the middle of the spectrum between, say, a Vitalik and a Hoskinson as far as the white paper versus just ship it. What has been the secret of your success? Because you’ve said before, my job is to get talent in the same room. And you’ve also made a joke before that if you fired all your biz development department, then you would be a layer two solution, which was a nice little knock there.
45:25 You’ve also brought in venture cap. I think you had Andreessen early, you had a $230 million raise recently when you sold tokens. I mean, these are all big strategic moves. And again, you’re constantly inviting in all sorts of other projects and helping them implement Avax, which takes a lot of manpower and creativity while you’re trying to also build a technology solution that doesn’t break. You know, as James Brown said, you pay the cost to be the boss.
45:51 I mean, you have to do a lot of things at the same time. Can you speak on some of those parts of you that allow you to be successful?
46:00 Emin Gün Sirer: Yeah, I think it’s very simple actually. So what I’ve done to the space is I’ve brought the cutting edge of distributed system science to it. That’s really it.
46:11 And I brought it with a team that I tapped into that hadn’t been tapped into, a team of very brilliant researchers and developers. So what did we do? Well, we innovated on the platform side. And I think I talked a little bit about the consensus protocol and the network architecture vision that powers Avalanche. But in addition to that, we went and innovated on the bridge side.
46:35 Our bridge uses SGX technology. I’m not aware of any other team that is in command of that technology that’s using it for production. our bridge is fully trustless and our bridge ends up, ends up having about $5 billion in it today. And it has a very, very nice user experience because it is, it distresses. Also, it also is not accessible to, the security architecture is quite good in the sense that there is no client access directly to the bridge.
47:08 So we will continue to plan and we continue to innovate. we plan to innovate across all fronts. We will bring new assets in, we bring new technologies in. And behind my success has been that sensibility to take things that actually work, technologies that I know that work from the research space and we bring them in to blockchains. So that’s really been the key to my success.
47:36 We’ve shied away from complicated Rube Goldberg machines. That’s, I think, another thing. there is a lot of tendency in this space to take the latest shiniest objects, the moon math, the craziest, latest things that roll off the research space and put them into blockchain form. And that’s something you could do, but usually the latest craziest stuff that rolls off the press typically has some issues with it that are not well understood. So that’s why we haven’t really seen VDFs, VRFs, et cetera, take off as much as people thought they would.
48:12 And so I think that sensibility is very important. You want to be on the cutting edge, but you want to apply to it some kind of Occam’s razor that says, has this been proven in practice? So I think that those two things combined have allowed me to build things that are cutting edge that actually work.
48:31 Brian Rose: And how do you choose VentureCap or work with VentureCap as in the partners or decide how much and when to get in, what’s some advice you could give to people out there on how you deal with that?
48:43 Emin Gün Sirer: Yeah, that’s interesting. So when I started this journey, I was a professor, I didn’t understand the venture capital space at all. There is a lot of money out there and money comes with all sorts of other services and entanglements. What you want are, and I didn’t understand, I didn’t appreciate the difference between VCs and hedge funds. And so people should pay attention to coins that have a lot of hedge funds behind them versus coins that have a lot of brand name VCs behind them.
49:11 Venture capital fosters the work. Venture capital is long-term commitment. Venture capital typically comes with a lot of support and a lot of down the line relationships that are incredibly valuable for that project. Hedge funds are there to make money. And so they’re buying coins only to sell them later on.
49:33 So we’re away from hedge funds, choose venture capital, choose partners that are committed to the space. There is no shortage of people out there, I found, that on Twitter when you talk to them, they talk up a big game, blockchains are going to revolutionize the world, etc. Easy talk. But when you go to them, say in March 2020, you say, look, we’re selling coins or whatever, it’s a bear market. And then suddenly all the spigots are closed.
50:02 They don’t believe in the space to invest in it when the times look like they might be rough for a little bit. So there’s a lot of money out there where the people behind it, despite their public stance, don’t actually believe what they say publicly. So I veered away from all such sources of cash. And the partnerships you build are key to your success later on. These people end up opening doors for you, and all of these partnerships I’ve selected with an eye towards developing a long-standing relationship to their hinterland. And whether that hinterland is a geographic region, or it’s industrial connections, or it’s something else, it’s paid off incredibly well for us to date. And I think to young entrepreneurs, I would say, yeah, you will need cash. This is a capital intensive effort. You cannot succeed without it and and the way to do this is to find sources of money that bring your value over over a long period
51:00 Brian Rose: and if people are listening to us right now either from a business perspective or an individual what’s the best way for them to jump into Avax I was actually playing around earlier I got my Avax wallet I linked it to my MetaMask I was on I think the X chain and then I put my C chain to send it over I think over to MetaMask but those three different the X chain, P chain and C chain are part of the reasons why you have this scalability and also the security, because you have these subnets.
