Crypto’s Momentum Shift, Kaito’s Token Launch, and Bridging UX | Roundup

I think we're returning to a dynamic where we can actually focus on building real things and doing real onboarding. And I feel good about it.

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Hey everyone, quick disclaimer before we get into today's episode. Nothing said on Expansion is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Our guests and I may hold positions in the companies, funds, or projects discussed. Expansion was kickstarted by a grant from the Celestia Foundation. All right, on with the show. All right everyone, welcome back to another Expansion Roundup. You got Mike, Nick, Jill, uh, we're missing Uma this week, but gonna hold down the fort. How's everyone doing?

Good. We're so back. We're gonna have an optimistic pod today.

We're feeling cleansed, right, Joe? Cleansed.

Catharsis.

It's optimistic because Uma's not here, so it's not a ZK pod.

We're just killing it with the puns, right off the bat. This is great.

Come on. If not on these types of podcasts, when can you tell those jokes? There's like 4 people in the world that appreciate that. So yeah, as our producer just mentioned, we got to start this off. I want to show Das. Data Availability Sampling, but it is also the name of the institutional conference that Blockworks is hosting in New York, March 18th to the 20th. So, uh, definitely come by. Uh, we got an expansion code for you. It'll be in the link in the show notes. Mark's gonna be mad at me because I can't remember what it is, but click the link. You're gonna get some money off. Uh, we'll see you in New York.

Um, yes, so the US is so back. US conferences, we're excited.

I actually want to go to DAS, by the way, Mike. At first, I remember like the other— I think last year was in London or whatever. I was like, fuck that, who wants to talk to a bunch of suits? And this time around I'm like, you know what, I think I do want to talk to some students.

Don't sound so bad. Yeah, New York is— it's kind of— actually, I've talked to like 3 founders in the last week that are either moving back to New York or they're moving. Mostly what it feels like is what I've heard is that the developers are going to be where they're going to be and it's very difficult to get them to move anywhere. But the business functions are mostly moving back into New York.

I'm moving to D.C. personally.

That's really—

no, I'm just kidding.

I was like, wait, is this the beginning of the political arc?

You did this movement labs? I thought this was the last year I was talking to you. Sorry, Yoshi.

Yeah, I— we love you, Yoshi.

Yeah, I—

are you actually going to D.C., Nick? That'll be fun.

No, I just was totally— oh, okay.

I mean, I think it's— I think it's next year.

There's no surfing in D.C. Come on, Mike.

So, Jill, you're feeling— why are you feeling optimistic this week? Talk to me about the catharsis and the cleanse.

Yeah, I mean, look, I'm not doing any grave dancing. I think that what has happened over the last couple of weeks is like a real tragedy for retail and for the onboarding, onboarding that I think a lot of people hoped was happening in the space. People have gotten totally washed out and I think are seeing meme coins for at least what I, for a long time, always kind of knew or thought they were. Um, but I think that it's healthy. I think that we're returning to fundamentals. I think we're returning to a dynamic where we can actually focus on building real things and doing real onboarding. Um, and I feel good about that. You started to make a comparison, Mike, to the period when Terra and Luna unwound and just like all of this there's not leverage in the system, I would say, in the same way. Maybe there's like reputational leverage that was in the system, but it's, it's not akin to it in terms of that. But just in terms of sentiment and just in terms of kind of a return to reality that I think is cathartic for people who are in the space for the long term, I, I welcome it. So that's, yeah, that's why I think we're actually so back right now.

Me too. Oh, Nick, go.

Well, no, I just, I feel like it's a little premature to say that we're returning to fundamentals. I hope that's what we're doing. I mean, I do agree that I feel like this has been a wake-up call for a lot of people. I've actually had some conversations with folks who are like, you know what, I'm leaving the space. I think there's a lot of disillusionment that's come out of this. And these are people who are like OGs. They're not like It's not like, oh, I just joined the space a year ago or something. We've been in for a long time and they're just like, dude, you know what, this is the last straw. I just can't bear this anymore. I'm trying to build something real and then we have all these assholes that are just like ruining it for everyone else and just trying to extract.

So it was ever thus, like, this has been the story of the space since the beginning and you then have these moments where it just becomes so obvious to people what's going on. And you can cleanse from the assholes. And I think that that is where we're at. So I, yeah, I want to like get on the phone with all of these people and encourage them like, no, you've just got to stick it out a few months here as we do this purge, but we're gonna rise again from the ashes.

Okay. So I, let me actually try to find, this was funny. I was having a, so I've been messing around a lot with Deep Research, the new ChatGPT, like that pro, you know, $200 a month one. It's actually really good. But I was asking it about just lying in bed having a conversation, as one does, about the history of financial frauds and speculation and stuff like that. And let me give you this. So I was just asking it about previous bubbles and things like that that have happened in history. And let me read you guys this quote because I thought it was super interesting. So on the flip side, after a crash like the South Sea Bubble or the 1929 stock market crash, there's often a culture of cynicism or reform. In the 1930s, speculation became a dirty word for a while. After 2008, there was public outrage, yada yada. For instance, it took stocks a long time to regain public trust post-1929. It wasn't until the 1950s that the majority of Americans were open to stock investing again. Isn't that funny? So none of this stuff, again, like, just to be a broken record about this, is new. It's just happening faster and faster in crypto. And I don't know, I mean, when was the last big outrage bubble? This feels a lot to me like Terra, everyone being mad about these scammers and grifters. It also feels a lot to me like the ICO bubble burst where people said, oh my God, I can't believe it, never again. But honestly, 5 years later, I think a lot of people look at ICOs and they're like, okay, well, if you put a little bit more rules around it and it wasn't so great, I think we actually would like to see a world where ICOs come back. So I don't know, I, uh, you know, I don't know, I'm not as negative as everyone else.

Yeah, yeah. I actually happen to get in this, uh, fight with— or not fight, but a conversation, uh, a very civilized conversation with this guy, uh, Red Hair Shanks on Twitter, who's been a very vocal critic of, of, uh, Celestia about— he was— and actually, this, this actually relates to one of Joel's tweets, uh, he was basically shitting on Celestia for like enriching insiders and for taking on VC funding and all this stuff. And I had to explain to him, I was like, dude, like, there was literally no other way to do any kind of— you could not— a public sale is like completely off the table.

