Ep. 567 Full Update on the Solana Network with Austin Federa

Ep. 567 Full Update on the Solana Network with Austin Federa
October 3, 2023 #CRYPTO101

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In this episode of Crypto 101 we have back on one of our favorite guests Austin Federa who is Head of Strategy for the Solana Foundation. This is a true must listen for anyone interested in learnings about all the updates around Solana including their partnerships with fortune 500 companies like Visa, the technology they continue to innovate, and an important conversation all the FUD about the Solana token locked up in the FTX bankruptcy.

 

— TRANSCRIPT —

SPEAKERS

Bryce Paul, Brendan Veihman

 

Bryce Paul  00:09

All right, ladies and gentlemen, welcome back to another episode of the crypto 101 podcast where I am your co host Bryce and I’m joined by my trusty compadre Mr. Brendan V. Min. Brendan, how’re you doing today?

 

Brendan Veihman  00:22

Hey, I’m doing good. Welcome back, everyone.

 

Bryce Paul  00:26

You’re hanging in through the chopped in the market. You’re not getting overtrading this are you? No,

 

Brendan Veihman  00:31

definitely not. We definitely are seeing a bit of range bound activity, but we’re surviving it. Good, man. You.

 

Bryce Paul  00:38

You You saw the Philly game the other night. I hope

 

Brendan Veihman  00:41

Yeah. Big Eagles fan over here. I’m satisfied. Where to and oh, now your boys are looking likings let’s freakin go here. Boys

 

Bryce Paul  00:49

are looking good. And yeah, fantasy season. We’ve been we got a whole crypto 101 podcast 12 Man fantasy league that we’ve been competing with. So it’s been a ton of fun. And yeah, we’re anyhow, we’re joined by an awesome guest. This is one that we’ve, you know, we’ve been really, really excited to dive into. Everybody who’s listening has probably heard of Solana, the soul token is burst onto the scene. It is just an incredibly vibrant community. You’ve had your members go across the world to some of the hackathons that Solana continues to host and we’re really excited to speak with a head of strategy, a gentleman and a scholar named Austin Fodera. who is joining us today, Austin, welcome to the crypto 101 podcast.

 

01:38

Hey, excited to be here. Thanks for having me on again.

 

Bryce Paul  01:41

Yeah, we’re excited. Yeah, we had you on maybe, you know, six months ago or something. And it’s just crazy how quickly Solana keeps rolling out developments in partnerships. You guys don’t sleep. I know. You know, you’re across the world right now hosting hackathons. And it’s just crazy. So before we really dive into all the new things that have been going on, just just catch us up for new listeners who are curious about what the Solana foundation is, and you know how you guys are a part of the ecosystem here.

 

02:08

Yeah, so we are the nonprofit Swiss foundation, that sort of behind a lot of the ecosystem development work of the Solana network. And so that you can think of is very similar to the role the Ethereum foundation played in the Ethereum network. But we are basically an organization that got a grant from basically the Sana network at the beginning to issue grants on the network to act as a group that helps sort of solve those public resource goods problems that, you know, no one is economically incentivized to necessarily solve without a nonprofit stepping in. And that’s kind of the work that we do, right. We’re not the main marketers of the network, we, you know, talk to probably less than 5% of the applications building on the network. This is a global, decentralized, permissionless network that anyone can build on, and 1000s of people do build on. But you know, our role is to do things like make big bets and fund things like fire dancer and new validator clients and make sure that the open source tooling that people are building is something that they can actually afford to build. And that’s kind of the grant giving component is a major function of what the Solana Foundation does. There’s also a sauna Labs, which is sort of you could think of it as similar to the world consensus plays in the Etherium ecosystem. They build products and services on the network, there’s sort of a profit motivation behind what they do. And you know, there’s about five different core contributor teams at this point, all building software and services to keep the Solana network running. And then of course, it’s run by 1000s of individuals all around the world. Yeah, that’s

 

Bryce Paul  03:37

incredible. And you’re also no stranger to podcasting. You’ve got a great podcast of your own called the validated pod. Tell us a little bit about that, and what kind of guests you have on and kind of what your goal is there.

 

03:48

Yeah, validated. It’s kind of like, I joke that it’s just like, me shooting the shit. But really what the show is, yeah, well, the what the show is really meant to be as explorations not of specific projects, and not necessarily in the slano ecosystem. But it’s really meant to be like an examination of some of the thoughts and theses and bets that folks are making. It’s not a crypto Maxi show, like a lot of these episodes are like, have we oversold the promise of Dow is like or NF T’s really the solution to these sorts of things. Like a lot of this goes into like the critical examination that I think a lot of these conversations are happening off Twitter, not at conferences, sort of quietly, people are like, Hey, do you really think that this thing is going to work in the way they say it’s going to and like, the point of the show is like, let’s have those conversations in public with very smart people who are also very intellectually honest. And that’s kind of the point of the show. So I have a lot of fun doing it.

 

Bryce Paul  04:42

Ya know, podcasting is just the best. I mean, it’s such a privilege, right? You get to talk to some of the smartest people in the world who just really wanted to share their opinion and are really cool about it. So yeah, that’s why we love doing what we do and we get great guests and, you know, before we move on to some really exciting stuff you guys are doing I wanted to ask One thing and clear up some, some FUD some fear, some uncertainty, some doubt that our listeners have been, you know, kind of emailing in and asking us what are our thoughts and stuff. And you know, we don’t really have much more visibility than than the public on this one. But it just recently in the news just the other day, on September 13, the FTX creditor, the creditor kind of trust was granted permission to liquidate their portfolio of crypto assets, of which they hold about a billion dollars or so worth of Solana. So everybody started freaking out. And of course, they hope they have Bitcoin Matic Ethereum, all these tokens, right? So they’re all kind of susceptible to the same font, I guess. But, you know, you know what, the way I’m looking at it, and I don’t ask you, but like a lot of their tokens are locked until 2028. They’re vested, they have staking contracts. So there’s not going to be a forced dump. And I also don’t think that they’re going to just like dump these coins to zero. I think they have like an obligation to kind of, you know, support the market. But I don’t I want to, I want to ask you, like, Do you have any thoughts on this whole chaos that’s kind of unfolding?

 

06:03

Yeah, I mean, when the collapse of FTX and Alameda happened last year, in November, the Solana Foundation, actually insulin labs put out a whole information, fact sheet and blog post that actually laid out all this information. It shows the unlock schedules, it shows how many tokens that they purchased from token sales. And so this shouldn’t be new information to folks. The other pieces you mentioned is, you know, I think about something like 87 88% of those tokens are locked for an extended period of time. And so we’re not talking about, you know, a billion dollars coming on to a liquid market, we’re talking about, you know, probably somewhere around a 10th of that, right? And so that’s kind of an important context here, too. And the other thing is the people running these processes, like they’re not morons, right? They can look at a market, they can look at liquidity. And they can figure out what the best way to do what is in the best interest of those shareholders is and those creditors. And so I think it’s in no one’s interest to see all of the FTX assets from all these networks just dumped on the public markets, especially in this kind of bear market. We’re in right now. I think, I think the people running that process, and I have not spoken to them, but they’re I have to admit that they’re they’re probably smart enough to realize that that is not the right way to do this. And, you know, that is not also the right way for them to maximize their ability to recoup funds for both creditors and people who, you know, were impacted by the collapse of FTX.

 

Bryce Paul  07:28

Yeah, not to throw shade at Mike Novogratz, who is actually running that process. But he did get a tattoo of Luna on his arm at the very top of the Luna market. And before it crashed, So anyhow, well, he’s a good guy. He’s been doing couple that’s one of those temporary tattoos. Yeah, exactly.

