We’re joined by Eric Conner and Anthony Sassano, founders of EthHub. Started in January of 2019, EthHub’s goal is to provide a trusted, objective source of information for the Ethereum ecosystem. The platform is made up of an open-source documentation website, a weekly newsletter, and a podcast, “Into the Ether” hosted by Eric and Anthony. Both active and vocal members of the Ethereum community, they are known to embody what some consider to be Ethereum Maximalism.
Topics we discussed in this episode
- What is EthHub and why they decided to start the organization
- Eric and Anthony’s view on the current state of the Ethereum community
- The different cliques, factions, and sub-groups in Ethereum
- The role of the Foundation and Vitalik Buterin as they see it
- A close look into project funding in Ethereum and the emergence of DAOs for funding
- Reflections on Anthony’s “Why Ether is Valuable” piece
- The state of Ethereum 2.0 research and the different parties involved
- Their views on where the crypto space is heading in the next 5 years
(10:26) Eric and Anthony talk about what drove them to the Ethereum Community and what they thought was attractive they didn’t find in other communities.
(15:43) Why EthHub is only a side project and not a full time business
(15:19) Eric and Anthony explain how they manage huge timezone differences
(15:35) We dive into what EthHub actually is and why it was started
(24:47) The EthHub documentation website and what Eric and Anthony find their readers are most interested in learning about.
(27:58) Hear Eric and Anthony’s views on the Ethereum community
(30:49) Ethereum vs Parity – hear EthHub’s take on Polkadot
(35:52) The chance of Ethereum 2.0 and Polkadot becoming one community
(44:00) Eric and Anthony share their views on ‘skepticism in the space’.
(48:16) How the success of Ethereum is dependent on the Eth asset and how the two are linked.
(53:24) MKR and Dai and thoughts on what will happen when individual operational tokens of different applications will eventually just want to break off into their own chains
(58:04) The value of Ether
(1:08:18) Maximalism in the Ethereum community
(1:11:08) The funding spreadsheet EthHub put together
(1:14:21) Eric and Anthony’s views on the current Ethereum funding situation
(1:17:08) The general state of Ethereum and the research around it.
(1:20:24) The Ethereum 2.0 roadmap and can Ethereum remain dominant in the space
(1:30:07) The definition of maximalist
(1:32:09) Interoperability within the space
(1:36:09) Eric and Anthony discuss if they have plans to focus more on development
(1:38:47) Where to learn more about EthHub
Sebastien Couture: Hi, so we’re here with Anthony Sassano and Eric Connor. They are both founders of EthHub an educational platform for the Ethereum community that has some great documentation about Ethereum, a podcast and a newsletter, and they’ve been doing EthHub for I think about since January and Anthony is a product marketing manager at Set and Eric is a product manager at Gnosis. Thanks for joining us guys.
Eric Conner and Anthony Sassano: Yeah. Thanks for having us.
Sebastien: So I’d like to ask each of you individually perhaps starting with Eric what drove you to Ethereum initially, what drove you to the community?
Eric: Yes, actually initially got involved with Bitcoin in 2013, which I feel like that’s how a lot of people got started right and my background is actually in finance I was working at a bank and ran across Bitcoin and the idea in general just fascinated me. I actually started day trading it at that point which wasn’t the best of ideas because I ended up losing a lot of Bitcoin that I could have today but I learned a lot of valuable lessons and kind of got very just enthralled with the technology and you know at that time Mount Gox had got hacked and a lot of my friends that were traders lost a lot of Bitcoin so, you know just about that time as well Vitalik was giving his introduction to Ethereum at Bitcoin Miami Conference and we said, you know, why are all these people trading these decentralized assets on centralized exchanges. It doesn’t make much sense. Why don’t we try and leverage this new technology to build something better. So the three of us set out to build Ether X which was kind of the first attempt at a decentralized exchange on Ethereum in late 2014 early 2015. Fortunately the project never fully got off the ground due to some internal turmoil I guess I’ll put it, but you know, the Ether X is still out there in GitHub if anybody ever wants to revive it or you know, I think some of the white paper ideas are still pretty relevant today, which is very interesting. But you know ever since then I’ve just been involved in the community going to meetups helping build out the community mainly on social media like Reddit and Twitter just bringing general awareness and learning as much as I can and then you know, I met Anthony and 2018. We had the idea of EthHub like you mentioned we launched it January 2019 this year and then, you know working full-time in the space now at Gnosis. So just kind of has been a slow evolution over the years from just, you know, learning about Bitcoin and then being fascinated about the ideas behind Ethereum and now just full time in the space.
Anthony: So I got started in 2013 as well with Bitcoin basically discovered it through a friend bought some Bitcoin followed it up all the way to whatever it was a thousand dollars followed it all the way back down. In 2014 I kind of like just sold off what I had and kind of exited the space altogether which obviously was a very big mistake for me and then I rediscovered crypto back early 2017 with Ethereum. I’ve read a few posts about Ethereum and I was like, oh, well, this is totally different to Bitcoin like it does a lot more than what be quick and do all the base layer and everything. So I got kind of enthralled with that with what Ethereum could do just spent 2017 basically doing I guess, you know, very similar to what a lot of other people would have been doing 2017, which was speculating a lot especially with the ICO craze and everything. So, I don’t think I actually learnt much in 2017 besides how to speculate I guess and then obviously after the crash happened again, I didn’t exit this time. I thought to myself I’m not going to make that mistake again. So I basically spent 2018 learning as much as I could. Early 2018. I started a website called Block by Block where it had like a bunch of resources and research links for crypto that I collected and I shared that with everyone in the community started a newsletter called the Block by Block Weekly Newsletter in April of 2018 I think it was maybe earlier than that. Yeah, so I started that and I did that and then towards the end of 2018 I met Eric, we haven’t we haven’t actually met in real life. We just kind of met online, you know both being involved with the Ethereum community and we thought hey we should start something because you know, there’s not much for Ethereum at the moment terms of education. There’s a lot of stuff happening. No one really knows about so we started EthHub together and that went live early 2019 and we’ve got the newsletter now and the podcast and everything. So yeah. The rest is history. I only recently joined Set in July actually July 15 was my official start date there. So yeah, it’s been quite an interesting journey.
Sebastien: Wow, it’s incredible that you’ve never met in person. That’s quite a long time working together not having face-to-face contact. When Brian and I started Epicenter we didn’t meet for about two months. We met two months after but yes, like eight eight months is a long time.
Eric: Yeah, definitely. We joke, hopefully when we meet in person, it doesn’t all fall apart since we work so well remote.
Sebastien: I think I was listening to your podcast you guys going to be meeting in Berlin.
Anthony: Yeah. The funny thing is that we both like really close to each other at the moment because I’m in San Francisco and he’s in LA but we actually aren’t meeting in California. We’re going to meet in Berlin which is quite funny.
Sebastien: Well, that’s a good place to meet.
Anthony: Yeah, exactly.
Sebastien: So what is it about the Ethereum community that you guys thought was attractive and that you maybe you didn’t find in other communities?
Eric: I guess for me. I mean when I first got started like I mentioned I was more got involved on the trading side of Bitcoin and at the time to be honest, a lot of the Bitcoin Community was pretty just fascinated on price and the wild price movements that were happening and like I mentioned saw these exchange hacks and you know, I was more fascinated about the underlying technology. I mean, obviously everybody wants to make money and we need these things to go up to secure the networks and all that good stuff. But you know at the end of the day what captured me was this idea that you could start to build applications on top of this technology, right? And that idea just fascinated me. I mean the possibilities seemed endless and pretty much at that point I decided to drop all my Bitcoin and go, you know dedicate all my time to Ethereum.
Sunny: Aggarwal: So when you say, you know dedicated all your time, one thing when I met Anthony for the first time, you know, I think that DevCon earlier this year, I was actually surprised to learn that both of you actually weren’t like working in the blockchain space. you had kind of been following along and you’ve been working on EthHub for quite a while actually, but why did you decide like, you know to be very actively involved with the space but not jump in like as your full-time job kind of thing.
Anthony: Yeah, I guess for me it was I guess mostly geographically challenged I like to call it because I live down in Melbourne Australia. There’s not much happening there unfortunately for crypto in the group of community, but I think that you know over the last few months and the reason why I was able to kind of land a job was because crypto companies are much more open to a remote work then other sorts of companies. So I’m working with Set remotely from Melbourne at the moment, but prior to that I think I had been kind of looking for a job in crypto. It’s just that nothing really kind of came up that would that would work for me. I in my case, I guess just because of like, you know in Melbourne, it’s actually a 17 hour time difference from San Francisco. 17 hours ahead which is quite crazy. So a lot of the stuff that would require me to be kind of like in sync with the team like at all times wouldn’t work. But in terms of like what I do for Set now, it’s marketing so it doesn’t really require me to be you know on at the same time as they’re working, you know in my own time when I can basically like I’m asleep pretty much like when the business hours are happening in San Francisco. So yeah, I think that’s mainly what came down to for me kind of like finding the right role that would allow me to work remote on such an extreme time difference.
Sebastien: How do you manage to record a podcast with a 17 hour time difference? How is that even possible?
Eric: Either one of us has to be a very early or very late. It’s not the easiest thing in the world. I’m hoping maybe Anthony can make the move over to San Francisco some day. That would be the ideal setup.
