[SPEAKER_01]: Thanks for joining us for the crypto maverage podcast and we have a great guest here for you today.
[SPEAKER_01]: It's Kevin Lep so he's the founder of ETH gas and it's a company building the next generation of Ethereum infrastructure through a market for future block space.
[SPEAKER_01]: Kevin really excited to have you on the podcast today.
[SPEAKER_00]: Likewise Brian, thanks for having me.
[SPEAKER_00]: Super excited for this.
[SPEAKER_01]: Yeah, I'm excited as well.
[SPEAKER_01]: And before we dive into everything to ETH gas, give us a quick version of your story.
[SPEAKER_01]: How'd you go from Morgan Stanley into crypto?
[SPEAKER_00]: Yeah, it wasn't so straight.
[SPEAKER_00]: Never real.
[SPEAKER_00]: I started off as an FX option trader, a vault trader, gotten a structured credit.
[SPEAKER_00]: And into the very, I guess you call it like deep ends of financial markets.
[SPEAKER_00]: trading infrastructure as it relates to like the tradify side of it and so you know you and I and most people familiar with like equities and then you know one step deeper you have a fixed income and credit and then credit is actually it kind of runs the global markets it's like it's much deeper than money per se for example like how much how much do you spend on like in cash versus like on credit and so credit is like 10 times larger than the definition of money itself so
[SPEAKER_00]: You get very much involved in financial market infrastructure and construction, and I had the honor, pleasure, displeasure.
[SPEAKER_00]: I guess I've working through the o-weight kind of like Lehman, financial crisis times, and so following that with Morgan Stanley, my job kind of shifted into a lot of this like regulatory
[SPEAKER_00]: strategic work where the world we had to understand how credit markets move, how does credit change from person to person or government or company.
[SPEAKER_00]: And then it just got me thinking about the world from a very macro perspective.
[SPEAKER_00]: And so that was, you know, 0809.
[SPEAKER_00]: And then we have, you know, early kind of Bitcoin days.
[SPEAKER_00]: And then it's like, what is this stuff?
[SPEAKER_00]: How does it work?
[SPEAKER_00]: I started
[SPEAKER_00]: But then, you know, just got me thinking, so I left finance, I started a tech company with my wife.
[SPEAKER_00]: We ran that for a handful of years.
[SPEAKER_00]: But in the back of my mind, it was Bitcoin was evolving.
[SPEAKER_00]: Ethereum came around.
[SPEAKER_00]: I had been in Hong Kong most this time.
[SPEAKER_00]: And so, Vitalik, I've been coming through for as early meetups.
[SPEAKER_00]: And then, you know, fast forward a number of years, basically, DeFi summer came around.
[SPEAKER_00]: And it's like, hey, we have minimum technical infrastructure to kind of run kind of the global financial system.
[SPEAKER_00]: I think it's time for me to kind of like hop off this tech company at the time and just get deeply involved in crypto.
[SPEAKER_00]: So it was really a DeFi summer.
[SPEAKER_00]: I think it was an opportunity for me
[SPEAKER_00]: working, uh, we basically built like a CDN type business in the web too world.
[SPEAKER_00]: Uh, so kind of infrastructure on both sides on finance, on tech, and I was like, this is, uh, this is my calling.
[SPEAKER_00]: I need to be here.
[SPEAKER_00]: And so, uh, yeah, you know, happy to dive deeper into eat gas, but you know, that's what, uh, landed me in it.
[SPEAKER_00]: I actually got COVID and during COVID, I had a young child at the time, didn't want to get the kids sick.
[SPEAKER_00]: So I, uh, self quarantine in a hotel.
[SPEAKER_00]: Actually, my wife forced me to self-quarantine in a hotel, but that's what I started kind of writing, I guess the early white paper, you know, thoughts about eth gas in terms of like, what if we could just change the fabric of ethereum?
[SPEAKER_00]: There you go, and then here we are.
[SPEAKER_01]: I love it.
[SPEAKER_01]: It's my favorite part of doing these podcasts is everyone's origin stories, especially in crypto, because even though it feels like we've all been living in the trenches for a lifetime and have seen crypto developed or what it is today.
[SPEAKER_01]: everyone's come from a different background and it's it's truly still a very young industry, especially when you compare to like traditional finance and it's just great to see it's like one of my favorite parts.
[SPEAKER_01]: So an amazing story and you mentioned it there.
[SPEAKER_01]: Today you're building ETH gas for someone hearing about the name for the first time.
[SPEAKER_01]: What's the mission you're trying to accomplish?
[SPEAKER_00]: It's basically make transactions on Ethereum faster and better.
[SPEAKER_00]: But that's kind of the overall mission.
[SPEAKER_00]: How we do it is much different.
[SPEAKER_00]: So imagine Ethereum has these validators.
[SPEAKER_00]: There's about $100 billion of validators.