 

Brendan Veihman  07:44

I mean, yeah, I mean, hopefully, he’s gonna make better decisions moving forward. But you’re right, it’s in everyone’s best interest that they don’t dump these on the market. It’s in our best interest, it’s in their best interest. I’m not too worried about all of it, to be honest.

 

Bryce Paul  07:59

I mean, especially when there’s so much positive fundamental development. Yeah.

 

08:03

Yeah, that’s the thing that always is like crazy about crypto is nothing happens and the price goes to the moon, and then you have incredibly impactful announcements, and it doesn’t move anything. And so, you know, this is like, this is classic, immature market, like, it’s cliche to say, we’re still so early, but like, we’re still so early when you see these kinds of like movements. And, you know, look, none of this is to say, like, you should make investment decisions based off of any of this. But like, this is just classic early market behavior. And, you know, there’s a hell of a lot of noise over the last year and a half. And I think what we’re seeing is, as the market continues to be is this like, really rough bear market, the signals becoming higher, and the noise is getting washed out. And this is still a lot more active than it was in 2018. And that’s kind of the piece that keeps me hopeful for this technology over the long term.

 

Brendan Veihman  08:53

We’ll talk about big partnerships, you all just came out with a really big one. I mean, talking about visa partnering with with all of you. So can you just walk us through that new pilot program? Like what’s that going to allow Solana users to do? Because from my understanding, this is going to allow Solana users to send USD through this Alana blockchain. So what does that mean for Solana who’s going to be able to benefit from this?

 

09:18

Yeah, so USD C, which was, you know, created by circle. Solana was, I think the first non EVM network, they brought that, that stable coin to natively and so we’ve had USD C on Solana for years at this point. And it’s a very beloved stable coin, partially because, you know, it’s fully Fiat backed and those daily audit reports that are available, but also, you know, on Solana that transaction fees are a fraction of a penny and the confirmations are 400 milliseconds. And so that is as fast as using a credit card, if not faster, that’s faster than Venmo. That’s faster than the peer to peer payment systems that exist today. And so visa, you know, did their own diligence. They did their own research, they looked around and they said Okay, we have this pilot program, doing settlement between these sort of merchant banks and, you know, Visa itself. If we’re going to scale this pilot program out into the future, and we’re going to eventually, you know, push this down further down the stack. So someday, maybe individuals are actually, when you swipe your Visa card, it’s actually sending a transaction on the Solana network, right? That that could happen sometime in the future. Now, Visa has not laid out plans for that yet to be clear, but like, you can see where this stuff is going, if you kind of look at what the future holds. But they were looking and saying, like, we look, we started this pilot program on Aetherium, we learned a ton. If we want to scale this thing, like we need a faster network. And that’s, you know, after, gosh, months, if not a year of diligence by their technical team, you know, there’s a really good technical blog post that the visa team put out about why they decided to pick Solana as a place to expand this pilot program to it’s an incredible in depth analysis of why they see this as a credible bet in the space. And that is what visa is doing today. Now, what does this mean, for salon users today? Actually very little right. At this point, what they’re doing is they’re settling large transactions that have to happen very quickly, and have to move money over the weekend. You know, there’s this whole thing that happens at 9am on Monday morning, where billions of dollars move across the networks to basically catch up on all the trades and not trades, but all the things you spent your credit card on over the weekend and all the payments that have to come in and all the merchants have to get paid out. There’s billions of dollars that move in the morning. There’s no reason that has to happen, right blockchain markets move 24/7, you can send any amount of USDC anywhere in the world and 400 milliseconds. And so that’s really what visa is exciting, excited about today. Eventually, those merchant banks like WorldPay, they’re going to actually start being able to say, Okay, well, now, if you own a coffee shop, you can actually start accepting your payout and USDC on Solana. And that’s kind of the natural progression of that stuff. For users, there actually isn’t a ton of Change today, right? For users, like you can still use USCC the way you’ve always been able to, you can use sauna pay to actually send that to anyone anywhere in the world. You know, there’s lots of payment focused tools, there’s decaf, there’s candy pay. There’s slang launching soon, there’s lots of really cool stuff happening on the Solana network for payments. But the visa announcement is really about enterprise adoption. It’s about building those rails so that when these companies say, hey, look, we want to save, you know, 5075 basis points on several billion, if not trillion dollars of transactions, they can turn that on, and they can have the confidence in the engineering resources to say, we’ve been piloting this program on Solana for years. We feel comfortable doing this.

 

Bryce Paul  12:40

It’s incredible.

 

Brendan Veihman  12:41

Yeah, I mean, it’s really about setting the foundation for so much more to be built. And for the listeners out there that maybe aren’t as familiar with USDC. It’s the sixth largest cryptocurrency by market cap, it’s the second largest stable coin, they have a market cap of over $26 billion. So it’s a really big project. It’s not like we’re bringing in some small new coin, like we’re bringing in a but it’s not an algo. Stable. Yeah. Working in a behemoth here. This is one of the big boys. Yes,

 

Bryce Paul  13:11

no, I’m I’m actually curious. Did visa come to Solana or did like Solana labs reach out to them? Or how did this all kind of happen? transpire? Yeah,

 

13:21

look, I mean, the team at visa was looking into a number of different blockchains to scale this project to and you know, we obviously talked to them as part of that process at the foundation. But this was a decision that they made, right, this is not something where, you know, a bunch of BD folks were saying like, hey, Visa, you really should try out this on Solana. This came from a product first engineering first decision at visa and of course, you know, we help them in that process to make sure their engineers have the resources they need to make their evaluation, but this was something that the visa crypto team chose to scale the pilot to. So it’s a pretty strong endorsement of the technology behind the Solana network. Yeah, there

 

Bryce Paul  14:02

are other enterprises that you know have that might be vetting Solana or, you know, maybe if there’s not any certain names as they’re like industries or kind of sectors that might be focused on this.

 

14:14

Yeah, I mean, MasterCard already has a pilot program. Google is building a bunch of infrastructure for the Solana blockchain. ASICs did a sneaker that they sold exclusively through USDC on Solana last year. Discord, you know, has a Solana integration. Now, the only blockchain they have an integration for there’s a lot of this kind of enterprise adoption happening. But you know, one of the differences I would say is like, sometimes you hear about these enterprises adopting blockchain and you dig into the project, and you’re like, they’re not really doing anything interesting here. Like they mostly issued a press release. And so what I’m really just like, thrilled about and thrilled to see constantly is that the experimentation folks are doing on Solana and the products people are wandering on Solana, these are actual real use cases for blocked chain, right? This is not like, oh, the whole thing is actually off chain in a database. But we can transfer the NFT on chain if we want to, like these are things that are actually happening on chain. And that’s the piece that we’re starting to really see these enterprises say, we can build what we want to build on Solana. And that is, you know, it’s been an uphill battle to get them to look seriously at a new architecture, right, a lot of these folks. They know EVM. And that’s what they feel comfortable with. But, you know, when push comes to shove, they need to find the right technical solution to solve their problems. And they just keep picking Solana, which, you know, feels pretty good for us.

 

Brendan Veihman  15:40

Now, for the people that are listening out there. I want to preface this by saying it’s no secret that I’m a fan of the gaming space. So I for one, I’m excited to ask you about this. But what is salon has planned for the gaming space because the other day I was reading that Johnny Lee came out and said that Solana is the only network that is truly ready for gaming. So I kind of want to get your thoughts on that. Like, what does that mean? What is setting Solana above the above the rest? And like what is the precedent that’s being set here?