Correct.

Last like 5+ years. They're like— and so I kind of do have on some level like ICO envy a little bit of like, if you're a legitimate— the thing— ICOs are actually great. I think if you're a legitimate project is you get to like distribute token to the community at a fair price, like bootstrap all these believers and things like that. And like raising from VCs means that then you have to build community a different way, which can be a lot harder, frankly. And that's not to say that VCs don't bring value, but like, I don't know, I feel like now the pendulum swung so far to the other side that it's been really bad and we need to bring it maybe not all the way back to 2017 where, you know, scammers, like that was the ultimate grift was like, I remember there was one ICO that was like, I can't remember what it was called, like maybe Banana Coin or something like that. It was about like tracking of food on-chain. And then they raised like $18 million. And then the next, like literally the hour after the ICO, they deleted their website and it just said penis. Like if you went to their URL, it just said penis in the top left.

I don't even remember this.

Oh my God. That level of shit.

I hate it, but I'm laughing.

There was so much of that though, to your point.

Yeah. So we don't, shouldn't go back there, but it'd be great to be able to like I don't know, be, be not where we have been the past 5 years, like somewhere closer to ICOs and like allowing public fundraising.

And I mean, I think this is happening with Echo and Legion and like, I think that's all super positive, super bullish, but exactly. People have this tendency. And again, I'm talking my own bag, like we're a venture-backed company, but people have this tendency now to lump all venture-backed companies A, together, and B, in with kind of like a meme coin meta of like, oh, it's just like a venture-backed infra meme coin. And I think that that's total garbage to try to dunk on companies that took venture funding when that was the only option.

Well, yeah, honestly, I, you know, I think that you have to— there's a certain class of like non-Twitter trader accounts, which I find a lot of value for a lot of things, but I would not listen to them about like long-term more long-term oriented stuff. And I've, I've always really hated the categorization of lumping like meme coins and infra coins into the same category, because all you have to do is talk to the team. There's such different things. There's such a big difference in between.

And there are definitely some bad actors out there who purported to be building infra, for sure.

But come on, you just have to talk to the teams. Uh, now one thing that I also want— I want to start to connect this into some of our conversation for the week. Oh, I also, Jill, I owe you your flowers. You were right, the Trump stuff was not bad. Uh, so You win. Yes.

Yes.

So I was wrong about that. I still am bullish on this idea of meme coins and creator coins in the long term, but we can talk about that maybe if we have time at the end. But crypto also, I've noticed it operates on these big swings of different narratives and ideas that gain momentum.

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And I have one thing that I think we're at a really interesting inflection point, a moment in time here where if you go back to 2021 and 2022, this idea of modularity with Ethereum and Celestia was very much in vogue. And that was if you actually voiced being a monolithic maxi, that was like really way out of consensus, right? And then the momentum swung hard in the other direction for the last couple of years towards Solana mostly, and they've got a bunch of activity there and they're generating revenue. And you get all of these sort of thought pieces about why it actually makes sense to be all on one shared layer, one shared state. And my prediction to you would be that I think we're about to swing back in the opposite direction here. So, yeah, I think there's some element of path dependence here, but there's also some— the original thought process or the original idea that I think gripped a lot of people and gave everyone so much confidence in the idea of modularity is that, yeah, if the idea is to bring everything on chain, we obviously can't fit that on one layer. And I think people will start to realize that again as the bloom comes off the rose with the meme coin market on Solana. And I just think this combo of momentum shifting away from that and people remembering that idea about why modularity made sense in the beginning is going to move more people towards that design choice. So that would be my prediction for you guys.

I agree. I'll just quickly add, I also think that there's going to be a catalyst of interop being solved. Across many chains. And I think once you get composability back amongst many chains, it's a no-brainer. It's like have the sovereignty that modularity gives you without having to sacrifice composability. And like Celestia is building with this with lazy bridging. We're building this more for the Ethereum ecosystem with Espresso alongside many others. That's— yeah, I think that you're spot on in spotting the trend here, but I think that that's going to be the real catalyst.

Yeah, I, I cannot agree more with you, Mike. And the way that I think about it is kind of like in a Chris Burniske lens where he thinks of like these like sort of like trends and cycles that kind of repeat themselves. But like, I think modular is a narrative that emerged as like a technical vision, right? And then as people sort of like realize, wow, this is a really interesting idea, really good idea. We should fund these ideas, right? Then it's still going to take from that point, which is probably like late 2022, it's still going to take multiple years for those things, all those experiments to get tried, all the funding to actually like manifest something real, right? And there's a lag there that's just inherent. And so I think, and unfortunately the way that it works too is like at the peak of the hype of the narrative is also when the most money gets deployed. And then people then like are like, they want results immediately, especially crypto people, crypto Twitter. They expect results literally overnight. They want to make 10x the money in like a day or they're like pissed, right? And so then they lose, they lose faith, they lose attention right at that moment when all the things are actually starting to get delivered and shipped. Yes, a lot of the experiments are going to fail, but that's the whole point of like speculation and innovation to begin with is like things are going to not everything's going to work out. Not every investment's going to actually pan out. And I think that we're finally there. But over the last few years, we haven't actually— we haven't even— true modularity hasn't been tried yet, is what I would say. And I think there's now massively scalable DA layers. There's actually mature roll-up frameworks. We're starting to see, like, ZK has actually matured to a level where we can actually build ZK rollups for the first time and solve that aspect of bridging. There's intent frameworks that are maturing, like everything, all the pieces are really starting to come together. So anyway, yes, you don't have to shill me on modular.