Sebastien: Well kudos to you guys for doing the podcast for so long and still sticking with it with these constraints. So moving to EthHub now, so let’s dive into what what is EthHub and why did you decide to start this?
Eric: Yeah, I guess at the core of it. I mean to be honest how it was going to start or how it started was Ether price was falling from the top of you know, $1,420 all the way down to $80 and during that time there was just a lot of obviously everyone was emotional and kind of freaking out on you know, whether it be Twitter, Reddit, blog post, whatever it might be and there was a lot of misinformation being spread about Ethereum and you know, we kind of got together and you know, how can there’s nowhere to point people to like say okay. Here’s what’s actually going on our here’s what developments are actually taking place. So originally the idea was going to be basically just like a fun fighter FAQ where you know, we would see our favorite top 10 idea and foot items and you know rebut them and say why they’re not true. It kind of evolved quickly from there and there’s also no Ethereum based podcast. There’s you know, very few Ethereum based newsletters, but you know, I’m still at the core of it is the documentation and you know, I still personally struggle explaining Ethereum to people, family and friends that have never heard about it. There’s just not a good place to point people and it’s you know, we’re kidding ourselves if we think it’s an easy concept to understand like Bitcoin has done a pretty good job at making an explainable narrative to people, digital gold is something that you know, people can understand Ethereum hasn’t quite found that you know easily explainable narrative yet. So, you know, I think you still have to consume a lot of information to really understand it and you know at the core that’s the goal of ether.
Sebastien: I think maybe in part that’s also because to some extent Ethereum hasn’t yet found really like what its primary use case is. Whereas like Bitcoin has its digital gold thing, with Ethereum it’s still a bit fluid and changing with time, right?
Anthony: I do think Bitcoin’s changed with time as well. Maybe not as an extreme change, but it’s definitely changed with time. Back in 2013 there wasn’t really much talk about these historic value digital gold kind of thing. It was more about payments and getting merchants to accept and all these sorts of things right? I guess that’s what Bitcoin cash is these days kind of like that community forked off into Bitcoin Cash and you know, they’re doing all that stuff over there. Whereas Bitcoin’s kind of you know, solidified itself as digital gold store value, macro hedge all that good stuff. Yes, but yeah, you’re definitely right where Ethereum kind of because by design it can do a lot more we’re still kind of like finding what the best fit is where you know whether use cases are where the product market fit is. I do think something like DeFI is really great and And found like a really really great product market fit within Ethereum’s pretty much like kind of like built for that if I was just to say what I think Ethereum will be going forward as well. But definitely other things like DAOs and just general Web3 apps, like decentralized social media and all that sort of stuff. Definitely I think Ethereum can still do that, I just think that the platform being limited in scale will obviously limit those use cases and I think the finance use cases are probably a very interesting to most people because of the fact that you can possibly make money from it right at the end of the day a lot of people are in the crypto space because they want to make money. I think if we’re honest about that then we can build apps that people actually want to use.
Eric: Yeah, then just add something quickly that I think one of the problems Ethereum had early on is a bit of mis marketing that we’re still paying a bit for I think we’re just getting out of it. But if you actually read the initial white paper, most of the use cases explained by Vitalik have to do with programmable money and financial use cases. About a year after I launched Ethereum went down this path of world computer and Web 3 which I think someday we’ll get to but it was way too early for Ethereum. Right? And so we’re kind of recovering a bit from that narrative that didn’t really fit early on and kind of getting back to more of the basics on the financial side. And I think you know DeFi personally I think is a great narrative for now for Ethereum.
Sunny: Yeah. I mean this is kind of what I was looking at as well like during that whole 2017 period where I thought everyone was just way too over excited by Web 3 and all these like decentralized applications and stuff and when I saw it as if you know, I just think that we should focus on the financial applications and to me smart contracts should be used exactly what they sound like which is as contracts and like, usually for particularly mostly financial purposes, and if you’re trying to build anything much more complex than some basic contracting stuff, I’m not sure if Ethereum is ready today to handle that kind of load. So at EthHub, currently is it just the two of you or is there anyone else kind of involved in it today?
Anthony: Yes, so in terms of like I guess you could say full time, I mean, it’s a passion project at the end of the day. We started out we actually just us 2 of course, but then we had kind of like some core contributors come on board that submitted a lot of content with us. So one of those is Chaz Schmidt. He’s been very helpful early on in getting a lot of documentation on there. He’s actually currently working on like translating EthHub as well, which is really cool. But yeah in terms of like ongoing maintenance and work on it, it’s mostly Eric and I but anyone can go to the GitHub repo and submit pull requests or whatever and content they want added, the people who have commit access is obviously Eric and I, Chaz and I think one other person from memory that can commit these things but we never really deny anyone unless it’s like advertising or something or an ICO or something like that or or scammy, so anyone can submit like educational content, but in terms of like the podcast and newsletter, that’s kind of like centralized like I do the newsletter, Eric will do the guest podcast and then we’ll do the weekly recap together.
Sebastien: I gotta say that the documentation website is just fantastic and I don’t spend a lot of time in Ethereum as much as I used to or researching Ethereum. So today I just went through all the docs and read everything and it was such a great refresher on everything that’s happening in Ethereum, just got a great overview and I think someone who’s coming into the space or maybe who’s coming from another community or even from traditional software development that wants to just spend three or four hours is learning like 90% basically what they need to learn about Ethereum to be up to date. It’s an ideal place to do it. So congratulations on building this like really nice clean and simple resource.
Eric: Yeah. Thanks good to hear.
Sunny: I poked around some of the docs especially like things around the monetary policy and stuff which is a kind of stuff I’m maybe least familiar with, but what kind of sections do you find personally the most interesting to write or the most rewarding or do you think that is really what brings maybe the majority of your audience? What are people most interested in learning about when it comes to reading EthHub docs?
Eric: That’s a great question. I think as far as like personally rewarding and I probably I think speak for Anthony and myself here is the things that are very complex topics that you know information is kind of spread on GitHub or on Gitter and chat rooms and we can kind of take that and piece it together and make it easily digestible for most people, you know, I would say the good examples there are around like Plasma and Layer Two Solutions and the different phases of Eth 2.0. I think our most popular pages that people go to and ask for are around the transition from Eth1 to Eth2 and how that’s going to take place because there’s multiple different phases and then people are very interested in the transition from proof of work to proof of stake and you know how that’s going to work, how much Ether they need, how they’re going to run it themselves, what kind of rewards are they looking at getting back? Those are definitely our most popular pages. I mean as far as like actual hitwise we’re actually linked on the Ethereum.org site now a few places so some of the more basic like how to get a wallet and things are technically our most hit pages but as far as getting the most community interest I think it’s around those, you know topics that it’s hard for people to understand unless it’s all put on just one page and kind of like an explain like I’m five type language.
Anthony: Yeah. Definitely. I do second that. I think that we have a section on there called the Ethereum FAQ section, which I think pays a lot of dividends. It’s basically just like the most kind of like asked questions that we see on Twitter or Reddit or see that people are kind of like spreading misinformation about so it’s basically just a bunch of pages that we can link to people to say, you know, here’s the explanation. Here’s why this is wrong instead of repeating ourselves constantly on Twitter. It’s just like this holistic page, which I think has paid the most dividends in terms of like, you know, getting the misinformation corrected and educating more people about these core things. Like there’s a few things in there about kind of do you need ether to you know, use the Ethereum Network as part of gas and things like that and explaining economic abstraction and meta transactions and a few more complex topics that people sometimes try to spin as a negative for Ethereum.
Sebastien: That’s a great idea. I think I might do that as well for certain topics. So switching gears a little bit. Let’s let’s take a step back a little bit and look at the Ethereum community as a whole. Can you describe what you see is the sort of state of the Ethereum community at the moment.
Anthony: So I guess it’s changing. It’s definitely changing. I think that there is definitely people that are getting kind of disenfranchised with the community. They might not feel like they belong anymore. They may feel like they’re being pushed out or they don’t align with the kind of vision and mission of Ethereum these days. I think that’s just like going to be a natural thing. We obviously saw this happen with Bitcoin right with the Bitcoin cash fork and everything like that and to an extent to be Bitcoin S V4. There are always going to be people in different groups that have different values that want to do different things. No one’s going to have a holistic narrative. You can’t please everyone, I think at the end of the day we can only do our best to please, you know the most amount of people so I definitely think that’s what’s happening in Ethereum at the moment, especially with the transition from Eth 1 to Eth 2. A lot of the Eth 2 teams, especially the ones building clients are new they weren’t around for Eth 1. They weren’t around until recently. So there’s a think nine teams moment. And most of them are only popped up over the last year or 2 maybe whereas the the old guard as you know, as you can probably call it has been around since the beginning like the Geths and the Parodies of the world and you know, even in that arena Parity is now moving on. I mean, they’re still working on Ethereum but they also have Polkadot that they’re working on now as part of the Web 3 Foundation and things like that. So yeah, there’s definitely divide in the community at this point in certain parts of the community, but I think that’s just a natural occurrence that will happen to any network that any crypto network that gets big enough.
Sebastien: How does that divide express itself, in reality where do we see at the most emerge?
