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Episode 10 of PatSnap's Frontier3 podcast

Solana & Decentralization’s Power Ft. Matty Taylor

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About the Frontier3 Podcast

Welcome to Frontier3 by PatSnap!

This series is dedicated to unpacking the innovation ecosystem of Web3. Featuring our Co-Founder, Ray Chohan, and various industry experts, Frontier3 explores how Web3 will fundamentally change how we live, work, and play.

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In This Episode of Frontier3

Ray is joined by Matty Taylor, the Head of Growth at Solana, a decentralized blockchain focused on facilitating user-friendly apps. Matty gives insight into Solana’s composability, high TPS, and low cost. He explains why the company is a good fit for the DeFi and NFT space. In this episode, Matty shares his view on Web3, the significance of decentralization, and how crypto could become widely accepted by the public, changing the investment and banking industries.

Episode Highlights

  • Why neutrality is important in blockchains, and the benefits it offers for developers and entrepreneurs
  • Solana’s current market strengths in the DeFi and NFT space including maintaining composability, low cost, and high TPS
  • How dApps like Audius may give power back to musicians in the futureA peek into what it takes to be an economically relevant validator, and their role in censorship resistance and decentralization
  • Why Bitcoin may become the new “gold standard” and how it solves today’s economic problems
  • Want curated insights into innovation across deep tech, IP and more, straight to your inbox? Sign up to the Connected Innovation Intelligence Newsletter.

The Experts

  • Episode Guest:

    Matty Taylor

    Head of Growth, Solana

    Matty Taylor Head of Growth, Solana

    Matty was born and raised in a rural town called Cashmere. He graduated from Claremont McKenna College and now lives in San Francisco and heads up Growth for Solana. He is passionate about growing the crypto economy.

    Connect with Matty Taylor on LinkedIn

  • Host:

    Ray Chohan

    Co-Founder & VP New Ventures at PatSnap

    Ray Chohan Co-Founder & VP New Ventures at PatSnap

    Ray started PatSnap’s western operation from his apartment in 2012, helping grow the team to 400+ by 2020. PatSnap now serves 15,000 companies worldwide – supporting R&D, Innovation & IP teams with market and technology intelligence research. Their SaaS-based platform helps Deep Tech innovators connect the dots between technology, markets, and people. PatSnap officially became a Unicorn in 2021 and now has over 1,100 employees and 15,000 companies using its software across EMEA, North America & Asia. The ultimate mission is to provide intelligence that improves R&D and Innovation productivity to help innovators bring their ideas successfully to market. Ray also works closely with Blockchain & Web3 community and is a passionate angel investor in this space.

Episode Transcript

Ray Chohan: Matt, welcome to Frontier3, really excited to have you on the show today. And Matt, I would love to just kick off with your journey really, in terms of your professional journey and how you ended up at Solana or in the wonderful world of Web3.

Matty Taylor: Yeah. Well, thanks for having me on the show. I’m happy to dive into it. I guess I started my crypto journey in college. I wrote my undergraduate thesis on Bitcoin, proof of work and the economics of Bitcoin mining. I was just taking a lot of economics courses and I had an internship in the tech industry. And so I combined those interests when I found Bitcoin, and yeah, still to this day, a big Bitcoiner and really interested in that. But I got interested in Ethereum shortly around the same time.

And I didn’t work in crypto initially after graduation, I worked at a large payments company called Square. But then in 2017, obviously crypto started to take off in terms of adoption and awareness. And so I had been just really interested in since college and I decided to jump in full-time and I joined a Ethereum project called 0X, which is a decentralized exchange protocol. And then about a year and a half ago, I learned about Solana and got more involved in their community, and yeah, now I work for Solana Labs, which is one of the core development teams behind the underlying blockchain. And yeah, happy to talk about my experience.

Ray: You’re the head of growth at Solana, and that job title, it means different things in different context. When I think of growth, I’m thinking more Web2 SaaS where it might be product growth or some form of growth-led marketing, or if it’s say Spotify, trying to grow user base. So what does head of growth mean at a Web3 trailblazer like Solana? What is your day-to-day there?

Matty: Yeah. I wear a lot of different hats depending on the day, it’s a small team. And I guess, the main thing that I view my responsibilities as are just growing the developer ecosystem, getting developers interested in the technology, introducing them to existing projects, building on Solana and so, yeah, it’s somewhat traditional tech like growth hacking, but it’s also just talking with teams in more of a business development fashion and getting folks excited about crypto generally and, yeah, Solana specifically.

Ray: Yeah. It’s interesting you mentioned developer numbers. We’ll just put a pin in that because Electric Capital released a really interesting report looking at the developer numbers. So we’ll just put a pin in that for now, but a lot of our audience will probably be aware of Web3 because I think it’s getting more and more on the zeitgeist every month and actually more and more in LinkedIn in time, but there’s still probably the large majority who have got no clue or don’t even have a foundational understanding on the underlying principles and the inner why behind Web3. So in layman’s terms, if you could unpack in your own words, because everyone’s got a slightly nuanced narrative to this, what is Web3 and what attracted you to this paradigm shift?

Matty: Yeah, everyone’s got a different answer to this. For me, I’m going to carve out Bitcoin from Web3. It’s going after disrupting central banking and Fiat money and I’m going to keep that separate. But when thinking about Web3 on smart contract blockchains like Ethereum and Solana, I think it comes down to giving people, for the first time, one digital property rights in the new digital world, and secondly, it provides developers and entrepreneurs a credibly neutral platform for building their applications and products.

And so, those combination of benefits of digital property rights and this credibly neutral platform for development, I think is what’s really exciting about this space. And I think we’re seeing a lot of interesting verticals pop up, whether it’s decentralized finance, DeFi, blockchain, gaming and this whole long tail of different use cases that remove the intermediary that you see extract rent or take hold in the Web2 world. So hopefully, that’s helpful in shaping the conversation.

Ray: It makes sense. So when you talk about incredibly neutral, are you alluring to the fact that most of the protocols are open source, so it becomes like a dreamland of composable Lego blocks where you can build on top of previous work? Is that your context behind incredibly neutral, Matt?

Matty: Yeah. So credibly neutral, not incredibly neutral, but yeah. I think that’s definitely a part of it, just the open-source nature and the composability of using existing open-source primitives to build out your application. I think that’s part of it. More, what I’m referring to there is, maybe a good example is, looking back at the beginning of Twitter, the products, it started out, this open-source protocol for messaging and the feed of information from your followers and all of that was open to the external developer community, to build products and services around that using core protocol.