I didn't expect I would have to shill you on it. And maybe to inject one bit of nuance here as well is that I think originally when this argument, when people started talking about modularity, they did so from the perspective of wanting to avoid messing with this idea of decentralization on Ethereum, specifically the layer 1, and having to raise validator bandwidth and hardware requirements. And so in like the last couple of years, it's kind of been painted as this— you have to do some sort of trade-off, right? It's either you do the modular design things that you can avoid having to scale and have high performance chains. And I would actually say that those two things should merge and you actually need to do both of those things. You need high performance and you need a modular design, I think. And I actually don't think that it's going to take that long for this to come into vogue. And you actually already see the beginnings of this in DeFi, where more modular designs like a Morpho versus an Aave, or like a Uni V4, or the Vault's Lido V3. Everyone's kind of adopting this, right? You had the V1 of DeFi was that there were basically these sort of managed products which was sort of a one-size-fits-all, very retail-oriented product. And now you're saying, hey, I actually need to respond to a more diverse set of customers, namely institutional customers that have very different, not only risk-reward preferences, but also different compliance requirements, that type of thing. And so you're creating these sorts of designs. And I would expect the same thing to happen with chains, with blockchains as well. But you also need to scale, you know, as we're talking about ad nauseam on Ethereum, we need to scale the throughput of the chains as well. You can't just say, okay, this is modular, so I don't need to worry about scale here. Throughput or high performance. So I think you need basically both of those things. So actually, Jason was talking to a guy— oh, sorry. Yeah, Jill, you want to respond to that?

Oh, I was going to say, I mean, I think that that's becoming the consensus view, but I think that then this question arises of like, what are we talking about here? Because there's this whole crisis of ETH value accrual. And I think that a lot of the resistance to that reality that you just outlined, Mike, has historically come from the Ethereum community and people who really care about ETH value accrual because they look at that future and they say, oh, well, what is the ETH L1 really optimized for then? And this ties into conversations that we've seen happening this week about like what happens if Ethereum leadership starts accepting alt-DA, like, is that going to be bad for, um, the EthL one, I think it was Synode who— doesn't he actually work at Celestia? It was like, I am so done. He was like, I'm so done with this. If Ethereum leadership starts tolerating alt-DA, I'm going to give up on ETH. And I think he's right. I think that's correct. So I think that it's this— there's still this tension or this conversation that has yet to play out of what, what are we actually talking about here? And I think that a lot of Ethereum folks have told themselves that modularity is acceptable for Ethereum and like for the Ethereum scaling roadmap without getting really specific about where and how and when and why modularity is acceptable. And then at which point the line just gets drawn and you're no longer an Ethereum chain, you're just something else. Sovereign rollup, I guess.

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Let me share my screen here and we can actually walk through this because this, this spurred my curiosity as well. I saw CNode post this on Twitter and Ansgar from the Ethereum Foundation got a little bit in the mix, but basically said if I start to see ETH leadership— oh, the other interesting thing about this as well, this was all prompted actually by an Ethereum Sequencing and Preconfirmations Call #17. And we can link— I'll link this exchange in the show notes so people can go and watch this video. But Jesse Pollock of Base got up during this call and said a couple of things. He had 3 points. I don't remember what all of them were, but the second point that he made was that he believes, and I'm paraphrasing here, that we're at an inflection point. He sees the demand for on-chain activity 10 to 20x-ing over the course of the next year. That's what they're planning for internally at Base. Their publicly stated goal is to get to a gigagass. And they kind of make these scheduled commitments like, this is how much we're trying to increase things on our side. And basically where they're projected to be by the end of the year would essentially max out the blob market on Ethereum. Ethereum. Right. So obviously that doesn't even leave space for anyone else, let alone, you know, doesn't even fit Base's aggressive growth plan. And so that sparked this conversation about the degree to which Ethereum should scale their own DA. And CNode basically said that, look, if Ethereum leaders don't give up on or don't try to at least scale DA and have L2s inherit security, which is really the definition of what a scaling solution for Ethereum is, then it's kind of cooked and I'm just giving up on it. And then there was a lot of thoughtful back and forth in between what is the right amount. Onsgar actually proposed a tiered solution for DA where maybe you could offer something that's slightly less secure and like max security DA. I'm not 100% sure how that would work, but yeah, I'm curious what you guys think about— there was also a ZK component to this as well. We're missing Uma this week where she we needed to explain the ZK side of things and how that would, you know, the amount of trust that we need, or whether or not DA is required if you're doing a bunch of ZK proofs. But I'm curious, like, what do you guys think? Where do you fall on the, you know, the sort of DA idea in general?

Well, I'll take that. I think it's Yeah, it's pretty obvious that at least the way the Ethereum roadmap is right now is not— there's just not going to be enough capacity. Um, there's not going to be enough capacity, like, not even for base. And then, and then you have all these other chains that are all trying to grow and scale. And when you put that all together, it's just like, wow, everyone's like driving on a train towards a, like, a brick wall. Uh, and so I do think that they need to take it more seriously and, and scale way more aggressively. I think even a lot of the, uh, ETH L3s on, on like Base or even I think Arbitrum are all data availability committees anyway. So like, there's just even, you know, if you, even if all those chains also wanted to be actually tied into the real security and actually part of the Ethereum community, like they're all paying lip service to being part of Ethereum. But I, I take the view that, that like, if you're not on ETHDA, are you really an Ethereum rollup is kind of like questionable to me. So I do kind of side with, with Conor there. And so I don't know, I don't know what Ethereum is going to do. I don't think that tiered— I didn't read about that, but that sounds kind of fishy to me, like a tiered DA service. Maybe they need to go all out and be like, hey, we're going to sacrifice decentralization and just scale the blobs a ton and like screw home stakers and whatever. If you can't keep up with the network, this is existential, and we're going to compromise a bit on our values of decentralization. Um, maybe that's what they have to do. I don't know. I don't know what— it's a very hard position to be in, frankly.

So I have a question for, for all of you. I think that one thing that I've noticed, um, especially in Ethereum, but sometimes in crypto writ large, is that, uh, sometimes we avoid incremental progress because a thing that gets said often in Ethereum is like, well, we're never going to be the fastest, so we might as well not make any performance gains. Right. Whereas another attitude that you could take is, let's make some incremental gains here and there. There's some low-hanging fruit. And then by virtue of doing this, maybe we'll help ourselves out on path dependence. But I think that one of the other maybe ideas that people got wrong a little bit was that in general, people saw fee compression. As a thing. And there's this thing that people thought, is DA a commodity? Is settlement a commodity?