51:30 Maybe you could just speak on that and then next steps for people that wanna jump into the Avax world.
51:37 Emin Gün Sirer: Sure, so let’s see, if you wanna get into Avax, the best way to do so is to buy some coins at an exchange and start playing with the system. MetaMask is perfectly capable of holding a box, the coins and allowing you to interact with DeFi on Avalanche, you can go to ecosystem.avox.network and look at what you can do and look at some starting points for DeFi experimentation on top of Avalanche. The Avalanche network architecture is a little bit different from what you might be used to. Most other coins are monolithic, one size fits all solutions. They have just one network, and that’s all they’ve got. So Ethereum is kind of like that. There’s Ethereum coin, and then the Ethereum network. Avalanche supports multiple subnets. There is something called the P chain, the platform chain. There’s something called the X chain, which is really, really fast, but only supports asset transfers. And there’s something called the C chain, the contract chain.
52:37 And that supports the Ethereum virtual machine that supports all of the things that you might might be used to from Ethereum. So most people I think will choose to interact mostly with the C-chain and that’s a good place to start. And MetaMask, like you can continue to use all of the Ethereum tooling like MetaMask with Avalanche or you could use the Avalanche Wallet at wallet.box.network. So those are some starting points and it’s, I think you’ll find that it’s fun.
53:05 I think you’ll find that it’s so fast and so pleasant to use that you forget you’re dealing with a blockchain. You don’t have to wait for confirmations and spinning little things. It’s just so blazingly fast that it’s just, it makes blockchains exciting and really a joy to use. That’s what we targeted.
53:23 Brian Rose: Yeah, I just had a flashback.
53:25 I remember reading one of the original books about Google where they had the search engine and they did some customer surveys and they found out that the faster the search was, the more the customer said that search was actually a better search. They realized it was just faster And that made people think it was better, even though they gave them the same results. And so, you know, you don’t think about the speed, just like when you’re in a movie, you don’t think about the lighting or the audio, but it’s an integral part of you enjoying the experience.
53:52 And sometimes even being in the experience, sometimes you’d rather just walk away or turn off the movie or the channel because those other things are so bad. Is this the thing maybe we don’t talk about enough speed? I mean, speed is everything in this business, and it is the future of DeFi at the same time.
54:11 Emin Gün Sirer: Right, and in fact, we talk about speed using the wrong metric. So until very recently, the thing that dominated all discourse was TPS, transactions per second.
54:21 So, and I kept, you know, I’ve been giving the following example to people. Suppose you have, like TPS numbers are so easy to fake and there are some coins out there that are faking their numbers up the wazoo and I’m not gonna name names, But the Solana people know that the numbers they report are not like the numbers that everybody else reports. They’re counting things very, very, very in a fashion that is almost outright misleading. So, but let’s actually get into this.
54:50 TPS is very easy to fake. So it’s suppose you and I build a system, suppose it makes one decision per day. And so we have, we could do this. We could say, guys, we built something that sucks. It’s only makes one decision per day.
55:04 And then that’s what we got, this terrible 0.0003 TPS, right? That’s what we got. Or what we do is we collate a gazillion transactions. We take the phone book, right, of transactions and we decide the phone book. We’re like, hey, we’re gonna approve the phone book right now.
55:21 And so, and then we count every single name in the phone book as a separate transaction. We still made one decision on the phone book, but the phone book contains so many names. So now we say, well, look, you know, Brian and I built a system that makes a gazillion TPS because the number of names in the phone book was so large. So this is the game that a lot of people are playing. So forget the TPS numbers, they’re meaningless.
55:46 Look at time to finality. That’s what determines the user experience. And that’s what we’ve been focused on from the get-go with Avalanche. So we achieve numbers that are just untouchable by anybody else’s technology. We’re achieving currently, as I mentioned before, 750 milliseconds.
56:05 That’s kind of like a slow eyeblink. And that’s how long it takes for a transaction to go from, hey, I just sent it into the network, to oh, oh my God, it is immutable for all time. It’s been accepted, it will never be reverted. So it’s blazingly fast, and time to finality is the name of the game. That’s what we should be talking about.
56:25 Brian Rose: Now, based on those speed assumptions, then tell us, what is the future of DeFi? Because I thought you were gonna cut me off when I introduced you in the beginning by saying I was impressed with all the innovation. And you know, I saw the yield swapping and I saw the coin swapping and I saw the liquidity pools. I was like, wow. You know, no one would have ever thought of this on Wall Street where actually I get shares in the company I transact with that provides liquidity.