And so you saw, like in the early days of Twitter, a lot of flourishing of external applications like TweetDeck and other things like that would modify the UI, but still tap into this core protocol. But what happened and why Twitter is not credibly neutral is that, one day, the Twitter company, the centralized company said, “Well, we’re not actually getting a lot of the value out of the customers that are using the protocol. And so we’re just going to cut off API access to all of these external developers.” Which ruined their businesses, right?

And so when I talk about this neutrality, it’s just that, it’s the confidence that you’ll have complete open access to these underlying blockchains, the data and users can interact with these things without working with this central intermediary blocking them or shaping their experience. It’s more of a free market.

Ray: So there’s no situation of that classic Web2 rug pull, where you’ve built a meaningful business through the API offering, and then one day you wake up and it’s that quintessential rug pull, and it’s goodnight Vienna in essence. So that scenario is not possible in a pure play Web3 format?

Matty: Yeah, that’s right. And I think another great example, I don’t know if this story is actually true, but there’s this legend that Ethereum was actually born when Vitalik [Buterin] had this game item, a warlock. I think it was in either League of Legends or a game like that. And the company that made League of Legends, took away his warlock and he was like, “This is not credibly neutral, I need to build the better alternative for gaming companies to build on.” And so, yeah, I think it applies to much more than just traditional Web2 social media platforms. I think there’s a whole long tail of things that this applies to.

Ray: They always say, great entrepreneurs can link their creativity to some form of childhood trauma. So, if his warlock scenario might have been one of his moments that really peed him off to go one day, “I’m going to build something interesting.” I actually have heard that story regarding Vitalik, because he’s quite an interesting and a mythical figure, isn’t he? But yeah. So, it’s actually segueing into Ethereum and your early journey, Matt.

So obviously, you go down the Bitcoin rabbit hole while you’re in college and then get enticed by more the smart contract, layer-1 world with Ethereum. And just taking a step back and then obviously you’re now at Solana and I know they’re one of the fast-moving trailblazers within the layer-1 space, but just unpacking layer-1 protocols and fundamentally what they offer. Because again, there’s going to be so many folks on LinkedIn who might have heard of Ethereum, Solana, maybe Polygon and some of the other, well, Polygon’s more layer-2, but some of the other layer-1s like Katana, and I think there’s a whole bunch of other ones out there, but who don’t really get what layer-1 protocols mean and what’s their value. So, could you unpack that just as a primitive, so the audience can get a little flavor of just the underlining principles behind the likes of Ethereum and Solana?

Matty: Yeah. So, I think you can think of layer-1s as the lowest level of infrastructure, that developers and entrepreneurs build these decentralized apps on top of. And what they provide is, a way for transactions on these networks to be uncensorable, and they provide kind of a development environment and almost like an operating system to build out applications and that involves tooling and all sorts of developer resources. And I think they, the layer-1 landscape is differentiated, based on the performance of the underlying chains, in terms of how many transactions can this blockchain process concurrently? What are the average fees?

And then really, most importantly, and maybe we can get into this about Solana is this notion of composability in a single state, that developers can tap into. And so, those are the core properties, and each one of these blockchains has a community around it of developers and projects and stakeholders that have different views on how to scale this underlying infrastructure. And so that’s where a lot of the differences come in and so, I’m happy to talk about that as well.

Ray: Yeah. Because I know Ethereum, obviously, they’re the OG in the smart contract world, but then you add some really compelling, fast followers during the winter, right? I think Solana, it was 2017, 2018 when the founder started building that technology out. So obviously, you were curious about Ethereum along your journey, but then swiftly you were attracted to Solana. What specifically attracted you to the Solana protocol and their wider mission?

Matty: Yeah. I think working in Ethereum, I had a front row seat in 2018 on seeing these new use case verticals where there’s a lot of demand. So, that’s primarily like DeFi, right? And seeing how that ecosystem was developing and then later on, NFTs and gaming and other use cases. But I think what I saw was that, one, first of all, Solana viewed Ethereum as this amazing technology and trailblazer that allowed for these new verticals to arise, but that it was running up against some issues with its scale.

So, there was so much demand for Ethereum blockspace and these applications that fees were rising very quickly and transactions were not getting confirmed in a very fast manner. And there was a community effort in Ethereum to one, add layer-2s and two, add this new architecture known as ETH 2.0, that involved sharding. And that was how it was going to scale, but that was going to sacrifice, massively, on composability between the applications building on top. And so, Solana architected its infrastructure around maintaining this composability, as well as just an order of magnitude, better transaction throughput.

And yeah, I think that was interesting to see, and there were a lot of, I guess, interesting benchmarks that they released 2018 around the white paper and what this system could do. And I was pretty skeptical, but the network launched, I think, on March, 2020 and the core team did it initially. And I think that was very, very telling that the technology was real and that it worked.

And then second was, it’s not enough to build out a blockchain that’s a better product, right? The best product doesn’t always win. You need to convince a bunch of developers and this whole community to keep it going and to build and to grow it. And that’s really difficult. And what I saw that convinced me in mid-2020 was that, not only did they build out the technology and it was ordered as a magnitude, more performant and composable than Ethereum, it’s that there was a community forming around it and developing it that I thought was really special and that I felt like I could help contribute to. So, yeah.

Ray: That makes sense. So, yeah. Ethereum, I think they’ve had a lot of challenges with their ETH 2 theoretical launch, which keeps on getting pushed out and obviously sharding, roll-ups, there’s a whole ecosystem behind that, right, like Albitrum and I think Polygon play into that.

Matty: Yep.

Ray: They’re one of the layer-2s trying to increase the transactions per second and reduce the cost. So, it looks like they’re trying to stitch things together, as they go, right? Which is like trying to, this may sound a bit extreme, but it’s trying to repair an airplane while they’re in flight, if that makes sense. So, which is possible, but very awkward and high risk. So yeah, it makes sense why you were drawn by the more focused vision for Solana. So, with Solana, you’ve got this exponential improvement in TPS, transactions per second. In terms of building on top of, it’s probably a lot. What I’m hearing from builders in this space, they do say the dev kit and actually building on Solana is really cool in terms of ease of use. That’s some of the feedback I’m hearing.

But one thing that a lot of people did say about Solana in the early years, that the original use case of Solana was very much geared towards a central limit order book. So, very much for the high frequency trading world, for more doing perpetual contracts, financial derivatives, so more hardcore financial services use case. Hence why you had Sam Bankman-Fried go, “Yes. Solana, I'm all in. FDX are impressed with your capability.” So, is that the main superpower for Solana in terms of dApps being built on top of it, more financial services products rather than Ethereum and some of the other folks, which probably have a more diversified ecosystem of financial services, like DeFi but also NFTs, other enterprise applications, other forms of use cases? So, what does the current state and future state look like for the dApps on Solana?