Right.

And people would say, well, because this stuff is going to be a commodity, we can't prioritize this. We can't count on the revenues or the fees accruing from this area. And so we need something else. And I think that's where we came up with this idea of, like, moneyness. Right?

Like, money.

Yeah. And it's like, it's not. And by the way, you can also— maybe it might be in the future, but the way that you will get there is not by saying it's money and having kind of these highfalutin ideas. Probably the best way to do that is to get people to hold it. And I really believe that every L1 over time is the way that you— the simplest Occam's razor way to get people to hold your L1 token is to generate fees on it. And you could do that in like a high margin way, like high execution fee density sort of way, which is the Solana way. Or I think the other route, the modular route, the Celestia or the Ethereum route would be I'm going to surrender a bunch of those, but I'm going to make it up in volume. And then I might find value-added, uh, you know, additional services that I can provide. Maybe that's base rollup, maybe it's native rollup, whatever it is. But I feel like we just kind of surrendered the fee discussion way too early and said, oh, we can never win this. We're never going to get a bunch of fees to this layer. You know, I just think that we were really premature in surrendering that idea.

I think of all of this as a spectrum of scalability versus decentralization, and there's this trade-off spectrum that exists, and those are just very real constraints. And you have Solana giving Ethereum feedback on one side. Like, that's really genuinely how I view Solana adoption. It's feedback to Ethereum on what the right point on that curve is of trade-offs between decentralization and scalability for users. And then I think that you have kind of the modular components of the ecosystem that have now emerged, whether it's Celestia or EigenDA or, I mean, Espresso on things like confirmations. There's all of these examples of this giving Ethereum feedback on all of these almost like microservices that Ethereum has been providing. As a generalized platform on whether or not it's made the right point of trade-offs again, along that curve for that specific service. And I think that the hard thing right now is that Ethereum is getting a lot of feedback that the optimization point that it's chosen on the curve maybe is not ideal for any of these things when it comes to what users and developers actually want. And that's why you have, I mean, in a, in a way, I don't know, you'd probably bristle at this too, Nick, don't take offense, but in a way Celestia is kind of an alt L1. In a way, Espresso is kind of an alt L1. And we're all just, Astria, I think kind of goes in this category to, to a degree as well. Like we're all just picking different points on this curve and saying, all right, we're gonna optimize for whether it's DA or for confirmations that would otherwise come from a sequencer. And it turns out that if you modularize, you can pick points on this curve in a way that you can't if you're just a single monolithic system. That's, that's really how I view it playing out right now. It's just feedback to Ethereum and it's, it's a tough pill to swallow.

People said this all the way back in 2017, and I think that they just underestimated how long it would take for the market to— or for users to pick— or for the market to understand where they should be on that trade-off curve, right? Like, that's kind of what we've been experimenting with this entire time.

And it changes over time too. Like, we talked about this a couple weeks ago, like, when there hasn't been a major hack in a while and like everyone's feeling pretty good and confident in the infrastructure, people pick a different point on that curve than when you have like the Ronin bridge hack and a bunch of these other things that turned out to be, you know, actually just multisigs and these are huge problems and actually we've made the wrong trade-offs in terms of decentralization security versus user experience. I think that it fluctuates.

Can I also, you know what, I think another thing as well is Okay. When there are these big disagreements or this very salient flashpoint, maybe that goes the wrong way. Sometimes it's hard to go back to an old idea after it's been vilified. So the example that I'm thinking about with this is the small block versus the big block debate that people used to have, or that Bitcoin famously had. And the sort of retrospective historical painting of that is that there were some good guys and bad guys. And the good guys won the sort of moral side. And I had always just kind of taken that at face value and thought that that made sense. And yeah, the good guys won. Thank God. Here we are all in crypto enjoying the fact that the small blockers won. And then I went back and listened to a bunch of the arguments and I was like, you know what? I really agree actually with the big blockers. And it's tough then to go back and first of all publicly, I even remember I started tweeting about this a year and a half or 2 years ago. I was like, am I going to get a lot of shit for this? I wasn't even sure if that was an okay thing to say. But sometimes it's very difficult socially to go back and revisit those ideas, and you can have improved trade-offs on them, right? And you can have solved some of the problems that led to people making the small block decision at the time. And I think it's probably worth questioning that in general. And the other thing too is there was a podcast I would recommend people listen to, Infinite Jungle with Christine Kim and John Tarpinow was just on there and she articulated something that I think that also people got the function kind of wrong on sort of decentralization in general. I think a lot of people's mental framework is that there was a market force where X units of decentralization leads to X amount more value. And I'm not 100% sure that's right. I think that there's probably minimum viable, and then everything after that, like, there's a massive diminishing marginal utility. And it's very difficult to know. It's going to take a lot of time. Probably some horrible hack or some government crackdown will need to happen, and then the curve will readjust. But it has never really made sense to me that, like, Eigenlayer used to talk about a market for decentralized trust and the fact that you might trust solo stakers more than industrial stakers. And that always felt like the opposite to me. I just thought I'd probably rather trust professionals. So I just, I think that, I don't know, I think it just takes time for the market to like figure all this stuff out.