Anthony: I think you can see it like, unless you’re really in the weeds it’s kind of hard to tell I think where people are going and whether divides are happening, but I think if you want to see any obvious examples of divides happening, it may be any kind of projects that or developers that have been traditionally pretty you know deep in Ethereum building on Ethereum moving over to other chains that may align with their vision more but I think the most obvious example of this divide happening and it might be a bit controversial to say but I think Parity moving on from it from Ethereum and focusing a lot of their time on Polkadot, which I consider like I mean people will disagree with me on this but I consider it a competitor to Ethereum and kind of like, it’s got a lot of the same architecture as Ethereum 2.0 as well. So, you know, I think that’s where the most obvious divide is happening right now and I think that puts a splinter in things in terms of friendships as well because traditionally a lot of the people at Parity have been friends with a lot of the other Ethereum community members and things like that. So I think that’s where it’s definitely showing most.
Sunny: Do you think that one of the reasons that there are so many Eth 2.0 developers is, I pointed this out last year where like, you know, the amount of control that Parity had over the Ethereum 2.0 roadmap was a little bit scary where like it seemed to me what if they not saying that this is what happened but if you’re going to take a really cynical point of view, what you would do is, you know, it seems what Parity would want to do is stall and like grind their feet until they could get Polkadot out the door and make sure it gets out the door before Eth 2.0. When I was at Scaling Ethereum this couple of months ago in Toronto, it seemed that like from what I could tell the Ethereum 2.0 design and the Polkadot design are quickly becoming very very very overlapping. So I guess this is a general question about the community as a whole like how cynical do you think we should be approaching like, you know, for example Ameen he likes to take a very very cynical approach and assume everyone has like the worst intentions or should we be a little bit more kind of not forgiving but more open to like, you know, you know, I mean a little bit not as cynical when we approaching assume people maybe have better intentions than they yeah. What do you think about that?
Eric: Yeah. It’s a great question. I mean, it’s something Anthony and I discuss a lot. I think you know in reality I think in general people aren’t skeptical enough and the reason is there’s a lot of money at stake here, right? And when you involve money and these teams in reality, you’re going to want to build out user base and you know grow their chain and they get bigger returns when you have that people are going to be playing not nice all the time, right? And you know, I don’t want to call out specific people or groups, but you know, the biggest issue that I think Ethereum had with the Polkadot team is like Parity, you know, they’ve done a lot of great work for Ethereum for years. They still have the second or maybe even the top client this day over Geth, so they’re very ingrained in the community. So it’s hard to like know, you know, like you said where they may be intentionally starting Eth 2.0. Who knows right? But I do think we need to be a tiny bit more cautious than people, a lot of people I think just like to assume that everyone’s playing nice and reality when money’s involved that just isn’t the case, right? So I think it’s fair at times to question. I don’t think it’s good to ever get personal or you know attack people and certain people go about it differently, but it seems to me, you know, we went through a weird transition of you know Reddit trying to oust admins that were involved in Parity from the Ethereum subreddits and I think we’ve moved on a little bit and it seems like the projects have kind of finally split besides Parity obviously having an Eth client and you know building out an Eth 2.0 as well. But to be honest, I haven’t seen much updates from them on the E2 side recently.
Sunny: What would you say is the most dangerous faction within the Ethereum community?
Anthony: That’s very controversial question.
Sunny: That’s what we like to do on this podcast,.
Anthony: Yes. I think it’s definitely with from within for sure it’d have to be like, I mean calling out an entire organization is a bit hard but definitely Parity from what I’ve seen their behavior, you know within Ethereum. If you really do dig into the weeds, it doesn’t seem they have Ethereum’s best intentions at heart anymore. As Eric said they’ve done a lot of good work in the past for Ethereum and they still contribute to ethereum to some extent but you know, I think most of their time is now focused on Polkadot and you did say that a lot of the designs on both the systems of the Ethereum 2.0 and Polkadot do overlap a lot especially, you know, if you really dig into the designs, you can see it quite obviously. So yeah, I do think there may have been dragging their feet a little bit as well. And that’s you know, obviously caused I think the Ethereum Foundation realized this and a lot of them a lot of people working on Eth 2.0 realized this and realized that this needed to be more decentralized over development process. So that’s all we have so many independent teams now, I think as well building up clients, you know as Eric said I haven’t actually seen much from Parity on the Eth 2.0 side. I know that they were building them a Casper client. They called it Casper was I guess the original name for her theorem 2.0 before we kind of like changed it from that because no one really liked that name, but they were definitely building that using their new substrate developer tooling or platform. But yeah, so I think it definitely comes from within and there are there are individuals and groups that may be trying to kind of like subvert different Ethereum people and bring them over to their chain. So, you know, the grass is greener over here. Come here. You’ll get paid more or you know, you can do more here you’re less restricted and all that sort of stuff. So I think the community traditionally being very open very nice, you know, very welcoming and everything but I think at this point in time we kind of need to keep that but also be a lot more cautious about who we let into the deep spaces of Ethereum who we let influence certain decisions, like whether that be politically or technically and things like that because at the end of the day, you know, there’s obviously core groups of people that people look up to and as a signal and things like that. So I think we need to be really cautious about who we give that kind of political power, too.
Sebastien: Since Ethereum 2.0 and Polkadot are so are so similar and they do overlap quite a bit. I mean ultimately it would be ideal if those two communities were to some some way rekindle and become one community because I would just make the entire ecosystem stronger. We would be in a much better situation if we had one strong Web3 / Ethereum community rather than two different fragmented communities in the long term. I think. Where do you think the barriers are for that to happen? Do you think it’s already too late or do you think people could mend things, certain factions of those communities could mend things in a way that would make that possible?
Eric: Yeah. I mean, I guess first you’d have to ask Gavin Wood right. He’s the one that decided to split them. But uh, you know, I think to be honest, I don’t see it rejoining. I think the communities could rejoin I mean for example in Berlin like Web 3 has their Web 3 Summit, then there’s Devcon and there’s E Berlin and like a lot of people are going all those events.
Sebastien: All of those are overlapping by the way.
Eric: Yeah, right exactly. Yeah. So I think like the community still cross. I know there’s people interested in both like Anthony’s definitely interested in both. He’s open about that and you know, wants to see Polkadot succeed as well. But I think in reality the values have split a little bit, right so Polkadot seems to be focusing more on the unchained governance aspect and they’re not as you know interested in the base asset gaining a monetary premium, which you know, I think the Ethereum community has started to grow up to and the Ethereum community isn’t that big on onchain government governance and doesn’t see it as a feature, right? So these are kind of two very important community values that I think of essentially split and you know, I don’t know Gavin. I don’t know what your why he decided to leave Ethereum and start Polkadot but I think he has more of this vision of this Web 3 world where people on chain are governing this system and I just don’t think that’s a fit for Ethereum right now.
Anthony: So I guess I’ll follow on from that as well and say I think we should address the elephant in the room when talking about Parity, right? They have a lot of money locked on Ethereum right now locked in that multisig. Not just them there’s a few other parties as well, but have a lot of money locked and I think that was the pivotal moment where the split really happened was when the Ethereum community basically said a strong no, we’re not going to unlock these funds essentially and I think that you know, a lot of people especially like obviously want those affected were like, well you did this for the DAO why won’t you do this for our sort of thing and I think that if the community has definitely proved itself in that the DAO was like a one-time thing up until this point. It wasn’t a precedent where you know, if there’s a large hack will, you know reverse that transaction or alter the state or anything like that or do whatever is necessary to get those funds back. So I think that was when I started noticing a lot more hostility happen between the maybe the two communities.
Sebastien: Do you think that was a bad decision in hindsight now looking back on that you think the community could have just said sure let’s reverse that and have the funds go back.
Anthony: No, I don’t think so. I don’t think it was a bad decision because I think the damage of reversing that would be a lot worse in the long term than the short-term pain of losing. With a really great team a great engineering term great core team to Ethereum, but definitely they were already working on Polkadot right? So I don’t think that would have made a positive difference giving the money back. I think it would have been very negative over the long term. We’re still reeling from the DAO, right? So just doing another one of those. I mean people call them bailouts people call them, you know rescue people call it censorship whatever you want to call it doing another one of those would definitely be a long-term negative impact on Ethereum.
Sebastien: And what about Vitalik. Where do you see his role currently and going forward?
Eric: Yeah, he seems to be taking just the lead researcher role at this point. I mean he has stepped back from, he’s very rarely seen on core dev calls. He wasn’t involved in any of the decisions like to lower block rewards from 3 to 2 last year, but he’s very active on the Eth researcher Forum on GitHub kind of like the top person as far as Eth 2 research goes right and Danny Ryan, and everyone they’re doing good work, but he definitely seems to have taken a step back from the I guess I’ll put it governance side of things. I mean in 2014, 2015 16, you know, what Vitalik said on core dev calls probably went right? And I think he probably realized that and said we need to grow up as a community, I’m going to take a step back and it seems like to be honest I think he just enjoys the research side more in general too so just kind of what he’s settled into now.
Sebastien: Yeah, I think that makes sense for him. Now that the community is what it is and and as as large and diverse as it is for him to take a step back and be in more of that research role makes more sense maybe for him and also for the sake of the project in general.