56:49 But you think we have so many orders of magnitude further to go in DeFi. You don’t even think we’re innovating. We’re just plugging what, new tech into old ideas.
56:58 Emin Gün Sirer: No, no, no, there is innovation in DeFi. And then there’s a lot of very exciting new services coming up, DeFi services coming up.
57:06 And so, but what we have done so far is just barely scratching the surface. So people have now seen DEXs and they have a notion of how DEXs could work. And so what they’ve really mostly seen are automated market makers. So DEXs like Uniswap, like Pangolin, like Trader Joe. And those are fantastic.
57:28 And that’s a very good start, but there’s an entire universe of even faster DEXs for things you want to trade in real time. So, and with far less slippage. So we’re going to see a lot more innovation on the DEX front. We’re going to see what we call central limit order books, you know, things like that look like the NYSE, things that look like the NASDAQ actually enter the blockchain space. That’s going to be fantastic.
57:55 We’re going to see far less slippage when it comes to trades that people do on DEXs. So currently if you interact with AMMs, there’s a lot of slippage that you can experience depending on the liquidity on the AMM. We’re going to, there’s going to be a huge battle and I think Avalanche is poised to, well poised to win this. It’s gonna be a huge battle to make sure that people don’t jump ahead of users. So this is sometimes known as minor extractable value.
58:25 In Ethereum, the miners are in prime position to look at what you wanna do and then squeeze you in between their transactions and extract value from you. Suppose you wanna buy something and they know how much it sells for, well, they could buy it ahead of you and sell to you at a higher price. And people do this all the time. And there are lots of different variants of this attack. And it just works counter to retail.
58:51 And it’s no different than what happens on Wall Street. Those HFT guys are jumping ahead of you, and this is a different form of it. And I am not here to take down Wall Street and replace it with something that’s equivalent or worse. I guess we don’t want to just change the actors, we want to change the game. So, and we have the potential to build systems that are bulletproof against these kinds of activities.
59:15 But when I say bulletproof, well, at least much, much, much better against these kinds of activities, making it entirely go away, might actually be a hard scientific problem. But certainly reducing its amount and protecting retail is the goal. So I can go on like this. There are many other DeFi projects that are coming on board. So yield farming is an exciting area.
59:37 There’s a lot to do. Portfolio management is a very exciting area and it takes three years its head and all sorts of things. So when you do staking into pools and into yield, What you’re really doing is you’re managing a portfolio behind the scenes or the DeFi protocol is managing a portfolio. So there’s a lot of innovation to be done there. There’s a lot of science that’s sitting by the sidelines that has not been applied into the blockchain world.
1:00:02 So that’s going to open up an entirely new universe. At the heart of it all, what this innovation will do is it will make accessible a set of financial tools that have only been accessible to the very, very rich. Could you not have the latest of science behind your portfolio management today? Yes, if you go to Goldman and you’re a high net worth individual, that could happen for you. Well, DeFi is gonna bring it to the masses.
1:00:32 You could tap into it with $200. And that opens up an incredible new world. And I think it’s just fantastic. And I wanna end on this last note. So you might remember when you entered finance, to actually have a seat at the table, you needed to have a terminal, right?
1:00:50 And if you needed to have, if you wanted to be a market participant, then you had to pay $150,000 a year to have a connection to NYSE. And now anyone can trade. There is nothing that would be ludicrous to try to charge people for it. You can connect to the Avalanche network or the Ethereum network for no money at all. And that’s a fantastic development.
1:01:13 And it’s wonderful to see energetic people, young people from all over the world just go head to head against the Wall Street Titans on the same unifying platform on equal terms. And that’s what gets me really excited.
1:01:26 Brian Rose: I can tell. Can I get your thoughts quickly on NFTs and how Avax is gonna play in that space?
1:01:32 Emin Gün Sirer: Sure, NFTs are wonderful ideas.
1:01:34 They currently have been used for a very limited use case. I’m really excited about collectibles. So I’m really excited about what we knew as you know, Major League Baseball cards, etc, being traded around. On Avalanche, we have MLB, we have Bundesliga from Germany, we have a bunch of other assets coming on board. Those are fantastic. I’m also excited about the the more crypto native NFTs, the eight big eight bit punks and so forth.
1:02:04 They’re fine. They’re interesting. But but there’s true innovation to be had there. NFTs will end up coding for credentials. So NFTs can actually help you open doors. And I mean that in a literal sense. NFTs can help you do all sorts of things online that you couldn’t do with NFTs. You can do without NFTs. So I’m really excited about that. They require a little bit of tweaking, a little bit of additional infrastructure. I’m glad to report that we’re working on that at AvaLabs. And so yeah, they are here to stay. They are part of a cultural phenomenon as well. And I love seeing that play out. That’s sort of where we are. And, you know, we’ll see how the whole thing takes shape.