Matty: Yeah. Well, first I want to say that, I think, in my mind personally, I don’t view Ethereum and Solana as direct competitors in a lot of senses. I feel like Ethereum is going to continue to grow and fill the need of many use cases and so will Solana. And so, when talking about what those use cases are, I think it’s pretty broad. Anything that requires high frequency and low fees and a composable ecosystem, I think Solana is a great fit for today. And I think, yeah, a lot of those use cases are more in like DeFi whether that’s decentralized exchanges or lending protocols or derivatives, that really haven’t been able to function correctly on Ethereum, just due to the nature of the speed and fees right now on Ethereum. And so, I think we’re seeing a lot of developers tackle those areas, but I think it applies also to things like NFTs, right? Minting NFTs on Ethereum, it that can be quite expensive and on Solana, it’s really not. And so, I think NFTs have grown considerably.

I think OpenSea is the largest NFT marketplace on Ethereum. They have most of the market share, although there’s a project called Magic Eden on Solana, that’s catching up in just in terms of total transactions and users. And so, I think we’re seeing quite a bit of usage on the NFT front. And then, I don’t know, there’s just a long tail of interesting projects also being built on Solana like Audius, which has, I think has 7 million monthly active users. It’s like a decentralized SoundCloud or a Spotify. And so, I think the long tail of use cases is pretty unlimited, but it seems like today, just given the current state of the crypto market and where most of the developers are building, I think DeFi is the best product market fit for Solana right now.

Ray: Yeah, it definitely seems that with the TPS, transactions per second, and some of that central limit order book capability, which is one of their superpowers, but we’ve also seen some cool projects like I think, Helium are doing some great work on the Solana protocol, and also, I think Hivemapper, which is some form of decentralized Google maps capability. So it does seem like things are spreading out. Is there any ultra emergent dApps which are gaining traction outside of Hivemapper or Helium, which really caught your attention Matt? Like, “Wow, this is going to be big, but no one’s talking about it.” Is there emergent dApps which you think are really going to blow up this year and get into more of a public profile?

Matty: Well, first of all, actually Helium is not built on Solana, I think they use their own chain. I think they’re considering maybe Solana. I’m not sure, but, yeah, that’s like a separate project, but they’re great. I love Helium, it’s growing really well. I would say, yeah, Audius is really interesting, I mentioned that before, but it has I think 7 million monthly active users. So just to give some context, I think, Uniswap maybe has like 1.5 million monthly, and I think that’s probably the top decentralized app across any ecosystem.

So their usage is really high. What’s really interesting is that their user base really doesn’t know that they’re using a blockchain under the hood. They’re just music fans and artists of all types and sizes that just feel like they can make a direct relationship with their fans and stream their music freely. And so I think that’s an interesting use case in this long tail Web3 world.

I think outside of Audius, there’s a wide range of projects that are tackling everything from a decentralized social media platform to a decentralized discord, to a decentralized GitHub, and so, any use case where, I guess, a large part of the user base is feeling like they’re being restricted and they wanted a more open free market platform, I think is fair game. But, yeah, we’ll see what ends up working in the long run.

Ray: Yeah. It seems like things are moving fast with Solana in terms of number of projects being built on top. I don’t know, were you at the event in Portugal last year where they had that big gathering?

Matty: Yes. At Breakpoint in Lisbon. Yeah. It was great. It was our first in person conference and it was great just seeing the whole community get together and yeah, meet each other face to face for their first time. So yeah, it was awesome. And it was great also that a lot of people that were not necessarily building in the ecosystem, but were just curious about Solana were there to meet ecosystem projects and founders, and talk to our team and get more involved. So, yeah, it was a great event.

Ray: Did it surprise you the attendance? Did you get that feeling at the event that, wow, there’s actually more people here and more energy than you expected? How did it compare to your expectations and just a wider team? What was their post-conference feedback?

Matty: Yeah. I think if you would have asked us, I think when we were thinking about planning this, first of all, COVID was tough to plan around just over the last year. We had tried to put together a plan even in December, 2020 for a conference later in 2021. And we were thinking it would be great if we have a couple of a hundred people, of our ecosystem, just to spend a couple of days together, and we’ll try to make that work. And so that was our expectation going into the year, but obviously, just throughout 2021, just the ecosystem grew so much. And there was so much attention on the community and just the projects building in the space. And so, I think, yeah, just the Solana Labs team was really excited to see that. And yeah, hopefully we can do it even bigger and better next year.

Ray: Great. So you’ve got this USP in terms of transactions per second, low cost, a really user friendly developer kit. So the on ramp is probably a lot more easier than other layer-1s to allow entrepreneurs to build on top of Solana. What’s next Matt, in terms of this year and next year? Is there any new innovations at Solana, which should really accelerate the protocol’s capability and ability to be a leading layer-1? Is there anything in the pipeline which gets you and the team really excited?

Matty: Yeah. I think this is another big difference between Solana and pretty much every other layer-1, is that, the way that it’s architected is not really relying on any computer science breakthroughs to continue to scale. It’s really built on, and I guess this comes from Anatoly who’s the creator and the founder. And the team he initially hired, they’re all from Qualcomm and experts in distributed systems from Web2. And I think what they realized was that the way that a blockchain should work is not that much different. And what it takes to continue to scale is just continually getting better hardware thanks to Moore’s law and just optimizing in every layer of the stack, so that you get just incremental and incremental, better performance over the years.

And so in terms of what the Solana Labs team is focused on, on the engineering side, and not just Solana Labs. Solana Labs is just one development team in the ecosystem at this point. There’s a bunch of external developer teams and individuals that are contributing at this point. And so I think it’s just optimizing every layer of the stack and getting block times down from 400 milliseconds to 200 milliseconds and max TPS up from whatever, 50,000 transactions per second to a hundred thousand transactions per second. And so it’s just, there’s no breakthroughs that need to happen in order to scale to millions of transactions a second. It just needs to continue optimizing and hardware just continues to get better. And so that’s the focus.

Ray: Okay. So the journey to that a hundred thousand TPS and lower cost, lower friction, more ease of use is more based on what’s happening in the hardware and ASIC world, and you guys will then engineer to that internally. Is that what you say is more of an external force in the ASIC market? And then you guys just jet ski on the back of that, but then do a lot of hardcore engineering to configure, to optimize that hardware upgrade. Is that the school of thought there?

Matty: Directionally. So it’s not ASICs. ASICs are for proof of work mining. Solana is a proof of stake blockchain, so it’s a little bit different mechanism. But generally, you’re correct. If you look at like an Xbox 10 years ago, it costs, let’s say like $500 to buy it, an Xbox one, and it had a certain speed. And just over time, processors, chips, silicon development in computing just continues to get exponentially better. And it also creates cheaper hardware. And so, I think we’re just riding on that wave, as you say, where we just are expecting that that will continue to happen into the future. And the community and all the developers around the validators who really run the network are optimizing around that trend. So, yeah.

