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Welcome to the Bankless Summit, a series of talks from speakers all around the Ethereum ecosystem,
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which were all presented at a one-day event hosted the day after DevCon called the Bankless Summit.
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We are releasing some of these talks on the podcast all throughout this week and next,
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and the rest are available on the Bankless Premium feed.
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You're about to hear Arjun Bhattani, the CEO of Everclear, formerly Connext,
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who gave what I think might have been the crowd favorite talk at the summit this year.
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Arjun takes us back to our crypto anarchist roots
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and gives a stellar account of what it means to all be in crypto.
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I had goosebumps the entire time.
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He got a roaring applause from the audience.
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So strap yourself in because I think you're about to get some goosebumps as well.
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But first, a message from some of these fantastic sponsors that make the show possible.
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Hello.
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Hi, I'm Arjun.
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If you don't know who I am, I have been in this space for quite a
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while.
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I've been involved in building things on top of Ethereum since 2016.
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I helped with a lot
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of like early L2 research.
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Actually, if you were here for Amin's talk earlier, he talked about
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building the first L2 on Ethereum, first bank chain, I also helped build that.
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And then also
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was involved deeply in a lot of like early thinking around DAOs and most recently interoperability.
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This talk is called Why Are We Here?
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It is not a technical talk, which is unusual for me.
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It's a much more kind of like systems and economics and political and philosophy oriented
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talk.
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And my hope is that people in this audience, people who are watching recordings of this talk at
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some point in the future, can use this as a way to kind of reflect on the core ideas behind why
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this space needs to exist in the first place.
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Because we're in this like very, very special
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place where we're kind of, it looks like we might cross the chasm into the mainstream for the first
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time ever.
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And if we do that, I hope that we don't kind of like forget some of the core reasons for
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why blockchains should be around in the first place.
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We live in a weird time.
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Over the course
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the last, I would say, like 100 years or so, the world has kind of gotten increasingly authoritarian.
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Part of this is propelled by technology.
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Part of it is just propelled by where we are in the
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life cycle of the American hegemonian empire.
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This is a graph that shows just the level of
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democracy that exists in the world.
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And you can see that it's really decreasing very significantly
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over time.
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This is a trend that has been going on for some time.
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And it's also mirrored by similar
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trends in corporations as well.
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There's this strong centralizing effect where more and more
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organizations are consolidating to become these large super monopolies, super governments that
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unfortunately can wield pretty much unchecked power.
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And at the same time, we have this secondary
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thing that's happening, which is we're seeing an increase in the number of negative externalities
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associated with the systems that we live in.
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There's something very broken about the world
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that we're in right now.
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This is global emissions of CO2.
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This is deforestation.
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You could really
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pull up a lot of other charts that look like this.
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These are just two examples.
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But it seems like
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there's something in the way that human beings are operating right now that is leading to us
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not effectively thinking about the long-term outcome for humanity versus the short-term
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benefit of a few stakeholders.
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What I want to do is try to understand a little bit more about like
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why we're here.
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Why did we end up in this place?
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Right?
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What is the what is so broken about systems
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today that leads us to continually fall into this cycle?
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Because this isn't the first time that this
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has happened.
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If you look at throughout history, I was trying to find a good graph of this, but
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wasn't able to find this last night.
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Throughout history, you see this like continuous cycle of
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like rise of empires over a long period of time followed by a crash, followed by rise of empires
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of a long period of time followed by a crash, right?
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And every time that happens, who suffers?
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It's people.
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So what is it fundamental to these systems that is a little bit broken?
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Who here knows what the tragedy of the commons is?
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Cool.
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Okay.
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Good that it's most people.
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For anybody that doesn't, the tragedy of the commons is an allegory that kind of talks about
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the failures of human coordination.
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There's a lot of similar allegories.
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In fact, if you are
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familiar with Moloch and the Moloch Tao, we talked about this extensively back in the day.
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and the the allegory kind of goes like well if you have a pasture that has a carrying capacity
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of like 10 sheep and there are 10 farmers each with one sheep on this pasture that is a sustainable
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system however without any kind of external policing there's no incentive for a farmer to
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only have one sheep in that system right because if you add another sheep it increases your output
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your output of wool or whatever by 100 and the cost is not actually borne by you it's shared
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amongst everybody else.
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So like the kind of benefit that you get is 100%, the cost that you
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pay is only 10%.
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And then obviously, this leads to this like death spiral, where over time,
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everybody just gets more and more sheep, and then the pasture gets overgrazed.
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And then you have
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like environmental impacts throughout the world for all sorts of things like CO2.
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There's a really, really interesting person named Eleanor Ostrom, who's a Nobel Prize winning
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economist.
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She actually doesn't get enough credit for a lot of the work that she does.
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Eleanor spent the majority of her life actually working on understanding the
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tragedy of the commons and basically how you can actually sustainably govern
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Commons systems what she called common pool resources and Ostrom's research
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found three possible ways to do this the first is centralization right you have
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some state come and just like take ownership of the system this is sort of
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like how communism works you the state just imposed imposes rules on how many
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sheep everybody can have and how they can graze and when they can graze.
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And that's basically it.
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But of course, you trust this state unilaterally, right?
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The state is telling you 100% of what is
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okay.
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And if the state decides to cheat, there's not really anything that stops that.
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So you have
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this who watches the watchman problem that kind of exists in any kind of system where you have this
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like godlike role.
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Option number two is privatization.
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This is kind of where we're
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headed right now with the US economy, and where usually is espoused as this solution to
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centralization risk in a lot of cases.
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But unfortunately, privatization also has a lot
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of flaws.
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So one is, it's very unclear as to how you define property rights in general.
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Who owned these things in the first place, right?
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What if you don't necessarily know who owned the
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land?
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And then similarly, you have the secondary problem of like, well, how do you enforce these
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property rights?
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How do you enforce privatization?
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How do you scale that enforcement?
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Ultimately,
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you have the same problem as option number one, which is who watches the Watchmen.
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And then there's option number three.
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And this is what Ostrom ended up kind of concluding was like,
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you actually can beat the tragedy of the commons.
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In fact, there's lots and lots of examples where
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human beings have done this.
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There are tons and tons of cases where human beings have coordinated
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around a shared resource for hundreds, sometimes thousands of years, and done so effectively and
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sustainably.
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However, and there's one very, very important caveat to this, it doesn't scale,
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right you can enforce these things on a peer-to-peer basis by like within your community
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who of everybody that you know the name of you can convince them to not do things wrong and if
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they do things wrong you can publicly shame them but how do you do this in even in an ecosystem of
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thousands of people right how do you do this in an ecosystem of billions of people how do you solve
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some of the biggest world's problems when the world's biggest problems when you you can't do
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this thing where you can't solve this problem of social scalability?
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How do you enforce rules
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on a global basis in a way that is ideally peer-to-peer?
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Now, unfortunately, until somewhat
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recently, the answer was you can't.
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And so the natural conclusion of all this was the very,
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very unfortunate realization that institutions don't scale.
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As a thought experiment, I would
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like you to spend some time thinking about this interesting question that I have actually asked
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a lot of people over the last couple of years.
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Can you think of a single instance in history
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where a large-scale institution has effectively represented its constituents for a long period
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of time without getting corrupted?
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I've never actually gotten anyone that has given me a real
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answer.
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That's really bleak, right?
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There's something inherent to humanity.
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There's
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inherent to the human condition that leads us to continually get to this output, which is
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every single time we try to build an institution, it breaks.
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And when we rely on these institutions
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to create goods for us, right, any sort of output that we need in order to survive as a species,
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those goods are themselves broken.
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Why does that happen?
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So there's this really interesting notion
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in kind of economics that is that talks about the way that goods are developed.
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And so goods, and this by this, I mean, really like any kind of product, any kind of innovation
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follows a fairly predictable life cycle, going from being breakthrough innovation,
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and then over time, or over the course of like innovation over the course of competition,
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getting to the point where they're just complete public goods, right, effectively utilities.
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you can map out most innovations in this kind of a chart today right so all the way on this end you
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have fusion reactors which are this really really highly custom thing today right we don't have
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fusion reactors in our home you can't buy a fusion reactor on amazon god i hope you can never do that
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and then all the way on the other end of the spectrum you have things like electricity and
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the internet right the internet is is a public good it's effectively open to anybody and as long
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as you have electricity and as long as you have a computer and as long as you have a few other
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dependencies.
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It is something that is fundamentally public.
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It's not owned by anybody.
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And then
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everything else kind of falls in between, right?
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You have things like compute and storage, AWS,
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where it's aggressively commoditized, but it's not a public utility yet.
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Payments are kind of
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in that category.
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AI is just now breaking through into becoming something that's productized,
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but not yet commoditized.
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And you can also plot a lot of sovereign goods in this chart, too.
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They kind of behave in a very similar way, right?
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All the way on one end of the spectrum,
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you have combat drones, right?
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Obviously, the US government, obviously, combat drones should not
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be commoditized.
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The US government has these as like fairly custom things.
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But you also have
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things like voting systems, right?
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Voting systems are not actually very easily and widely available,
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because as we talked about earlier, they require enforcement.
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And then all the way on the other
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end, you have things like roads, right?
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Anybody can use roads.
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So how do innovations move through
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this system.
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Let's talk about payments, for instance.
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Payments, for example, Visa,
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are an innovation that have, especially digital payments, are an innovation that have been around
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for some time.
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They really should be commoditized, right?
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Visa charges anywhere between 30 basis
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points to several percent on making transactions.
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That's a fee rate that is honestly way too high
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for the world that we live in today.
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It doesn't really make any sense.
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But they stay there.