Anthony: Yeah. It’s definitely taken like as Eric said purposely taken a step back within the community because he realized he did have this kind of like centralizing influence if you want to call it, where people would look to him and wait for his answer sort of thing and say, oh he’s you know, is Vitalik on my side or is he not and then people kind of rally around that as like this this beacon, I guess you could call it which I think was definitely unhealthy and I’m really like obviously happy that Vitalik realized that but I think that there’s a distinction to be made between centralization of development and centralization of like decision-making, you know on chain and things like that and and things like Parity and frozen funds for instance and things like that. So I think at the moment obviously Eth 2 is in centralized development because the network’s not live. The research is pretty much centralized around a core group of people work for the Ethereum Foundation, you know, Eric mentioned some of them but there’s also research going on now in other areas such as consensus. They have their quilt team working on Phase 2 to research for Eth 2, to we have the nine independent developer teams as well. And so I think Vitalik has just fallen into the background where he like he commonly just post things on Eth research that he’s come up with because he obviously loves doing the research stuff and he puts it out there and then people will literally read it think oh, that’s cool I’ll build that and they go ahead and build it right? I don’t think I’ve seen Vitalik weigh in on any decisions or anything like major decisions with regards to Eth 1. He’s seems squarely focused on Eth 2 and he’s letting you know the community basically stew with Eth 1 and I don’t think that if he came back and said something like, oh we should you know save the the Parity funds. I don’t think the community would go with him on that at all to be honest.
Sunny: One question. I actually want to I want to ask a little from a little bit earlier but was about the skepticism in the space. Do you think that there’s an extent where we might be taking it a bit too far. So there was this the Coin Jazeera article a few weeks ago one of the ones about like Polkadot and stuff and you know, I know Coin Jazeera is mostly like a satire magazine and stuff but you know, they called Lane like a sleeper agent for Polkadot. And do you think that there’s an I don’t know. I feel that there might be almost a little bit of trotskyism going on where it’s like, oh anyone who disagrees with the mainstay of what the community says. It’s like, oh, they’re clearly working for the enemy or something like that. And do you think that might get dangerous at a point where it’s like, for example, you know, I I’ll admit I felt this sometimes myself. Where like, yes, I work on Cosmos, but there’s I worked on Ethereum on before I even started working on Cosmos and there’s a lot of times where I’d like know I propose stuff where I’m like, oh, I think this would be a way to legitimately improve ethereum. And then people’s direct response is oh, you’re doing it to undermine Ethereum in order to help Cosmos. And do you think that can be a little bit dangerous and maybe disincentivize people from even wanting to contribute?
Anthony: Yeah. I think that it definitely, you know, it can’t play out like that where I know I’ve seen this happen myself for sure. I think you know, if we if I don’t want to single anyone out but I mean Lane’s been a pretty big topic lately in the Ethereum Community, right? He’s taking the other side of basically every mainstay as you say like the Ethereum narrative and what the Ethereum Community rallies behind and everything like that? But I think in the case of Lane he is actually going to seem to be going to work for something outside of the Ethereum community, right and you know, it’s kind of like the timing is curious right when you look at it. It was something like that where he basically is going to work for another project right? And now he’s all of a sudden saying all these negative things about Ethereum, whereas while he was working with the you may have taken, you know, the contrary incited sometimes but he never really did it as he does now so I think that the timing is what you need to look at and things like that. But I mean that’s just one individual right? I think most people don’t operate like that. I don’t think most people have the capacity to do that all want to do that. Like it’s kind of like when you really think about it, it’s kind of like a shitty thing to do. So I think that you know in your case, for example, I don’t think personally that you’re trying to undermine Ethereum at all. I just think that you have different views about how something should be built and that’s why you’re you know, you’re building on Cosmos and things like that and and most people are probably like that right even the people working at Parity pretty much like all of them I would say don’t have you no bad intentions or want to cause harm to Ethereum but at the end of the day if you’re building a platform that you want people to use like if people say it’s not a zero-sum game and all these sorts of things but it does have a distribution where most of the people will use one particular network, right? So we see already seen this play out where Ethereum even though it has so many competitors is still the dominant platform by far like EOS raised four billion dollar Block One raised four billion dollars for EOS, right? And from what I’ve seen they aren’t getting much traction even though they have all this money, any of the other competitors don’t seem to be getting much traction, not to say they won’t in the future. But I think at this point, you know, if you’re standing up something another chain or something then it definitely is a competitor whether you know, the people standing it up want it to be or not. You know, there might be an interoperable future where you know chains talk to each other and things like that. But in terms of like where the most users go and wear like a kind of like monetary premium accrues to the base and things like that. It definitely follows that it’s like a I guess a winner take most kind of thing.
Eric: Yeah, I think a couple things too, I think depending on the market cycle this stuff’s amplified a lot. So we saw the most inviting in the community when price was tanking which kind of all stemmed out of the funding debate, right? So the EF’s treasury was drying up a bit at $80 and everyone was saying how we’re going to fund all this work. You know, now that we’ve bounced back up to whatever 200 or so like that treasury is now inflated back up a little bit and those debates have settled down a tiny bit. But you know also I think in general social media amplifies it too so like you actually go to an Ethereum conference or meet up everyone’s getting along and you know, everyone’s there from all these different teams and I think social media plays a role in it, too.
Sunny: You mentioned this like monetary premium and you think that that’s kind of like one of the more important things that these chains are competing on. Could you explain to me? Like, why do you think that first of all is the success of Ethereum dependent on the Eth asset kind of you know appreciating in value? And yeah, how linked are these two things?
Anthony: I think during the phase that we’re in right now where it’s really early and speculation is pretty much like most of what people use these networks for I think it’s extremely important. I don’t think Bitcoin would be anywhere where it is today if the price then go up like no one would be nearly as interested. If you look at kind of like Bitcoin as the shining example of why people are involved, you know, people will freely admit that they’re involved because they want Bitcoin to go up right and everything they do is to make Bitcoin go up and educating more users means more people buy Bitcoin, which means it goes up like theoretically right and I think that’s what most of the people have been rallying around at this point. It definitely exists in Ethereum as well people obviously by Ether because they want to see either appreciate like, I mean, you can buy Ether a little bit of Ether so you have to use it for gas and things like that to use the network but like there’s a massive premium there like, no one’s really buying Ether for gas unless they have to they’re not buying it and being like, okay. I’m going to stockpile this so I can use the Ethereum network in the future know they’re buying it with the hopes because of a depreciating so I think it plays a massively important role in a crypto network. You just getting people involved like at the end of the day, you know, even in the future when we evolved past these people are going to buy these assets so that they can make money and I don’t think there’s anything wrong with that. I mean, we’ve already seen that the biggest use cases on Ethereum being DeFi which is all pretty much all speculation. I mean Dais used in some capacity, you know for people to hold US. Dollars in other countries, like I know something like Argentina, there’s people there that use Dai instead of like so they can get exposure to the US dollar but kind of censorship resistant way and things like that, but I think that you know, an appreciating asset prices as Eric mentioned is just great for the overall Community the morale the kind of Network Health and things like that, it definitely obviously plays a massive role in the security of the network, you know, especially under proof of stake where obviously the higher the price of the asset is the more it will cost to attack the network and things like that. So, you know, I put out a few tweets around this where I where I say that high Eth price brings in the kind of legitimacy to the platform. So if Ethereum being like number two to Bitcoin and being the number one smart contract platform means that most people will default just building on Ethereum because of that right and and and it works as a signal to the community that Ethereum is going to be around for a long time because there’s a lot of money invested and things like that. So there’s all these kind of second order effects that happen from attaining a kind of like monetary premium and becoming like historic value not to mention all of the social stuff that happens around people getting like really involved with the Ethereum community simply because they hold Ether like I mean, that’s the reason why both Eric and I, you know got pretty heavily involved as well like we obviously own Ether and we’d like to see it appreciate in the future. So we take that as a one motivation to build things like a table and to keep contributing to the community. So I think that that’s a massive driver and you know taking the flip side to that and going back to I think like what Lane was talking about on Twitter recently where he feels that people coming into Ethereum later I getting like a way smaller share of the pie, because if Ethereum launched in 2015 they had the ICO in 2014 where the public ICO like obviously was very public it was available to everyone to participate in but someone like me who only got in late I didn’t get to actually participate in that ICO and you know, depending on when you bought Eth bought it like x x amount as to who bought it at ICO. But I don’t think that that’s something that these networks can kind of like fix it. No one, you know stopped anyone from buying Ether at these low prices. It was just like an awareness thing at the end of the day. So I definitely think that that, you know can cause something disenfranchisement in the community and things like that, but I don’t think it’s going to be like a massive barrier to to entry into different communities.
Eric: Yeah, I think on that too. I mean we’re obviously both big believers in DeFi and think you know, ideally this could become the new Global Financial system, right and to do that you need Ether which is basically the reserve asset of this new global economy one day ideally, you need it to have value because it’s securing Dai which is essentially stable Eth and you need Eth to be collateral for everything that’s kind of happening in the DeFi space. So, you know in doing that and if that’s the vision you believe in for the future on Ethereum you know DeFi continue to grow and ideally kind of usurping the traditional Finance system. You need ether to have value and especially because you can even get more basic than that if we’re tokenizing real world assets someday, there’s trillions in value secured on the Chain, you know, the chain can’t be cheap to attack because no one’s going to want to secure all this value on a chain that could be easily 51% attack because the underlying asset is cheap, right? So I think those all together kind of you know, that’s at least why I believe that ether needs to develop this monetary premium.