Ray: So that framework for growth is that from Anatoly’s background in Qualcomm and his background in semiconductors, where he is like, “That’s happened in that industry well, and it works well, why can’t we just use that methodology in the Web3 layer-1 blockchain world?” Is that the general school of thought?

Matty: Yeah, exactly. And I think that also translates into why Solana can process so many transactions a second, just architecturally. So one difference that may be of interest to your audience is that in Ethereum and other layer-1s, transactions are processed serially, which basically means, one transaction enters a mempool of unconfirmed transactions and it’s confirmed in that order. But in Solana, it doesn’t really work that way where, if person A sends a transaction to person B and person C sends a transaction to person D, those two should be confirmed at the same time, because they don’t affect each other’s accounts, right, and state on the blockchain.

And so partially, what these machines the validators run are doing is just processing in parallel way more transactions rather than serially in order, like on other chains. And so just these architecture decisions based on how parallelization works in Web2 and distributed systems previously, have been brought into this Web3 world. And I think that’s where you see all the performance gains.

Ray: Okay. Makes sense. And obviously, we hear the term validators a lot in the world of blockchain/Web3. I know a lot of folks haven’t got a clue, Matt, on what a network validator is. So in the most simplistic format, imagine I’m a nephew, and it’s Thanksgiving dinner, how would you explain what validators mean in the world of blockchain and Web3?

Matty: Yeah. Well, validators are entities that run these machines that confirm transactions on the network. And so they’re really important because of that. And it’s important that there are a lot of these folks, because if there’s only one validator, then the network isn’t very decentralized, right? It’s just, if you can shut down that one validator, who’s processing all the transactions on the network, then it’s not decentralized or censorship resistant. And so, it’s important for many of these validators, who are these entities often businesses that are running these machines, or running the Solana network software, abiding by the rules of the protocol and are confirming transactions on the network on behalf of all the applications and users that are using the network. And so they’re really important stakeholders in the ecosystem.

Ray: That makes sense in terms of creating that trust factor, right? And there’s always this battle about how decentralized the network really is. I know the Ethereum community really bang on about the importance of decentralization, and it’s one of their things they’re loud and proud about. And they rebuttal to some of the other layer-1s as they’re not as decentralized. They’re working in partly a Web2 mindset, when it comes to spreading that risk. What are your thoughts there? Because then there are some on the application side is, the users don’t really to give a shit about decentralization. They want speed, low cost and they want the outcome. So, what’s your school of thought, as a fast-moving practitioner in the space, on the order of magnitude something should be decentralized?

Matty: Well, I think, censorship resistance and decentralization is really important. It’s core to this notion of credible neutrality, right? And making sure that the system is fair, open and unstoppable. So it’s a really important concept that’s core to all this technology that crypto has produced. I think in terms of the way that I think about it though, is maybe a little bit different in the sense that I think you have to look at, when evaluating, okay, which network is more decentralized than another, I think there’s a lot of factors that go into it. But one of the core ones from a technical level is just, how many validators or miners are economically relevant in the network? And not necessarily the total number.

So for instance, in so Solana there’s a lot of validators. There’s, I think, something like 2000 validators that are live right now. And that’s important, that’s one factor. But what’s more important is, well, how many of those validators are actually confirming transactions that have actual economic weight in the system? And that’s more like 19. So a much smaller number. And that is the number that if a government or some bad actor wanted to shut down the network, you just target those 19 validators, shut them all down at the same time, and that would halt the network practically.

And so you have to look at, what is that number on other networks? And so on Ethereum, it’s three mining pools, on Bitcoin, it’s two or three mining pools. And so I think the total number is important, but even more important is optimizing for this, what we call the Nakamoto coefficient. What is the total number of validators that are economically important that if you compromise, it would shut down the network? And so that’s partially what the Solana Foundation is working on improving. Their sole focus is, how do we increase that number and make it easier to validate, to basically maximize decentralization?

Ray: Okay. That’s really clear. Thanks for that, Matt. So it’s the ones who have economic significance, right? So that economic significance, is that directly correlated to proof of stake, like how much they actually have staked themself on the network?

Matty: Yes.

Ray: So I’m jumping ahead. Sorry. We’re getting to the more intermediate conversation.

Matty: Sure.

Ray: But back for the beginners for our lovely LinkedIn community, what is proof of stake, Matt?

Matty: Okay. At a high level, in order to confirm transactions on the network, you have to prove that you are, one, running a validator, like machine that is capable of doing so, and two, you have to prove that you have economic weight behind your machines and your entity. In Bitcoin the way that it’s done is called proof of work, and you basically connect to a big power source, whether it’s like a hydroelectric dam or like a wind farm and you convert that energy into these machines called ASICs, that basically compete on a global level across all other ASICs to confirm transactions and earn a reward in terms of a block rewards, a little bit of Bitcoin.

In proof of stake and in Solana, there’s this reward of SOL tokens for confirming transactions and locking up, basically, your tokens instead of power. And so that’s what it is at a … I tried to say at the highest level possible. I don’t think that’s very high level, but it can get a lot more technical than that.

Ray: That makes sense. It’s basically the meaningful validators back up their work with actually having skin in the game. But that skin in the game in Solana tokens is actually locked in. It’s not like they can draw that down. A good validator might … I’m sorry, I’m butchering this right now, so please correct me. You might have a good validator who does really good work, but maybe locks in their tokens for 36 months. So they’re a meaningful validator because they actually got a high amount of value staked and they’re locked in for a meaningful amount time period. So does that play into the equation, amount and time duration locked in?

Matty: So in terms of duration, I don’t think there’s any specific timing that you want to lock in. Although in order to participate, in order to continue earning SOL token rewards, you need to have a staked SOL. And so it’s just a requirement to even participate in the network generally. And when looking at validators, the ones that become the top validators, that scale their operations and earn more block rewards than others is that they have an extremely high uptime and yes, they’ve staked their tokens for a longer period of time. And so I think those are factors that lead to building out a successful validator business.

Ray: Yeah. I get this question a lot actually on LinkedIn, where do these validators come from? Are they people at home or many businesses? Could my 16 year old nephew be a validator? Who are they and what’s their background?