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they don't move towards becoming a utility and this is somewhat intentional
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because one of the things that's actually really critical to this pattern
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to this to this life cycle of goods is that when companies are creating goods
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when governments are creating goods they don't necessarily want these goods to
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become utilities they don't want every good to become a utility and they want
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to limit the ability for their good to become effectively get disrupted as a
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as a result of moving further along in this timeline.
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So for payments, that means working with governments
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to regulate the way who has access to payments,
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requiring KYC, things like that,
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basically making it impossible for new entrants
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to come into the market to disrupt Visa and MasterCard.
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This is a strategy that you see everywhere, right?
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Health insurance in the US
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is a really great example of this.
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Health insurance should be commoditized.
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It doesn't really make sense that it's not.
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But in the US, it is not a commodity good, it's a product.
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And you pay for it like a product.
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It is much more expensive than many, many other parts of the world.
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And the evidence that it's a product is just,
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you can kind of see the distribution of health insurance providers.
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This is not what a commodity good looks like.
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A commodity good is way more fragmented.
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And that's a good thing.
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That's how you drive prices down.
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That's how you actually create competition.
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There is not competition here.
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Why isn't there competition?
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Honestly, because of a broken system.
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You have this unfortunate thing that happens over and over again,
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where corporate monopolies will work together with governments
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to effectively basically keep themselves in power,
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usually at the cost of users.
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There's a flywheel that kind of represents how this happens.
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You have incumbent corporations will fund politicians.
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Those politicians will be elected,
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and they'll go and pass policy,
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and the policy that they pass will protect the donors that funded them.
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once they pass that policy those corporations will solidify their monopolies grow revenue and
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become basically super super dominant and then they'll partner back with the governments to
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give them technology dominance right so governments will then leverage the exact same technology
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example twitter to control people's opinions to control the way that they think and to then fund
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more politicians and kind of go around in this in this cycle where of course unfortunately
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you are the one that's losing.
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We talk so much about incentives in this space.
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And that's such a core part of the way that we think about blockchains, about building
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infrastructure.
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But there's also a similar kind of like system of incentives that exists
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around governance right now, around policy.
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And regardless of whether you fall into the economic
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right or left, the system of incentives, unfortunately, continues to drive us upwards,
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which is no matter what happens, every single cycle, we get more and more authoritarian,
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right?
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Even if you even, I mean, we'll see kind of what happens with this presidency,
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but even when you have net reductions in complexity of legal systems,
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we have not yet seen a net reduction in authoritarianism.
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We have only seen the
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slow and gradual reduction in civil liberties over time.
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And in history, the only instances
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where that's changed is when you have a revolution.
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So hopefully we don't have to hit that point.
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What we do need is ideally something that is not a revolution, but something that pulls us
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strongly in the other direction towards anarchism.
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Now, I'm sure the word anarchism makes people a
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little uncomfy.
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It makes me a little uncomfy, right?
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There's a lot of brainwashing around
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anarchism where, like, the first thing I think of when someone says anarchism is, like,
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cars on fire.
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Right?
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Like, that is the first mental image that you have.
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That's not actually
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what anarchism is at all.
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It's just, like, the association that has been drawn, which you're
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just like, okay, it's a person in all black that is, like, throwing a Molotov cocktail.
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But it's not that.
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It's this much more simple notion that actually when you go and talk to
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anybody, regardless of where they're from, regardless of the political backgrounds.
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When you go and you talk to anybody about this idea, and you talk about, hey, what do you feel
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about trying to dismantle some of the problematic systems that kind of govern the world that we live
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in today?
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I have yet to meet anybody that's like, no, I think that's a bad idea.
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And this is what's
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kind of important, right?
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It's like anarchism is not this notion of like no rules.
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It's this notion
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of no rulers.
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It's not a end state, it's a methodology.
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And crypto-anarchism
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is an extension of that methodology.
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Now, this isn't exactly the definition,
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but this is my definition, and it's my talk, so I can give a definition.
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My definition of crypto-anarchism is this notion of working to dismantle oppressive systems of
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power and replace them with technology where enforcement can happen peer to peer, right?
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Technology that we now know exists that lets us fix things like the tragedy of the commons,
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that lets us build these socially scalable systems that have never existed before,
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where no one needs to police them, where we don't have watchmen, right?
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Where the watchmen are every
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person that is running an Ethereum node, which is a completely different paradigm.
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It's the first
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time in human history that we've ever had the ability to create these kinds of systems,
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where the cost of policing them,
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the cost of operating them is near zero
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and where they're fundamentally untamperable.
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So if we all share this belief
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that we can use cryptography,
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we can use technology,
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we can use incentives
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to build these kinds of systems,
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then that means you are also
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probably a crypto-anarchist.
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You should cheer.
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Yeah, absolutely.
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because honestly, when it comes down to it, decentralization is anarchism, right?
390
00:19:15.621 --> 00:19:17.007
That's what it means.
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You're taking away power from a bunch of centralized entities.
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You're breaking up monopolies.
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00:19:21.627 --> 00:19:23.455
You're breaking up these oppressive systems.
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That is decentralization.
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Crypto-anarchism breaks this spiral that we have been locked into, and it does it in this,
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00:19:33.301 --> 00:19:36.720
It's honestly in a way that is effectively political protest, right?
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Even though we may not think about it that way, even though we are all to an extent also
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working to build like businesses or something that kind of looks like businesses.
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00:19:44.820 --> 00:19:48.140
Effectively, what we're doing by disrupting these organizations, by kind of resisting
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00:19:48.341 --> 00:19:52.140
against these existing systems is protest, right?
401
00:19:52.561 --> 00:19:58.380
It's a form of rebellion against this like cycle that we have been trapped in really
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00:19:58.685 --> 00:19:59.560
for all of human history.
403
00:20:00.221 --> 00:20:09.020
And the way that this happens is instead of elective governments, you know, stopping there from being any competition, we just build protocols that are not stoppable.
404
00:20:10.586 --> 00:20:11.360
And we compete anyway.
405
00:20:14.202 --> 00:20:17.800
And in addition to that, we also accelerate the transition of goods into being utilities.
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00:20:18.440 --> 00:20:19.980
There's something really interesting that happens.
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00:20:20.320 --> 00:20:27.320
This is one of the things that's maybe sometimes a little bit challenging in this space is things are so incredibly competitive that you have someone goes and creates a breakthrough innovation.
408
00:20:27.340 --> 00:20:27.465
Right.
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00:20:28.504 --> 00:20:31.040
and they go and they talk about it on Twitter,
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they raise a round.
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In approximately two weeks, there are 1,500 competitors.
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00:20:37.184 --> 00:20:38.400
And all of a sudden, you have this thing
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00:20:38.400 --> 00:20:40.140
that's like this very, very custom system
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00:20:40.221 --> 00:20:41.820
that was built for a very custom use case
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that everybody's super excited about.
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And now everyone and their mother is running a bridge.
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00:20:47.762 --> 00:20:50.040
And all of a sudden, bridges become utilities.
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All of a sudden, restaking becomes a utility.
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00:20:52.860 --> 00:20:54.920
All of a sudden, L2s become utilities.
420
00:20:55.320 --> 00:20:56.699
And that's a good thing, right?
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00:20:56.920 --> 00:21:11.140
And that's effectively what we end up doing to the rest of the world, to the rest of a lot of these, like a lot of the kinds of innovations that are out there, especially digital innovations like voting systems, is we take them, we pluck them out of being these custom systems and put them into being utilities.
422
00:21:12.085 --> 00:21:13.360
And we disrupt things like payments.
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00:21:13.500 --> 00:21:19.820
We disrupt all of these different ways in which institutions kind of resist being disrupted.
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Obviously, they don't like this.
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00:21:24.445 --> 00:21:25.660
It shouldn't need to be said.
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00:21:26.162 --> 00:21:31.920
Amin talked about this a bunch, which was like, what happens when a lot of the assumptions that
427
00:21:31.960 --> 00:21:38.520
we hold true about this space today, like, you know, the US government likes what's going on,
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00:21:39.402 --> 00:21:41.329
a bunch of other governments like what's going on.
429
00:21:42.192 --> 00:21:44.360
USDC is not actively being used as a tool
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for censorship.
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00:21:45.244 --> 00:21:47.776
What happens when those assumptions break down?
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I don't think we're
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really thinking about that deeply enough.
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And in fact, this is the time to really, really think
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about them deeply.
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Because as I mentioned earlier, we are crossing the chasm, right?
437
00:21:57.839 --> 00:21:58.160
And because
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we're crossing the chasm, we're starting to experience what it looks like to actually have
439
00:22:02.880 --> 00:22:07.155
products that appeal to the mass market and that also step on people's toes.
440
00:22:07.917 --> 00:22:08.680
One of the big mistakes
441
00:22:08.740 --> 00:22:11.993
that I think a lot of people make, this is Shane from Polymarket.
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00:22:12.636 --> 00:22:13.600
If you don't know, Polymarket
443
00:22:13.700 --> 00:22:14.322
obviously blew up.
444
00:22:14.663 --> 00:22:20.520
But a few days later, Shane's house was raided and then his electronics were
445
00:22:21.346 --> 00:22:23.040
This is obviously like bizarre behavior, right?
446
00:22:23.424 --> 00:22:24.680
There's no point to this at all.
447
00:22:24.841 --> 00:22:26.020
It doesn't really make any sense legally.
448
00:22:26.581 --> 00:22:30.980
But this just goes to highlight that like we think about governments as this like homogenous
449
00:22:31.121 --> 00:22:34.220
blob, but that's not what actually exists in practice.