Sunny: So I think Dai is actually a great example of one of my concerns with the Ethereum model and maybe you know, I meant to ask Rune this on our Maker DAO episode, but there was so much interesting stuff going on that we didn’t even have time to get to that but here’s my question. I don’t think Dai gets any security from Ethereum because what’s happening here is you have two different tokens, one that’s being used to secure the operational side of the network, which is Eth and then one that’s being used to secure the governance of the network, which is the MKR token and what you would do if you wanted to attack the system is you’d attack the lower value system the lower price asset, which is the MKR you go buy a controlling share of MKR and like just crash the the functionality of Dai . So in this world like you get the lower of the two security, but you’re paying for the higher of the two security so you’re getting MKR security, but you’re the the Dai holders are paying for Eth security wouldn’t it make sense to me at least in this case for MKR to kind of break off into its own chain in which the MKR acts as a staking token for that system. I think this acts true for many applications as well, I think it’s true for Auger. I think it’s true for the 0x token. I think it’s true for a lot of applications. So what are your thoughts on this where eventually like the individual operational tokens of different applications will eventually just want to break off into their own chains?
Anthony: I think it’s an interesting question. There’s a lot to unpack there. I definitely think in terms of like I know this is like the Cosmos model right where things break off into their own little universes and then connect to like I said a central Hub and things like that, but I think that the Maker system obviously I think does inherit the security from Ethereum. So say like maker was the break off into its own chain, right and the MKR tokens worth I think 700 million market cap at the moment something like that. So that network would be essentially worth 700 million dollars worth of security if you want to look at it that way or something like that. So, you know, I’m not entirely sure about the tentacles of how it works in Cosmos and maybe Polkadot later on about like shared security and things like that. But as far as I know in Cosmos, it’s like you be responsible for the security of your own kind of like chain essentially and then you can plug in and interoperate with other chains if you want to so, I think the Maker system itself definitely benefits from the fact that if you’re in a much higher market cap so there’s much higher implied security from that as well, whereas being its own chain, the security would obviously be lowered and things like that.
Sunny: But my point is if you want to attack the MKR system if you want to destroy Dai, I don’t need to attack the chain. I just need to attack the MKR governance.
Sebastien: Yes. Yes for sure. I mean that’s definitely a definitely a risk there. But I think that moving to I guess the own your own chain, it would kind of compound these things where you could attack both, you know, obviously the governance and that would in that would just destroy the chain itself. Right? So you’d be doing you be like killing two birds with one stone. Whereas maker being on Ethereum like you can attack the maker system right? But I mean, it depends like how big maker is I mean, it’s pretty big at the moment and Dai’s a pretty big part of Ethereum where it will have a cascading effect on the rest of the Ethereum network, but I think that even if maker was its own system that kind of plugged into Ethereum and I will still use as it is today, it would still have those effects. So I guess I can still I can still see benefits to both ways of doing it where Maker being its own system means that if it gets destroyed it’s like concentrated there, but I still think it has those on flow effects. Whereas if Dai is still used in the same capacity it would still have the same effect on it on Ethereum where all the apps that rely on Dai would kind of go down with it. Basically.
Eric: Yeah, and I think this is almost more of a governance question too which I’m not personally a fan of much app work on chain governance, but you know, this is more around. yeah the cost to attack a governance system and it gets a little tricky with maker because they technically have a Fail-Safe switch and you know, they have this scientific governance which technically, you know, it’s not totally up to the coin voters because they can fail switch it at the at the end there and kind of settle the entire system so but yeah, I know I think an important question definitely is like how cheap is it to attack some of these, you know applications that have a token voting system, right? And there’s a lot of them out there 0x, Aragon, Maker, you know Maker’s not the only one right and for some of these coins, it’s very cheap to attack those systems. So I guess you know the value of what you capture after the attack has to be there, but it’s an interesting question.
Sebastien: So I’d like to come back to this idea of Ether having value and try to unpack that a little bit. So if we look at Ether and the value that has today and so the market cap there are two things primarily. So one is the demand for gas and the other is the expectation that ether will someday power the Global Financial system and the value that is derived from that. At the moment I would say that there is a huge premium on ether because I don’t think the demand for gas gives Ether the value that has at the moment and then all of the overhead there is speculation on what the future Ether platform could provide in terms of actual value. So if we agree on that then wouldn’t it be the best course for the community rather than focus on building more applications more tooling DAOs etc, wouldn’t it be better for the community to be really focusing on the use cases and bringing those real-world assets in Ether, creating the bridges that allows real Financial assets tangible assets physical assets from the traditional Financial system into Ethereum so that we can actually have real assets backing it and Ether having actual value rather than the spectrum of the value.
Eric: Yeah, I guess to your first point. I I don’t fully agree well I agree to an extent, but I would push back and say you can say the exact same thing for Bitcoin, you need Bitcoin for fees on the Network. Other than that, it’s entirely speculative. I guess Bitcoin holders would argue that its sound money and it’s a store value right? So I think that’s where we’re going in the Ethereum community with you know this store value, Ether as money, Ether as a reserve currency for the Global Financial system someday, you know that’s more of where the value is being derived from now not just gas payments because if you believe that, you know, the value would just be derived from gas. Like you said we’re way off from that but the exact same thing can be said for Bitcoin to right so, you know right now the issuance on both the Ethereum and Bitcoin networks are right around four to four and a half percent. So there’s really not much difference in the asset underlying it other than just the narratives between the two communities. But you know, I fully agree with you. I think beyond this just like meaning of sound money and store value we need to actually bring use cases to the chain and in the long run that’s going to drive adoption and usage and people are going to want to buy it and speculate on it and use it as gas right and I do think that that’s why the community is building out more and more on the DeFi space, right? We’re seeing all these narratives around like Argentina and Venezuela and people are saying, you know buy Bitcoin well in reality most of the people who actually live in those countries are saying they’d prefer to buy the US dollar or Dai right if they were on a on a crypto Network because they want stability. So things like DeFi are starting to actually do that. And I think the narrative of kind of be your own bank on Ethereum where you can you know, you can have your digital asset and actually put it to use for you. You can earn interest on compound you can invest it in a Set and have that set automatically rebalance across different investment types for you. You know, I think that’s a strong vision that is slowly being built out on the Ethereum chain right now.
Sebastien: That’s one application. So for example, you mentioned Argentina and having a stable cryptocurrency that you can use there in the form of Dai is probably extremely valuable for a lot of people but it still doesn’t give any more value to the underlying asset which is Ether it gives a bit gives value of this derivative asset on top of Ether but Ether itself as sound money, you know, if we take the Bitcoin narrative sound money cheat transaction borderless payments etc, if the Dai is the currency of people are using Ether will never have that function. And so where does the value of Ether then get derived from if all of the value is being created in the layers on top and essentially it’s just a house of cards,s the value Ether starts to drop and people start leaving the platform all this other stuff comes along with it.
Anthony: Yeah, so I think I’ll I’ll circle back to a post that I wrote earlier this year called why Ether is Valuable. Now your criticisms or I guess like points about, you know, Ether itself and you know what will drive Ether…
Sebastien: Just to be fair. I have this points or criticisms or observations for every currency, Bitcoin, Cosmos, whatever.
Anthony: Yeah, for sure. I definitely think that that rings true for definitely everything and as I mentioned previously speculation is like the main driver here of a lot of this value for sure, but I guess like what I tried to do in my blog post, is outline what use cases thee theorem is kind of fitting today. So if we actually look at you know, go back a little bit of look at the history in 2017 ether was used for the ICO boom. And I think that’s what drove a lot of its value it became a kind of like, you know snowball effect where people would buy Ether to contribute to these ICO and then they would sell their tokens whether they profited or not from it back into Ether and then put that additional Ether back into other ICO’s. Now, you know, they could have sold those tokens for US dollars or Bitcoin, but that I think a lot of them sold it for Ether because they expected that they just recycle it back into another ICO using Ether and then you know have those games again. So I think that’s what happened in the second half of 2017, especially when basically, you know, every ICO was returning these insane gains to a lot of people so that’s what drove most of the value then I think that’s what actually drove a lot of value to Bitcoin itself too like on flow effect I think that’s why Bitcoin got the 20K and things like that and then obviously we had to hand over period during 2018 where both of the assets crashed a lot. I think Eth kind of led the crash there and pulled Bitcoin down with it, you know Eth obviously fell more than Bitcoin has as still a lot lower than Bitcoin as well. And then I think since then the Ethereum Community has taken a look at why ether is valuable. So what will drive more value to Eth outside of its use cases as being used as money like I know that’s become a bit of a meme at the moment it you know, is Eth he’s money or isn’t it. It definitely has been used as money in limited capacities, not enough to justify the market cap of Ether as it currently stands and then a lot of people are saying like you are that if Dai fills a lot of these use cases which Dai actually a lot better for I think for a lot of these use cases whether it’s as money or or you know, any type of payment is basically going to be better than Dai because it’s stable relative to the US Dollar. I think that the value of Ether is going to have to come from different things. So there’s been a lot of a thinking being evolved around this especially from someone that I follow quite closely. He’s name is Ryan Sean Adams. I think a lot of people would have seen him on Twitter. He basically is I think the leader in making the case for why ether should have value and you know where that value is going to be derived from, he recently went on a podcast called POV Crypto with David Hoffman and his co-host there Christian explaining that ether has become this kind of triple point asset or will become this triple point asset where it basically serves three different functions as one asset. So he outlines these functions as ether as a capital asset. So it produces income for the holders where whether it’s being its lending out Ether or getting staking in the future where you’ll get a return on staking it, Ether as a consumable asset. So if needed for all kinds of financial transactions on Ethereum in the form of gas, of course, and in the future, we may have state rent which is basically paying to use the Ethereum Network pays a little bit of rent to use the Ethereum network if you’ve deployed a contract or things like that so that the state doesn’t bloat out, that may or may not happen so I’m not I’m not entirely sure, then with the gas fees we may have a new fee market on Ethereum in the form of PIP1559 which Eric co-authored as well. If you go check that out of basically describes this thing of burning Eth so making it I guess I’m more scarce asset in that way. Then he describes Ether as a historic value asset so similar to Bitcoin in the sense that it can be a historic value, but it’s also has a use within the Ethereum network as a required capital for things like open finance. So I mean interesting stuff that I looked at around ether was that ether being so valuable right now can allow for these other platforms to get bigger and within DeFi so something like Maker right has I think it’s like 2% of all Eth locked up in Maker. It’s probably less than that now. In all of DeFi , it’s about 450 million dollars or 2% of all Eth. So if you were to do that on something like like Tezos for example, the same amount of dollar amount value would require you to lock up 50% of all XTC in DeFi to do that. So, you know Ether being more valuable allows it to be more liquid and and allows us to do a lot more things within the Ethereum network without having to put up 50% of the supply for example, which would be extrememly hard to get everyone rallying around that so yeah, there’s all these different things that can drive value to Ether itself in terms of core uses but I think for the foreseeable future and I’m talking decades here, it’s going to be driven mainly by speculation just as pretty much every other network is and as I’ve mentioned previously, I don’t think that’s a bad thing. I think that has, you know, massive second order effects that they compound and and create these other use cases.