 

16:09

Yeah, Johnny Lee ran games for the episodic foundations was sort of him and his team are responsible for bringing on about 100 games to the network. And most of those haven’t launched yet, right? Building a game takes a while. But, you know, the transition like games is such a strange industry because gamers tend to hate change until they love change. Right? Everyone hated the the free to play model until fortnight came around. Everyone hated mobile games, no Candy Crush came around, right. And so I think most people in the game space right now. They’re not like the players aren’t thrilled about blockchain yet. I think they haven’t seen the promise and potential of what networks like Solana sort of have to offer. But games require a lot of transactions, right? Games have a massive infrastructure requirements today, and most of us run in Azure. And so as we look at like, what are games built on blockchain, they’re going to be different. I think we’re still probably a decade away before like you have Call of Duty on a blockchain or something like that. But you see teams like star Eilis building triple A games that are, you know, massively multiplayer online games. And they’re building it from the ground up to be powered by Solana. And what does that mean, right? Obviously, like, the rendering still requires a gaming computer. And if you’re in a you know, you’re in a spaceship dogfight like that still is going to be off chain. But the minute you go to a marketplace to say, Hey, I built this really cool ship, I want to sell it or I want to buy some new lasers for my starship, or, you know, whatever you do. And in a game like that. Those markets are actually defy markets. Those items are actually represented as NF T’s and they’re basically traded in giant on chain order books. And so we’re taking the economic game engine of all this stuff, and we’re moving on chain are taking clan reputations and sort of what’s a player’s score? What’s the reputation? What guild? Are they a member of whoever they pissed off, right? All that data is actually getting moved on chain. And that’s a really big breakthrough. I still think we’re a decade away from like, real time combat games being able to be on chain because even though Solana is the fastest blockchain out there, 400 milliseconds is pretty bad ping, right? If you talk to a gamer like Counter Strike is going to be happy with that. And so that’s kind of the piece we’re seeing here is that like the actual on chain game engine, like turn based strategy games like Civilization or something like that, you could totally see a world where that starts moving on chain. But the real power here of blockchain gaming is ownership, right? Right now you don’t own the things that you get in games, you don’t own the reputation points, you don’t actually own your character. And gamers don’t like this, right? Like I remember like back in the World of Warcraft days, there were people who would be going on Craigslist to sell like a sword that God for 100 bucks and meeting in a parking lot and pulling out laptops and trading the item and handing off cash like in a parking lot, or you’d buy a World Of Warcraft Gold on eBay like these things can now be represented in defy in blockchain markets that are permissionless and that I think, is the really big unlock for games

 

Bryce Paul  19:14

and no scamming. I remember when I was a kid, you know, I’d play all those MMO RPGs and stuff. I remember one time some guy was like, hey, like, you know, I’ll give you you know, gold in Guild Wars if you give me your account on RuneScape but you have to give me your password on her escape first Ah,

 

19:31

so then just just send me one bitcoin I’ll send you a to Bitcoin back.

 

Bryce Paul  19:35

I’ll never exactly Oh, no, never get scammed again, because it hurts so bad. And I was like, and I realized, you know, I was in seventh grade I had you know, I trusted people, right? You just inherently like oh, yeah, this guy is telling me he’s going to do a deal but, you know, just ripped off this little kid. And so, you know, you know, it definitely from an early age is like wow, we Why is there no, you know, exchange for digital assets. Right. Why is there no exchange that we could go and trade my Runescape gold for his World of Warcraft accounts are all that kind of stuff. And I think, you know, on chain, and all these blockchain networks are going to be able to facilitate that kind of stuff soon.

 

20:08

Yeah. And look, the reason for that is twofold. One, the technology is hard. And two, game companies are greedy, and they want to make as much money as possible, right? And selling you the same thing twice is a great way to make a lot of money. Great. So what we’re seeing is a lot of the adoption here is coming from New game developers the same way that the mobile games market was not the existing companies, it was a whole new crop of companies. I think the blockchain gaming market is going to largely be built out by people who are like, Yeah, I worked at Activision for 10 years. And I think there’s a better way to do this. And I’m going to start a new company dedicated to trying to do that, I don’t think it’s going to be moving over a lot of the existing gaming studios, which means the adoption curve is going to be longer, but in the end, I think it’s going to be better for gamers, like they’re going to come around and say, like, oh, man, when I own this stuff, it’s a much better experience than this old model that I had. Yeah,

 

Bryce Paul  21:01

a couple of these venture capital funds and hedge funds, you know, they’re getting, you know, me really bullish on this gaming sector, because they’re just talking about, like, the total addressable market, you know, there’s, you know, hundreds of millions, you know, maybe a billion gamers out there, and there’s in the next, you know, billion users for crypto are probably going to be that crossover from people coming from gaming, and just that natural extension, finding themselves interacting with with blockchain and earning, you know, cryptocurrencies and just, you know, kind of in a, you know, in a back in a roundabout way, just kind of coming into the industry through the game, so I’m pretty excited about it. But I’m also excited about the decentralized physical infrastructure, which is a totally other sector unrelated to gaming, but super important. It’s got the deepin sort of acronym going on. And I know, helium is the most prominent one that’s built on Solana. But can you kind of give us an overview of maybe this landscape? What is deepin? Why is it important, and maybe who are some key people building on it?

 

22:03

Yeah, the, the key thesis of decentralized physical infrastructure networks are that direct ownership and decentralization can actually create much better products and services, even if each individual atom in the network is worse at doing what it does. Now, that’s like a kind of a heady concept, but trucks, one over trains, why trucks are decentralized, right? Trucks are decentralized infrastructure, in a sense, right? You can drive a truck to almost any house in the United States, right, you can get it anywhere in the world, trains go on tracks. And trains are super efficient at moving stuff anywhere in the country, as long as it’s on a train line. And it’s super cheap to do, as long as it’s on a train line, right. But that last mile really requires a truck. But nowadays, most goods even between cities are not moved by trains, they’re moved by trucks. And so this is kind of the analogy for decentralized physical infrastructure networks. So a great example of this is hive mapper. Hive mapper is a system where you can get these dash cams, you put them in your car, and it takes photos about 10 photos a second, and then uploads them. And now these photos are like the quality of photos, you get off the phone, they’re not as good as the Google Street View car that drives around and costs like a million dollars to build that car drive down your street, maybe once every six years. And hive mapper has daily photos of a lot of places all over the world that done about 8000 Kilometer a minute, sorry, excuse me, they have an 8 million kilometers of road mapping at this point in less than a year. And so that’s a great example of where like, yes, each photo is not necessarily as good as the photos coming off Google Streetview. But now with AI and image compilation, you might get 50 photos a month of a street, and you can start having AI build together an actual better image than you’d get off Google Streetview with much more frequent data. And also everyone driving cars is now earning revenue for that, right Google Maps is in Street View is the most expensive consumer facing API on the planet. It’s incredibly expensive to be a real estate agent and use Google Streetview or something like that, right. And so you can see a world where hive mapper starts to actually have a competitive product here. But instead of you know, a venture backed company getting all the money, the people who actually map those photos are going to get that money, right? The network is going to reward those people who participate in it. And that’s kind of the great embodiment of what decentralized physical infrastructure networks are all about. Helium is doing this with 5g cell service, and that cell service, right it’s not as good as you get from T Mobile or Verizon or at&t, most of the time, but in it is much cheaper. And eventually that network will be just as compatible and big. And so helium is actually launched this helium mobile product, which uses like AT and T as a fallback network when you can’t access the helium network, but most of the time, if you’re in one of these launch cities, you’re getting internet from people’s houses, they have these 5g network routers set up in their window. And that’s how you’re accessing the internet and accessing the cell phone network. It’s really incredible to see.

 

Brendan Veihman  25:17

Yeah, it sounds like a reoccurring theme here is that cutting out the middleman, you know, specifically through blockchain tech and smart contracts being not only be a profitable thing, but it can also be more beneficial from like a security and privacy standpoint. And so there’s like numerous applications that we can look at deepen in the different ways that it cuts out the middleman, I find it so interesting, because you mentioned helium, you mentioned hive mapper, it makes me wonder like, what’s next, like what’s going to be the next big application of deep end? And I don’t know if you have something that might be on the horizon that’s coming that you can maybe tell us about, but I’m curious to get your thoughts like, what is this next generation of deepin going to look like?