[SPEAKER_00]: They basically are like,
[SPEAKER_00]: oil producers or like block space producers and they produce blocks every 12 seconds.
[SPEAKER_00]: And so imagine in the real world, you know, we basically take raw crude oil from the ground and we refine it.
[SPEAKER_00]: So what that means is we go to the validators and say like, hey, Brian, you know, you're running your validator on a raspberry pie or whatever.
[SPEAKER_00]: Why don't we take your block space and we'll just do cool stuff with it?
[SPEAKER_00]: And so, you know, we can basically buy, sell, trade your block space.
[SPEAKER_00]: You know, why would you want to do that?
[SPEAKER_00]: Well, everyone in the real world does that, you know, from airlines who head, you know, their their gas expense to, you know, farmers who had, you know, their grain and offtake and miners as well.
[SPEAKER_00]: Everyone kind of hedges their commodity exposure to basically reduce risk.
[SPEAKER_00]: In the context of ethereum, we take the block space and we refine it.
[SPEAKER_00]: And what that means is,
[SPEAKER_00]: we can basically take a block and cut it in like a hundred pieces.
[SPEAKER_00]: And so instead of waiting 12 seconds for a transaction to go through, we can tell you your transactions going through in like 50 milliseconds.
[SPEAKER_00]: And so, when you hit like confirm, accept or trade basically on your meta-mask, then am I gonna go through this block?
[SPEAKER_00]: Yes or no, you just kind of wait there as it's kind of loading.
[SPEAKER_00]: And maybe it goes through, maybe it doesn't.
[SPEAKER_00]: So that forms a lot of anxiety to the everyday person, but think about it if you're like a bot or an AI agent, you can't have that uncertainty, right?
[SPEAKER_00]: Like you want it like instant and right away.
[SPEAKER_00]: And so that's what we do.
[SPEAKER_00]: We basically say within a 12 second block, let's cut into these hundreds of pieces and every, you know, split, second, 50 milliseconds.
[SPEAKER_00]: We say like, hey, you're done, you're done, you're done.
[SPEAKER_00]: And this allows you,
[SPEAKER_00]: that confidence to know you've traded right away, like kind of when you lift your finger off the button, as well as you could trade again.
[SPEAKER_00]: So you could trade three, four, five times over that 12-second period, and all of a sudden, ethereum is processing five times as many trades, ten times as many trades.
[SPEAKER_00]: So, so critically important.
[SPEAKER_00]: So that's basically what I mean by kind of refining gas and making the network much faster, but
[SPEAKER_01]: No, no, that's, that's great.
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[SPEAKER_01]: I mean at the time, I like NFT still and I still enjoy the NFT world, but at that time, I was like, oh, I'm gonna pay $372 to get this NFT minted because it just felt like I remember going through my taxes with my CPA and my wife.
[SPEAKER_01]: And I was, you could like get that time on, or at least we were, we were writing off like gas fees and it's such a high amount of gas fees.
[SPEAKER_01]: I'm embarrassed to even say the number that like my wife was like, what are you doing?
[SPEAKER_01]: You know what is this?
[SPEAKER_00]: Where is this gas?
[SPEAKER_00]: Have you like, uh,
[SPEAKER_00]: What is it?
[SPEAKER_00]: How does it work?
[SPEAKER_01]: I mean, what's up in thousands and thousands of dollars of gas feed, but I was even thinking, but I could, I'm sympathetic.
[SPEAKER_01]: I mean, I've been there just staring at the screen.
[SPEAKER_01]: I'm like, is this going to go through?
[SPEAKER_01]: What's happening?
[SPEAKER_01]: And one step that certainly stood out to me for confirmation.
[SPEAKER_01]: One of what I was doing research was 50 milliseconds instead of waiting around 50 milliseconds, instead of waiting for the next block.
[SPEAKER_01]: And obviously, why that's such a big deal.
[SPEAKER_01]: Now, my question for you is, is that
[SPEAKER_01]: Is that mainly benefit institutions or everyday users eventually going to honestly notice this because I think I would have noticed it, but I'm curious kind of like what the theme is there.
[SPEAKER_00]: Yeah, well, it's basically everyone.
[SPEAKER_00]: So let's kind of come back to that.
[SPEAKER_00]: If you look, let's go back to NFT era, right?
[SPEAKER_00]: Like what happened?
[SPEAKER_00]: We basically brought on millions and millions, like I don't know, half a billion users, whatever it was, just because it's fine, it's interesting, right?
[SPEAKER_00]: We brought all these people into crypto.
[SPEAKER_00]: and then, of course, gas fees spiked, and then we had these L2s, and then, oh, L2s are much cheaper, and maybe it doesn't have the asset I have, but it's cheaper, fast, and everything, so we went off and, you know, had this proliferation of L2s.
[SPEAKER_00]: And then, as everyone's kind of looking at the L2s, the base ethereum itself, you know, the institutional people stayed on ethereum, retail people moved to the L2s.