Eric: I think that’s a very important point. I don’t think anybody would argue that like today, you know, ether is money across the world and all of its values derived from usage. Right? We’d be kidding ourselves and saying that I think it’s more about setting this up for the future right like something can’t just become money and have a monetary premium overnight. So how do you assure that you know this can happen in the future and I think building out the DeFi infrastructure making sure issuance is low and Anthony mentioned staking like that’s a big component of this to right you’re going to be able to stake your capital and earn interest return on it. So all these things just coming together over the years. I think that’s your, you know monetary premium and we’re just basically in the I guess the birthing stage of how we get there.
Sunny: When it comes to the monetary premium, I feel like one of the things that a lot of people have been doing on Twitter lately you guys as well, but you know other people as well is I feel there’s just been a lot of like critiquing of Bitcoin going on just like, you know, but I feel like Twitter feed it’s just like constantly just people just shitting on Bitcoin and to what extent do you think this is beneficial to the system as a whole or do you think it might drive people away like, you know, it seems that like even Vitalik one of the reasons he left the Bitcoin community and like and created Ethereum was he got kind of turned away from the maximalism that was happening in the Bitcoin community and I don’t know I just feel over the course of the last year the I see similar trends of maximalism reappearing in the Ethereum community. And do you think this is dangerous for the for the community?
Eric: Well, I guess first. I think the term maximalist has become very watered-down these days. I mean it’s basically turned into you’re a fan of it and then your maximalist of a sudden I guess still the core reason VItalik actually left is he wanted to program on top of Bitcoin, right? So I think it’s definitely important to keep that perspective. But you know, I think Bitcoin gets a free pass in a lot of things and I think it potentially upsets people in other communities including the Ethereum Community. I mean, you know, the same hard questions aren’t asked of Bitcoin that are asked of different commodities or currencies that are out there. Right? And one of the big ones is Bitcoin of essentially as derived most of its value out of this what I say is a meme of a 21 million Bitcoins cap, right? There is a lot of studies out there that says that that’s not going to be sustainable, right? How are you going to pay miners if this is the case and the answer that is given back a lot is oh, well, every happening price goes up double so by the time we get to there will be able to just pay it through fees. That’s not a very good security model in my mind, right? So at the end of the day, I think there’s just differences in the community and you know, the Bitcoin Community is much larger, like if Anthony and I had our Twitters and we were Bitcoin people we would have 5 to 10 times the amount of followers that we have. So their voices are just louder than most of the what I would say fudd or misinformation about Ethereum that we see EthHub comes from the Bitcoin community. So it’s more of a defensive position in all honesty. And you know, I think I think it’s okay to have people that are you know, advocates and fans of a crypto and you know, I don’t think Anthony and I are as big Ether maximalist as people think we are, you know, I started in Bitcoin. I actually still don’t mind Bitcoin. I just think they get some free passes and some big topics and you know, we’ve owned different coins over time. And you know, I think we’re both open to the fact that maybe Ethereum doesn’t win this thing. Right? But at the end of the day, I think you’re just going to get that when people are dedicating a lot of time and passion and potentially money too right.
Sebastien: I think it’s honestly if that’s true and I do agree that a lot of the people who are quote unquote Bitcoin maximalists attract huge following. So if one wants to build a personal branding attaching themselves to some maximalism ideas is probably a good way to to it. Although I don’t know how genuine it is to do that. I’d like to talk to you about this spreadsheet you recently compiled and published with all the projects basically and how they’re being funded through the different forms of community funding that exist. So whether it’s the Ethereum Foundation or even like Moloch DAO or the Aragon fund or some of the different community funds that projects have, why did you do this? And what kind of trends did you observe in this from from this analysis?
Eric: Yeah, so this kind of all stemmed from this funding debate, which we referenced earlier and the Ethereum Community is trying to find its way of how to fund important work outside of the Ethereum foundation. Right? Like Ethereum Foundation is not going to be around forever. Eventually they’re going to run out of funds. They’re not a for-profit business. They just give funds out so that’s leaking slowly and slowly. So we need to find better ways to fund the community and you know, I’m personally a part of Moloch DAO and MetaCartel DAO which are DAOs that try to give money out to Ethereum projects and you know, there were a lot of this debate around I think the EF gets a lot of unfair flak. I actually think they’re doing a pretty good job at giving out funds and you know, there was debates around block rewards, which is something you know, I disagree with so the community was like trying to justify what teams deserve more money and it was just asking like has anybody actually put together like a spreadsheet of what teams need money how much they have and why they need more and the answer which is no people are like, oh we should find someone to do this and I just got frustrated and spent four hours and I just collected all the grants that I’ve ever been given out on Ethereum and I just built it myself. So basically how it works is I put the teams and projects on there I think there’s like a hundred and five of them or so and then where they got their money and how much they’ve raised. You know, the trends would be the EF is clearly given out the most amount of money the highest investment so far is definitely around Eth 2 and the second most would be around Layer Two scaling solutions most of the stuff kind of pales in comparison to those two. So, you know, one of the biggest things that we’re seeing is this pop-up of you know outside of the EF like Community grants. So like Aragon has one, Gnosis has one, there’s the ECF, there’s Gitcoin grants and then really the emergence of DAO’s, you know, I think Anthony said the other day 2019 is kind of become the year of the DAO so the communities trying to find ways to coordinate capital which seems to be that we can do this through things like the Moloch DAO where people put in funds and then we have a very simple voting mechanism how these funds should be spent. So, you know, I think we’re getting there. I don’t think the answer is block rewards and there’s been a lot of money given out over time. I mean, there’s 21 million dollars that have been given out according to the sheet over the last couple of years. So I think we need to just give it time and I think we’re finding ways slowly to to fund important work.
Sebastien: I think one of the things that stands out on that spreadsheet that you kind of see when you look at it the first time is that Polkadot actually got the five million dollar grant which kind of ties back to our earlier discussion, but we’re not going to get into that. I want to ask you though, but in terms of funding so 21 million, okay, that’s some amount of money some might argue. It’s not a whole lot. If you look at maybe, you know the available funding that projects could get from raising money from VC’s or investors. Do you think it’s better for the ecosystem to approach funding from this sort of ground-up community funded grants program, DAO’s etc. Like the ones we see today or do you think it would be but more beneficial for projects to seek investor funding VC funding where the interest is perhaps more to build real world applications and consumer applications and applications for businesses where investors could bring some of that experience and perhaps partnerships and sales approach that would lead us towards what we’re talking earlier and Ethereum that is more closely connected to the real real world and where we’re building real applications.
Eric: Yeah, I definitely think teams could do a better job on the VC funding side and finding ways to monetize their platform. So, you know, I’m pretty surprised to see teams haven’t started offering like small subscription services and you know Pro features and finding ways to monetize their platform and I think especially around Eth 2 I mean you’re talking about if you become a top client in Eth 2 your user base is going to have hundreds of millions of dollars secured in your software, right? There’s definitely ways to sell services to those people and more Pro features and you’ve got all this money sitting there. That’s something a venture capitalist would be very interested in hearing a pitch on right. So I’m surprised that we don’t see more of it. I’m not sure why that’s the case. You know, VC’s don’t have a problem throwing money at people that don’t have a monetization plan. Right? Like that’s how most seed funding works. So I’m surprised it’s not happening. Maybe it will over time. We recently saw like you Uniswap raise and I know Anthony’s team over at Set has raised some money recently too so I think we’re seeing it happen, but it needs to happen more because the reality is we’re not going to be able to fund, you know, twenty, fifty million dollars a year in Ethereum out of DAOs and less price goes up 10, 20 times from here. Right? So it’s just the reality of the situation. I mean Moloch has like 1.5 million dollars in it. The idea is that you give out funds and you know, those funds are used to build cool things on Ethereum and the price goes up and you have more to fund, but I hope that teams can find ways to find revenue in different avenues.