 

25:56

So in order to make deepin possible, you needed a network like Solana where transactions were fast, abundant, and cheap. And that’s not the characteristics of other blockchains. Right. That’s, that’s one of those things that’s kind of only possible on Solana nowadays, right? So what also fits into that category? Well, almost the entire gig economy fits into that category. Right? If you think about it, this is how Uber works. This is how DoorDash works. This is how you know any of these courier package services work, anything where there’s a centralized company, where basically all they’re doing is matching and payment fulfillment, you know, blockchains, are great at order matching and payments, right. And those are two things that blockchains can do in their sleep. And so assuming you have a network that can handle enough throughput, to be able to, you know, handle all the Uber ride requests, or all the DoorDash or UberEATS requests, like we’re getting to a place where you can actually start to see these things might start disrupting some of these big incumbent players.

 

Bryce Paul  26:57

And it will actually end up you’ll be like, you know, every time I’m in an Uber, I always ask them, like, what’s your experience with Uber? Lyft. And they always complain, Oh, they’re not paying me enough. They’re always taking more than their fair share. It’s like, well, guess what, we have a technology that could disintermediate companies like that, and have direct peer to peer payments. I’m driving you. So you’re gonna pay me right. Like, that’s how it works. And why do I have to pay this company? Well, because their order matching and they’re, you know, doing all this stuff. It’s like, what if we have a blockchain that did exactly what Uber did? You know, it’s like, no, you don’t need them.

 

27:29

It’s actually even better than that, right? Because there’s people who drove for Uber for 10 years before the IPO. And they didn’t get anything when that company went public. Right? If they’d been earning tokens. Who knows, I might have been, we might have had 20,000 drivers who suddenly went from making 18 bucks an hour to having a down payment for a house or having a college fund for their kids. Right? Yeah, be

 

Bryce Paul  27:55

able to share the side of the overall network that they’re building.

 

27:59

Exactly. And that’s not the way venture capital is built, right? Venture capital is built. And this is this is no fault of VC. But like, this is basic economics, right? Like they want to capture all the value possible. And so the drivers aren’t paid very well. And when the network goes public, they don’t get any share of that, right. But there are people who put $25,000 into the seed round of Uber, that got paid out $30 million when that company went public 10 years later, wouldn’t have been awesome if drivers also got to share in that.

 

Brendan Veihman  28:29

Yeah, I mean, looking at Uber, I was just looking at the like, what the numbers and what the split is. And it looks like that the drivers earn anywhere between 50 to 70% of what the ride costs. And what we’re able to do is we like Bryce said, we literally have the technology that can make this a significantly higher split, instead of this being 5050 or 6040, or 7030. This could be something that was like 9095 95 Plus split in favor of the drivers, and then they’re walking home with more money, we’re cutting out the middleman like everyone’s getting a little bit more happy.

 

29:04

Yeah, that’s that’s the vision, I think of crypto. And this is the thing that like, not to get political, like a lot of people who I know in my life who are like pretty liberal, they have this view of blockchain that like, oh, there’s something sleazy or something weird going on here. And I think they just haven’t thought through like, these things are basically giant digital cooperatives like these are worker owned networks, for lack of a better term, right? Or like we actually are in a place where blockchains can make the economy more fair, it can create more wealth accrual for people who typically are not paid very much and don’t have an access to like wealth generation. And so these things that are like, yes, Blockchain is very libertarian, right? It’s very, like freedom. But at the same time, there’s a piece of this that’s very human, right. And it’s very much like, no, no, like the people who are building the network deserve to get rewarded. Like we should actually have much more fair systems. We don’t pay bug bounties based on what zip code you live in. It’s not like, oh, like you’re in India and US you solve this bug bounty, we’re gonna give you $2,500 Because people aren’t paid much there, right? You’re gonna get the full $25,000 that you would get the same if you solve the bug bounty in San Francisco. These your value is not based on what we’re willing to pay you it’s based on what you’re contributing to the network.

 

Bryce Paul  30:21

Yeah, actually, speaking of that exact scenario I heard recently about this young Solana kind of prodigy. Can you tell us about this guy? Because I heard he, you know, he’s in India, and he won this big bug bounty for 1000s of dollars. Tell us about good Jesh? Or how do i pronounce? Yeah,

 

30:40

good, Josh. So, you know, he got started on the network, you know, last year about 18 months ago, and you know, solved a few bug bounties for protocols. And he got a I think he was 13 or 14 at the time. I think he’s, he’s 15. Now, but like, he got what is fair to say, is a windfall, right? A I wouldn’t quite say life changing amount of money, but like, the equivalent of several years of salary for his parents in bug bounty bonus, right? And to be able to say, like, Hey, I was on the internet, and I was coding as a 13 or 14 year old and like, now we’re gonna renovate the house. It is like an incredible experience that is truly only possible on blockchain. Right? And now he’s like, he’s, like gone all around the world. He’s met a bunch of folks like he’s building really cool stuff. There’s a documentary. Yeah, there’s this documentary that just came out called Super teens, which is about, you know, I think it’s four or five folks below the age of 18. All from India who have, you know, been able to, like really change their lives by building on blockchain. And that is like such a powerful story hear nothing about this had to happen with Blockchain, right. The internet was supposed to be this fair and open world where anyone anywhere in the world, you know, the classic on the internet, no one knows you’re a dog. But you know what, the high paying jobs are still in the US. And the slightly lower paying jobs are still in Europe. And the bad jobs are still in India, right? Like, this is the classic thing where like, most companies are not putting their best engineers in developing countries. And they should be right because there’s great engineers everywhere in the world. But blockchain is inherently global. And it removes a lot of that bias of saying like, well, we’re a US company. So therefore, like, the senior staff really has to be operating on us ours. Like, that’s not how a blockchain is built. And so I’m really excited to see us unlock a lot of potential for folks who have kind of been shut out of the traditional tech market.

 

Bryce Paul  32:47

Yeah. And really, like as we as we kind of close out our conversation here today. You know, you you personally and the Solana foundation, you guys are traveling the world to accomplish those very ends, hosting hackathons, Solana break point that was last year, and I’m not sure if it’s an annual thing, but we had one of our guys go there in Portugal. And so it’s like, you guys are actually not just talking the talk, but you’re walking the walk, you probably, you know, are on mixed timezones every other week.

 

33:18

Yeah, I’m actually in Bangalore right now. And we’re hosting a sauna hacker house here, which is over 3500 people registered and showing up to, to learn about the network. And like, man, if you think it’s a bear market, like go to India, it is not a bear market here. Everyone is building everyone is incredibly excited. You know, it’s really awesome to see. But this because these networks are global, right? Like we go where the intention is we go where folks are developing. And that’s kind of the commitment. You have to have to make this stuff possible. You talked about breakpoint breakpoints coming back again this year. It’s an Amsterdam, October 31st to November 3, it’s going to be great. Next year, I’m really trying to get it in Asia. I think it’s time we do break point and somewhere in APAC. So but the whole thing is an incredible experience. I hope you guys can also come this year. It’s yeah, no, I’m just gonna.

 

Bryce Paul  34:09

I’m gonna try and mark my calendar for that. That would be incredible. Yeah, dive a little deeper into they’ll get you a media pass. Let’s do it. TiVo. You heard them super producer TiVo. Can I get a copy on that, buddy? Did somebody say Amsterdam?

 

Brendan Veihman  34:23

Hey, we’re in we’re in.

 

34:25

I swear it’s a work trip. Yeah,

 

Brendan Veihman  34:27

taking it back.

 

Bryce Paul  34:29

Awesome. Dude, thank you so much for coming on. Thanks for staying up late for us. By the way over in India. We really appreciate your time as always, hope to see you again soon and take care.