Also, I want to jump in here. First is on the big blockers thing. The thing is that like so much has changed and most significantly we have invented data availability sampling and rollups, which actually means that you can circumvent the whole scaling trilemma, right? So that's why we're in a different paradigm now. I think the big blocker— the small blockers had a point. Maybe they were overly conservative and you could have gotten away with this much more of a big block before you hit that point in the curve that you're talking about where all of a sudden it's not decentralized enough. But also, ultimately, for Bitcoin's use case, if it's really just trying to be a store of value, it doesn't really need— doesn't need fees at all, right? Clearly. Bitcoin, like, you know, is not— its value is not valued as a chain. Like, I don't think scaling the execution throughput actually makes Bitcoin more valuable. Maybe it would, who knows? But on this decentralization point, I think we also are too early to draw any conclusions about how much decentralization we need. Because we just are playing like the peanuts in the playground right now. I don't know how much money we have on chain, but it's tiny compared to where we're going and the amount of value and how important this infrastructure will be for the world in the future. Right. So it's like in the '90s, it's like, yeah, who gives a shit if all of my data on the internet is insecure? Because whatever, there's not that much value on there now. In 2025, 30 years later, it's like, Wow, I want to make sure everything is secure. I literally, you know, had this, all this like security software and crazy shit that we go through just to be like, make sure that we're safe online on the internet. And that's before we even have any, all this value on chain. And I think that's why for Celestia, like we very much prioritize decentralization. And the crazy thing is that there is also no more trade-off. That's the other thing. Like, With data availability sampling, we can have gigabyte blocks and you can still verify it on your phone. So it's like, if you can have it, why the fuck wouldn't you choose that? You know what I mean? Like, there isn't a trade-off anymore, in my opinion. Like, that's the world we're trying to build towards. And yeah, so I don't know, I'm kind of a decentralization maxi while also being a scaling maxi.

But like, in a practical way, right?

Mm. What do you mean?

Yeah.

Like you're a decentralization maxi, but you also, it sounds to me and just from what I know about, you know, Celestia's strategy, you're not willing to make trade-offs that, for example, the Ethereum main chain is making on user experience in order to get there. You just think that we have to just keep pushing the tech forward.

Yeah, well, I think we've designed it in such a way where like, you don't have to make those trade-offs. And like, to be clear, actually, Celestia is not as decentralized as we want it to be right now. Like, we shipped it—

I guess that's my point.

Data availability sampling that like works, but like the block reconstruction is not perfect. It's not anonymous sampling. The, you know, there's a fraud-proof mechanism for making sure the encoding is correct. Like, there's all these like things. And also like, it's hard to observe how many light nodes there are. Do we know if we have enough light nodes to actually have 8 megabyte blocks right now? The answer right now is probably not, but we have a roadmap to get there and all those things are achievable. It's just like a matter of engineering. And so that makes me— that allows me to sleep at night and not feel like I'm a big fraud, like charlatan saying like, oh yeah, we're going to have this really verifiable thing sometime. And actually it's a lie. It's true. It's real. It's possible.

Right. Well, I think that the thing that always attracted me, uh, you know, in figuring out this big block debate was, um, yeah, I actually— Hasu said this in, uh, like a 5-year-old episode of Uncommon Core where he was describing what a blockchain is. It's just a database where individual users can verify that the database is correct. Um, and it occurred to me that at one point the assumption was in order to verify it, you had to be able to replay every transaction and actually participate in consensus. There was this idea that verifying the network was connected with consensus, participating in consensus, which they don't have to be. You can actually run an Ethereum full node. You don't have to be a validator. There's not much incentive to do that other than if you're a security maxi and you want to be able to submit your own transaction and see that your own transaction has landed. Otherwise, you're trusting Infura or whatever RPC endpoint you're using. But, um, but yeah, I mean, I think that was like the, the big observation. So yeah, you, you sometimes in tech you can just solve trade-offs. Um, it doesn't always have to be trade-offs.

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I actually want to get your guys' take. Can we talk about Kaido for a second? Because this is like the big—

Yeah, we're trying to yap.

Yeah, we're trying to yap.

I love Taro, by the way, but it's just that it's— I like—

Nick, should Taro open its own chain?

Huh? Should Taro open its own chain? I don't actually understand what they are even doing on-chain other than launching a token. That's a great product. Sorry, I just was like, everyone's been yapping and/or complaining about yapping and then talking about this airdrop for so long. I'm just like, I'm just a little tired of it. But kudos to them. I like the team. I know them really well. They're great people. It's a great product.

We're having an optimistic episode, Nick. I know.

I'm very optimistic about Kaito. I'm just over it. That's all.

Did you not have to laugh though? People were like, people were with totally straight faces predicting $100 to $200 per Kaito. It's like $0.14.

What would the FTV be of that?

Something massive.

I think it's a billion supply. So 200 billion. Yeah.

Well, maybe they just didn't know what the full number of tokens were.

No, no, that was announced. Oh, no, I think—

no, you know what it was? I think that they knew how many YAFs they had earned and maybe they thought like, oh, they're going to allocate this much to the community.

That was it. They didn't know the pie. That's right.

It turned out to be 10% or whatever.

Well, okay, so here's— okay, so here's why I think this is actually interesting, um, is this is, this is one of the first— this is actually, as far as I can tell, the first centralized company that's launched a token that people were excited about. Um, so I don't think this has ever happened before. So actually, uh, people— most people probably won't know this, but CoinDesk actually launched a token called DESK. Um, you probably haven't heard of it. Yeah, because it didn't take off. There's no traction. It was a utility token that you could, you know, it was kind of this old way that people thought about utility tokens where, you know, you can pay for your consensus ticket and desk and you can get some percent off or something. It's like obviously never going to work.

You know, they're a US company because there was no marketing around this.

Right? Yeah. Yeah.

To the point that no one knows about it.

Yeah.

So I'm pretty sure it still exists. But, but anyway, I can't really remember any other time that centralized companies launched a token outside of exchange tokens that people have been excited about. And I think actually the strategy for Kaido, if I have no insider information, but if I had to guess, a huge part of the valuation of public and private— sorry, of media and data companies is first-party data. So this idea of actually having, like, I know not only that you live in New York, but I know what your name is and your job and your title and all of this stuff is really valuable to advertisers and probably fund managers as well. So I would guess that Kaido just farmed an unbelievable amount of first-party data for— by connecting people's wallets with their Twitter profiles. I think that made the company much, much, much more valuable overnight. So people are kind of focusing on the social media algo part of this and yada yada, but I think it was an unbelievably savvy move of actually farming something that is super valuable to the company.

Do you think people are dumb enough to use their normal like, address to claim?

Definitely.