Sebastien: So moving onto Ethereum 2.0, can you tell us what is the state of it generally and the research around that the big project.
Anthony: Yeah, so I guess currently so this spec for 2.0 Phase 0 beacon train spec was frozen back at the end of June June 30th and think it was so that basically means that the client teams can now build off that spec without it changing every day and build the implementations out and things like that and get more testing going. So we’ve got a few testnet clients out of the moment, you know from Prismatic Labs from Sigma Prime, I think Status as well as a nimbus testing that client out too so that’s coming along really nicely, they’re live, you know, they’re finding bugs changing things every day to make sure it all works and and you know talks to each other and that’s one thing they actually that their client teams are now focusing on there was recently a workshop about it the networking of Eth 2.0 and how all these different clients are going to basically talk to each other. So that’s been a really heavy focus as of late and that’s coming along really nicely as well. There’s a really great newsletter from Ben Edgington called What’s new in Eth 2, that goes out every other week that you can use to follow basically follow along with what’s happening with Eth 2 basically in the weeds. It gets a bit technical but it’ll keep you up to speed. So yeah, basically once that’s fleshed out, I think the target date for launching that on mainnet for the phase zero on mainnet is early 2020. So there was a date flying around about it being January 3rd, but I don’t think that date’s, you know anywhere near concrete. I think it was just like a date given on one of the calls and some people including me unfortunately took it as like gospel. But yeah, definitely targeting, you know Q1. In terms of research into the other phases, so Phase One specs come along really nicely as well. I think that’s you know, getting completed really quickly actually and then Phase Two of Ethereum 2.0 is definitely in heavy research as well and new things such as execution environment is coming out too at the moment and they’re kind of playing with that and seeing how they can make that work with Ethereum 2.0. So a lot of this stuff is documented EthHub for those listening who don’t know the different phases of Ethereum and what each one means for a Ethereum 2.0. So definitely go there if you want to check out more of this stuff. But yeah in terms of timeline, I think Phase 0 will hopefully go live in Q1 of 2020 and then from there Phase One and Two can follow rather quickly. I think Phase One is the different chard chains going live and then Phase Two would be basically bringing 2.0 to feature Parity with Ethereum 1.0 in terms of what it can do, you know in terms of having a virtual machine and smart contracting platform where people can build up some things like that as they can do and with Ethereum 1.0 today,
Sunny: Wasn’t there some plans to allow staking at Devcon 5 this year?
Anthony: I think the Devcon 5 is going to be deploying the contract with Ethereum 1.0. So basically the contract where you send your Eth in to get burned so that your issued Eth on the Eth 2.0 beacon chain. I think there was gonna be like a ceremony around that but I don’t think that would include that I don’t think the beacon chain which is where you can stake your Eth going live at Devcon.
Sunny: Okay. I see. What do you think about this roadmap that we’re taking on the Eth 2.0. I have like an alternative roadmap that I prefer, which is I think a bit more conservative where I would prefer to see, you know, as someone who’s worked on proof of stake for the last two and a half years, I don’t trust proof of stake, especially not to transition a thirty billion dollar network with like so much value depending on it and applications depending on it and real-world systems depending on it to an untrusted security system and so know what I would have personally preferred and I still need to give a talk on this at Devcon, I haven’t heard back yet, but you know, I would prefer to see a system where we test proof of stake on the shards and you know you we keep the current 1.X chain as the beacon chain and you know, so at the end of the day the fundamental root security is still the proof of work and then we test proof of stake on shards. What do you think about you know, why was such a radical approach taken to the current Eth 2.0 roadmap like oh no if you want to participate in staking you have to participate in a one-way burn from the current system to the new system. Where do you fall on this like radical versus conservative upgrade procedures?
Anthony: Yeah for sure. There are definitely concerns around that I think, you know, just a bit of history for those who don’t know, Ethereum 2.0 was definitely going to be an upgrade to a Ethereum 1.0. it wasn’t going to be deployed as a separate chain. So it was actually going to be just deployed as regular network upgrade or hard fork whatever you want to call it to Eth 1.0 chain and then about a year ago, maybe over a year ago now, that kind of got, you know scrapped and basically the sharding team and the proof of stake team merged together and said we’re just going to build this new system essentially. I think that approach was done because they realized exactly what you’re saying that migrating this, you know, thirty billion dollar network or whatever it is over to this new untested system or untried system is his reckless for lack of a better word. Right? So I think that that’s why Eth 2.0 is being stood up as a separate chain. Now in terms of like we’re finding people to burn their Eth to go over to the Eth 2.0 chain and be able to stake on there. I think that that’s not a bad approach because what basically happens is you have these people ad I like to call them militants that come over from Eth 1.0, the ones that are going to take the most risk, going to be on the front lines, they’re going to stake in Eth 2.0 with Ether that they know has been burned on Eth1.0. They won’t be able to access until the other phases are deployed in Eth 2.0 and then for that I actually get a higher reward because there will be less people staking so that the reward is actually higher. So I think that doing that approach which launching a separate chain and requiring these militants to basically be the first stakers to take the most risk is probably where I see it being conservative and things like that while we have these two parallel chains. I mean, it does add additional complexity with how, you know, something like how exchanges are going to list these two things. Like are they going to list Eth 1 as an asset separate to the Eth 2 asset and things like that until the migration has been completed all together, because Eth 1 there’s a few different ways to kind of fold Eth 1 into Eth 2, either it becomes a shard or it becomes an execution environment or or we just copy this state over or you know, the technicals of it are are a bit deeper there. But basically I think that’s the approach that we’re going with this. So in terms of you know, being conservative versus reckless, I think the current approach is quite conservative, you know, and I think the timelines are quite conservative as well. It’s definitely taking a lot longer than people would have liked it to take but I think that’s definitely being done on purpose for security reasons and for the overall health of both networks, essentially.
Sunny: Do you think there’s a chance of you know, once the splits start to happen that there is a large segment of the community who wants to continue focusing on Eth 1.X and maybe taking for example, a different roadmap or something and that we actually see a split between the you know, people who switch to the current Eth 2.0 roadmap and people who take an alternative path and continue maybe the current chain.
Anthony: Yes. Definitely. I think that’s definitely a big risk and I actually fully expect whether someone does it to be or whether a group or someone does it to make money or do it from a different difference in vision I definitely think that once Eth 1 one, you know gets folded into Eth 2 someone will fork the Eth 1 chain and basically continue it on as it currently is but I think that there are certain apps on Ethereum that have sway over where the community goes. So if you look at it in terms of like DeFi if all the DeFi has to be moved over to Eth 2.0 as it currently stands is not a huge reason for many users to stick to Eth 1 at the end of the day. Now most of the apps they use are moved over so they’re just going to move with it, the users at the end of the day I think have the most power here, you know, they follow wherever the apps go. I mean you could say the apps have the most power as well where they can migrate over to this new chain and basically force everyone to go over there. So I think there’s yeah there’s going to be a tug-of-war with certain, you know aspects of the community, there’ll be people who like Eth 1 maximus or whatever that don’t want to migrate over don’t think that Eth 2 is broken and doesn’t work very well. I’m not sure how that’s going to play out and things like that. There are definitely people that I know that I’ve spoken to that think Eth 1 is good enough as it is like it’s fine and things like that. You know, I’m not sure if I agree or disagree with that to be honest, like I think if it’s really awesome it enables a lot of different things but I think that that’s you know, as we as we you know increase usage of the platform things like that the scalability issues are really going to rear their head, especially in kind of like the next if we have another bull market right where Bitcoin is definitely going to suffer from the same issues it’s always suffered from from 2017 where the fees are going to go really high again. I think Ethereum is going to suffer from the same issues because the Ethereum doesn’t scale much better than Bitcoin at the moment, especially because there’s more expressive apps you can use on Ethereum. So the gas, you know, you need to use more gas to interact with these apps. So it’s definitely going to make the fees go up as well. So all these sorts of concerns is is kind of like why I want to see Eth 2 play out because I don’t think that Eth 1 is enough, like it’s good it’s great it does like what we need to do today. But in terms of future proofing Ethereum, it’s not enough. It definitely isn’t especially if Eth 2 wants to differentiate itself from Bitcoin not just be a platform where it supports e phone and you hold e phone if it goes up basically, I think that Ethereum has much grander goals than that.
Sebastien: Yeah, that makes a lot of sense. I mean obviously Ethereum can’t continue to grow with the current limitations on scaling, I mean we saw it in 2017 and presumably things would be much much worse if there would be another bullrun or another rally for ICOs or something like that. Right? So obviously it has to it has to evolve but this is a question I like to ask people who are deeply involved in the Ethereum space is with Ethereum 2.0 being so far ahead in the future the roadmap is about two or three years for things like cross shard transfers I think it’s even further out. Do you think that Ethereum risks losing talent and even just general attractiveness to other platforms that are already out there? So Cosmos is one of them and Polkadot which is I think probably coming before Ethereum 2.0 and then there’s a lot of other platforms coming from Asia and their ability to attract people in those regions. Do you think Ethereum can continue to remain dominant in the space if it has such a long roadmap ahead of it to get to parity, pardon the pun, with any of these other points.