 

34:38

Yeah, thanks for having me on.

 

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All Episodes

In this episode of Crypto 101 we have back on one of our favorite guests Austin Federa who is Head of Strategy for the Solana Foundation. This is a true must listen for anyone interested in learnings about all the updates around Solana including their partnerships with fortune 500 companies like Visa, the technology they continue to innovate, and an important conversation all the FUD about the Solana token locked up in the FTX bankruptcy.

 

— TRANSCRIPT —

SPEAKERS

Bryce Paul, Brendan Veihman

 

Bryce Paul  00:09

All right, ladies and gentlemen, welcome back to another episode of the crypto 101 podcast where I am your co host Bryce and I’m joined by my trusty compadre Mr. Brendan V. Min. Brendan, how’re you doing today?

 

Brendan Veihman  00:22

Hey, I’m doing good. Welcome back, everyone.

 

Bryce Paul  00:26

You’re hanging in through the chopped in the market. You’re not getting overtrading this are you? No,

 

Brendan Veihman  00:31

definitely not. We definitely are seeing a bit of range bound activity, but we’re surviving it. Good, man. You.

 

Bryce Paul  00:38

You You saw the Philly game the other night. I hope

 

Brendan Veihman  00:41

Yeah. Big Eagles fan over here. I’m satisfied. Where to and oh, now your boys are looking likings let’s freakin go here. Boys

 

Bryce Paul  00:49

are looking good. And yeah, fantasy season. We’ve been we got a whole crypto 101 podcast 12 Man fantasy league that we’ve been competing with. So it’s been a ton of fun. And yeah, we’re anyhow, we’re joined by an awesome guest. This is one that we’ve, you know, we’ve been really, really excited to dive into. Everybody who’s listening has probably heard of Solana, the soul token is burst onto the scene. It is just an incredibly vibrant community. You’ve had your members go across the world to some of the hackathons that Solana continues to host and we’re really excited to speak with a head of strategy, a gentleman and a scholar named Austin Fodera. who is joining us today, Austin, welcome to the crypto 101 podcast.

 

01:38

Hey, excited to be here. Thanks for having me on again.

 

Bryce Paul  01:41

Yeah, we’re excited. Yeah, we had you on maybe, you know, six months ago or something. And it’s just crazy how quickly Solana keeps rolling out developments in partnerships. You guys don’t sleep. I know. You know, you’re across the world right now hosting hackathons. And it’s just crazy. So before we really dive into all the new things that have been going on, just just catch us up for new listeners who are curious about what the Solana foundation is, and you know how you guys are a part of the ecosystem here.

 

02:08

Yeah, so we are the nonprofit Swiss foundation, that sort of behind a lot of the ecosystem development work of the Solana network. And so that you can think of is very similar to the role the Ethereum foundation played in the Ethereum network. But we are basically an organization that got a grant from basically the Sana network at the beginning to issue grants on the network to act as a group that helps sort of solve those public resource goods problems that, you know, no one is economically incentivized to necessarily solve without a nonprofit stepping in. And that’s kind of the work that we do, right. We’re not the main marketers of the network, we, you know, talk to probably less than 5% of the applications building on the network. This is a global, decentralized, permissionless network that anyone can build on, and 1000s of people do build on. But you know, our role is to do things like make big bets and fund things like fire dancer and new validator clients and make sure that the open source tooling that people are building is something that they can actually afford to build. And that’s kind of the grant giving component is a major function of what the Solana Foundation does. There’s also a sauna Labs, which is sort of you could think of it as similar to the world consensus plays in the Etherium ecosystem. They build products and services on the network, there’s sort of a profit motivation behind what they do. And you know, there’s about five different core contributor teams at this point, all building software and services to keep the Solana network running. And then of course, it’s run by 1000s of individuals all around the world. Yeah, that’s

 

Bryce Paul  03:37

incredible. And you’re also no stranger to podcasting. You’ve got a great podcast of your own called the validated pod. Tell us a little bit about that, and what kind of guests you have on and kind of what your goal is there.

 

03:48

Yeah, validated. It’s kind of like, I joke that it’s just like, me shooting the shit. But really what the show is, yeah, well, the what the show is really meant to be as explorations not of specific projects, and not necessarily in the slano ecosystem. But it’s really meant to be like an examination of some of the thoughts and theses and bets that folks are making. It’s not a crypto Maxi show, like a lot of these episodes are like, have we oversold the promise of Dow is like or NF T’s really the solution to these sorts of things. Like a lot of this goes into like the critical examination that I think a lot of these conversations are happening off Twitter, not at conferences, sort of quietly, people are like, Hey, do you really think that this thing is going to work in the way they say it’s going to and like, the point of the show is like, let’s have those conversations in public with very smart people who are also very intellectually honest. And that’s kind of the point of the show. So I have a lot of fun doing it.

 

Bryce Paul  04:42

Ya know, podcasting is just the best. I mean, it’s such a privilege, right? You get to talk to some of the smartest people in the world who just really wanted to share their opinion and are really cool about it. So yeah, that’s why we love doing what we do and we get great guests and, you know, before we move on to some really exciting stuff you guys are doing I wanted to ask One thing and clear up some, some FUD some fear, some uncertainty, some doubt that our listeners have been, you know, kind of emailing in and asking us what are our thoughts and stuff. And you know, we don’t really have much more visibility than than the public on this one. But it just recently in the news just the other day, on September 13, the FTX creditor, the creditor kind of trust was granted permission to liquidate their portfolio of crypto assets, of which they hold about a billion dollars or so worth of Solana. So everybody started freaking out. And of course, they hope they have Bitcoin Matic Ethereum, all these tokens, right? So they’re all kind of susceptible to the same font, I guess. But, you know, you know what, the way I’m looking at it, and I don’t ask you, but like a lot of their tokens are locked until 2028. They’re vested, they have staking contracts. So there’s not going to be a forced dump. And I also don’t think that they’re going to just like dump these coins to zero. I think they have like an obligation to kind of, you know, support the market. But I don’t I want to, I want to ask you, like, Do you have any thoughts on this whole chaos that’s kind of unfolding?

 

06:03

Yeah, I mean, when the collapse of FTX and Alameda happened last year, in November, the Solana Foundation, actually insulin labs put out a whole information, fact sheet and blog post that actually laid out all this information. It shows the unlock schedules, it shows how many tokens that they purchased from token sales. And so this shouldn’t be new information to folks. The other pieces you mentioned is, you know, I think about something like 87 88% of those tokens are locked for an extended period of time. And so we’re not talking about, you know, a billion dollars coming on to a liquid market, we’re talking about, you know, probably somewhere around a 10th of that, right? And so that’s kind of an important context here, too. And the other thing is the people running these processes, like they’re not morons, right? They can look at a market, they can look at liquidity. And they can figure out what the best way to do what is in the best interest of those shareholders is and those creditors. And so I think it’s in no one’s interest to see all of the FTX assets from all these networks just dumped on the public markets, especially in this kind of bear market. We’re in right now. I think, I think the people running that process, and I have not spoken to them, but they’re I have to admit that they’re they’re probably smart enough to realize that that is not the right way to do this. And, you know, that is not also the right way for them to maximize their ability to recoup funds for both creditors and people who, you know, were impacted by the collapse of FTX.

 

Bryce Paul  07:28

Yeah, not to throw shade at Mike Novogratz, who is actually running that process. But he did get a tattoo of Luna on his arm at the very top of the Luna market. And before it crashed, So anyhow, well, he’s a good guy. He’s been doing couple that’s one of those temporary tattoos. Yeah, exactly.

 

Brendan Veihman  07:44

I mean, yeah, I mean, hopefully, he’s gonna make better decisions moving forward. But you’re right, it’s in everyone’s best interest that they don’t dump these on the market. It’s in our best interest, it’s in their best interest. I’m not too worried about all of it, to be honest.