I did. Why not? Like, I mean, are you serious? Yeah, I don't care. Okay.

Yeah.

I mean, I have other ghost wallets that I use for other stuff, but like, I, I have no qualms with—

I'm sure it's already like a doxxed set of wallets. I guess that makes sense.

I think— I bet you— I mean, look, I like— maybe Kaido, if you're listening, you could confirm or deny. What's the concern?

Well, no, I mean, like, if you're doxxing, you're linking literally whatever, everything you do on-chain to your Twitter profile. I mean, I don't know. You really want to—

like, that's anytime you post an address for someone to send you something. This happens all the time, right?

I actually, I'm in Jill's camp here. I've, I've never— I, uh, I actually, something malfunctioned, uh, on my Kaido claim. I literally signed up for it. I have a screenshot of it and I lost my Kaido airdrop. So Kaido, if you're listening, hit me up because I'm sorry about this. But I was also on the top 100 posters, yappers too.

Uh, yeah, this is why Mike wants to talk about this, so that he can—

yeah, this is my public shame. Kaido, hit me up. I'm actually gonna hit you guys up later tonight. Uh, but, but I— but no, I, I, I'm with Jill. I, I think that most people probably just claim this on their main wallet. Um, and yeah, I think it's— I think it's a really savvy move of them. Um, and it also makes me think Yeah, I mean, Nick, you joked the other day, like, I think at some point Blockworks would launch a token. You know, we have no plans to launch a token, but I think probably over time you can— No, we actually have no— I know your game.

I'm not farming that token, man. I'm not linking my—

But are we farming it by being on the pod?

I'm going to get a fat airdrop, Mike. Otherwise I'm going to fund you so hard.

Oh my God. All right, so no, we are not doing this. People do not— You're not going to farm anything by listening to these. But I think you can squint at it and be like, yeah, I think this makes sense even for centralized companies. And the original point of airdrops were to incentivize people to do a thing that was valuable for the protocol, which was to lock your funds up and provide liquidity. And yeah, I think this is going to not— it's not going to happen overnight and it's not going to be immediate. But I think this is the very beginning of centralized companies, probably in the beginning because they can't get out. And the IPO market is frozen and whatever. But I think you probably will see more centralized companies experiment with this.

Um, well, I do have the question though, what they're going to do with it. Like, to Nick's point, like, I'm not at all clear on where this goes from here. Niraj also from Coin Center posted something funny earlier, which is like, hmm, I think a lot of people are selling their Kaido tokens because they don't know what they are. And I mean, we talked about this a few weeks ago with Jelly Jelly, which is like, I think also, I mean, they're like a centralized, normal, private venture-backed company that launched a meme coin. And I don't necessarily think that Kaido is a meme coin here, but I do think people have this question of like, what's next? Like, where does it go from here? And I think that that's legitimate. So I, I guess that's where I'd push you on this, Mike.

I know we're having an optimistic episode, but yeah, I just think that basically over time these things just diverge to equity. I think we're living in this weird in-between time. I know, but I know not that you guys don't view that as token havers, but this is me speaking hypothetically. Like, I just, I don't know. I just think that over time, the, what the end game here is that the US is going to reconsider its securities laws. Um, and it's that disclosure requirements, because outside of crypto, there's a big conversation going on about public and private markets being broken.

I would agree with that, actually.

Yeah, like private markets, like everyone's staying private longer. Um, VC returns are getting decimated because, like, if you think about it, on average it takes twice as long to realize an investment. Um, you know, like an outcome, and it just doesn't really make sense. Um, a lot of these, like, dynamics overall in public markets that everyone hates is that it's just passive and you buy the index and active managers, it doesn't make sense anymore. Crypto is kind of solving that, right? Like, if you were to draw— if you were to chart a graph, in the last 3 years there have been something like 50 IPOs. Um, but if you were to chart the amount of IPOs that have happened against the number of tokens that have launched, that would be really interesting, I think, for people. And I think we're just moving towards a world where the, you know, basically markets start to look more like they did in the 1920s, where you had a bunch of companies that were much smaller and it was more of a stock picker environment. Like, that's just—

I wish more people would say this out loud. I agree.

That's where I just see the world trending. And the beauty of this and why I think that we're going to have so much more data on-chain than we even do today is because blockchains actually make the reporting requirements much easier for companies. If you're building all of this shit on-chain, that it is much— you don't need to do— if you've ever gone through, done like a financial audit on your private, like your startup, it's a huge pain in the ass. It's so manual. Everything's written down in different siloed spreadsheets and whatever. The fact that all of this should exist on a public blockchain, a ledger, it really should. You should reduce the cost and friction of reporting requirements and disclosures by seriously including time and dollars, like 100x. So that's the neat thing.

Ironically, the best example of this to date is probably FTX.

Wait, say more. What is the— why do you think that?

We could see so much of the FTX and Alameda wallets just on-chain. We could see stuff moving around in real time as they're, you know, filing bankruptcy and people are going rogue. I think that that's the best example of reducing audit requirements.

I don't think, in fact, and also just kind of from like, you know, conversation with institutional people, like, that's not the end game. I don't think businesses are going to have their like accounting directly visible on-chain for everything. I think we're going to need privacy.

Privacy, yay!

But there will be a way to like prove to auditors, or maybe you— yeah, exactly, ZK, not just for— yeah, like you can compute over this private data and prove like 'Hey, this is our tax bill,' or whatever it is, uh, or 'Here's our financial statement to the world.' Um, but yeah, it's not going to be the way that like everyone can track.

No, it's not going to be all of us watching it.

That's also why I don't feel like I would not claim a Kaito airdrop from my main wallets where I do everything, you know what I mean? But it's like degrees of doxxing. So you can have something that's fully undoxed where you didn't even like touch any kind of KYC platform. And then there's like, okay, I had like a, you know, KYC on exchange. And so like, obviously the analytics companies can, they know who I am. And then there's like, literally everyone on Twitter knows exactly what I've done. Uh, yeah, you know, and I'm just not, I don't really, I care about that.