450
00:22:34.381 --> 00:22:37.500
Even within the United States governments, there are different factions, some of whom
451
00:22:37.520 --> 00:22:40.500
will not agree with you and will not agree with the technology that you're building,
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00:22:40.881 --> 00:22:45.259
let alone all of the many other governments that live in the world, in the rest of the
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00:22:45.600 --> 00:22:48.479
world, that are oftentimes opposed to the U.S.
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government's regulations and views, right?
455
00:22:51.611 --> 00:22:54.140
Maybe you are partnering really closely with the U.S.
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00:22:54.220 --> 00:22:59.580
government to build your protocol, and you're fine, you're bona fide within the U.S. economy.
457
00:23:00.140 --> 00:23:01.167
But what happens in Russia?
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00:23:01.388 --> 00:23:03.160
What happens when you travel and all of a sudden,
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you are now the focus of a bunch of... You get arrested in another country because you actually
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00:23:08.981 --> 00:23:11.720
violated their laws, even though you didn't violate anything in the United States.
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00:23:13.184 --> 00:23:19.040
this will happen policies between countries are actually not unified and in many cases conflicting
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this is why fundamentally if you think about it right if we went and we built the internet today
463
00:23:26.162 --> 00:23:31.340
it would not look like it does today because everybody would try to regulate it and you would
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not actually have an outcome where the like output makes any sense at all you have to build the
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internet you have to build technology in the space in a way that is fundamentally neutral and in a way
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that is fundamentally unstoppable.
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00:23:47.516 --> 00:23:49.040
And this maybe brings me to one of my last
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points, which is that decentralization is not just the ends, it is the means.
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And
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what that means is that, no pun intended, what that means is that we need to
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actually build technology that can't be stopped.
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00:24:01.774 --> 00:24:02.660
We can't just talk about
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building technology that can't be stopped, right?
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00:24:05.013 --> 00:24:06.340
Rollups are extremely
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censorable right now.
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00:24:08.506 --> 00:24:09.369
That is a problem.
477
00:24:10.291 --> 00:24:12.759
We need to fix that problem as soon as possible.
478
00:24:12.899 --> 00:24:13.120
If we
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00:24:13.682 --> 00:24:18.280
scale in the way that we expect to scale, and by the way, I'm the biggest bull of all of this stuff.
480
00:24:18.400 --> 00:24:22.199
I have been saying for years that we need to move towards a world with hundreds of roll-ups.
481
00:24:22.219 --> 00:24:22.320
I've
482
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been saying for years that there's a benefit to organizations having sovereignty around building
483
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their own execution environment and maintaining their own execution environment.
484
00:24:30.118 --> 00:24:30.340
However,
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if we end up in a world where every single application running on blockchains is running
486
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on top of our love today, and then we hit mass scale, we are so screwed.
487
00:24:42.258 --> 00:24:43.300
And that should keep
488
00:24:43.320 --> 00:24:43.822
you up at night.
489
00:24:43.862 --> 00:24:44.624
It keeps me up at night.
490
00:24:47.132 --> 00:24:49.139
And so we're kind of at this precipice, right?
491
00:24:49.199 --> 00:24:49.400
We're
492
00:24:50.042 --> 00:24:54.340
like in the next 12 to 24 months, we are going to hit this very, very interesting period.
493
00:24:54.901 --> 00:24:59.160
And I think in the next 12 to 24 months, we are going to lock ourselves into one of these three
494
00:24:59.180 --> 00:25:00.584
outcomes, which is terrifying.
495
00:25:02.791 --> 00:25:05.560
Outcome number one is really the worst outcome that I can possibly
496
00:25:05.620 --> 00:25:14.060
imagine, which is we don't just fail in our mission to reduce the scope of systems of power.
497
00:25:14.861 --> 00:25:21.580
We actively make them so much worse because we build the perfect tool to control every single
498
00:25:21.801 --> 00:25:23.004
aspect of our lives forever.
499
00:25:24.608 --> 00:25:26.212
We are currently on this path.
500
00:25:27.936 --> 00:25:29.360
It would be really nice to get out of
501
00:25:29.400 --> 00:25:31.968
that path and head towards one of the other two options.
502
00:25:32.309 --> 00:25:35.840
Option number two being we fail and just
503
00:25:35.960 --> 00:25:37.546
end up in the same spot again, right?
504
00:25:38.610 --> 00:25:41.640
Eventually, all of these organizations, all the organizations
505
00:25:41.761 --> 00:25:46.340
that we're building, don't successfully resist government control, don't successfully resist
506
00:25:46.441 --> 00:25:50.160
capture, don't actually become decentralized, and then just get folded under the exact same
507
00:25:50.200 --> 00:25:51.364
regulatory framework that exists.
508
00:25:53.051 --> 00:25:55.540
Now ideally what we want is the third option.
509
00:25:56.244 --> 00:25:58.054
And at least that's why I got into this space.
510
00:25:58.114 --> 00:25:59.220
That's what I'm personally fighting
511
00:25:59.301 --> 00:26:02.020
for and that's what I will continue to fight for, is this notion that we
512
00:26:02.140 --> 00:26:05.275
actually can fix humanity's coordination failures, right?
513
00:26:05.436 --> 00:26:06.300
The whole goal of this
514
00:26:06.400 --> 00:26:06.681
talk.
515
00:26:07.545 --> 00:26:11.580
If we can do that and if our thesis in this space is correct, then that means
516
00:26:11.660 --> 00:26:15.440
we can actually get past this place that humanity has been stuck in for the last
517
00:26:15.561 --> 00:26:19.300
10,000 years where we fail to actually like coalesce around what we all want to
518
00:26:19.340 --> 00:26:19.802
do together.
519
00:26:20.084 --> 00:26:23.360
And we can work towards a world where we can actually imagine if we were all
520
00:26:23.400 --> 00:26:25.672
like rowing in the same direction for the first time ever.
521
00:26:25.913 --> 00:26:26.616
It would be crazy.
522
00:26:26.898 --> 00:26:27.340
We would get so
523
00:26:27.380 --> 00:26:27.801
much done.
524
00:26:32.130 --> 00:26:33.312
We are entering the endgame.
525
00:26:35.557 --> 00:26:37.180
I think that this is really where things kind of get
526
00:26:37.240 --> 00:26:37.622
decided.
527
00:26:37.763 --> 00:26:40.820
And I think it's up to like every person that's in this room, every person that listens to
528
00:26:40.880 --> 00:26:46.880
this talk to think about where they fit into this story and think about where they want this story
529
00:26:46.940 --> 00:26:47.301
to end up.
530
00:26:48.807 --> 00:26:50.011
And so I'd like you to do that.
531
00:26:50.452 --> 00:26:52.680
Like, this is this is really this is the last slide of
532
00:26:52.680 --> 00:26:52.981
the talk.
533
00:26:53.042 --> 00:26:55.272
I think I might have a minute for questions after this.
534
00:26:55.312 --> 00:26:56.900
But I would like you to
535
00:26:56.960 --> 00:26:58.026
do this after this talk.
536
00:26:58.066 --> 00:27:00.720
And when you go home, think about where you want this industry to end
537
00:27:00.780 --> 00:27:02.246
up and think about what it would take to get there.
538
00:27:02.748 --> 00:27:06.040
Because I currently am not super happy
539
00:27:06.562 --> 00:27:09.955
and super stoked about the direction that we're headed.
540
00:27:10.015 --> 00:27:11.260
And you probably shouldn't be too.
541
00:27:13.426 --> 00:27:13.938
Thank you so much.
542
00:27:22.051 --> 00:27:23.575
Wow, that was amazing.
543
00:27:23.775 --> 00:27:24.416
Oh my God.
544
00:27:24.637 --> 00:27:25.399
One more round of applause.
545
00:27:25.479 --> 00:27:25.980
That was really cool.
546
00:27:30.643 --> 00:27:32.600
All right, real quick questions, real quick questions.
547
00:27:35.781 --> 00:27:41.440
You bring up this interesting point about the movement of, say, products to utilities
548
00:27:41.921 --> 00:27:50.160
like bridges but can you comment on the consolidate the capital's tendency to
549
00:27:50.220 --> 00:27:58.200
consolidate around one or a few things yeah I mean capital's tendency to
550
00:27:58.220 --> 00:28:02.640
consolidate around one or a few things is usually something that is like okay
551
00:28:02.680 --> 00:28:07.620
so like in in competitive free markets you don't have monopolies you just don't
552
00:28:08.063 --> 00:28:10.680
monopolies are an indication that like your capitalism is breaking down
553
00:28:11.384 --> 00:28:11.826
effectively.
554
00:28:12.268 --> 00:28:13.816
There's some cases where that's not the case, right?
555
00:28:13.836 --> 00:28:14.560
When you have like massive
556
00:28:14.640 --> 00:28:17.255
economies of scale associated with giving a certain good or service.
557
00:28:17.497 --> 00:28:18.080
But that's usually,
558
00:28:18.280 --> 00:28:21.380
again, an instance where like you have created an inefficient system because
559
00:28:22.585 --> 00:28:25.015
some underlying means of production is being monopolized.
560
00:28:25.155 --> 00:28:26.280
So for example, with like Facebook,
561
00:28:26.581 --> 00:28:30.059
there is an underlying social graph that they are effectively monopolizing, right?
562
00:28:30.079 --> 00:28:30.300
And they're
563
00:28:30.360 --> 00:28:31.063
selling to other people.
564
00:28:31.344 --> 00:28:32.770
With Google, it's like a search graph.
565
00:28:32.851 --> 00:28:34.980
With Amazon, it's like tons of
566
00:28:35.020 --> 00:28:41.154
warehouses, with Twitter, I don't know, Musk, I guess.