 

Bryce Paul  07:59

I mean, especially when there’s so much positive fundamental development. Yeah.

 

08:03

Yeah, that’s the thing that always is like crazy about crypto is nothing happens and the price goes to the moon, and then you have incredibly impactful announcements, and it doesn’t move anything. And so, you know, this is like, this is classic, immature market, like, it’s cliche to say, we’re still so early, but like, we’re still so early when you see these kinds of like movements. And, you know, look, none of this is to say, like, you should make investment decisions based off of any of this. But like, this is just classic early market behavior. And, you know, there’s a hell of a lot of noise over the last year and a half. And I think what we’re seeing is, as the market continues to be is this like, really rough bear market, the signals becoming higher, and the noise is getting washed out. And this is still a lot more active than it was in 2018. And that’s kind of the piece that keeps me hopeful for this technology over the long term.

 

Brendan Veihman  08:53

We’ll talk about big partnerships, you all just came out with a really big one. I mean, talking about visa partnering with with all of you. So can you just walk us through that new pilot program? Like what’s that going to allow Solana users to do? Because from my understanding, this is going to allow Solana users to send USD through this Alana blockchain. So what does that mean for Solana who’s going to be able to benefit from this?

 

09:18

Yeah, so USD C, which was, you know, created by circle. Solana was, I think the first non EVM network, they brought that, that stable coin to natively and so we’ve had USD C on Solana for years at this point. And it’s a very beloved stable coin, partially because, you know, it’s fully Fiat backed and those daily audit reports that are available, but also, you know, on Solana that transaction fees are a fraction of a penny and the confirmations are 400 milliseconds. And so that is as fast as using a credit card, if not faster, that’s faster than Venmo. That’s faster than the peer to peer payment systems that exist today. And so visa, you know, did their own diligence. They did their own research, they looked around and they said Okay, we have this pilot program, doing settlement between these sort of merchant banks and, you know, Visa itself. If we’re going to scale this pilot program out into the future, and we’re going to eventually, you know, push this down further down the stack. So someday, maybe individuals are actually, when you swipe your Visa card, it’s actually sending a transaction on the Solana network, right? That that could happen sometime in the future. Now, Visa has not laid out plans for that yet to be clear, but like, you can see where this stuff is going, if you kind of look at what the future holds. But they were looking and saying, like, we look, we started this pilot program on Aetherium, we learned a ton. If we want to scale this thing, like we need a faster network. And that’s, you know, after, gosh, months, if not a year of diligence by their technical team, you know, there’s a really good technical blog post that the visa team put out about why they decided to pick Solana as a place to expand this pilot program to it’s an incredible in depth analysis of why they see this as a credible bet in the space. And that is what visa is doing today. Now, what does this mean, for salon users today? Actually very little right. At this point, what they’re doing is they’re settling large transactions that have to happen very quickly, and have to move money over the weekend. You know, there’s this whole thing that happens at 9am on Monday morning, where billions of dollars move across the networks to basically catch up on all the trades and not trades, but all the things you spent your credit card on over the weekend and all the payments that have to come in and all the merchants have to get paid out. There’s billions of dollars that move in the morning. There’s no reason that has to happen, right blockchain markets move 24/7, you can send any amount of USDC anywhere in the world and 400 milliseconds. And so that’s really what visa is exciting, excited about today. Eventually, those merchant banks like WorldPay, they’re going to actually start being able to say, Okay, well, now, if you own a coffee shop, you can actually start accepting your payout and USDC on Solana. And that’s kind of the natural progression of that stuff. For users, there actually isn’t a ton of Change today, right? For users, like you can still use USCC the way you’ve always been able to, you can use sauna pay to actually send that to anyone anywhere in the world. You know, there’s lots of payment focused tools, there’s decaf, there’s candy pay. There’s slang launching soon, there’s lots of really cool stuff happening on the Solana network for payments. But the visa announcement is really about enterprise adoption. It’s about building those rails so that when these companies say, hey, look, we want to save, you know, 5075 basis points on several billion, if not trillion dollars of transactions, they can turn that on, and they can have the confidence in the engineering resources to say, we’ve been piloting this program on Solana for years. We feel comfortable doing this.

 

Bryce Paul  12:40

It’s incredible.

 

Brendan Veihman  12:41

Yeah, I mean, it’s really about setting the foundation for so much more to be built. And for the listeners out there that maybe aren’t as familiar with USDC. It’s the sixth largest cryptocurrency by market cap, it’s the second largest stable coin, they have a market cap of over $26 billion. So it’s a really big project. It’s not like we’re bringing in some small new coin, like we’re bringing in a but it’s not an algo. Stable. Yeah. Working in a behemoth here. This is one of the big boys. Yes,

 

Bryce Paul  13:11

no, I’m I’m actually curious. Did visa come to Solana or did like Solana labs reach out to them? Or how did this all kind of happen? transpire? Yeah,

 

13:21

look, I mean, the team at visa was looking into a number of different blockchains to scale this project to and you know, we obviously talked to them as part of that process at the foundation. But this was a decision that they made, right, this is not something where, you know, a bunch of BD folks were saying like, hey, Visa, you really should try out this on Solana. This came from a product first engineering first decision at visa and of course, you know, we help them in that process to make sure their engineers have the resources they need to make their evaluation, but this was something that the visa crypto team chose to scale the pilot to. So it’s a pretty strong endorsement of the technology behind the Solana network. Yeah, there

 

Bryce Paul  14:02

are other enterprises that you know have that might be vetting Solana or, you know, maybe if there’s not any certain names as they’re like industries or kind of sectors that might be focused on this.

 

14:14

Yeah, I mean, MasterCard already has a pilot program. Google is building a bunch of infrastructure for the Solana blockchain. ASICs did a sneaker that they sold exclusively through USDC on Solana last year. Discord, you know, has a Solana integration. Now, the only blockchain they have an integration for there’s a lot of this kind of enterprise adoption happening. But you know, one of the differences I would say is like, sometimes you hear about these enterprises adopting blockchain and you dig into the project, and you’re like, they’re not really doing anything interesting here. Like they mostly issued a press release. And so what I’m really just like, thrilled about and thrilled to see constantly is that the experimentation folks are doing on Solana and the products people are wandering on Solana, these are actual real use cases for blocked chain, right? This is not like, oh, the whole thing is actually off chain in a database. But we can transfer the NFT on chain if we want to, like these are things that are actually happening on chain. And that’s the piece that we’re starting to really see these enterprises say, we can build what we want to build on Solana. And that is, you know, it’s been an uphill battle to get them to look seriously at a new architecture, right, a lot of these folks. They know EVM. And that’s what they feel comfortable with. But, you know, when push comes to shove, they need to find the right technical solution to solve their problems. And they just keep picking Solana, which, you know, feels pretty good for us.

 

Brendan Veihman  15:40

Now, for the people that are listening out there. I want to preface this by saying it’s no secret that I’m a fan of the gaming space. So I for one, I’m excited to ask you about this. But what is salon has planned for the gaming space because the other day I was reading that Johnny Lee came out and said that Solana is the only network that is truly ready for gaming. So I kind of want to get your thoughts on that. Like, what does that mean? What is setting Solana above the above the rest? And like what is the precedent that’s being set here?