People can watch my wallet and see when I stake and unstake my Kaido. That's fine.

Well, can I—

I was planning to dump actually, though. Maybe I wouldn't have claimed it with my ENS.

That's my thing. Everyone's going to know now when you sell your— I guess they would know anyway. Yeah, everyone's going to track you.

Yeah.

I don't really get this like dump shaming though. It's like if you— if someone gave you something for free, you should be able to sell it with no shame. I'm not really on board with that.

I agree with that. I just— I know that there will be dump shaming and—

okay, maybe dump shaming wasn't the best phrase.

Yeah, I think dump shaming is—

we'll see if it catches on. Uh, okay, wait, let me make just one prediction for you guys in the future because I actually think that— yeah, I agree with you, Nick, um, that yeah, there's no reality here where everything is transparently going on on-chain. But here's the happy future that I see, and maybe a slightly ironic future, is that the more you bring stuff on-chain, um, because it's easier to report and there's just a natural incentive to do it because you can launch a token, actually, there will finally, for the first time, be a real business case for privacy. And that's how we end up getting privacy on chain, because it's like, hey guys, there's this new sort of capital market launchpad where everyone's launching their tokens anyway. Okay, this is inevitable. We have to create rules around this. Oh, and by the way, it's actually really nice. You can audit everyone's financials a lot easier. Yeah, this should be on chain, and we need privacy for this to exist on chain. I actually have a far-out prediction for you, would be that in the future, Governments might make it illegal to not conduct transactions on chain because it is so much easier for them to track and for it to be transparent. And actually, we might end up in a future where the three of us, if we're a counterculture, are advocating for being able to do things off chain because it's so much easier for governments to surveil. But I just view this as this— it'll be— it's like an arc, right? I think this is an inevitable, like, the beginning of an enormous amount of demand for block space and stuff coming on chain, which is why I'm also bullish long term in this modular vision because the thing that everyone misses at the beginning of tech paradigm shifts is everyone underestimates the demand by like several orders of magnitude. McKinsey famously predicted that there would be 1 million cell phones in the US in the year. Yeah, famously.

Yeah.

Wait, okay, you guys should all send you both this link.

End state, a million.

Yeah. Or like they did it on like a 20-year time horizon, right? They were off by 299 million. So, but there's a great Twitter account called Pessimists Archive and it mostly takes clips.

Oh yeah, yeah, I love that account.

And there was a great— maybe like 2 months before the Wright brothers took off in whatever it is, Kittyville or Kitty somewhere and whatever, they predicted that it would take 9 million years for humanity. This was in a newspaper. This was in a newspaper and it was 2 weeks away. So yeah, I'll find the actual numbers. But anyway, I think that people genuinely are way off on the demand and that's the future that I see for all of this stuff. But maybe we can end here because I was a little bit frustrated this morning, but I am still very surprised that in the year of our Lord 2025, the bridging experience is still this rough.

Oh, tell us.

I want to talk to you. Well, so where it's gotten a lot better because everyone— I tweeted this and everyone jumped in my messages about like Bungie and Across and shout out Heart, shout out Bungie. Those are great for inter-L2 swaps. But I was trying to get in this particular instance from Solana onto another chain and there's a huge— and some of this actually was trying to do a trade on a, on a SACS that was, uh, this particular coin that I was trying to buy was barred in the state of New York. So it's not all on, but it's still, this whole thing took me like an hour and a half, um, to do this morning. So it was a pretty simple thing that I was trying to do. And I don't know, I mean, what is your guys' sort of thoughts on the current state? Totally up in general, like the bridging experiences.

I tried to invest in an Echo deal a couple weeks ago and I had the exact same experience. It took me like 90 minutes over the course of many different platforms to finally get funds where I wanted them to be. And by that point, the deal had sold out. And I was like, I literally do this all day long. Like, this is— this is— if anyone should be able to do this, it, I would have thought, should be me. But no, I am still so bad at this. Um, but yeah, I mean, I think that I think that's a great point that like we talk a lot about, or I, I guess spend a lot of time thinking about Ethereum-wide interop, which is still a really hairy problem. Across and LayerZero have done God's work and made it better, but there's still kind of fragmentation of trust assumptions there. Oh, I also wanna shout out the Ethereum Foundation. I know it's very in vogue to hate on the Ethereum Foundation, but Josh Rudolph there has done amazing work. They just announced this whole Intents framework this week, bringing together all of these competitors. Like, in Ethereum, interop is not that bad anymore thanks to all of these efforts relative to having to move across chains. That is still very much unsolved. And I don't think that there is that much impetus actually to solve it right now, unfortunately.

I just want to say, I think the— I totally agree. I'm surprised that bridging is this bad in 2025. I would have thought, like, you know, in 2020 when I was first kind of like dabbling in modularity and all that, I was like, oh wow, like, you know, 5 years from now all this stuff is going to be solved and it's going to work seamlessly and whatever else. And like, yeah, 5 years later it's really painful in a lot of cases, except for these very limited instances like you mentioned with ACROSS and certain intense frameworks on these limited chains that they support can be really, really fast, very, very cheap, like incredible user experience. Cosmos, I find when you're bridging between Cosmos chains using IBC, also phenomenal user experience for the most part. But something that's like completely generalized across everything does not exist. And like in between those pockets of where interoperability is actually good, it's like pretty terrible.

And even with—

it's a lot of why modularity sucks right now and like why it's so difficult right now to build, you know, an application as a chain. There's just no distribution.

Even with Intents, I was going to say, it's kind of like we've pushed the user pain just onto these specialized centralized actors of solvers.

That's a great thing.

Oh, it's great. No, I, I love it. It's great as a user. I love it. But like, it hasn't solved like a true, the true underlying issue, which is still solvable, but like solvers then have to deal with fragmentation of trust assumptions. Like they're fulfilling, you know, a, a transaction in 2 seconds. And it's some random rollup that they've never heard of before and they have a centralized sequencer. Like, that's an issue that the solver still has to solve. Solvers still have to move liquidity around to manage their liquidity pools on, on all of these different chains. It's just pushed the pain elsewhere. I'm glad that solvers take this on. They get paid to do so. Like, the market is doing what the market should do.