Matty: Short answer is, yeah. Anyone with a good internet connection and a really good gaming rig basically, can become a validator and participate in consensus. And there’s plenty of people that do that. Having said that, in order to be economically relevant and really grow your business and actually earn staking rewards, it’s more of a business at that point where you have to connect with a data center and you have to hire employees and ensure uptime and making sure you’re connected to the network at all times. If you just go to solanabeach.io, you can see all the validators listed there. A lot of those validators at the top are professional businesses that this is their job, is to provide validating services across, not just Solana, but all of these proof of stake networks. So, yeah. And they’re pretty globally distributed. There’s a bunch in Europe, they’re in United States, Asia, South America, so it’s really all over the world.

Ray: It makes sense. And another question I got often is, what if in a Web2 form factor, you have a specific validator which is a professional outfit? Like you describe on, everyone should check out solanabeach.io. But that validator ends up having X private capital backing. So, it becomes more and more powerful, has more and more staked, has more and more of the share of the economic activity. So then it imposes a more centralized risk in a proof of stake network like Solana. Is there certain guide rails in place at the cooperating system level where that’s not allowed and certain rules which circuit break that scenario happening, Matt?

Matty: So not in that sense, they’re not rules around that. But I think you’re right. There is a moat that some validators have. What’s interesting though is that, the way that a lot of these validators get the stake size that they have is that they allow individuals who have SOL tokens to stake on their behalf. So they delegate that to these individuals, like myself delegate my tokens to a validator, right? And so there’s also this natural, and I think we saw this with the Bitcoin, honestly, with Bitcoin pools in 2014, 2015, where if anyone pool or a validator in this case becomes too powerful, you see a lot of folks unstake or pull out of that pool to distribute the stake. Because you don’t want someone that has even that risk of centralizing the network.

The other really important thing here is, and we’re getting, I guess, definitely into the intermediary section is this notion of being able to delegate to a stake pool. And what a stake pool does is that, it delegates the tokens to people outside of that top 19. And so it distributes stake evenly across people that have good uptime, that are following the rules that are trying to become a large validator and it automatically shifts stake to those folks to add more numbers to that, I guess, super minority that could shut down the network if all of them are compromised at the same time.

Matty: And so the reason why you would want to do that though, is, one, it helps just the network and two, you get stake tokens. And you can use these staking derivative tokens in DeFi. So you can earn extra yield on it or you can trade them, you can make them economically viable in a lot of DeFi protocols. And so that’s what a lot of people do because of just the extra rewards that you get from doing so.

Ray: Okay. So who are the big staking pool providers for our audience? Because I think that term is getting banded about a lot, but again, people have no clue what staking … Are those individual companies as well, where you get applications which are purely focused on being a staking pool for token holders?

Matty: Yes, absolutely. So the main ones on Solana today are Marinade, Lido and Socean. There’s probably like 10 to 15, but those three are the largest in terms of usage today.

Ray: So then this segues into another mythical topic, which we hope this year, people will try to demystify. Because I think NFTs that part of understanding is moving quick, Matt, and I’m sure you see it in the market where people are … I’m getting carried away here now. It’s still in the minority, let’s face it. But, the understanding of what NFTs are and digital scarcity and the way you can program an NFT to offer X capabilities, I think that train is picking up pace. And with Coinbase NFT coming out and with the announcement with MasterCard to make that unwrap super easy where my sister could do it, I think NFTs are progressing fast.

I felt DeFi, which is a really meaningful value on lock, especially with all the money printing and the fact that no one can get a meaningful risk free rate on return on their capital, is causing so much pain in the world, right? That’s why people are going so further up the risk curve to fight inflation and make sure their fear isn’t a melting ice cube, which it is.

And last year, everyone talked about DeFi summer. Everyone last year, thought this is going to be the year of DeFi. And it’s not really happened because it’s still very complicated. Most people haven’t got a bloody clue of what DeFi is, but I think I’m getting a lot of questions on where does the APY come from? So is a lot of that APY from things like Marinade and Lido, where you are offering your token to a staking pool, they go away and spread that across the more minority validators, and that value exchange, that spread offers some form of yield back to the original holder. Is that an example of DeFi or a way of another financial instrument where people can actually generate yield from holding a Solana or Ethereum?

Matty: Yeah. So just as an example, I think you’re right. So inherently in Solana, according to the core protocol code, there’s an inflation rate. It tails off over time where it becomes very deflationary. But right now that there’s an inflation rate, I think it’s something like, I don’t know, six and a half percent for block rewards. So that means there’s 6% new tokens entering the market. And when you stake, you get to basically get that 6%, because you’re locking up your tokens in a staking validator. And so that’s one way to earn yield, I guess, on your existing tokens. But what’s interesting with stake pools is, you don’t just get that. You get that automatically, but when you use a stake pool like Marinade, it automatically generates an mSOL token. A new token that you can basically go onto a decentralized lending protocol, like Solend and get an additional 5% of just traders who are borrowing tokens on a short term and earn an extra APY that way. And so that’s what’s interesting in terms of stake pools and the ability to earn yield.

Ray: So wait, when it’s things like wrap SOL, which becomes some form of MSOL, for example, that’s then staked with a pure play DeFi protocol and then it goes away off into the mist to those, really exotic, derivatives players who want access to that collateral. And they go away and do their ultra complex trading, which you as a customer at the end doesn’t need to know because it’s far too damn complicated, obviously you’re taking risk. And in that market, that new parallel system, that’s where you get those compelling APYs, because it’s a brand new market and there is some frankly risky, but interesting and exotic things happening. Is that the whole, I know it’s a simplified [crosstalk 00:47:42].

Matty: Yes. That’s generally correct. Although I think the risk is less than you think, because you’re not necessarily like … The way that a lot of these lending protocols work is that they’re over-collateralized. So, when you borrow tokens, you can get liquidated very quickly automatically, if the market turns against you. And so, I think lenders are pretty protected on, on that sense. I think the risk with all of this stuff is that it’s one big experiment, right? Our contracts haven’t been around that long. And so there could be a variety of different bugs, both economic and technical that have happened where, there’s this smart contract risk. But if you’re comfortable with that, if you’re comfortable living in this Web3 world, it’s an interesting world to play around in.

Ray: When do you think DeFi is going to drop? Because I look at the TVL today on say, DeFi pulse, it’s always flirting around 75 billion for sometimes. I think it touched a hundred billion for like a couple of days, but that’s still like tiny in the world of bonds and equities and real estate. It’s nothing, right? When do you think, because I think DeFi is really useful. I know a lot of family and friends who would love to just use an app based DeFi protocol and go, not understand what’s happening on the backend because they don’t need to. And they probably can’t to be fair with them, probably could if they had the time, but they don’t have the time and they just want to get a meaningful yield of six to maybe 8% or further up the risk curve if they decide.