567
00:28:42.076 --> 00:28:44.060
And, you know, the right answer is over
568
00:28:44.140 --> 00:28:46.755
time to actually just like decentralize that means of production, right?
569
00:28:46.775 --> 00:28:47.740
That's how you actually get
570
00:28:47.860 --> 00:28:51.960
from these things being like products or commodities into becoming utilities is that like,
571
00:28:52.401 --> 00:28:55.720
the means of production is something that then anyone can do, or at least or at least like is,
572
00:28:56.001 --> 00:29:00.320
is widespread enough, like with electricity that, like, people, it's like an open system,
573
00:29:00.380 --> 00:29:01.406
and anyone can participate in it.
574
00:29:01.727 --> 00:29:03.960
The best real example of this is the internet, where like,
575
00:29:04.583 --> 00:29:07.340
Nobody owns the internet, nobody owns the network itself,
576
00:29:07.420 --> 00:29:09.979
nobody owns the underlying network effects of the network,
577
00:29:10.242 --> 00:29:11.999
and anyone can participate in it.
578
00:29:12.100 --> 00:29:13.700
It might be harder in some places than others,
579
00:29:13.740 --> 00:29:15.278
but anyone can participate in it.
580
00:29:16.860 --> 00:29:20.020
That, I think, is how you break through
581
00:29:20.101 --> 00:29:20.839
exactly what you're saying,
582
00:29:20.961 --> 00:29:22.616
which is the centralizing effects
583
00:29:23.161 --> 00:29:25.476
of being at a certain point in this flow.
584
00:29:26.100 --> 00:29:26.448
Does that help?
585
00:29:31.949 --> 00:29:37.800
Sorry, and I guess I'm kind of worried about the in the context of blockchain and decentralization,
586
00:29:38.080 --> 00:29:42.777
you know, you see, say, like base is awesome, but it is taking up all the mindshare.
587
00:29:43.601 --> 00:29:44.295
Yeah.
588
00:29:45.001 --> 00:29:50.478
Yeah, I mean, I think, yeah, it's gonna be interesting to see how this market plays out.
589
00:29:51.321 --> 00:29:55.039
I think there are certainly places in which there are organizations that have retained
590
00:29:55.240 --> 00:29:56.988
monopolies over certain kinds of things.
591
00:29:57.028 --> 00:29:59.780
But at the moment, I would say, crypto is an interesting
592
00:29:59.880 --> 00:30:05.640
place where every single founder, even if you are in a position in the market where
593
00:30:05.700 --> 00:30:10.720
you're winning and absolutely dominating, every single founder is terrified about competition
594
00:30:10.780 --> 00:30:11.384
and being disrupted.
595
00:30:11.424 --> 00:30:14.320
Because really, it seems like the main thing that matters here is mind
596
00:30:14.360 --> 00:30:15.586
share and attention, right?
597
00:30:15.626 --> 00:30:18.459
And that's actually how you know that these are commodity goods,
598
00:30:18.740 --> 00:30:18.880
right?
599
00:30:18.901 --> 00:30:19.623
Like toothpaste.
600
00:30:21.610 --> 00:30:24.420
There's no real difference between types of toothpaste, but you know
601
00:30:24.561 --> 00:30:26.790
the big brands because they win all the mindshare and attention.
602
00:30:27.854 --> 00:30:29.220
And I think the same kind of thing
603
00:30:29.361 --> 00:30:34.380
exists with DEXs or lending protocols, where it's like, ultimately, you know, there are some network
604
00:30:34.440 --> 00:30:37.776
effects associated with like, you know, Uniswap's liquidity, for instance, right?
605
00:30:37.796 --> 00:30:38.680
But the differential
606
00:30:38.801 --> 00:30:43.160
in price is actually so small, fundamentally, that for the most part, most users probably
607
00:30:43.220 --> 00:30:45.593
wouldn't even know if you were to switch to something else.
608
00:30:45.914 --> 00:30:46.859
But why does Uniswap win?
609
00:30:46.879 --> 00:30:47.020
Well,
610
00:30:47.120 --> 00:30:48.768
because they're everywhere, right?
611
00:30:48.828 --> 00:30:51.320
Like, you literally, for the longest time, we would all
612
00:30:51.360 --> 00:30:55.000
be like, okay, well, what is an example of a quintessential application built on top of a
613
00:30:55.000 --> 00:30:56.606
blockchain we can all think about and talk about?
614
00:30:56.887 --> 00:30:57.429
It was Uniswap.
615
00:30:57.690 --> 00:30:59.598
And they're not just the
616
00:31:00.320 --> 00:31:02.909
decentralized exchange, they are the app, which is crazy.
617
00:31:04.373 --> 00:31:06.460
I think that those are all indicators
618
00:31:06.661 --> 00:31:11.800
that we're kind of on the right track, even if it might be kind of bleak to be a founder in that
619
00:31:11.860 --> 00:31:14.547
situation, as a founder that is currently in that situation.
620
00:31:16.533 --> 00:31:16.834
One more?
621
00:31:18.318 --> 00:31:19.100
One more, all the way over
622
00:31:19.120 --> 00:31:28.918
there you got it what do you believe are the biggest centralization problems we
623
00:31:29.920 --> 00:31:35.260
need to fix right now which are the biggest most scary things in a theorem
624
00:31:35.480 --> 00:31:48.060
or in general general privacy 100% terrifying all right one more round of
625
00:31:48.080 --> 00:31:48.740
Applause for Arjun.
626
00:31:48.881 --> 00:31:49.520
Arjun, thank you so much.
627
00:31:49.804 --> 00:31:50.700
Thank you so much, everybody.
628
00:31:50.921 --> 00:31:51.439
I appreciate it.
629
00:31:52.744 --> 00:31:54.160
New projects are coming online
630
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to the Mantle Layer 2 every single week.
631
00:31:56.982 --> 00:31:57.620
Why is this happening?
632
00:31:57.820 --> 00:32:00.140
Maybe it's because Mantle has been on the frontier
633
00:32:00.200 --> 00:32:01.759
of Layer 2 design architecture
634
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since it first started building Mantle DA,
635
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powered by technology from EigenDA.
636
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Maybe it's because users are coming onto the Mantle Layer 2
637
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to capture some of the highest yields available in DeFi
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and to automatically receive the points and tokens
639
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being accrued by the $3 billion Mantle treasury
640
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in the Mantle reward station.
641
00:32:17.041 --> 00:32:20.520
Maybe it's because the Mantle team is one of the most helpful teams to build with,
642
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giving you grants, liquidity support, and venture partners to help bootstrap your Mantle application.
643
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Maybe it's all of these reasons all put together.
644
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So if you're a dev and you want to build on one of the best foundations in crypto,
645
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or you're a user looking to claim some ownership on Mantle's DeFi apps,
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The Uniswap wallet is officially the preferred wallet of bankless, and it's the one we use
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664
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667
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669
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Start swapping smarter with Uniswap.
1
00:00:04.089 --> 00:00:08.700
Welcome to the Bankless Summit, a series of talks from speakers all around the Ethereum ecosystem,
2
00:00:09.181 --> 00:00:14.500
which were all presented at a one-day event hosted the day after DevCon called the Bankless Summit.
3
00:00:15.182 --> 00:00:18.940
We are releasing some of these talks on the podcast all throughout this week and next,
4
00:00:19.060 --> 00:00:22.240
and the rest are available on the Bankless Premium feed.
5
00:00:22.940 --> 00:00:26.520
You're about to hear Arjun Bhattani, the CEO of Everclear, formerly Connext,
6
00:00:26.600 --> 00:00:30.580
who gave what I think might have been the crowd favorite talk at the summit this year.
7
00:00:30.700 --> 00:00:32.900
Arjun takes us back to our crypto anarchist roots
8
00:00:33.383 --> 00:00:36.480
and gives a stellar account of what it means to all be in crypto.
9
00:00:37.062 --> 00:00:38.840
I had goosebumps the entire time.
10
00:00:39.160 --> 00:00:40.540
He got a roaring applause from the audience.
11
00:00:40.660 --> 00:00:43.660
So strap yourself in because I think you're about to get some goosebumps as well.
12
00:00:43.740 --> 00:00:47.520
But first, a message from some of these fantastic sponsors that make the show possible.
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Go to kraken.com slash bank lists
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to see what crypto can be.
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Not investment advice,
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crypto trading involves risk of loss.
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leveraged prediction market perpetual futures, instant deposits, and there's even a revamped
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trading rewards program to get rewarded for every trade you make.
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So visit dydx.trade today to get
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started.
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Hello.
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Hi, I'm Arjun.
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If you don't know who I am, I have been in this space for quite a
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while.
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I've been involved in building things on top of Ethereum since 2016.
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I helped with a lot
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of like early L2 research.
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Actually, if you were here for Amin's talk earlier, he talked about
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building the first L2 on Ethereum, first bank chain, I also helped build that.
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And then also
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was involved deeply in a lot of like early thinking around DAOs and most recently interoperability.
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This talk is called Why Are We Here?
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It is not a technical talk, which is unusual for me.
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It's a much more kind of like systems and economics and political and philosophy oriented
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talk.
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And my hope is that people in this audience, people who are watching recordings of this talk at
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some point in the future, can use this as a way to kind of reflect on the core ideas behind why
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this space needs to exist in the first place.
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Because we're in this like very, very special
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place where we're kind of, it looks like we might cross the chasm into the mainstream for the first
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time ever.
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And if we do that, I hope that we don't kind of like forget some of the core reasons for
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why blockchains should be around in the first place.
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We live in a weird time.
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Over the course
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the last, I would say, like 100 years or so, the world has kind of gotten increasingly authoritarian.
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Part of this is propelled by technology.