[SPEAKER_00]: But now the L1 in terms of like capacity and technology, it's caught up.
[SPEAKER_00]: Right, so it's kind of con full circle, right?
[SPEAKER_00]: You know, you go to an L2, oh, it takes one or two seconds and it costs a cent, five cents.
[SPEAKER_00]: You know, let's do a transaction.
[SPEAKER_00]: That's why we went to L2s, but that's ethereum now.
[SPEAKER_00]: And so ethereum now costs sense to do a transaction.
[SPEAKER_00]: It has 10, 20 times the throughput or the capacity.
[SPEAKER_00]: And with us, it can do trades in 50 milliseconds.
[SPEAKER_00]: So it's actually much faster has much more capacity than any L2 largely.
[SPEAKER_00]: And so that's the interesting arc.
[SPEAKER_00]: I'd say for Ethereum, having gone full circle there.
[SPEAKER_00]: Now, who does it serve is it's basically everyone, right?
[SPEAKER_00]: So let's say there is,
[SPEAKER_00]: Let's say someone's just buying an NFT, you know, coming back to to I don't know how active that market is, but you know, if you want to buy some NFT and you don't want to get snipe right you don't want someone to front run you then you could do that and you get specifically what you're looking for like right away before anyone can see that transaction or manipulate that that that transaction so that's that's how it affects the everyday person for
[SPEAKER_00]: You know, again, the everyday person, you can trade multiple times within the same block.
[SPEAKER_00]: So instead of waiting 12 seconds, you can trade again and again, maybe a Binance on one screen, Uniswap on the other screen.
[SPEAKER_00]: great and then of course there is well who does most of the transactions it's like bots and agents right and so from a bot and agent perspective then you can really let these things fly you know again and again this is really like high velocity, high frequency trading you know normally that would move to more salana or the centralized exchanges but we have the infrastructure to
[SPEAKER_00]: we are undergoing this initiative to make everyone what we call a real-time ready.
[SPEAKER_00]: And so, you know, it's getting the validators on board to become real-time ready, getting the wallets on board, getting the like RPC providers to be ready for it.
[SPEAKER_00]: You need kind of the, uh, we're a kind of this foundational layer and it's getting those people who access the chain to become real-time ready.
[SPEAKER_00]: So that's kind of how we're, um, that's what we're going through right now.
[SPEAKER_00]: We're just getting people on board for that.
[SPEAKER_01]: Yeah, and Vitalik recently said, it was like, it was like an X thread or something along the lines where he said that Ethereum isn't trying to be the fastest blockchain and said it was focused on predictability and just better base layer infrastructure.
[SPEAKER_01]: Does that align with the vision of EF gas as well?
[SPEAKER_00]: Yeah, so I guess it's probably a matter of focus.
[SPEAKER_00]: So predictability is super important because you might do a trade
[SPEAKER_00]: Does it go through or doesn't not?
[SPEAKER_00]: And do you have privacy?
[SPEAKER_00]: Do you have people front running it?
[SPEAKER_00]: Do you have people manipulating it?
[SPEAKER_00]: And these are, like, no one wants to be front run.
[SPEAKER_00]: And so imagine, we talk and you and your guests, we're all saying, like, oh, try to find institutional capitals going to come on chain.
[SPEAKER_00]: Imagine BlackRock, looking to buy a billion dollars of something, right?
[SPEAKER_00]: You know, like, ridiculous amounts.
[SPEAKER_00]: They buy a billion dollars of something.
[SPEAKER_00]: And here's Brian with his bots in the background saying, I'm going to front run black or off like no that's not going to happen right and so you know like how do we get that infrastructure to get like I don't want to say the real money but like deep like.
[SPEAKER_00]: Like, like, the much larger capitals and money to come on chain and feel comfortable because, you know, they're, they're less worried to do with what Vitalik is saying in terms of, like, I want this to go through in a split second and they're more worried about, like, I do this trade on my money just disappears, like, like, you know, there's maybe a hack which affects, you know, like an avi, like a lending, like protocol.
[SPEAKER_00]: or what if someone takes over 50% of the network or 51% of the network and just says, hey, all of your money is my money.
[SPEAKER_00]: There's certain types of attacks that are existential, we don't think about it day to day.
[SPEAKER_00]: We think about like, oh, faster, better, we want to trade like the CME, New York Stock Exchange or whatever, but that's fine and dandy, but the foundation is we want to make sure that this money can't be taken, stolen, manipulated,
[SPEAKER_00]: high frequency and stuff.
[SPEAKER_00]: It just so happens that we've addressed a lot of that high frequency stuff outside of the ethereum networker protocol itself, but obviously we would love it to be both stronger, faster, secure, private as well as high speed as well.
[SPEAKER_01]: Yeah, yeah, of course, and that makes it that makes it ton of sense, but the predictability standpoint seems like, you know, a priority will becomes possible when a theorem once transactions become predictable instead of just fast.