But I don’t see DeFi really blowing up yet, in terms of really accelerating it. But everyone’s mooted before Christmas and January, this is going to be the year of DeFi. From what you’re seeing in the Solana ecosystem, because it’s got a natural superpower for that use case, do you think this year is going to be the year of DeFi, Matt, where it does cross that chasm in terms of adoption and traction?

Matty: First of all, I don’t know. Well, all I know is, where are the developers building? And by far, where they’re building the most is in DeFi. And so that’s why I’m super excited about it. In terms of when mass adoption happens, I don’t know. I think partly, that is determined on a few different funds. One is just, we need better user interfaces and better product experiences that integrate with these core protocols. I think that’s happening quickly. I think things like Phantom, which is the main wallet on Solana, is pushing forward on the UX front and making it really easy to interact with these things. But that’s been something in the past that’s prevented people from entering the DeFi world.

Second, I’m not a lawyer, I’m not a regulator, but I think regulation is a big thing that scares folks in some senses. And it’d be interesting to see how that piece of it plays out, because a lot of this technology is inherently very different than previous technologies and how it functions. And so, I think regulations are going to need to follow suit in order to accommodate the ecosystem.

Ray: It’s interesting, there’s this exponential gap between the tech and regulators, right? You look at securities laws, they’re from 1933, they can’t really understand the context at the moment. The SCC just more have a lazy posture that, “God, these are all securities, period. Right?” And that’s not really an adult way of going about it, right? I think that needs to be revamped. From what we observe and it’s kudos to the community in Web3, they’re just moving so damn quick that regulators just can’t even keep pace. Can they Matt? It’s just too much to digest.

Matty: Yeah. At least in the US, they’re trying to wrap their head around Bitcoin, let alone all this stuff happening in Web3. I remain somewhat optimistic that … This technology is global in nature, and so if any one jurisdiction decides to try to shut it down, or restrict entrepreneurs from building in the space, or holding crypto or whatever, it’s just going to move somewhere else and flourish in that place instead. And so, I think there’s an inherent incentive, at least in the United States to be very, yeah, accommodative to this technology, because I do think it’s the future of the financial space generally, in a bunch of other industries. And so if we want to ensure that we have a good place in the world order in the 21st century, it’s going to require us to have pretty friendly laws. And so we’ll see how it plays out. But I think that’s going to become very apparent, very quickly, in the next couple of years.

Ray: Yeah. I share your optimism, Matt, because there was a big hearing just before … There was one in Q4, right? Where you, I think, was it Brian Brooks, you had to chat with the CEO from Celsius, you had Sam fly in with his, you look funny in a suit.

Matty: [crosstalk 00:53:15].

Ray: Yeah at Coinbase. I think it was Coinbase legal counsel there, which was really cool. Everyone was trying to represent and speak well. And to be fair, Matt, the questions were pretty good from the senators. I think 80% of the questions were good and well researched. I was pleasantly surprised. There’s always one hero in the crowd who doesn’t know anything and can just ask stupid questions, but you could tell everyone actually done their homework, didn’t they? And they were trying to learn and trying to meet people intellectually, halfway. I don’t know if that was just a thing [crosstalk 00:53:53] publicity, but it seemed promising.

Matty: Yeah. It’s interesting. I think there’s a few things that are, just narrative wise, going for crypto. One is just that, China has functionally banned things like mining and exchange within its borders. And so, a counterbalance to that is one narrative that I think is resonating. I think another thing is, there’s this huge push to disintermediate, I think, Google, Facebook, these big Web2 monopolies in a sense. And the government is seemingly, very much, not happy about that. And I think Web2 or Web3 is a technology version of that, right? That I think could gain alignment. And so, yeah. Well, I remain optimistic. If you go to Crypto-Twitter, people are always complaining about the US government and other jurisdictions on their regulation. But I think so far, it hasn’t been that detrimental, at least to the development other than some DeFi protocols don’t feel comfortable offering their interface in the US. But other than that, I think it’s going okay so far.

Ray: Yeah. I think for the US, this is a massive opportunity. So anything they do from a regulatory standpoint, which is archaic, they’re just going to lose entrepreneur and jobs, right, and ingenuity in the economy.

Matty: Yep.

Ray: So fingers crossed, US has got a great history on putting their arms around innovation, right, or the next new paradigm. And that’s been proven out with the internet. So it would be shocking if they let this one slip outside their borders, because you’re right, this time round, it can go global, right? You’ve got different hubs in Southeast Asia, Singapore, I know things are happening in UAE, I know certain parts of Europe. We’ve had a number of guests from the dark region, Germany, Switzerland, Austria. Matt, I was really impressed with some of the active there. UK’s getting there. So US has a shot here, right? To get some impetus back.

So it’s more of an opportunity, but that one we could talk about for hours, because I think that’s going to be a big journey for everyone, right? It’s not going to happen overnight. But going to a key metric, which is always foundational is, they always say follow the developers, right? And Electric Capital published a really good report, I think a week and a half ago where they, I think they mentioned there’s, what? 18,000 plus developers in the ecosystem now. Obviously they were only the open source folks. They could actually track a lot of people. I think the number is a lot bigger than that. But how’s it been at Solana in terms of traction and numbers? What does it look like in terms of that volume and that excitement in that community?

Matty: Yeah. The Electric Capital Developer Report is great. Every year, I always read it. And I think it showed this year that Solana has really increased it’s developer ecosystem. Yeah. And I think you’re right. It’s directionally correct, but it doesn’t include closed repositories on GitHub, which there are many teams building. I think they admitted that it didn’t include like NFTs and gaming and such. So I think it’s directionally correct, not exactly correct.

But in Solana, I think that’s where it stops and ends in terms of why people are so excited about this technology is that it has attracted such a high-quality ecosystem of developers that’s just growing faster than any other chain by a mile. And so, yeah, I think that’s what’s super exciting and obviously, the core technology and its performance is attracting these really quality entrepreneurs. And, yeah, this is what’s most exciting, I think about Solana right now.

Ray: And breaking that activity down, where are you seeing compelling dApps? Is it within the NFT space or B2B enterprise use cases, is it DeFi? What are the top two use cases? What gets you really excited in just the Solana community?

Matty: Right now, I think, yeah, as we’ve talked about just like DeFi, and specifically DeFi use cases right now that can’t really work on other chains, especially like options protocols, other derivatives, margin trading. Things that struggle on other L-1s are thriving on Solana right now. And so that’s one interesting area. And then obviously just like … It was supposed to be the year of DeFi, but it was definitely the year of NFTs, right? And just a huge explosion. I think I mentioned this, but Magic Eden is the main NFT marketplace on Solana right now. And there’s a ton of usage of that. Just a ton of different NFT projects that are plugging into that core infrastructure.

