Podcast Summary
Exploring new possibilities for Web 3 and Ethereum: Vitalik Buterin discusses potential for AI, decentralized science, and synthetic biology in crypto space. Ethereum poised to be platform for new use cases with advancements like Solana VM, account abstraction, and EIP 4337. Focus on net new things rather than just reimagining old.
Key takeaway from this episode of Bankless is the exploration of new possibilities and use cases for Web 3 and Ethereum that go beyond historical references. Vitalik Buterin, the creator of Ethereum, discussed the potential for sibling technologies like AI, decentralized science, and synthetic biology to emerge in the crypto space. He also emphasized the importance of focusing on net new things rather than just reimagining old ones. With the advancement of technology such as the Solana virtual machine, account abstraction, and EIP 4337, Ethereum is poised to be a platform for these new use cases. Vitalik's experiences in various industries and technologies have expanded his vision for what Ethereum can do for the world. This conversation from the Permissionless conference aims to open the minds of listeners to the unimagined future possibilities of crypto. So whether you're a trader, defi journeyman/woman, airdrop hunter, or healed seeker, the crypto world has much to offer beyond what we can currently articulate.
New Layer Twos and Innovative Developments on Ethereum: New layer twos like Mantle reduce gas fees by 80%, Stater lets you run a staking pool with 4 Ether, UniswapX offers gas-free swaps, Celo introduces a layer 2, and Ethereum unlocks new imaginative possibilities beyond existing systems.
Ethereum's evolving roadmap introduces new layer twos like Mantle, which uses Eigenlayer's data availability solution to reduce gas fees by 80% compared to other layer twos. Meanwhile, projects like Stater make it easy to run a staking pool with just 4 Ether, allowing you to charge a fee and increase yield. UniswapX offers gas-free swaps, MEV protection, and theoretically optimal pricing. Celo, a mobile-first, EVM-compatible, carbon-negative blockchain, is introducing a layer 2 to bring its rapidly growing ecosystem to Ethereum, offering advantages like decentralized sequencer, off-chain data availability, and 1 block finality. Vitalik Buterin, co-creator of Ethereum, emphasizes the importance of exploring new things Ethereum can unlock beyond improving existing systems. The crypto industry could be under-indexing on new, imaginative possibilities. Exciting developments include DeFi, stablecoins, and NFTs, but Ethereum also has the potential to enable net new things we can't readily imagine.
Creating a Holistic Decentralized Ecosystem: The future of decentralized technologies like DeFi and NFTs lies in creating a more interconnected ecosystem, particularly in decentralized social media, which can integrate with other decentralized solutions to address issues like content moderation, account recovery, and privacy preservation.
While decentralized technologies like DeFi and NFTs offer exciting new possibilities, they currently exist as individual pieces in an otherwise unchanged ecosystem. The true potential lies in creating a more holistic and interconnected decentralized ecosystem, particularly in areas like decentralized social media. Decentralized social media platforms, such as Forecaster, have made progress in this direction by offering unique selling points and fostering cohesive communities. However, the long-term future lies in their ability to integrate with other decentralized solutions to address issues like content moderation, account recovery, and privacy preservation. By leveraging decentralized technologies, we can create a more secure and privacy-preserving alternative to centralized platforms.
Decentralized tech stack interconnectivity: Ethereum accounts, proof of humanity protocols, reputation systems, and various recovery methods are becoming interconnected, creating a decentralized digital world that is self-sufficient and rivals traditional systems.
We are witnessing a rapidly developing ecosystem in Ethereum, with various tools and technologies becoming increasingly connected. For instance, social recovery wallets like those used in Farcaster can be linked to Ethereum accounts, which can in turn be connected to decentralized wallets like Agnosis safe. This interconnectedness has the potential to create a decentralized tech stack that rivals traditional systems, such as the one dominated by Google, Twitter, and phone numbers. This independent stack could include Ethereum accounts, proof of humanity protocols, reputation systems, and various recovery methods. The ultimate goal is to create an on-ramp for new users, allowing them to gradually decentralize their digital presence and eventually become fully independent. This vision is made possible by the advancements in technology that have emerged in the past year, and the decentralized science movement is one area where this independent tech stack is gaining significant traction. In essence, we are witnessing the emergence of a decentralized digital world that is becoming increasingly interconnected and self-sufficient.
Ethereum's Multifaceted Role: Alternative Financial System, Crypto Innovation Hub, and Decentralized Solutions Provider: Ethereum functions as an alternative financial system for underbanked populations and industries, fosters crypto innovation, and influences the wider world with decentralized solutions.
Ethereum's role in the world has evolved significantly over the last decade, especially in the context of emerging industries and economies. Ethereum serves as an alternative financial system for people in countries with broken currencies or oppressive regimes, as well as for those in industries not served well by traditional financial intermediaries. Additionally, Ethereum is a testing ground for decentralized technologies within the crypto community, with potential for these ideas to trickle up into the wider world and set new standards for decentralized, neutral, and sovereign systems. Public goods funding is an example of Ethereum's impact in this regard, as it demonstrates the potential for decentralized decision-making and funding mechanisms. Overall, Ethereum's role is multifaceted, providing an alternative financial system, fostering innovation within the crypto community, and influencing the wider world with decentralized solutions.