[SPEAKER_00]: Also, uh, predictable means that you can just, you can do more trades with, with more certainty.
[SPEAKER_00]: And so, as I mentioned earlier, like,
[SPEAKER_00]: like whether it's you or an agent, an AI agent, you put a trade through and you just wait.
[SPEAKER_00]: And if it doesn't happen, you need to kind of like recoil and figure out like what's your next step.
[SPEAKER_00]: It's the same thing to like,
[SPEAKER_00]: booking a ticket with the airline, and they've canceled your trade.
[SPEAKER_00]: I canceled your flight, like, what are you going to do?
[SPEAKER_00]: Like, I have my Uber booked, you know, my bags pack, my hotel booked, and like, what is that process?
[SPEAKER_00]: It's super annoying.
[SPEAKER_00]: And so just as it is for us in the real world with flights, it's the same thing on Ethereum.
[SPEAKER_00]: Like, oh, I was trading on a centralized exchange versus UNISWAP again.
[SPEAKER_00]: And I thought my trade was going to go through on Uniswap.
[SPEAKER_00]: Now I need to cancel those trades I did elsewhere to offset it.
[SPEAKER_00]: So there's all this like opportunity cost or cost of unwinding trades.
[SPEAKER_00]: If we don't get that predictability and don't get that certainty.
[SPEAKER_01]: So I guess there's a lot of applications that can't exist if today if there's an unpredictability.
[SPEAKER_00]: I mean, correct?
[SPEAKER_00]: Well, I'll think about insurance, for example, right?
[SPEAKER_00]: Or you want to do some longer data trade.
[SPEAKER_00]: So in breaking the world into two parts, you have kind of like equity markets, and you have fixed income or credit markets.
[SPEAKER_00]: In the credit markets, you basically make long-term
[SPEAKER_00]: decisions.
[SPEAKER_00]: For example, I want to borrow, you know, let's say like real like infrastructure projects in the real world, I want to build a dam.
[SPEAKER_00]: Well, I need to borrow money for, um,
[SPEAKER_00]: to build this dam, I need, you know, $5 billion and I need to do construction for the next like 10 years or 20 years.
[SPEAKER_00]: You need to know that like the financial system is going to still be there and interest rates are going to be at a certain level and that money has a certain definition over all this time period.
[SPEAKER_00]: And so when you have predictability, you can make much longer data decisions, much deeper decisions.
[SPEAKER_00]: And that's basically
[SPEAKER_00]: an entire different pool of capital that we can bring into crypto.
[SPEAKER_00]: You know, instead of us just trading things, buying things that go up and down, we could start making long-term bets.
[SPEAKER_00]: We can place large pools of capital in ether on the network, and we could start planning five or ten years ahead.
[SPEAKER_00]: So this is a, I call it the other half, much larger part of the financial markets that that we're really talking about when we talk about predictability.
[SPEAKER_01]: So with industries, do you think are a benefit or adopt this first?
[SPEAKER_01]: Is it going to be payments, trading, stable coins?
[SPEAKER_01]: I guess AI, AI is such a big sector as well, machine to machine comments.
[SPEAKER_01]: I'd love to know your thoughts there.
[SPEAKER_00]: So I guess which sectors and maybe AI, so in terms of which sectors, again, I'd say it's quite generic.
[SPEAKER_00]: So from a financial standpoint, it's just anyone who wants to think long-term.
[SPEAKER_00]: So we might have insurance plans more broadly natively issued because life insurance, I need to think five, 10, 15 years out in the future, do the legal systems and the technical systems are they comfortable with the infrastructure that ethereum has?
[SPEAKER_00]: to be able to support this.
[SPEAKER_00]: It's fine if maybe you and I are doing something for $500,000, right?
[SPEAKER_00]: But when it's like a hundred million dollar contract for this company's pension plan or
[SPEAKER_00]: like insurance or medical plan like that's that's a little different.
[SPEAKER_00]: So yeah, you can get kind of like insurance and pension funds, but as it relates to what industries, I mean, AI is moving pretty quickly as well.
[SPEAKER_00]: And so, you know, we can't we can't deny the speed and velocity that moves that it shifts from a world where.
[SPEAKER_00]: sophisticated traders are using a call them bots, you know, they're using bots to wear everyday people can use agents, right?
[SPEAKER_00]: And so as an everyday person, we're using an agent but you know, whatever you want to call it, it's basically acting on your behalf, but that agent is
[SPEAKER_00]: It's not like you and I are managing our portfolio.
[SPEAKER_00]: We don't go in there every day or two days or a week and hit a button, right?
[SPEAKER_00]: Agents are going to be doing things in real time, responsive to the market.
[SPEAKER_00]: They're going to be doing it every like second minutes based on the market movements.