So, yeah. A lot of these projects have started, it’s like generative NFTs, right, like profile pictures, but what’s interesting is, it’s evolving into, first of all, they form like a DAO, right, on discord and they are trying to figure out, “Okay, based on this IP that we all hold, we can build a game, we can build other experiences that incorporate these NFT primitives.” And so I think we’re seeing a lot of games specifically pop up in that vein that I’m really excited about. So yeah, we’ll see how it plays out.

Ray: Awesome. And obviously you’re a practitioner in this space and naturally bullish on this, but some predictions, I know predictions are always a challenge, Matt, in the wacky world of Web3 and the beautiful primitive of the blockchain. But what excite you in the next 18 months to two years, A, in Solana and just B, in the wider Web3 world, what you’re really bullish on and just excited to see come to fruition?

Matty: I’m excited, I guess, for Solana to just continue growing across these various use case verticals like DeFi, NFTs, gaming, I think we’ll see in the next 18 months, very, very large companies and organizations plug into these DeFi protocols and probably just organically some protocols are going to reach a hundred million users. And so, yeah, really excited about that.

Outside of Solana, I think, like I said at the beginning, I’m still a massive Bitcoin believer and I think we’re just macroeconomically and just politically in the world by now, we’re in an interesting spot where there seems like there’s rising inflation on some level, there is a schism in how governments are treating each other, potentially escalated by COVID, I think is a big factor. And I think Bitcoin, obviously I think that it could solve a lot of the issues that we have with our central banking system and inflation, but I think it unifies people in a sense of having a global monetary standard, which I think people are just completely underestimating what the outcome of that will be, but it is a unifying monetary phenomenon and asset, and I’m really excited to see what happens in the next 18 months around Bitcoin.

Ray: Yeah. I couldn’t agree with you more. I think people putting the price action aside, I think that gets looked at too much. It’s not really about that, it is really, if you look back at history and I’m sure you’ve read things like the Bitcoin Standard, there’s a great piece by the same author called the Fiat Standard, which I highly recommend. And if you look at history, the gold standard was meaningful back in the day, right? Because it meant something. It gave you some peg and some meaningful store of value, which Fiat was pegged against. So gold did serve a purpose, right, for all those, God, for thousands of years in the 1900s, it was something. But history is full of so many events where you’ve got central banks, always trying to run away from being pegged against gold, right? And just run away and just be naughty and print and just destroy the monetary base.

So history has proved they can’t be trusted to behave and stay on a gold standard or stay on some form of peg, which protects wealth. So it looks like the Bitcoin network it’s like adult supervision, right? Independent adult supervision on having an effective monetary system in a way. It seems like the mature, mathematically program, beautiful system in the room, right? Which can solve this world problem, which leads to so many socioeconomic problems, inequality in wealth and all the other side effects around that. So what’s your thoughts on that? Is that the way you like to think about Bitcoin or would you like to also add to that perspective?

Matty: Yeah. I agree with a lot of what you said. I think the way maybe I’ve recently, after years, convinced my parents that Bitcoin matters is that, I think two factors. One is that, central banks, it’s just a group of people, right, that are influenced often by politics and their view of what the state of the economy is, which is often imperfect. And so, we’re just relying on a small group of people to make a decision on what the supply or demand of money should be. And I think that was proven out in the 20th century that that central planning doesn’t work in markets very well. And I think Bitcoin is immune to that. It’s more of a market based solution to the money problem.

And so that leads to one really important thing, which is the ability to economically plan, and I think this also relates with Web3 where if you look at, yeah, again, like the lessons of the 20th century were like, where economic prosperity happened is often in places that provided, one, certainty and stability both in rule of law and it’s economy in terms of building businesses and creating entrepreneurship. And so, I think Bitcoin and these incredibly neutral, smart contract platforms are setting up a digital country or nation in a sense of having that certainty and that ability to economically plan for everyone, no matter where you live. And so, I think that’s a super powerful concept and I think we’re just seeing the beginnings of it right now, but yeah, just super excited about it all generally. Yeah.

Ray: Yeah. I love the way you put it there, Matt, economically plan and that opportunity being open to everyone. It could be someone with say, a blue collar job but works really hard and wants to plan for their children’s education. So allocate somewhere where they get a meaningful yield and they can just have a happy life and have structure, or it could be someone who an ultra high performer and works really hard and achieves something great. But then can still not have to spend an exorbitant amount of time, like Michael Saylor who was an enterprise software guy, but he’s gone so far up the risk curve and research rabbit hole to go, “I need to protect myself, right? I’m really pissed off with the system, I’m going to go all in on investing, but also advocate and make this a global standard because the world needs to change.”

So, I think the existing system is forcing people to even not do anything. And I feel so sorry for them because a lot of them don’t even know. The ones who do know are super frustrated, hence all the challenges we have on the social side of things. But also, the people who do know are forced further up the risk curve, right? Enough to do growth equities and do this and do that and do handstands just to defend themselves against basic inflation. And inflation is a vector, right? And for most people, in most areas, if you live in the Bay Area, you might argue your inflation rate, depending on your context, can be up to 35%, right, if you’re into prime real estate and you are quite ambitious around where you live, right?

So it’s all these handstands we have to do, that energy can be used on creating the next new great medicine or building something in your community which helps children, where all this other energy is now being used on protecting your wealth, which you can have math and code do that and go, “Guys, I’m taking care of this, go do some other cool stuff.” It seems so obvious, but I know it’s going to be a challenge getting there.

Matty: Yeah. And I think it’s just also so many people. I think what’s interesting about DeFi and Bitcoin and some of these things is that there’s so many people working within the financial industry, these huge monolithic companies. And these people are like, “Should some of the best and brightest PhDs in the world be working at hedge funds to make an 8% return on their capital, right? Is that the best usage of their time?” And I don’t think it is. I think, if there’s more certainty, I think a lot of these folks will choose things that they’re passionate about. And so, yeah. I completely agree.

Ray: Yeah. You’re from the Elon Musk school or camp I think. Elon says it all the time. He goes, “The amount of engineering talent which gets sucked into finance engineering because of the economic rewards, is a complete waste of talent.” So obviously, we need financial engineering in Web3, but once it’s built, it’s built, right? It’s software.

Matty: Yep.

Ray: So, yeah, I couldn’t agree with you more. Those engineering chops needs to go into machine learning first medicine and life sciences or anything around the environment. So, yeah.

Matty: And I think what’s interesting also is, I think we’re just seeing the beginnings of this is, this notion of a DAO and a group of people forming around a certain cause or want to buy something, right? I don’t know if you saw … Obviously you’ve probably heard of the ConstitutionDAO.

Ray: Yeah. The ConstitutionDAO, that was crazy, right?