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Part of it is just propelled by where we are in the
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life cycle of the American hegemonian empire.
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This is a graph that shows just the level of
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democracy that exists in the world.
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And you can see that it's really decreasing very significantly
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over time.
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This is a trend that has been going on for some time.
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And it's also mirrored by similar
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trends in corporations as well.
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There's this strong centralizing effect where more and more
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organizations are consolidating to become these large super monopolies, super governments that
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unfortunately can wield pretty much unchecked power.
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And at the same time, we have this secondary
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thing that's happening, which is we're seeing an increase in the number of negative externalities
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associated with the systems that we live in.
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There's something very broken about the world
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that we're in right now.
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This is global emissions of CO2.
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This is deforestation.
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You could really
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pull up a lot of other charts that look like this.
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These are just two examples.
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But it seems like
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there's something in the way that human beings are operating right now that is leading to us
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not effectively thinking about the long-term outcome for humanity versus the short-term
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benefit of a few stakeholders.
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What I want to do is try to understand a little bit more about like
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why we're here.
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Why did we end up in this place?
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Right?
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What is the what is so broken about systems
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today that leads us to continually fall into this cycle?
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Because this isn't the first time that this
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has happened.
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If you look at throughout history, I was trying to find a good graph of this, but
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wasn't able to find this last night.
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Throughout history, you see this like continuous cycle of
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like rise of empires over a long period of time followed by a crash, followed by rise of empires
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of a long period of time followed by a crash, right?
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And every time that happens, who suffers?
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It's people.
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So what is it fundamental to these systems that is a little bit broken?
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Who here knows what the tragedy of the commons is?
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Cool.
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Okay.
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Good that it's most people.
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For anybody that doesn't, the tragedy of the commons is an allegory that kind of talks about
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the failures of human coordination.
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There's a lot of similar allegories.
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In fact, if you are
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familiar with Moloch and the Moloch Tao, we talked about this extensively back in the day.
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and the the allegory kind of goes like well if you have a pasture that has a carrying capacity
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of like 10 sheep and there are 10 farmers each with one sheep on this pasture that is a sustainable
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system however without any kind of external policing there's no incentive for a farmer to
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only have one sheep in that system right because if you add another sheep it increases your output
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your output of wool or whatever by 100 and the cost is not actually borne by you it's shared
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amongst everybody else.
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So like the kind of benefit that you get is 100%, the cost that you
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pay is only 10%.
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And then obviously, this leads to this like death spiral, where over time,
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everybody just gets more and more sheep, and then the pasture gets overgrazed.
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And then you have
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like environmental impacts throughout the world for all sorts of things like CO2.
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There's a really, really interesting person named Eleanor Ostrom, who's a Nobel Prize winning
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economist.
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She actually doesn't get enough credit for a lot of the work that she does.
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Eleanor spent the majority of her life actually working on understanding the
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tragedy of the commons and basically how you can actually sustainably govern
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Commons systems what she called common pool resources and Ostrom's research
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found three possible ways to do this the first is centralization right you have
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some state come and just like take ownership of the system this is sort of
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like how communism works you the state just imposed imposes rules on how many
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sheep everybody can have and how they can graze and when they can graze.
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And that's basically it.
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But of course, you trust this state unilaterally, right?
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The state is telling you 100% of what is
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okay.
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And if the state decides to cheat, there's not really anything that stops that.
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So you have
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this who watches the watchman problem that kind of exists in any kind of system where you have this
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like godlike role.
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Option number two is privatization.
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This is kind of where we're
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headed right now with the US economy, and where usually is espoused as this solution to
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centralization risk in a lot of cases.
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But unfortunately, privatization also has a lot
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of flaws.
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So one is, it's very unclear as to how you define property rights in general.
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Who owned these things in the first place, right?
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What if you don't necessarily know who owned the
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land?
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And then similarly, you have the secondary problem of like, well, how do you enforce these
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property rights?
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How do you enforce privatization?
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How do you scale that enforcement?
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Ultimately,
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you have the same problem as option number one, which is who watches the Watchmen.
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And then there's option number three.
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And this is what Ostrom ended up kind of concluding was like,
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you actually can beat the tragedy of the commons.
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In fact, there's lots and lots of examples where
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human beings have done this.
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There are tons and tons of cases where human beings have coordinated
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around a shared resource for hundreds, sometimes thousands of years, and done so effectively and
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sustainably.
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However, and there's one very, very important caveat to this, it doesn't scale,
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right you can enforce these things on a peer-to-peer basis by like within your community
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who of everybody that you know the name of you can convince them to not do things wrong and if
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they do things wrong you can publicly shame them but how do you do this in even in an ecosystem of
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thousands of people right how do you do this in an ecosystem of billions of people how do you solve
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some of the biggest world's problems when the world's biggest problems when you you can't do
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this thing where you can't solve this problem of social scalability?
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How do you enforce rules
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on a global basis in a way that is ideally peer-to-peer?
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Now, unfortunately, until somewhat
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recently, the answer was you can't.
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And so the natural conclusion of all this was the very,
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very unfortunate realization that institutions don't scale.
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As a thought experiment, I would
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like you to spend some time thinking about this interesting question that I have actually asked
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a lot of people over the last couple of years.
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Can you think of a single instance in history
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where a large-scale institution has effectively represented its constituents for a long period
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of time without getting corrupted?
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I've never actually gotten anyone that has given me a real
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answer.
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That's really bleak, right?
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There's something inherent to humanity.
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There's
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inherent to the human condition that leads us to continually get to this output, which is
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every single time we try to build an institution, it breaks.
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And when we rely on these institutions
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to create goods for us, right, any sort of output that we need in order to survive as a species,
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those goods are themselves broken.
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Why does that happen?
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So there's this really interesting notion
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in kind of economics that is that talks about the way that goods are developed.
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And so goods, and this by this, I mean, really like any kind of product, any kind of innovation
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follows a fairly predictable life cycle, going from being breakthrough innovation,
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and then over time, or over the course of like innovation over the course of competition,
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getting to the point where they're just complete public goods, right, effectively utilities.
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you can map out most innovations in this kind of a chart today right so all the way on this end you
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have fusion reactors which are this really really highly custom thing today right we don't have
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fusion reactors in our home you can't buy a fusion reactor on amazon god i hope you can never do that
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and then all the way on the other end of the spectrum you have things like electricity and
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the internet right the internet is is a public good it's effectively open to anybody and as long
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as you have electricity and as long as you have a computer and as long as you have a few other
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dependencies.
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It is something that is fundamentally public.
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It's not owned by anybody.
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And then
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everything else kind of falls in between, right?
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You have things like compute and storage, AWS,
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where it's aggressively commoditized, but it's not a public utility yet.
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Payments are kind of
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in that category.
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AI is just now breaking through into becoming something that's productized,
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but not yet commoditized.
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And you can also plot a lot of sovereign goods in this chart, too.
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They kind of behave in a very similar way, right?
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All the way on one end of the spectrum,
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you have combat drones, right?
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Obviously, the US government, obviously, combat drones should not
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be commoditized.
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The US government has these as like fairly custom things.
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But you also have
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things like voting systems, right?
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Voting systems are not actually very easily and widely available,
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because as we talked about earlier, they require enforcement.
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And then all the way on the other
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end, you have things like roads, right?
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Anybody can use roads.
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So how do innovations move through
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this system.
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Let's talk about payments, for instance.
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Payments, for example, Visa,
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are an innovation that have, especially digital payments, are an innovation that have been around
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for some time.
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They really should be commoditized, right?
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Visa charges anywhere between 30 basis
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points to several percent on making transactions.
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That's a fee rate that is honestly way too high
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for the world that we live in today.
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It doesn't really make any sense.
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But they stay there.
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they don't move towards becoming a utility and this is somewhat intentional
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because one of the things that's actually really critical to this pattern
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to this to this life cycle of goods is that when companies are creating goods
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when governments are creating goods they don't necessarily want these goods to
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become utilities they don't want every good to become a utility and they want
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to limit the ability for their good to become effectively get disrupted as a
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as a result of moving further along in this timeline.
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So for payments, that means working with governments
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to regulate the way who has access to payments,
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requiring KYC, things like that,
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basically making it impossible for new entrants
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to come into the market to disrupt Visa and MasterCard.
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This is a strategy that you see everywhere, right?
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Health insurance in the US
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is a really great example of this.
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Health insurance should be commoditized.
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It doesn't really make sense that it's not.
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But in the US, it is not a commodity good, it's a product.
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And you pay for it like a product.
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It is much more expensive than many, many other parts of the world.
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And the evidence that it's a product is just,
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you can kind of see the distribution of health insurance providers.
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This is not what a commodity good looks like.
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A commodity good is way more fragmented.
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And that's a good thing.
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That's how you drive prices down.
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That's how you actually create competition.
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There is not competition here.
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Why isn't there competition?
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Honestly, because of a broken system.
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You have this unfortunate thing that happens over and over again,
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where corporate monopolies will work together with governments
307
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to effectively basically keep themselves in power,
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usually at the cost of users.
309
00:14:53.121 --> 00:14:56.260
There's a flywheel that kind of represents how this happens.
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You have incumbent corporations will fund politicians.
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Those politicians will be elected,
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and they'll go and pass policy,
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and the policy that they pass will protect the donors that funded them.
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once they pass that policy those corporations will solidify their monopolies grow revenue and
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become basically super super dominant and then they'll partner back with the governments to
316
00:15:18.720 --> 00:15:22.180
give them technology dominance right so governments will then leverage the exact same technology
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00:15:22.681 --> 00:15:28.818
example twitter to control people's opinions to control the way that they think and to then fund
318
00:15:30.001 --> 00:15:35.940
more politicians and kind of go around in this in this cycle where of course unfortunately
319
00:15:36.963 --> 00:15:37.925
you are the one that's losing.