[SPEAKER_00]: And so we need that infrastructure for these agents to perform these micro transactions in small, minute amounts to finally tune whether it's.
[SPEAKER_00]: our portfolio or, you know, some whatever it is, you know, that that we're looking to do.
[SPEAKER_01]: I think the AI agent sector is so interesting, just because of how far it's come over the past.
[SPEAKER_01]: You can just say a couple of years, but then when you say a couple of years, a couple months, it's just been, you know, it's coming faster than I think I even ever expected.
[SPEAKER_01]: And just the amount of tools and agents and things are just, you know, for sure.
[SPEAKER_00]: Like we can set up an agent now and you basically hit a couple of buttons, it's kind of plug and play.
[SPEAKER_00]: And then boom, this agent's gonna be doing, you know,
[SPEAKER_00]: 100s hopefully it's not wasting on gas fees right but you know the point is that it can be doing you know dozens or hundreds of trades over some period of time and it's just running autonomously and then on your phone you're basically getting a graph to show you like how is it performing today you know what are some considerations what are some decisions you might need to to make in order to tweak the strategy or you know think about your next steps but agents are like us on like autopilot effectively.
[SPEAKER_01]: Yeah, I'm not waking up at 215 every morning or 315 checking in or it's definitely the where the world's going and I'm trying to embrace it as much as I can and I try to tell friends about the new age and because we all know a little bit about AI and everybody kind of just knows what like chat GPT gives them and that's changed a lot of people's lives as well but
[SPEAKER_01]: like, you know, we call it a chatbot.
[SPEAKER_01]: I was like, that's like going for a good one.
[SPEAKER_01]: It's awesome.
[SPEAKER_01]: Don't get me wrong.
[SPEAKER_00]: It's just, it's changed the lives of students everywhere.
[SPEAKER_00]: You know, cheating on their exams and assignments, but you know, it's reaching the adult world worth.
[SPEAKER_00]: You know, we need to plan our finances, you know, schedule our daily tasks.
[SPEAKER_00]: Uh, you're everything.
[SPEAKER_00]: So, uh, fascinating time we're in.
[SPEAKER_01]: Well yeah and I'm I'm all about embracing it because I remember being in high school writing book reports and having the encyclopedia of Britannica I believe it was like something to keep our door and like sold it to my mom and like you know that's how I would write the report and then the internet was obviously starting to boom we got a computer
[SPEAKER_01]: I don't remember my grandma to tell me like you know it's it's gonna make people Dumber you know kind of like well, I was like I even at the time I was like I don't see how that's the case like I still kind of have to do stuff, but it's just Informations more accessible makes me a little bit more efficient for sure all of a sudden everyone is far more Far more articulate like I could remember is so good These like you know these M-dashes like why am I seeing more of these?
[SPEAKER_01]: I mean, the M-Dash, my wife, who's extremely articulate, she's very artistic, she's very smart, she's not like super tech savvy, I should say, she understands crypto, but she's always used an M-Dash, but she wrote me a text message to the other day, and people are calling her out now.
[SPEAKER_01]: No, I call her.
[SPEAKER_01]: I call her.
[SPEAKER_01]: I was like, hey, like, lens like not to like, I know you're not going to like this, but you should probably just stop using the M-dashes and she's like, why?
[SPEAKER_01]: I was like, grock, Gemma and our chat, GPT, they always use M-dashes and it looks fake.
[SPEAKER_01]: And she's like, no, I've always used them.
[SPEAKER_01]: I go, I'm just telling you.
[SPEAKER_00]: I see an M-dash.
[SPEAKER_01]: I think Audemnatic A. I literally, she sent me a text message last day.
[SPEAKER_01]: It must have been like five words.
[SPEAKER_01]: I don't remember what it said, but I was just zeroed in.
[SPEAKER_01]: I was like, I can't believe she's still using an M-dash, I specifically don't know what to do.
[SPEAKER_00]: And you almost need to write things with errors to show that it's like a real human, right?
[SPEAKER_00]: You have like typos and like some grammatical things like quirks.
[SPEAKER_00]: And they'll think, oh, it's actually a real person.
[SPEAKER_00]: Like there's this warm fuzzy feeling again.
[SPEAKER_00]: So it's kind of totally different.
[SPEAKER_01]: It really is making a stummer.
[SPEAKER_01]: Instead of talking to each other, you need to make no mistakes.
[SPEAKER_01]: It's like, make one or two sneaky mistakes.
[SPEAKER_01]: It's certainly an interesting time.
[SPEAKER_01]: I do want to pivot a little bit over to just institutions and
[SPEAKER_01]: It does feel like a lot of institutions are continuing to choose Ethereum despite all these new chains promising faster speeds, but it does seem like Ethereum just keeps winning.
[SPEAKER_01]: I would love to know your thoughts on that.
[SPEAKER_00]: Yeah, so there's, I mean, we're in a world, it is multi-polar world.