1:02:48 Brian Rose: Yeah, it’s a fun space. I don’t think we can even imagine how it’s going to morph and grow multidimensional. I’ve bought my first NFT. I sent my daughter one last week. I’m not the coolest dad in the world. I’ve sold one. I’ve minted one. I’ve minted one. I’ve sold.
1:03:03 I’m just getting to know the space because it is part of DeFi. I think it’s 20% of the market cap is in NFTs and it’s a real part of this space. I’m also trying to understand the metaverse forcing myself to into the axis infinity world, just so I can understand the gaming mentality, because it’s all part of this space, too. So I’m trying to get up the curve. Final question for you is five years from now, what does your world look like?
1:03:28 That’s what I’m kind of curious. So it’s 2027, you know, Jan, or, you know, end of the year 2026. What does your world look like? You know, what is Avax doing? What are you doing? What’s the world doing now in this space? What do you think?
1:03:39 Emin Gün Sirer: Okay, so the easiest way to forecast the future is to simply look at the current world and pretend you’re looking into a crystal glass, but you’re really looking backwards and you’re just extrapolating. So here’s what I see. I see a lot of funds going into crypto. I see this space growing immensely. And what we’ve seen is the is essentially the tip of the iceberg with the hedge funds coming into crypto.
1:04:04 There are pension funds, there are like large sources of money that have been sitting on the sidelines with FOMO because there are no yield opportunities anywhere on the planet right now. And what are they going to do? They want to buy more Facebook stock. I cannot imagine a fate more boring than that. Just kill me instead of having me do that.
1:04:25 So instead, what I think is going to happen is we’re going to see the SpaceX continue to grow. So that’s one thing. thing we’re going to start seeing institutional plays defies until now has been is it just been like what the Wild West and it’s been fantastic as I’m sure you’ve discovered from the discussions with Stani etc the other defied players. So that’s going to be supplanted by people coming in with institutional money with institutional concerns. We will need chains that actually respond to their needs. We will need KYC AML walled gardens for institutional players to come and take advantage of DeFi. So, like it or not, it’s a fact that, say, whatever, Citadel cannot trade with certain countries. If there is a user from a certain country, they just can’t do that trade. They’re just legally prohibited. And they need a universe where they understand who the players are. Like it or not, there are many banks out there with illiquid assets on their balance sheet that they want to put on a blockchain. But those that they need to control the full life cycle of that asset. So again, you’re going to need chains that accommodate this. So from the ground up, we built Avalanche to respond to these needs.
1:05:45 So I see a good future ahead for us. The space overall will expand, Bitcoin will grow. And I I said some, you know, I said critical things about lightning, I’ve been saying them for a long time. But regardless, Bitcoin will grow. I’m a big believer in Bitcoin and what it has done for the space.
1:06:00 Ethereum will grow. We’re not a killer of Ethereum. The space is going to be so big that the growth is going to be, is going to be great for all of us, but it’s the differential growth that will define the systems. There’s so much more stuff to happen in the future that it’s those systems that can absorb that growth that will be at the forefront and that’s what we’re working on.
1:06:20 Brian Rose: exciting stuff. I really appreciate the time. I’m a big fan of what you guys are doing over at Avalanche and the more I’ve gotten to understand how you created these subnets and how you’ve kind of proved this future and again this whole lifecycle existence of an asset is an important point whereas you can convince an institution to tokenize an asset but then what happens five years from now, ten years from now, what happens with all the other subsequent legality issues and the fact that you can kind of custom design those subnetworks inside Avax is what makes it interesting took me a while to get my head around it now I think I’ve got my head around it so thank you I’ve got my Avax wallet and yes it was fast so I appreciate the work you guys are doing and I am gonna call you from now on the Conor McGregor of the blockchain world calling everyone out on stage and again appreciate you appreciate you going out there and creating this technology and again I can only imagine what your world is like behind the scenes where you have to keep so many balls in the air to get
1:07:17 Your technology working, keep your community happy, keep biz developing, keep liaising, and it’s it’s it’s quite an impressive feat what what you’re doing over there. So great work and just please keep up the great work going forward.
1:07:30 Emin Gün Sirer: Thank you Brian. It’s a lot of fun thanks to the community and thanks to people like you.
1:07:35 Brian Rose: Alright good stuff. Alright check this out.
1:07:37 Avax is the token. We left all the websites. We’ll have all the links here below. Basically get some and start playing with the wallet because it’s Probably here to stay for a long time. All right folks. That’s it on London Real. We’ll see you next time
1:08:03 Emin Gün Sirer: Thank you so much, sir.
1:08:06 Brian Rose: Take care. Bye