320
00:15:41.134 --> 00:15:43.160
We talk so much about incentives in this space.
321
00:15:44.141 --> 00:15:48.360
And that's such a core part of the way that we think about blockchains, about building
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infrastructure.
323
00:15:50.048 --> 00:15:52.720
But there's also a similar kind of like system of incentives that exists
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around governance right now, around policy.
325
00:15:56.653 --> 00:15:58.960
And regardless of whether you fall into the economic
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right or left, the system of incentives, unfortunately, continues to drive us upwards,
327
00:16:06.921 --> 00:16:10.900
which is no matter what happens, every single cycle, we get more and more authoritarian,
328
00:16:11.420 --> 00:16:12.324
right?
329
00:16:12.666 --> 00:16:15.540
Even if you even, I mean, we'll see kind of what happens with this presidency,
330
00:16:15.661 --> 00:16:18.620
but even when you have net reductions in complexity of legal systems,
331
00:16:19.462 --> 00:16:22.214
we have not yet seen a net reduction in authoritarianism.
332
00:16:22.495 --> 00:16:23.278
We have only seen the
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00:16:23.981 --> 00:16:26.650
slow and gradual reduction in civil liberties over time.
334
00:16:27.492 --> 00:16:29.760
And in history, the only instances
335
00:16:29.881 --> 00:16:31.550
where that's changed is when you have a revolution.
336
00:16:31.631 --> 00:16:33.200
So hopefully we don't have to hit that point.
337
00:16:34.320 --> 00:16:39.260
What we do need is ideally something that is not a revolution, but something that pulls us
338
00:16:39.260 --> 00:16:41.505
strongly in the other direction towards anarchism.
339
00:16:44.291 --> 00:16:48.300
Now, I'm sure the word anarchism makes people a
340
00:16:48.380 --> 00:16:50.066
little uncomfy.
341
00:16:50.729 --> 00:16:52.294
It makes me a little uncomfy, right?
342
00:16:52.375 --> 00:16:53.880
There's a lot of brainwashing around
343
00:16:54.182 --> 00:16:57.760
anarchism where, like, the first thing I think of when someone says anarchism is, like,
344
00:16:58.240 --> 00:16:58.942
cars on fire.
345
00:17:01.650 --> 00:17:01.851
Right?
346
00:17:01.931 --> 00:17:04.318
Like, that is the first mental image that you have.
347
00:17:04.618 --> 00:17:05.200
That's not actually
348
00:17:05.200 --> 00:17:06.426
what anarchism is at all.
349
00:17:07.210 --> 00:17:09.340
It's just, like, the association that has been drawn, which you're
350
00:17:09.400 --> 00:17:12.140
just like, okay, it's a person in all black that is, like, throwing a Molotov cocktail.
351
00:17:12.961 --> 00:17:13.845
But it's not that.
352
00:17:13.905 --> 00:17:17.440
It's this much more simple notion that actually when you go and talk to
353
00:17:17.480 --> 00:17:20.240
anybody, regardless of where they're from, regardless of the political backgrounds.
354
00:17:20.540 --> 00:17:25.160
When you go and you talk to anybody about this idea, and you talk about, hey, what do you feel
355
00:17:25.762 --> 00:17:30.880
about trying to dismantle some of the problematic systems that kind of govern the world that we live
356
00:17:30.880 --> 00:17:31.221
in today?
357
00:17:31.963 --> 00:17:34.990
I have yet to meet anybody that's like, no, I think that's a bad idea.
358
00:17:37.617 --> 00:17:38.700
And this is what's
359
00:17:38.720 --> 00:17:39.504
kind of important, right?
360
00:17:39.544 --> 00:17:41.857
It's like anarchism is not this notion of like no rules.
361
00:17:41.937 --> 00:17:42.420
It's this notion
362
00:17:42.500 --> 00:17:43.283
of no rulers.
363
00:17:44.205 --> 00:17:46.452
It's not a end state, it's a methodology.
364
00:17:47.616 --> 00:17:48.960
And crypto-anarchism
365
00:17:54.833 --> 00:17:56.236
is an extension of that methodology.
366
00:17:56.717 --> 00:17:58.120
Now, this isn't exactly the definition,
367
00:17:58.240 --> 00:18:00.880
but this is my definition, and it's my talk, so I can give a definition.
368
00:18:01.701 --> 00:18:08.200
My definition of crypto-anarchism is this notion of working to dismantle oppressive systems of
369
00:18:08.260 --> 00:18:13.240
power and replace them with technology where enforcement can happen peer to peer, right?
370
00:18:13.540 --> 00:18:18.080
Technology that we now know exists that lets us fix things like the tragedy of the commons,
371
00:18:18.140 --> 00:18:21.880
that lets us build these socially scalable systems that have never existed before,
372
00:18:23.202 --> 00:18:26.735
where no one needs to police them, where we don't have watchmen, right?
373
00:18:26.755 --> 00:18:28.020
Where the watchmen are every
374
00:18:28.100 --> 00:18:31.518
person that is running an Ethereum node, which is a completely different paradigm.
375
00:18:31.538 --> 00:18:31.860
It's the first
376
00:18:31.880 --> 00:18:36.100
time in human history that we've ever had the ability to create these kinds of systems,
377
00:18:36.848 --> 00:18:37.960
where the cost of policing them,
378
00:18:38.040 --> 00:18:39.480
the cost of operating them is near zero
379
00:18:39.762 --> 00:18:42.280
and where they're fundamentally untamperable.
380
00:18:44.021 --> 00:18:45.800
So if we all share this belief
381
00:18:47.108 --> 00:18:49.180
that we can use cryptography,
382
00:18:49.320 --> 00:18:49.940
we can use technology,
383
00:18:50.041 --> 00:18:50.720
we can use incentives
384
00:18:51.085 --> 00:18:52.240
to build these kinds of systems,
385
00:18:54.048 --> 00:18:56.800
then that means you are also
386
00:18:57.728 --> 00:18:59.060
probably a crypto-anarchist.
387
00:19:03.150 --> 00:19:03.620
You should cheer.
388
00:19:03.820 --> 00:19:04.580
Yeah, absolutely.
389
00:19:08.867 --> 00:19:14.480
because honestly, when it comes down to it, decentralization is anarchism, right?
390
00:19:15.621 --> 00:19:17.007
That's what it means.
391
00:19:17.288 --> 00:19:19.800
You're taking away power from a bunch of centralized entities.
392
00:19:20.361 --> 00:19:21.607
You're breaking up monopolies.
393
00:19:21.627 --> 00:19:23.455
You're breaking up these oppressive systems.
394
00:19:23.495 --> 00:19:24.600
That is decentralization.
395
00:19:28.000 --> 00:19:32.698
Crypto-anarchism breaks this spiral that we have been locked into, and it does it in this,
396
00:19:33.301 --> 00:19:36.720
It's honestly in a way that is effectively political protest, right?
397
00:19:36.860 --> 00:19:40.560
Even though we may not think about it that way, even though we are all to an extent also
398
00:19:40.661 --> 00:19:44.420
working to build like businesses or something that kind of looks like businesses.
399
00:19:44.820 --> 00:19:48.140
Effectively, what we're doing by disrupting these organizations, by kind of resisting
400
00:19:48.341 --> 00:19:52.140
against these existing systems is protest, right?
401
00:19:52.561 --> 00:19:58.380
It's a form of rebellion against this like cycle that we have been trapped in really
402
00:19:58.685 --> 00:19:59.560
for all of human history.
403
00:20:00.221 --> 00:20:09.020
And the way that this happens is instead of elective governments, you know, stopping there from being any competition, we just build protocols that are not stoppable.
404
00:20:10.586 --> 00:20:11.360
And we compete anyway.
405
00:20:14.202 --> 00:20:17.800
And in addition to that, we also accelerate the transition of goods into being utilities.
406
00:20:18.440 --> 00:20:19.980
There's something really interesting that happens.
407
00:20:20.320 --> 00:20:27.320
This is one of the things that's maybe sometimes a little bit challenging in this space is things are so incredibly competitive that you have someone goes and creates a breakthrough innovation.
408
00:20:27.340 --> 00:20:27.465
Right.
409
00:20:28.504 --> 00:20:31.040
and they go and they talk about it on Twitter,
410
00:20:31.180 --> 00:20:31.819
they raise a round.
411
00:20:32.301 --> 00:20:34.897
In approximately two weeks, there are 1,500 competitors.
412
00:20:37.184 --> 00:20:38.400
And all of a sudden, you have this thing
413
00:20:38.400 --> 00:20:40.140
that's like this very, very custom system
414
00:20:40.221 --> 00:20:41.820
that was built for a very custom use case
415
00:20:41.861 --> 00:20:42.959
that everybody's super excited about.
416
00:20:43.321 --> 00:20:45.740
And now everyone and their mother is running a bridge.
417
00:20:47.762 --> 00:20:50.040
And all of a sudden, bridges become utilities.
418
00:20:50.161 --> 00:20:52.680
All of a sudden, restaking becomes a utility.
419
00:20:52.860 --> 00:20:54.920
All of a sudden, L2s become utilities.
420
00:20:55.320 --> 00:20:56.699
And that's a good thing, right?
421
00:20:56.920 --> 00:21:11.140
And that's effectively what we end up doing to the rest of the world, to the rest of a lot of these, like a lot of the kinds of innovations that are out there, especially digital innovations like voting systems, is we take them, we pluck them out of being these custom systems and put them into being utilities.
422
00:21:12.085 --> 00:21:13.360
And we disrupt things like payments.