Eric: Yeah. I mean, I think what’s going to determine that to be honest, especially as far as developer share goes is more on the funding side, right? I don’t think it’s necessarily roadmap related. I think a lot of these chains have very similar problems, you know Polkadot we can talk about it. It sounds great but in all reality the chains not live, right? So I think who knows how long that could be for them to get up to full speed of what like an Eth 2 could look like but funding is the interesting debate, right? Like these projects have bigger war chests of money to give out to developers in Ethereum does now it’s very interesting because Ethereum has the network effect. It currently has the developers I think there was a report out yesterday that Ethereum has four times the developer of the second chain in the space, but it has the network effect, it has the apps and it currently has the users right? So how strong is that pull right. I mean so far it’s proved to be very strong at least it seems to be but as the years go on like you’re asking could that sway of network effect and users, you know slowly decay? It obviously would if we’re talking, you know for five years not much progress is made will one to two years be enough. I personally don’t think so. I think you know, we talked a lot about people just switching for monetary reasons, which is obviously important people need to be paid right but there’s more than that to you know, a lot of people have dedicated years of knowledge building they’ve learned Solidity, they’ve learned all the dev tooling on Ethereum. They’ve just learned a lot whether it’s through like EthHub or different education sites. Like there’s a lot to you know, there’s community building and going to meet ups and like a lot of my friends are in the Ethereum space now, right? There’s a lot to this, you know that people don’t seem to talk about and I feel like once you kind of get sucked in one of these communities and your you know your full time job in it and all your friends are that you’re going all the meetups. It’s more than just leaving for the technology.
Sunny: So, you know, I think you and I were having this discussion on Twitter a few weeks ago where we were kind of arguing about what the definition of a maximalist is and I defined it as someone who’s hesitant to engage in discussion or experimentation of searching for potentially better optimums that may undermine a current system / asset value. So how much time should we be spending looking for new systems that might be better than the current systems and that have the potential to maybe, you know, maybe create better global optimums than the current ones even though if it may undermine our current market position or something like that? And what do you think about that definition of maximalism in general?
Eric: Yeah, it’s solid to be honest. I agree with you. I think you know how I look at maximalism personally is if if you don’t think anything besides a certain chain could win to me that’s a maximalist. Right? And I don’t like it’s obvious to me that Ethereum could lose and you know something I talked to Anthony a lot about often is I actually think just blockchain in general could lose. So I’m not even concerned about Ethereum winning per se I’m actually just concerned about the whole blockchain movement winning. All right, so I do think you know finding better technologies from projects and the interesting thing though is this is like all open source, right? So the Ethereum communities talked about forking parts of Polkadot over and bringing into Ethereum. I think that’s extremely valuable. I think where it could start to get dangerous as if you’re trying to slosh users around to all these different technologies and chains like that’s the sticky part. That’s the hardest to come by is finding users for dapps, right like that’s something we’re still struggling with so are you going to be able to like pull these users to a different chain and then like bring them to another and back, like that’s the tricky part. I mean ideally if we could get all the technology shared in one area that’s the winning solution, but it’s tough to do when you have six or seven chains kind of competing for the same small user group.
Sebastien: Yeah, on that topic interoperability we haven’t really talked about so far but where do you see our interoperability going in the future and if we have all of this tribalism already just in the underlying chains, and now if every chain, every major chain attempts, its own interoperability standard, for example Cosmos has IBC, now if Ethereum comes up with its own thing and which is not compatible with IBC then we just continue along this path where none of the chains are interoperable. Where do you see this going? And do you think we can at least agree on some form of interoperability standard?
Anthony: Yes, so basically I’m not sold on interoperability. It breaks a lot of what we have already I think in terms of composability. I mean as it currently stands right Ethereum’s main strength I think is the fact that everything’s composable with each other like obviously Dai is integrated with a lot of different DeFi apps already and it kind of like feeds off of each other and different apps can pull from different other apps and you know, it just compounds like people like to call it money legos or things like that, which I think is a great way of putting it for sure and you know, it doesn’t just involve the DeFi apps as well involves everything like you could have an Aragon DAO powering a DeFi app or another apple or something like that, but where interoperability fits into what I think. I’m not sure like Ethereum 2.0 I’m not sure how compatible that is with with Cosmos or Polkadot from an architectural point of view. If you do look at Ethereum 2.0 as a system of like just the beacon chain being the center and then the shards connecting to it it kind of looks like an interoperable system where there’s 1024 shards which are 1024 different block chains that all talk to this hub called the beacon chain for security basically and that’s that’s pretty much how Polkadot works as well with the power chains and the relay chain so the relay chain is the beacon chain, the power chains or the shard chains and this is the different quirks and things like that and Polkadot’s different in that they have onchain governance and limited slots for power chains that can that can change whereas Ethereum at the start will have 1224 shards. So yeah looking at the architecture of it they do look like interoperable systems. But if you’re talking about even cross chain systems so say Bitcoin talking to Ethereum and things like that I think that there’s value value definitely in that but I’m not sure like how like I know the way the way Cosmos works is it’s got that, you know, the hub and then chains can plug into it so that they can actually be an ether chain that plugs into it too. But in terms of compatibility there and I mean, I’m sure someone can build it in some way or another but it just depends like if you’re trying to build it into the core protocol of Ethereum itself I don’t think maximalism or whatever would stop it from being built into it, it would be more around does it make sense for Ethereum to add this functionality for other chains to basically plug in easily and how does it affect the security of the network? How does it affect the design, you know is it doesn’t make Ethereum more complex does it a bloat Ethereum out of it. There’s all these other concerns I think from an architecture perspective. I don’t know if maximalism plays into a lot of the core devs minds to be honest. Like I think that’s more of a Twitter, Reddit like I guess a community member thing or rather than a developer thing. I think developers just work on what they find exciting and things like that. There are maybe some developers that are can be considered I guess maximalist that openly say that they just want Ethereum to win because they love the Ethereum platform everything like that. But you know, I don’t think they’d be against interoperability. I’m not against it like, you know, I’m not against Bitcoin coming onto Ethereum and acting as an asset on Ethereum. There are some people that are against then say that it’s kind of like poisonous to have Bitcoin on Ethereum because it takes away from Eth’s monetary premium, right and things like that. So, I’m not sure if that’s true or not. It does make sense on the surface level. But yeah, so I think the prevailing narrative at this point in time I think is that the way Eth’s being built, you know, it does look like an interoperable system basically.
Sunny: Yeah, I mean, I would say that through your point about composability I feel like all the problems and the new paradigms have to come up with for composability in an interoperable system are the same as that you have to do in Eth 2.0, basically most of their current applications break apart in Eth 2.0 and we have to figure out you know, shards and chains are just two words for the same thing in my opinion and I don’t think there’s much difference there. I think there’s been a lot of work being done on the consensus side of Eth 2.0 but not enough I don’t know I guess preparing application developers for the new realities of developing on Eth 2.0 which are going to be extremely extremely different than developing on the current system. You know currently you guys focus not so much on the development, I don’t think there’s many Solidity tutorials and stuff on EthHub. But is this something that you guys would be interested in pursuing?
Anthony: Yeah we have spoken about it for quite a while that we want to develop a section of EthHub it’s just like what time permits basically because having a whole developer thing keeping it up-to-date is massive time sink and I think you know getting people on board and helping with that would be a great way to do it whether that’s through bounties or putting out a request for work or things like that. But yeah to your point about, you know developer considerations from Geth to Eth 2 research team and things like that I think that we’re now starting to see that come to fruition in the terms of execution environments, which is part of Phase Two of Eth 2. So this kind of new idea around each, you know, each shard or platform, I guess on Eth 2.0 can have their own execution environment and that can be like an EBM environment, you can have an Ewasm environment, you can have an environment that just acts like a fee relay and things like that, so it gets quite technical but I think there are definitely considerations being made for developers now and how best to migrate developers over but I do agree that needs to be a lot more work done and I think there needs to be especially on Eth 2.0 like on Eth 1.0 1.0 there’s a fair bit of work I think ConsenSys has their website that is like a developer portal where you there’s a bunch of different links there. We have some stuff on EthHub. There are a few tutorials out there for Solidity and things like that. But yeah, I think there needs to definitely be a lot more work on Eth 2.0 side of things and getting developers up to speed but I think I mean in terms of like the way EthHub could do it we probably have to wait until Phase Two, which is the main phase where all this stuff can happen is actually, you know set in stone and the specs frozen for that. We actually know what it’s going to look like rather than trying to chase the researchers which is you know, if you ask any other client teams, they’re going to tell you chasing the researchers is is really hard and it takes a lot of work. So yeah, that’s that’s definitely a consideration.
Sebastien: So where can people find EthHub and all the wonderful things you guys are doing and how how can people contribute?
Anthony: Yeah for sure. So if you want to subscribe to our newsletter and podcast you can go to a ethhub.substack.com, the documentation is at docs.ethhub.io but all the relevant links are actually at ethhub.io so you can go there and find everything there.
Sebastien: Great we’ll link to all of those in the show notes and thank you for coming on the show.