 

16:09

Yeah, Johnny Lee ran games for the episodic foundations was sort of him and his team are responsible for bringing on about 100 games to the network. And most of those haven’t launched yet, right? Building a game takes a while. But, you know, the transition like games is such a strange industry because gamers tend to hate change until they love change. Right? Everyone hated the the free to play model until fortnight came around. Everyone hated mobile games, no Candy Crush came around, right. And so I think most people in the game space right now. They’re not like the players aren’t thrilled about blockchain yet. I think they haven’t seen the promise and potential of what networks like Solana sort of have to offer. But games require a lot of transactions, right? Games have a massive infrastructure requirements today, and most of us run in Azure. And so as we look at like, what are games built on blockchain, they’re going to be different. I think we’re still probably a decade away before like you have Call of Duty on a blockchain or something like that. But you see teams like star Eilis building triple A games that are, you know, massively multiplayer online games. And they’re building it from the ground up to be powered by Solana. And what does that mean, right? Obviously, like, the rendering still requires a gaming computer. And if you’re in a you know, you’re in a spaceship dogfight like that still is going to be off chain. But the minute you go to a marketplace to say, Hey, I built this really cool ship, I want to sell it or I want to buy some new lasers for my starship, or, you know, whatever you do. And in a game like that. Those markets are actually defy markets. Those items are actually represented as NF T’s and they’re basically traded in giant on chain order books. And so we’re taking the economic game engine of all this stuff, and we’re moving on chain are taking clan reputations and sort of what’s a player’s score? What’s the reputation? What guild? Are they a member of whoever they pissed off, right? All that data is actually getting moved on chain. And that’s a really big breakthrough. I still think we’re a decade away from like, real time combat games being able to be on chain because even though Solana is the fastest blockchain out there, 400 milliseconds is pretty bad ping, right? If you talk to a gamer like Counter Strike is going to be happy with that. And so that’s kind of the piece we’re seeing here is that like the actual on chain game engine, like turn based strategy games like Civilization or something like that, you could totally see a world where that starts moving on chain. But the real power here of blockchain gaming is ownership, right? Right now you don’t own the things that you get in games, you don’t own the reputation points, you don’t actually own your character. And gamers don’t like this, right? Like I remember like back in the World of Warcraft days, there were people who would be going on Craigslist to sell like a sword that God for 100 bucks and meeting in a parking lot and pulling out laptops and trading the item and handing off cash like in a parking lot, or you’d buy a World Of Warcraft Gold on eBay like these things can now be represented in defy in blockchain markets that are permissionless and that I think, is the really big unlock for games

 

Bryce Paul  19:14

and no scamming. I remember when I was a kid, you know, I’d play all those MMO RPGs and stuff. I remember one time some guy was like, hey, like, you know, I’ll give you you know, gold in Guild Wars if you give me your account on RuneScape but you have to give me your password on her escape first Ah,

 

19:31

so then just just send me one bitcoin I’ll send you a to Bitcoin back.

 

Bryce Paul  19:35

I’ll never exactly Oh, no, never get scammed again, because it hurts so bad. And I was like, and I realized, you know, I was in seventh grade I had you know, I trusted people, right? You just inherently like oh, yeah, this guy is telling me he’s going to do a deal but, you know, just ripped off this little kid. And so, you know, you know, it definitely from an early age is like wow, we Why is there no, you know, exchange for digital assets. Right. Why is there no exchange that we could go and trade my Runescape gold for his World of Warcraft accounts are all that kind of stuff. And I think, you know, on chain, and all these blockchain networks are going to be able to facilitate that kind of stuff soon.

 

20:08

Yeah. And look, the reason for that is twofold. One, the technology is hard. And two, game companies are greedy, and they want to make as much money as possible, right? And selling you the same thing twice is a great way to make a lot of money. Great. So what we’re seeing is a lot of the adoption here is coming from New game developers the same way that the mobile games market was not the existing companies, it was a whole new crop of companies. I think the blockchain gaming market is going to largely be built out by people who are like, Yeah, I worked at Activision for 10 years. And I think there’s a better way to do this. And I’m going to start a new company dedicated to trying to do that, I don’t think it’s going to be moving over a lot of the existing gaming studios, which means the adoption curve is going to be longer, but in the end, I think it’s going to be better for gamers, like they’re going to come around and say, like, oh, man, when I own this stuff, it’s a much better experience than this old model that I had. Yeah,

 

Bryce Paul  21:01

a couple of these venture capital funds and hedge funds, you know, they’re getting, you know, me really bullish on this gaming sector, because they’re just talking about, like, the total addressable market, you know, there’s, you know, hundreds of millions, you know, maybe a billion gamers out there, and there’s in the next, you know, billion users for crypto are probably going to be that crossover from people coming from gaming, and just that natural extension, finding themselves interacting with with blockchain and earning, you know, cryptocurrencies and just, you know, kind of in a, you know, in a back in a roundabout way, just kind of coming into the industry through the game, so I’m pretty excited about it. But I’m also excited about the decentralized physical infrastructure, which is a totally other sector unrelated to gaming, but super important. It’s got the deepin sort of acronym going on. And I know, helium is the most prominent one that’s built on Solana. But can you kind of give us an overview of maybe this landscape? What is deepin? Why is it important, and maybe who are some key people building on it?

 

22:03

Yeah, the, the key thesis of decentralized physical infrastructure networks are that direct ownership and decentralization can actually create much better products and services, even if each individual atom in the network is worse at doing what it does. Now, that’s like a kind of a heady concept, but trucks, one over trains, why trucks are decentralized, right? Trucks are decentralized infrastructure, in a sense, right? You can drive a truck to almost any house in the United States, right, you can get it anywhere in the world, trains go on tracks. And trains are super efficient at moving stuff anywhere in the country, as long as it’s on a train line. And it’s super cheap to do, as long as it’s on a train line, right. But that last mile really requires a truck. But nowadays, most goods even between cities are not moved by trains, they’re moved by trucks. And so this is kind of the analogy for decentralized physical infrastructure networks. So a great example of this is hive mapper. Hive mapper is a system where you can get these dash cams, you put them in your car, and it takes photos about 10 photos a second, and then uploads them. And now these photos are like the quality of photos, you get off the phone, they’re not as good as the Google Street View car that drives around and costs like a million dollars to build that car drive down your street, maybe once every six years. And hive mapper has daily photos of a lot of places all over the world that done about 8000 Kilometer a minute, sorry, excuse me, they have an 8 million kilometers of road mapping at this point in less than a year. And so that’s a great example of where like, yes, each photo is not necessarily as good as the photos coming off Google Streetview. But now with AI and image compilation, you might get 50 photos a month of a street, and you can start having AI build together an actual better image than you’d get off Google Streetview with much more frequent data. And also everyone driving cars is now earning revenue for that, right Google Maps is in Street View is the most expensive consumer facing API on the planet. It’s incredibly expensive to be a real estate agent and use Google Streetview or something like that, right. And so you can see a world where hive mapper starts to actually have a competitive product here. But instead of you know, a venture backed company getting all the money, the people who actually map those photos are going to get that money, right? The network is going to reward those people who participate in it. And that’s kind of the great embodiment of what decentralized physical infrastructure networks are all about. Helium is doing this with 5g cell service, and that cell service, right it’s not as good as you get from T Mobile or Verizon or at&t, most of the time, but in it is much cheaper. And eventually that network will be just as compatible and big. And so helium is actually launched this helium mobile product, which uses like AT and T as a fallback network when you can’t access the helium network, but most of the time, if you’re in one of these launch cities, you’re getting internet from people’s houses, they have these 5g network routers set up in their window. And that’s how you’re accessing the internet and accessing the cell phone network. It’s really incredible to see.

 

Brendan Veihman  25:17

Yeah, it sounds like a reoccurring theme here is that cutting out the middleman, you know, specifically through blockchain tech and smart contracts being not only be a profitable thing, but it can also be more beneficial from like a security and privacy standpoint. And so there’s like numerous applications that we can look at deepen in the different ways that it cuts out the middleman, I find it so interesting, because you mentioned helium, you mentioned hive mapper, it makes me wonder like, what’s next, like what’s going to be the next big application of deep end? And I don’t know if you have something that might be on the horizon that’s coming that you can maybe tell us about, but I’m curious to get your thoughts like, what is this next generation of deepin going to look like?