[SPEAKER_00]: Well, you have multiple blockchains that are coming forward, right?
[SPEAKER_00]: You have multiple L1s and you have multiple L2s.
[SPEAKER_00]: And so there's, there's a number of parts this.
[SPEAKER_00]: Ethereum was the first, you know, ignoring that Bitcoin.
[SPEAKER_00]: But it has security.
[SPEAKER_00]: And what I mean by this is like, let's say you and I start like our own L1 tomorrow, how much is this worth, you know, how many validators are there on the network?
[SPEAKER_00]: Let's say it's worth like $100 million for argument's sake.
[SPEAKER_00]: You know, you could take,
[SPEAKER_00]: $50 million or 51 and you could take over the network and you could re-org the blocks and again, you could say that money is not yours, these trades are not going to go through and that security is paramount.
[SPEAKER_00]: Coming back to what we're talking about earlier in terms of the decision process for institutions to come on chain, you want to make sure no one can steal or reorganize the transactions that are there.
[SPEAKER_00]: So that's the challenge that new chains have to contend with
[SPEAKER_00]: Ethereum, it has that 10-year track record, there's been no downtime, it hasn't been taken over.
[SPEAKER_00]: And so, if you're a financial institution, you look at blockchans and you realize, well, hey, they are far more efficient.
[SPEAKER_00]: We, in triadfied, they spend coming back to Ethereum's 12-second block times.
[SPEAKER_00]: They spend $10 to $15,000 in fees every 12 seconds.
[SPEAKER_00]: But on Ethereum, it's like 50 bucks.
[SPEAKER_00]: So, you get tens of thousands versus 50 bucks.
[SPEAKER_00]: It is far more better.
[SPEAKER_00]: It's not just like five times better, 10 times so it's like 100 times better in terms of its efficiency in terms of settling trades.
[SPEAKER_00]: So that's one part, we need to pursue that.
[SPEAKER_00]: So Ethereum is going to be on every institutional companies radar simply because it's been around.
[SPEAKER_00]: It is large enough that you can't co-opt or take over the network.
[SPEAKER_00]: And so you'll try ethereum, maybe you'll try another chain because they've given you a big grant.
[SPEAKER_00]: And you know, you want some money to kind of fund these initiatives, but everything is going to touch ethereum in the financial world.
[SPEAKER_00]: Like you have basically all the Wall Street banks, the asset managers, the custodians, they're all touching ethereum.
[SPEAKER_00]: And it'll be a very interesting world these next six to 12 months, where
[SPEAKER_00]: Imagine you have these assets in the traditional world, and you have those same assets trading on ethereum.
[SPEAKER_00]: Now, the assets that are on-chain are starting to trade with much higher velocity, simply because it's much faster, easier, it's cheaper.
[SPEAKER_00]: And as you see people trading in this world on Ethereum and there's more liquidity, what's the phrase?
[SPEAKER_00]: Like, liquidity, begets liquidity.
[SPEAKER_00]: The more trading you see here, the more you're going to see on top of that.
[SPEAKER_00]: And then capital would just kind of spill over into this market.
[SPEAKER_00]: And so we're very much at this inflection point.
[SPEAKER_00]: It's not something that
[SPEAKER_00]: The everyday person sees you see.
[SPEAKER_00]: Oh, the price of eat has dropped It's all over right, but you know fundamentally bags and Institutions they don't make Movements based on where the market is today or three months you make long-term Decisions over like multiple years and so this is the culmination of multiple years of work of
[SPEAKER_00]: getting the technical infrastructure and play the education in terms of people just understanding how it works on both sides.
[SPEAKER_00]: We have on the crypto native side and on the tri-fi side and it's starting to happen very quickly.
[SPEAKER_01]: Yeah, we've certainly seen, especially this year, quite a bit of an adoption and more headlines around institutions and their partnerships of collaborations with Ethereum.
[SPEAKER_01]: And I saw that you recently introduced an institutional block space framework.
[SPEAKER_01]: What problems, when you say, when you say education, this is what clicked in my head, what problems were institutions asking you to solve?
[SPEAKER_00]: Uh, yeah, uh, good question.
[SPEAKER_00]: So the, uh, when most people talk about triadfied coming on chain, it's like, okay, let's tokenize some assets.
[SPEAKER_00]: All right.
[SPEAKER_00]: And so we tokenize a billion dollars of assets and that's great.
[SPEAKER_00]: The extension of that is, we don't need to wrap the traditional assets and break it on chain.
[SPEAKER_00]: Why don't we just need to really issue it on chain?
[SPEAKER_00]: And that's a slightly separate discussion.
[SPEAKER_00]: That's the next step for tokenization.
[SPEAKER_00]: But coming back to my earlier point on BlackRock looking to do a billion dollar trade.
[SPEAKER_00]: What people often overlook is, yes, we can get billions or trillions of assets on chain.