Decentralized decision making for public goods funding: Decentralized decision making leads to optimal outcomes for public goods funding, while compromise can result in suboptimal results. Crypto space can help fund entrepreneurial public goods and billionaires have been the primary contributors to the funding gap.
Decentralized decision making works best for public goods funding due to the nature of the decisions being made. Compromise in other types of DAO governance can often lead to suboptimal outcomes. Public goods funding, such as allocating funds to multiple projects, generally yields better results than putting all the funds into one project. However, there are exceptions, such as funding large-scale projects that require significant resources. The crypto space can potentially help fill the funding gap for entrepreneurial public goods, which are often overlooked by both markets and governments. So far, billionaires have been the biggest contributors to this gap.
Building a community-driven approach to funding scientific projects with crypto: The crypto space offers a decentralized model for funding and executing scientific projects, promoting equitable access and efficient resource allocation, with the potential to inspire investment in areas that truly matter.
The crypto space presents an opportunity to build a community-driven approach to funding and executing scientific projects, particularly those focused on improving everyday life, using decentralized tools and methods. This approach could potentially lead to more equitable access to valuable research and technologies, as well as serve as a model for other industries to follow. Additionally, the crypto space's focus on decentralized funding mechanisms, such as quadratic funding and retroactive public goods funding, can help allocate resources more efficiently to projects with the greatest impact. Ultimately, the goal is to create a new system for funding and executing important scientific projects, with the long-term aim of inspiring the world to invest in areas that truly matter.
Exploring Network States Beyond Decentralized Countries: Appreciation for projects like Forecaster, Lens, and others that align with values, addressing Oracle problem in DeFi, and potential for newcomers to join or create interfaces in existing ecosystems
The concept of a network state, while related to decentralized communities and technologies, can be explored in various ways beyond creating a new country. The speaker expresses appreciation for projects like Forecaster, Lens, and others that align with values and allow individuals to contribute without fully diving into geopolitics. The Oracle problem in DeFi, ensuring security over speed, is identified as an area needing more attention. Additionally, there's potential for newcomers to join existing ecosystems or even create their own interfaces following different principles.
Exploring Opportunities in Ethereum: Security Software, Layer 2 Infrastructure, and Enterprise-Focused Stacks: New entrants can join the crypto space on a level playing field, with opportunities in security software, layer 2 infrastructure, and enterprise-focused stacks. Tools for understanding complex DeFi interactions and verifying transactions on layer 2, and encouraging enterprise adoption, are areas of potential growth.
The crypto space, particularly Ethereum, continues to offer new opportunities for innovation, and the current areas of focus include security software, infrastructure for pushing Ethereum to layer 2, and enterprise-focused stacks. The speaker emphasizes that the crypto space creates a reset for new entrants, enabling them to participate and contribute on a level playing field. While wallets are becoming saturated, there is still room for growth in security software and infrastructure development. For instance, there are opportunities to build tools that help users understand complex DeFi interactions and verify transactions on layer 2 without relying on centralized providers. Additionally, encouraging enterprises to build on Ethereum instead of maintaining centralized systems could lead to significant progress in the ecosystem. Overall, the crypto space remains a dynamic and exciting field for innovation, and there are numerous opportunities for those willing to explore and contribute.
Consortium chain approach vs. validium approach: The validium approach offers a more efficient and effective compromise between decentralization and centralization by keeping the database centralized but adding a daemon for proofs and hash updates.
The consortium chain approach to blockchain, which aimed to offer a compromise between decentralization and centralization, has largely failed due to its high IT overhead, community building challenges, and difficulty in attracting new members. Instead, the validium approach, which involves keeping the database centralized but adding a daemon to create proofs and hash updates for the blockchain, offers a more efficient and effective compromise. This approach allows for decentralization benefits, such as proofs and on-chain hashes, while maintaining the efficiencies of centralization, like no gas fees and no need to rebuild systems. Proof of solvency, an early use case of this approach, is a semi-successful example, and it can be applied to various industries, including gaming.
Balancing Security and Decentralization in Crypto: Focus on enhancing security and decentralization in crypto ecosystem for modest returns without compromising funds, shifting from maximizing returns to prioritizing security and decentralization.
The crypto world offers numerous opportunities for innovation across various industries, from social media algorithms to supply chain management. However, building the necessary software infrastructure for these applications relies heavily on the advancement of knowledge proofs, which are now accessible to regular developers. Moving forward, the crypto community should focus on enhancing security and decentralization simultaneously to create an ecosystem where users can earn modest returns without compromising their funds. This delicate balance requires a shift in mindset from maximizing returns at all costs to prioritizing security without sacrificing decentralization. By achieving this goal, the crypto industry can navigate future bull markets successfully and continue to inspire innovation.