423
00:21:13.500 --> 00:21:19.820
We disrupt all of these different ways in which institutions kind of resist being disrupted.
424
00:21:21.381 --> 00:21:23.139
Obviously, they don't like this.
425
00:21:24.445 --> 00:21:25.660
It shouldn't need to be said.
426
00:21:26.162 --> 00:21:31.920
Amin talked about this a bunch, which was like, what happens when a lot of the assumptions that
427
00:21:31.960 --> 00:21:38.520
we hold true about this space today, like, you know, the US government likes what's going on,
428
00:21:39.402 --> 00:21:41.329
a bunch of other governments like what's going on.
429
00:21:42.192 --> 00:21:44.360
USDC is not actively being used as a tool
430
00:21:44.420 --> 00:21:45.184
for censorship.
431
00:21:45.244 --> 00:21:47.776
What happens when those assumptions break down?
432
00:21:48.278 --> 00:21:48.720
I don't think we're
433
00:21:48.760 --> 00:21:50.006
really thinking about that deeply enough.
434
00:21:50.307 --> 00:21:52.940
And in fact, this is the time to really, really think
435
00:21:53.020 --> 00:21:53.703
about them deeply.
436
00:21:54.004 --> 00:21:57.317
Because as I mentioned earlier, we are crossing the chasm, right?
437
00:21:57.839 --> 00:21:58.160
And because
438
00:21:58.200 --> 00:22:02.800
we're crossing the chasm, we're starting to experience what it looks like to actually have
439
00:22:02.880 --> 00:22:07.155
products that appeal to the mass market and that also step on people's toes.
440
00:22:07.917 --> 00:22:08.680
One of the big mistakes
441
00:22:08.740 --> 00:22:11.993
that I think a lot of people make, this is Shane from Polymarket.
442
00:22:12.636 --> 00:22:13.600
If you don't know, Polymarket
443
00:22:13.700 --> 00:22:14.322
obviously blew up.
444
00:22:14.663 --> 00:22:20.520
But a few days later, Shane's house was raided and then his electronics were
445
00:22:21.346 --> 00:22:23.040
This is obviously like bizarre behavior, right?
446
00:22:23.424 --> 00:22:24.680
There's no point to this at all.
447
00:22:24.841 --> 00:22:26.020
It doesn't really make any sense legally.
448
00:22:26.581 --> 00:22:30.980
But this just goes to highlight that like we think about governments as this like homogenous
449
00:22:31.121 --> 00:22:34.220
blob, but that's not what actually exists in practice.
450
00:22:34.381 --> 00:22:37.500
Even within the United States governments, there are different factions, some of whom
451
00:22:37.520 --> 00:22:40.500
will not agree with you and will not agree with the technology that you're building,
452
00:22:40.881 --> 00:22:45.259
let alone all of the many other governments that live in the world, in the rest of the
453
00:22:45.600 --> 00:22:48.479
world, that are oftentimes opposed to the U.S.
454
00:22:48.620 --> 00:22:51.270
government's regulations and views, right?
455
00:22:51.611 --> 00:22:54.140
Maybe you are partnering really closely with the U.S.
456
00:22:54.220 --> 00:22:59.580
government to build your protocol, and you're fine, you're bona fide within the U.S. economy.
457
00:23:00.140 --> 00:23:01.167
But what happens in Russia?
458
00:23:01.388 --> 00:23:03.160
What happens when you travel and all of a sudden,
459
00:23:03.941 --> 00:23:08.900
you are now the focus of a bunch of... You get arrested in another country because you actually
460
00:23:08.981 --> 00:23:11.720
violated their laws, even though you didn't violate anything in the United States.
461
00:23:13.184 --> 00:23:19.040
this will happen policies between countries are actually not unified and in many cases conflicting
462
00:23:20.003 --> 00:23:25.700
this is why fundamentally if you think about it right if we went and we built the internet today
463
00:23:26.162 --> 00:23:31.340
it would not look like it does today because everybody would try to regulate it and you would
464
00:23:31.380 --> 00:23:36.180
not actually have an outcome where the like output makes any sense at all you have to build the
465
00:23:36.200 --> 00:23:40.940
internet you have to build technology in the space in a way that is fundamentally neutral and in a way
466
00:23:40.940 --> 00:23:42.183
that is fundamentally unstoppable.
467
00:23:47.516 --> 00:23:49.040
And this maybe brings me to one of my last
468
00:23:49.100 --> 00:23:52.455
points, which is that decentralization is not just the ends, it is the means.
469
00:23:52.475 --> 00:23:53.540
And
470
00:23:53.560 --> 00:23:59.700
what that means is that, no pun intended, what that means is that we need to
471
00:23:59.801 --> 00:24:01.754
actually build technology that can't be stopped.
472
00:24:01.774 --> 00:24:02.660
We can't just talk about
473
00:24:02.801 --> 00:24:04.731
building technology that can't be stopped, right?
474
00:24:05.013 --> 00:24:06.340
Rollups are extremely
475
00:24:06.420 --> 00:24:07.243
censorable right now.
476
00:24:08.506 --> 00:24:09.369
That is a problem.
477
00:24:10.291 --> 00:24:12.759
We need to fix that problem as soon as possible.
478
00:24:12.899 --> 00:24:13.120
If we
479
00:24:13.682 --> 00:24:18.280
scale in the way that we expect to scale, and by the way, I'm the biggest bull of all of this stuff.
480
00:24:18.400 --> 00:24:22.199
I have been saying for years that we need to move towards a world with hundreds of roll-ups.
481
00:24:22.219 --> 00:24:22.320
I've
482
00:24:22.320 --> 00:24:27.040
been saying for years that there's a benefit to organizations having sovereignty around building
483
00:24:27.120 --> 00:24:29.837
their own execution environment and maintaining their own execution environment.
484
00:24:30.118 --> 00:24:30.340
However,
485
00:24:31.361 --> 00:24:34.680
if we end up in a world where every single application running on blockchains is running
486
00:24:34.740 --> 00:24:39.652
on top of our love today, and then we hit mass scale, we are so screwed.
487
00:24:42.258 --> 00:24:43.300
And that should keep
488
00:24:43.320 --> 00:24:43.822
you up at night.
489
00:24:43.862 --> 00:24:44.624
It keeps me up at night.
490
00:24:47.132 --> 00:24:49.139
And so we're kind of at this precipice, right?
491
00:24:49.199 --> 00:24:49.400
We're
492
00:24:50.042 --> 00:24:54.340
like in the next 12 to 24 months, we are going to hit this very, very interesting period.
493
00:24:54.901 --> 00:24:59.160
And I think in the next 12 to 24 months, we are going to lock ourselves into one of these three
494
00:24:59.180 --> 00:25:00.584
outcomes, which is terrifying.
495
00:25:02.791 --> 00:25:05.560
Outcome number one is really the worst outcome that I can possibly
496
00:25:05.620 --> 00:25:14.060
imagine, which is we don't just fail in our mission to reduce the scope of systems of power.
497
00:25:14.861 --> 00:25:21.580
We actively make them so much worse because we build the perfect tool to control every single
498
00:25:21.801 --> 00:25:23.004
aspect of our lives forever.
499
00:25:24.608 --> 00:25:26.212
We are currently on this path.
500
00:25:27.936 --> 00:25:29.360
It would be really nice to get out of
501
00:25:29.400 --> 00:25:31.968
that path and head towards one of the other two options.
502
00:25:32.309 --> 00:25:35.840
Option number two being we fail and just
503
00:25:35.960 --> 00:25:37.546
end up in the same spot again, right?
504
00:25:38.610 --> 00:25:41.640
Eventually, all of these organizations, all the organizations
505
00:25:41.761 --> 00:25:46.340
that we're building, don't successfully resist government control, don't successfully resist
506
00:25:46.441 --> 00:25:50.160
capture, don't actually become decentralized, and then just get folded under the exact same
507
00:25:50.200 --> 00:25:51.364
regulatory framework that exists.
508
00:25:53.051 --> 00:25:55.540
Now ideally what we want is the third option.
509
00:25:56.244 --> 00:25:58.054
And at least that's why I got into this space.
510
00:25:58.114 --> 00:25:59.220
That's what I'm personally fighting
511
00:25:59.301 --> 00:26:02.020
for and that's what I will continue to fight for, is this notion that we
512
00:26:02.140 --> 00:26:05.275
actually can fix humanity's coordination failures, right?
513
00:26:05.436 --> 00:26:06.300
The whole goal of this
514
00:26:06.400 --> 00:26:06.681
talk.
515
00:26:07.545 --> 00:26:11.580
If we can do that and if our thesis in this space is correct, then that means
516
00:26:11.660 --> 00:26:15.440
we can actually get past this place that humanity has been stuck in for the last
517
00:26:15.561 --> 00:26:19.300
10,000 years where we fail to actually like coalesce around what we all want to
518
00:26:19.340 --> 00:26:19.802
do together.
519
00:26:20.084 --> 00:26:23.360
And we can work towards a world where we can actually imagine if we were all
520
00:26:23.400 --> 00:26:25.672
like rowing in the same direction for the first time ever.
521
00:26:25.913 --> 00:26:26.616
It would be crazy.
522
00:26:26.898 --> 00:26:27.340
We would get so
523
00:26:27.380 --> 00:26:27.801
much done.
524
00:26:32.130 --> 00:26:33.312
We are entering the endgame.
525
00:26:35.557 --> 00:26:37.180
I think that this is really where things kind of get
526
00:26:37.240 --> 00:26:37.622
decided.