 

25:56

So in order to make deepin possible, you needed a network like Solana where transactions were fast, abundant, and cheap. And that’s not the characteristics of other blockchains. Right. That’s, that’s one of those things that’s kind of only possible on Solana nowadays, right? So what also fits into that category? Well, almost the entire gig economy fits into that category. Right? If you think about it, this is how Uber works. This is how DoorDash works. This is how you know any of these courier package services work, anything where there’s a centralized company, where basically all they’re doing is matching and payment fulfillment, you know, blockchains, are great at order matching and payments, right. And those are two things that blockchains can do in their sleep. And so assuming you have a network that can handle enough throughput, to be able to, you know, handle all the Uber ride requests, or all the DoorDash or UberEATS requests, like we’re getting to a place where you can actually start to see these things might start disrupting some of these big incumbent players.

 

Bryce Paul  26:57

And it will actually end up you’ll be like, you know, every time I’m in an Uber, I always ask them, like, what’s your experience with Uber? Lyft. And they always complain, Oh, they’re not paying me enough. They’re always taking more than their fair share. It’s like, well, guess what, we have a technology that could disintermediate companies like that, and have direct peer to peer payments. I’m driving you. So you’re gonna pay me right. Like, that’s how it works. And why do I have to pay this company? Well, because their order matching and they’re, you know, doing all this stuff. It’s like, what if we have a blockchain that did exactly what Uber did? You know, it’s like, no, you don’t need them.

 

27:29

It’s actually even better than that, right? Because there’s people who drove for Uber for 10 years before the IPO. And they didn’t get anything when that company went public. Right? If they’d been earning tokens. Who knows, I might have been, we might have had 20,000 drivers who suddenly went from making 18 bucks an hour to having a down payment for a house or having a college fund for their kids. Right? Yeah, be

 

Bryce Paul  27:55

able to share the side of the overall network that they’re building.

 

27:59

Exactly. And that’s not the way venture capital is built, right? Venture capital is built. And this is this is no fault of VC. But like, this is basic economics, right? Like they want to capture all the value possible. And so the drivers aren’t paid very well. And when the network goes public, they don’t get any share of that, right. But there are people who put $25,000 into the seed round of Uber, that got paid out $30 million when that company went public 10 years later, wouldn’t have been awesome if drivers also got to share in that.

 

Brendan Veihman  28:29

Yeah, I mean, looking at Uber, I was just looking at the like, what the numbers and what the split is. And it looks like that the drivers earn anywhere between 50 to 70% of what the ride costs. And what we’re able to do is we like Bryce said, we literally have the technology that can make this a significantly higher split, instead of this being 5050 or 6040, or 7030. This could be something that was like 9095 95 Plus split in favor of the drivers, and then they’re walking home with more money, we’re cutting out the middleman like everyone’s getting a little bit more happy.

 

29:04

Yeah, that’s that’s the vision, I think of crypto. And this is the thing that like, not to get political, like a lot of people who I know in my life who are like pretty liberal, they have this view of blockchain that like, oh, there’s something sleazy or something weird going on here. And I think they just haven’t thought through like, these things are basically giant digital cooperatives like these are worker owned networks, for lack of a better term, right? Or like we actually are in a place where blockchains can make the economy more fair, it can create more wealth accrual for people who typically are not paid very much and don’t have an access to like wealth generation. And so these things that are like, yes, Blockchain is very libertarian, right? It’s very, like freedom. But at the same time, there’s a piece of this that’s very human, right. And it’s very much like, no, no, like the people who are building the network deserve to get rewarded. Like we should actually have much more fair systems. We don’t pay bug bounties based on what zip code you live in. It’s not like, oh, like you’re in India and US you solve this bug bounty, we’re gonna give you $2,500 Because people aren’t paid much there, right? You’re gonna get the full $25,000 that you would get the same if you solve the bug bounty in San Francisco. These your value is not based on what we’re willing to pay you it’s based on what you’re contributing to the network.

 

Bryce Paul  30:21

Yeah, actually, speaking of that exact scenario I heard recently about this young Solana kind of prodigy. Can you tell us about this guy? Because I heard he, you know, he’s in India, and he won this big bug bounty for 1000s of dollars. Tell us about good Jesh? Or how do i pronounce? Yeah,

 

30:40

good, Josh. So, you know, he got started on the network, you know, last year about 18 months ago, and you know, solved a few bug bounties for protocols. And he got a I think he was 13 or 14 at the time. I think he’s, he’s 15. Now, but like, he got what is fair to say, is a windfall, right? A I wouldn’t quite say life changing amount of money, but like, the equivalent of several years of salary for his parents in bug bounty bonus, right? And to be able to say, like, Hey, I was on the internet, and I was coding as a 13 or 14 year old and like, now we’re gonna renovate the house. It is like an incredible experience that is truly only possible on blockchain. Right? And now he’s like, he’s, like gone all around the world. He’s met a bunch of folks like he’s building really cool stuff. There’s a documentary. Yeah, there’s this documentary that just came out called Super teens, which is about, you know, I think it’s four or five folks below the age of 18. All from India who have, you know, been able to, like really change their lives by building on blockchain. And that is like such a powerful story hear nothing about this had to happen with Blockchain, right. The internet was supposed to be this fair and open world where anyone anywhere in the world, you know, the classic on the internet, no one knows you’re a dog. But you know what, the high paying jobs are still in the US. And the slightly lower paying jobs are still in Europe. And the bad jobs are still in India, right? Like, this is the classic thing where like, most companies are not putting their best engineers in developing countries. And they should be right because there’s great engineers everywhere in the world. But blockchain is inherently global. And it removes a lot of that bias of saying like, well, we’re a US company. So therefore, like, the senior staff really has to be operating on us ours. Like, that’s not how a blockchain is built. And so I’m really excited to see us unlock a lot of potential for folks who have kind of been shut out of the traditional tech market.

 

Bryce Paul  32:47

Yeah. And really, like as we as we kind of close out our conversation here today. You know, you you personally and the Solana foundation, you guys are traveling the world to accomplish those very ends, hosting hackathons, Solana break point that was last year, and I’m not sure if it’s an annual thing, but we had one of our guys go there in Portugal. And so it’s like, you guys are actually not just talking the talk, but you’re walking the walk, you probably, you know, are on mixed timezones every other week.

 

33:18

Yeah, I’m actually in Bangalore right now. And we’re hosting a sauna hacker house here, which is over 3500 people registered and showing up to, to learn about the network. And like, man, if you think it’s a bear market, like go to India, it is not a bear market here. Everyone is building everyone is incredibly excited. You know, it’s really awesome to see. But this because these networks are global, right? Like we go where the intention is we go where folks are developing. And that’s kind of the commitment. You have to have to make this stuff possible. You talked about breakpoint breakpoints coming back again this year. It’s an Amsterdam, October 31st to November 3, it’s going to be great. Next year, I’m really trying to get it in Asia. I think it’s time we do break point and somewhere in APAC. So but the whole thing is an incredible experience. I hope you guys can also come this year. It’s yeah, no, I’m just gonna.

 

Bryce Paul  34:09

I’m gonna try and mark my calendar for that. That would be incredible. Yeah, dive a little deeper into they’ll get you a media pass. Let’s do it. TiVo. You heard them super producer TiVo. Can I get a copy on that, buddy? Did somebody say Amsterdam?

 

Brendan Veihman  34:23

Hey, we’re in we’re in.

 

34:25

I swear it’s a work trip. Yeah,

 

Brendan Veihman  34:27

taking it back.

 

Bryce Paul  34:29

Awesome. Dude, thank you so much for coming on. Thanks for staying up late for us. By the way over in India. We really appreciate your time as always, hope to see you again soon and take care.

 

34:38

Yeah, thanks for having me on.

 

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