But yeah, Georgios, uh, tweeted something that was, uh, He— it was an idea that I like— many people are articulated, but he articulated like the best, which is— and I can't actually remember his exact words, but it's basically like the, uh, intents and solvers just make the, the UX really good, but the cost, uh, of rendering that service is a function of like how good is the actual bridging underneath, how trust minimized is it, how fast can you rebalance your positions across different chains. And so I agree with you. There's two sides to this puzzle. Thankfully, we have ZK coming in to save us and make it so that— and that's also why single-slot finality is so important on the base layer, at least within—

I love it.

That's why I think Celestia's single-slot finality is really a huge advantage over Ethereum's 12-minute, very forkful consensus, because it makes the finality between chains much, much faster.

Or you can use a fast finality layer.

You can do both sides, basically. But yeah.

Yeah, no, totally.

Yeah, it's, uh, you know, it's still a ways away. I know people get— and I actually ended up using Portal, I think, the wormhole bridge, and it was good. Like, once I found it, it was like a pretty easy, um, but even still, I still send test transactions, right? Like, I send a test transaction, get rocked on the fees the first time, wait, beta— the whole thing ends up taking me like 10 minutes, and I still would never send my mom to do this, right? Like, I would never.

I'm—

it still feels like we're very far away from— and that is the bar. It's like, would I send my mom to do this? And I don't know how you solve one of these challenges, which is, you know, if you think about dollars being fungible in the banking system, they're actually JPM dollars and Bank of America dollars. They're not fungible, but there is the appearance of fungibility because there's a social contract that the Fed will come in and— or the FDIC will broker a sale or whatever, and you'll— the government has basically guaranteed the fungibility of dollars. So you don't really— you can't really do that in crypto. Um, like, I could imagine a system where I would guess the reason that the exchanges and the wallets don't do this, right? Like, they still let you choose the network, right? They still let you choose what network you want to send USDC on. They should just do that for you, right? They shouldn't even show USDC or USDT in your wallet. They should just show USD. It doesn't matter, right? But, but, but they won't because then they have to assume the risk, right? Like, there's different security. Yeah, right, right. So everyone's just playing hot potato with risk along this chain. And we've all kind of decided, well, if the user ends up making the decision, then it's kind of on them, but that's the wrong design pattern.

So, no, I'm just going to shill fast finality here for a second. This is why it matters so much to have fast finality as a uniform set of trust assumptions that all of these different players can rely on, because otherwise you're relying on all of these different trust assumptions and finality rules, etc., across all of these different chains that someone has to take it on. Exactly. Whether it's the solver or the exchange. Yeah, it's, it's a huge problem.

Can I offer one contrarian take, which is that to me, we are, we're really obsessed with bridging between chains right now because we're still stuck. I mean, and it's, that is actually an extremely important problem to solve. Don't get me wrong. We're obsessed with that because we're not onboarding any new users. It's still kind of like this zero-sum, kind of like, I need to attract existing crypto users from other ecosystems thing. And I think that actually kind of maybe the more important problem for us to solve and the more important problem to design for is like, how do I just onboard users, period? Especially non-crypto native users. And I think that's That's something that's more important because when there is a killer app and it is having viral growth, it's going to by definition have to onboard— most of its users are going to be non-crypto people to start out with. Right. And so it's not going to be like, oh, I need to use this app. I don't know, whatever. Maybe a payments thing. Oh, well, I'm already on Base. It's going to be like, I've never fucking used crypto before. How do I get even like $10 on this thing? Right? Um, so I don't know, I feel like that's—

that is the brilliance of Base though, I think, right? And having the vertical integration kind of, I guess, app and some of the infrastructure integration of, you know, Coinbase Wallet, Coinbase Exchange to get fiat money in, and Base. I, I think that that's— yeah, that's the winning strategy right now. I don't know if that'll remain that way. But I was talking to a friend this morning who was trying to claim his Cato airdrop, and he was like, the whole thing was so painful except for Base. He was like, I'd never used Base before, and that was like the smoothest process, getting some ETH on Base, like blah blah blah. So kudos, Jesse.

Yeah, actually, and just transferring USDC around or using like USDC on Coinbase versus other exchange— on other exchanges, sometimes you have to swap USDC for USD and pay pay a fee on that. Like, do you know how frustrating that is? That's ridiculous. Um, so yeah, anyway, all the— I think that that's probably what ends up happening over time, is that these, um, first of all, everyone's going to try to launch a stablecoin. The fintechs are all going to launch their own stablecoins, and then everyone's going to be like, this is an unacceptable user experience to decide between USDT, USDT Zero, USDC, USDC Base. It's just all kind of— people are gonna— at some point, someone is just gonna say, I'm just calling this USD. And they're going to kick the risk down to some other layer, or they're going to absorb the risk. And that's what I think— that's what's going to end up happening.

This is kind of interesting, and I know we're running out of time here, but did you guys see the announcement of this company Universal yesterday? They are— I think it's— I actually think it's a really cool hybrid of centralized and decentralized where they are trying to solve crypto asset interop By doing the stablecoin model and just custodying these assets in Coinbase Prime and then in a centralized fashion issuing versions of these assets across the chains that you're trying to bridge to. And I, I kind of love it because I'm like, we're making all of these trust assumptions anyway. Might as well experiment with this point on the spectrum where, yeah, you're totally trusting this company and Coinbase Prime is what we do with Circle anyway. There's just more of a track record.

I am interested in that. There's another, uh, I got a— I got dinner with the— I don't know if you guys have come across mStable, um, but they're attempting to solve some of the more backend liquidity management stuff of stablecoins, which is pretty interesting.

But yeah.

All right, guys, I think we're, we're out of time here, but this was a really fun one. Uma, we missed you this week. Uh, all right, everyone, we'll see you, uh, actually, we'll see you in person. I think we're doing this live at Denver next week. All right. Nerdy dance. You're alive, baby. All right, guys, we'll see you in person next week. It'll be fun.