[SPEAKER_00]: But we want them to trade with the high velocity and high confidence.
[SPEAKER_00]: You know, let's say there's a validator who's going to process the trade.
[SPEAKER_00]: Is this a North Korean validator, you know?
[SPEAKER_00]: Am I paying fees to some validator in some country or some person who, you know, like, I don't agree with or who I shouldn't be paying to facilitate this, right?
[SPEAKER_00]: So that's one point.
[SPEAKER_00]: Who is that validator?
[SPEAKER_00]: And can I can a regulated institution trust them, right?
[SPEAKER_00]: The second part is how are the transactions being ordered?
[SPEAKER_00]: Now, if I'm putting my trade in, but people can frontrun it or sandwich attack or manipulate it, that's not best execution.
[SPEAKER_00]: That's not right.
[SPEAKER_00]: So I can't have that as well.
[SPEAKER_00]: And then there are some other elements around this where we basically say,
[SPEAKER_00]: You know, maybe we can have a network of American validators who support like, hey, if something goes wrong, this is my address, this is where I am.
[SPEAKER_00]: And, you know, we can have this fair transaction ordering, and maybe there's some other rules like, maybe you can't touch tornado cash.
[SPEAKER_00]: But anyway, the point is to get basically a clean audit trail, if I might say, for regulated entities to land trades on chain.
[SPEAKER_00]: You know, currently they might use an L2 or a very highly customized L2,
[SPEAKER_00]: Yes, that works.
[SPEAKER_00]: Maybe they use another L1, but the capital, the infrastructure, it's already there on Ethereum.
[SPEAKER_00]: So how do we bring it all to Ethereum instead of fragmenting capital across every other blockchain?
[SPEAKER_00]: And so that's the initiative around institutional block space.
[SPEAKER_00]: We did this event earlier with a bit mine, some sharp leg guys, they're cracking a whole bunch of other validators.
[SPEAKER_00]: We had about 70% of the Ethereum's validators in the room to chat about it, but nothing formally yet.
[SPEAKER_00]: But it's really just kind of, hey, we can make this happen.
[SPEAKER_00]: We can make a clean path for institutions to come on chain.
[SPEAKER_00]: This is how we think it'll work.
[SPEAKER_00]: Let's open up a dialogue to see how we can kind of build it together.
[SPEAKER_01]: Amazing.
[SPEAKER_01]: And I know you amounts to massive three billion with a big commitment from you for five, how significant was that for the business?
[SPEAKER_00]: Oh, that's great.
[SPEAKER_00]: If there's been a great partner and supporter of ours, but that's a small number.
[SPEAKER_00]: With that, we'll be increasing over time.
[SPEAKER_00]: So check back a little bit later on with that we can talk about that a little bit more.
[SPEAKER_00]: All right.
[SPEAKER_00]: You heard it here first.
[SPEAKER_00]: Yes.
[SPEAKER_01]: uh... there's something like that validate that this market has real demand or it's still early it's uh... there's a a lot of this takes
[SPEAKER_00]: trust with the people in the infrastructure, part of Ethereum.
[SPEAKER_00]: You know, I would say we are much further along the path that many people are aware of, simply because, you know, we've been talking to a number of the validators, the traders for a long period of time.
[SPEAKER_00]: But externally, it's early, right?
[SPEAKER_00]: So we have about just shy of 5% to be theory I'm kind of running through us.
[SPEAKER_00]: We're basically testing this real-time mechanic.
[SPEAKER_00]: Towards the end of the year, we'll be much, much higher than this.
[SPEAKER_00]: And it'll be, at that time, you won't even know what's happening.
[SPEAKER_00]: Ethereum will just feel faster.
[SPEAKER_00]: And that's the best case, right?
[SPEAKER_00]: It's almost like,
[SPEAKER_00]: I don't know for those kids in the 90s are using dial up internet and all of a sudden it just gets faster and like you can, well, what are people doing back then?
[SPEAKER_00]: Downloading MP3s and stuff, right?
[SPEAKER_00]: You know, basically like everything is just much faster and you're like, hey, that's kind of cool, right?
[SPEAKER_00]: So that's the hope for us that block by block percent by percent of Ethereum, it'll just feel much faster, cleaner, and then all of a sudden it's like, well, yeah, I have the time I get, my transaction just goes through when I hit the button.
[SPEAKER_00]: And there we go.
[SPEAKER_00]: And I hope we get there within the next 12-18 months for half a network.
[SPEAKER_01]: Oh, that's amazing.
[SPEAKER_01]: And I think you're right.
[SPEAKER_01]: There's always a little bit of a slow cook.
[SPEAKER_01]: I mean, we can't even notice that it was like gas.
[SPEAKER_01]: She's going down, speed, increasing.
[SPEAKER_01]: It's just kind of sneaking up on us, always.
[SPEAKER_01]: Looking at Ethereum today, what do you think people are still underestimating?