527
00:26:37.763 --> 00:26:40.820
And I think it's up to like every person that's in this room, every person that listens to
528
00:26:40.880 --> 00:26:46.880
this talk to think about where they fit into this story and think about where they want this story
529
00:26:46.940 --> 00:26:47.301
to end up.
530
00:26:48.807 --> 00:26:50.011
And so I'd like you to do that.
531
00:26:50.452 --> 00:26:52.680
Like, this is this is really this is the last slide of
532
00:26:52.680 --> 00:26:52.981
the talk.
533
00:26:53.042 --> 00:26:55.272
I think I might have a minute for questions after this.
534
00:26:55.312 --> 00:26:56.900
But I would like you to
535
00:26:56.960 --> 00:26:58.026
do this after this talk.
536
00:26:58.066 --> 00:27:00.720
And when you go home, think about where you want this industry to end
537
00:27:00.780 --> 00:27:02.246
up and think about what it would take to get there.
538
00:27:02.748 --> 00:27:06.040
Because I currently am not super happy
539
00:27:06.562 --> 00:27:09.955
and super stoked about the direction that we're headed.
540
00:27:10.015 --> 00:27:11.260
And you probably shouldn't be too.
541
00:27:13.426 --> 00:27:13.938
Thank you so much.
542
00:27:22.051 --> 00:27:23.575
Wow, that was amazing.
543
00:27:23.775 --> 00:27:24.416
Oh my God.
544
00:27:24.637 --> 00:27:25.399
One more round of applause.
545
00:27:25.479 --> 00:27:25.980
That was really cool.
546
00:27:30.643 --> 00:27:32.600
All right, real quick questions, real quick questions.
547
00:27:35.781 --> 00:27:41.440
You bring up this interesting point about the movement of, say, products to utilities
548
00:27:41.921 --> 00:27:50.160
like bridges but can you comment on the consolidate the capital's tendency to
549
00:27:50.220 --> 00:27:58.200
consolidate around one or a few things yeah I mean capital's tendency to
550
00:27:58.220 --> 00:28:02.640
consolidate around one or a few things is usually something that is like okay
551
00:28:02.680 --> 00:28:07.620
so like in in competitive free markets you don't have monopolies you just don't
552
00:28:08.063 --> 00:28:10.680
monopolies are an indication that like your capitalism is breaking down
553
00:28:11.384 --> 00:28:11.826
effectively.
554
00:28:12.268 --> 00:28:13.816
There's some cases where that's not the case, right?
555
00:28:13.836 --> 00:28:14.560
When you have like massive
556
00:28:14.640 --> 00:28:17.255
economies of scale associated with giving a certain good or service.
557
00:28:17.497 --> 00:28:18.080
But that's usually,
558
00:28:18.280 --> 00:28:21.380
again, an instance where like you have created an inefficient system because
559
00:28:22.585 --> 00:28:25.015
some underlying means of production is being monopolized.
560
00:28:25.155 --> 00:28:26.280
So for example, with like Facebook,
561
00:28:26.581 --> 00:28:30.059
there is an underlying social graph that they are effectively monopolizing, right?
562
00:28:30.079 --> 00:28:30.300
And they're
563
00:28:30.360 --> 00:28:31.063
selling to other people.
564
00:28:31.344 --> 00:28:32.770
With Google, it's like a search graph.
565
00:28:32.851 --> 00:28:34.980
With Amazon, it's like tons of
566
00:28:35.020 --> 00:28:41.154
warehouses, with Twitter, I don't know, Musk, I guess.
567
00:28:42.076 --> 00:28:44.060
And, you know, the right answer is over
568
00:28:44.140 --> 00:28:46.755
time to actually just like decentralize that means of production, right?
569
00:28:46.775 --> 00:28:47.740
That's how you actually get
570
00:28:47.860 --> 00:28:51.960
from these things being like products or commodities into becoming utilities is that like,
571
00:28:52.401 --> 00:28:55.720
the means of production is something that then anyone can do, or at least or at least like is,
572
00:28:56.001 --> 00:29:00.320
is widespread enough, like with electricity that, like, people, it's like an open system,
573
00:29:00.380 --> 00:29:01.406
and anyone can participate in it.
574
00:29:01.727 --> 00:29:03.960
The best real example of this is the internet, where like,
575
00:29:04.583 --> 00:29:07.340
Nobody owns the internet, nobody owns the network itself,
576
00:29:07.420 --> 00:29:09.979
nobody owns the underlying network effects of the network,
577
00:29:10.242 --> 00:29:11.999
and anyone can participate in it.
578
00:29:12.100 --> 00:29:13.700
It might be harder in some places than others,
579
00:29:13.740 --> 00:29:15.278
but anyone can participate in it.
580
00:29:16.860 --> 00:29:20.020
That, I think, is how you break through
581
00:29:20.101 --> 00:29:20.839
exactly what you're saying,
582
00:29:20.961 --> 00:29:22.616
which is the centralizing effects
583
00:29:23.161 --> 00:29:25.476
of being at a certain point in this flow.
584
00:29:26.100 --> 00:29:26.448
Does that help?
585
00:29:31.949 --> 00:29:37.800
Sorry, and I guess I'm kind of worried about the in the context of blockchain and decentralization,
586
00:29:38.080 --> 00:29:42.777
you know, you see, say, like base is awesome, but it is taking up all the mindshare.
587
00:29:43.601 --> 00:29:44.295
Yeah.
588
00:29:45.001 --> 00:29:50.478
Yeah, I mean, I think, yeah, it's gonna be interesting to see how this market plays out.
589
00:29:51.321 --> 00:29:55.039
I think there are certainly places in which there are organizations that have retained
590
00:29:55.240 --> 00:29:56.988
monopolies over certain kinds of things.
591
00:29:57.028 --> 00:29:59.780
But at the moment, I would say, crypto is an interesting
592
00:29:59.880 --> 00:30:05.640
place where every single founder, even if you are in a position in the market where
593
00:30:05.700 --> 00:30:10.720
you're winning and absolutely dominating, every single founder is terrified about competition
594
00:30:10.780 --> 00:30:11.384
and being disrupted.
595
00:30:11.424 --> 00:30:14.320
Because really, it seems like the main thing that matters here is mind
596
00:30:14.360 --> 00:30:15.586
share and attention, right?
597
00:30:15.626 --> 00:30:18.459
And that's actually how you know that these are commodity goods,
598
00:30:18.740 --> 00:30:18.880
right?
599
00:30:18.901 --> 00:30:19.623
Like toothpaste.
600
00:30:21.610 --> 00:30:24.420
There's no real difference between types of toothpaste, but you know
601
00:30:24.561 --> 00:30:26.790
the big brands because they win all the mindshare and attention.
602
00:30:27.854 --> 00:30:29.220
And I think the same kind of thing
603
00:30:29.361 --> 00:30:34.380
exists with DEXs or lending protocols, where it's like, ultimately, you know, there are some network
604
00:30:34.440 --> 00:30:37.776
effects associated with like, you know, Uniswap's liquidity, for instance, right?
605
00:30:37.796 --> 00:30:38.680
But the differential
606
00:30:38.801 --> 00:30:43.160
in price is actually so small, fundamentally, that for the most part, most users probably
607
00:30:43.220 --> 00:30:45.593
wouldn't even know if you were to switch to something else.
608
00:30:45.914 --> 00:30:46.859
But why does Uniswap win?
609
00:30:46.879 --> 00:30:47.020
Well,
610
00:30:47.120 --> 00:30:48.768
because they're everywhere, right?
611
00:30:48.828 --> 00:30:51.320
Like, you literally, for the longest time, we would all
612
00:30:51.360 --> 00:30:55.000
be like, okay, well, what is an example of a quintessential application built on top of a
613
00:30:55.000 --> 00:30:56.606
blockchain we can all think about and talk about?
614
00:30:56.887 --> 00:30:57.429
It was Uniswap.
615
00:30:57.690 --> 00:30:59.598
And they're not just the
616
00:31:00.320 --> 00:31:02.909
decentralized exchange, they are the app, which is crazy.
617
00:31:04.373 --> 00:31:06.460
I think that those are all indicators
618
00:31:06.661 --> 00:31:11.800
that we're kind of on the right track, even if it might be kind of bleak to be a founder in that
619
00:31:11.860 --> 00:31:14.547
situation, as a founder that is currently in that situation.
620
00:31:16.533 --> 00:31:16.834
One more?
621
00:31:18.318 --> 00:31:19.100
One more, all the way over
622
00:31:19.120 --> 00:31:28.918
there you got it what do you believe are the biggest centralization problems we
623
00:31:29.920 --> 00:31:35.260
need to fix right now which are the biggest most scary things in a theorem
624
00:31:35.480 --> 00:31:48.060
or in general general privacy 100% terrifying all right one more round of
625
00:31:48.080 --> 00:31:48.740
Applause for Arjun.
626
00:31:48.881 --> 00:31:49.520
Arjun, thank you so much.
627
00:31:49.804 --> 00:31:50.700
Thank you so much, everybody.
628
00:31:50.921 --> 00:31:51.439
I appreciate it.
629
00:31:52.744 --> 00:31:54.160
New projects are coming online
630
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631
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Why is this happening?
632
00:31:57.820 --> 00:32:00.140
Maybe it's because Mantle has been on the frontier
633
00:32:00.200 --> 00:32:01.759
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634
00:32:02.103 --> 00:32:03.860
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635
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636
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Maybe it's because users are coming onto the Mantle Layer 2
637
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639
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640
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641
00:32:17.041 --> 00:32:20.520
Maybe it's because the Mantle team is one of the most helpful teams to build with,
642
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Maybe it's all of these reasons all put together.
644
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So if you're a dev and you want to build on one of the best foundations in crypto,
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664
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