[SPEAKER_00]: Ooh.
[SPEAKER_00]: all the shakeups with the foundation, right?
[SPEAKER_00]: Like, from a very macro perspective, again, you see, I mean, what is this AI, the vacuum, kind of pulling money out of, I don't know if you're gonna, it'll rotate back.
[SPEAKER_00]: But, you know, there's this news around like, oh, the EF is moving here, there, right?
[SPEAKER_00]: But like, there's actually a lot of like optimizations and enhancements that can be done.
[SPEAKER_00]: You know, this organization set up,
[SPEAKER_00]: 10 years ago with some young guys who just wanted to change the world and like kudos to them they're making it happen.
[SPEAKER_00]: And as you grow up you realize well let's reflect on our self to think of how could we do this better.
[SPEAKER_00]: And so it's it's really good timing that you have
[SPEAKER_00]: you know, other parties who have the capital, the wherewithal, to support and make a lot of these initiatives happen.
[SPEAKER_00]: So for example, you have this eat labs initiative with a handful of guys, top researchers like like Barnaby Casper and Skar from from Ethereum Foundation.
[SPEAKER_00]: You have this new organization called Eat Systems where there's two guys.
[SPEAKER_00]: One of them is Mo, Jelliel, if I'm
[SPEAKER_00]: but you basically have these new organizations that are funded in some part by, you know, Joe Lubin, sharp-length, bit-mind, and those companies are much closer to track-fi.
[SPEAKER_00]: Right, if you think about ethereum traditionally, it's a, it's a, it's a much a tech guys super smart tech guys right, but if the goal is to challenge Tried Phi, let's get some tried Phi people in the room.
[SPEAKER_00]: And so having this, having this, you know, support from institutions that are publicly traded it gets you, you know, like two steps closer to tried Phi.
[SPEAKER_00]: for that intellectual DNA to percolate and spread across into these organizations to think about how can we more specifically bring triadfin on chains.
[SPEAKER_00]: So I think that's largely been underestimated.
[SPEAKER_00]: Yeah, I mean, the price of eth is it'll go wherever it'll go, but I'm quite positive.
[SPEAKER_01]: Amazing.
[SPEAKER_01]: And I'm curious, outside of eth gas, what areas of crypto are you most personally excited about over the next few years?
[SPEAKER_00]: I'm a triad-fi guy at heart.
[SPEAKER_00]: It may be boring for the rest of the world, but I talk about credit.
[SPEAKER_00]: You know, I mentioned this early on, and again, you and I, we see the equity markets.
[SPEAKER_00]: It goes up and down, and we think, oh, we can make it lose money.
[SPEAKER_00]: but credit runs the world, like it's a far larger market than the equity markets.
[SPEAKER_00]: You know, when you have a mortgage, that's credit.
[SPEAKER_00]: Like how much credit do we have every day?
[SPEAKER_00]: We don't think about it because we're just paying interest on student loans, on car loans, on our property.
[SPEAKER_00]: But that's what runs the world.
[SPEAKER_00]: So if we can bring that infrastructure on chain, then we'll be doing five, 10 times the amount of transactions that we're doing.
[SPEAKER_00]: today.
[SPEAKER_00]: So I think that is an absolutely massive unlock.
[SPEAKER_00]: There's very few people in that space.
[SPEAKER_00]: Traditionally, the fixed income folks are a little bit more risk-averse, you know, a little less cowboyish, so they're still in the triad-fi world.
[SPEAKER_00]: But I would love to chat with their support.
[SPEAKER_00]: Any of those guys and gals, who want to come on chain and do super cool things in the credit world, we're not specifically in that space.
[SPEAKER_00]: But I think that's the major unlock to bring real capital sovereign funny, sovereign money, sovereign wealth funds on chain.
[SPEAKER_00]: So I think that's the most underrated.
[SPEAKER_00]: And part that I'm excited for.
[SPEAKER_01]: I love that answer.
[SPEAKER_01]: I love it.
[SPEAKER_01]: And Kevin, you're obviously a brilliant individual in your building such an outstanding product.
[SPEAKER_01]: I would love for you to give an opportunity for people in our audience to learn more about you and then specifically more about ETHIAS.
[SPEAKER_00]: Yeah, well, you know, just follow us on Twitter.
[SPEAKER_00]: You know, we're a ETHGAS official, our website's ETHGAS.
[SPEAKER_00]: Simple as that.com, where you can learn a little bit about us.
[SPEAKER_00]: You know, what we're working on, we have a number of initiatives with a number of protocols to eliminate gas fees.
[SPEAKER_00]: We have initiatives to, you know, work with wallets to get a faster experience, reach out.
[SPEAKER_00]: And let's have a chat, come see us at all the conferences around the world where we're still in the conference circuit.
[SPEAKER_01]: Amazing, I love it, thanks again for joining us.
[SPEAKER_00]: Thanks for having me, Brian.