Matty: But then there was more recently this group of people that didn’t believe like Ross Ulbricht, the founder of the Silk Road shouldn’t be in prison for life. And so, they’ve banded together and are formulating a coalition to get him out of prison, right?

Ray: I wasn’t aware of that one.

Matty: Yeah. But that notion of just seeing people form capital, form a group until it’s a group that’s non-sovereign to solve some problem that needs attention, I think is really interesting. I think that’s where you’re going to see maybe climate work and education and all sorts of really interesting use cases for DAOs. And so that’s another pretty exciting area. I think we’ll see, maybe not in the next year or two, but five, 10 years down the line.

Ray: Matt, on that one, I think DAOs might happen a lot faster than we think. I’ve got a little sneaky feeling.

Matty: What’s your reasoning for that?

Ray: I just think, obviously you had the ConstitutionDAO, right?

Matty: Yeah.

Ray: And then obviously, you got the Silk Road situation. And I’m seeing a few emergent use cases. I’ve seen a really cool one, which does it on early stage R&D within life sciences. They’re doing some work around longevity drugs, which I thought was quite cool when that spun up. But I think, the actual model of a DAO, and the way you can spin it up, and the way you can bake in all the incentive structures, we actually have a lot of those picks and shovels, either ready or about to be ready and very scalable.

So, the actual stack is pretty much nearly there. And I think, with right marketing and the right packaging for folks at scale to understand what a DAO is and how they can participate at scale, might happen a lot faster because it can then jet ski on the back of other, obviously using Kickstarter, other FES AngelList, there already is Web2 type. You’ve got Republic, there already are examples which people are aware of and they’re successful of capital formation through retail getting involved and many parties all across the world.

So I just think mentally, if it’s packaged well with the right team doing it, I think people will get it and go, “Wow. I want to participate. I want to work for a DAO. I can work there and get even more values.” And I think that’s going to converge, because I think a lot of things move fast when things are secretly converging. What’s happening with NFTs and Coinbase, MasterCard, all of these periphery things just quietly in the background will accelerate the timing for DAOs and the understanding of DAOs. Am I making sense where all these background things accidentally end up accelerating DAOs, and the adoption of DAOs, and the way they gather momentum and traction?

Matty: Yeah, no. I think I generally agree. We’ll see what people do. I think one interesting, maybe point to add on to that is, if you’ve ever joined, let’s say one of these DAOs that exist in NFT land, where you have a bunch of people that bought into this vision of an NFT project and they have profile pictures or whatever, cats or monkeys or whatever, if you go into these Discord channels, what’s interesting is that there’s usually a skills channels, where people will post, “Hey, I’m a designer.” Or, “Hey, I’m an accountant.” And the vastness of experiences and people that are in these things is insane. You could never hire for this diverse group of skill sets.

And I’m curious to see if that results just like in very different ancillary products and services or movements around it. And I don’t want to say that DAOs are going to disrupt the limited liability corporation model, but I think their ability to attract a bunch of different types of people under a shared vision is really interesting. Yeah.

Ray: Even the LLC model back in the day was a huge innovation.

Matty: It was huge, huge innovation.

Ray: There’s actually a book about it. I forgot the topic. I’ll ping it to, Matt.

Matty: Yeah.

Ray: But that was huge because before that, you didn’t have that where people were like, “I’m not going to invest. I’ve got crazy exposure. See you later, right.” People underestimate how massive the LLC form factor was. You described it, Matt, you raised a crazy point here, when you talk about, not only capital formation, but top quality talent formation.

Matty: Yep.

Ray: So analogy I would use is, it’s more of a Web2 SAS analogy, but you’ll know, you’re a growth guy and you’re from Square, you spent four years there. You don’t need people talk about product-led growth where the product’s that good and it just grows itself because you have a free in your model, people use a product they’re not paying. With DAOs, you are going to have talent ape into a project because talent will be aware, I can shop for a job. I can actually look inside the kimono and see what this is and make my own decision if I want to participate. When that genie is out the bottle, top people are going to be like, “Mate, I don’t need to go speak to a recruiter or apply for a job. There’s plenty of DAOs out there. Here’s a repository of DAOs or a subset of DAOs, I’m just going to go out there and find it myself or create my own one.”

Matty: Yeah.

Ray: And suck up talent. [crosstalk 01:16:14].

Matty: Yeah, no, I agree. I know this is already happening in the crypto industry where I know some really top investors, data scientists, designers that were leading VC firms and crypto projects that just quit, and now they issue out proposals to DAOs of DeFi projects or NFT projects for their services essentially. And they’re making a living doing that and a much better living than they were when they were working for some VC firm. So it’s interesting.

Ray: Yeah. And if these things scale, this is more finance talk here, but it is meaningful to people, the liquidity profile is revolutionary. Once these projects scale, people stay in the projects because they’re passionate about it, but people can gain liquidity if required, right, because of a personal reason. A is in your classic startup model, this is just a whole new way of capital formation, talent formation, business execution and having liquidity whenever you want it, because you’ve done the work and you’ve earned it without no process. It seems so much better on all fronts, Matt.

Matty: Yeah. I think that the way that you laid out is good, where I think in 2017, it’s interesting, there’s the explosion of the ICO, right?

Ray: Yeah.

Matty: The narrative was like, “Look at how ridiculous this is, all these crappy projects getting tons of funding.” But what was the missing huge benefit to this was, there has never been in a time in history where you could accumulate capital so efficiently and effectively across the world from so many different people. And I think that was the model that was pioneered in 2017. But now I think with the, like you said, the DAO tooling and services have allowed for this next, really important critical part, which is, yeah, attracting talent to all this capital. And good things happen when those two things meet, right? And so, yeah, we’ll see what happens in the future.

Ray: Yeah. It’s definitely one to watch. But Matt, man we could go on for hours. This has been an enthralling conversation. For our audience, top resources that you recommend online or books for someone who’s entry level or slightly entry/approaching intermediate, whatever intermediate means in this wacky world. But any recommended favorite learning resource where people can continue their learning journey.

Matty: Yeah. This is a good question. There’s a ton of noise in crypto generally. If you’re someone coming in fresh, actually it’s hard to sift through. I don’t know if I have any books necessarily to recommend, but they got to get on Crypto-Twitter. This is the epicenter of crypto information and starting to spend the time finding people that you trust that are in the space and that will lead you to follow and create a feed of information coming out of the crypto industry that you can learn very quickly from. So that is my one recommendation is definitely get on Twitter.

And then, I don’t know. If you’re interested in Bitcoin and want to learn just about the principles, I would just like YouTube, Andreas Antonopoulos, he’s got a bunch of great videos about the philosophy and economics behind Bitcoin. And at least when I was first starting out, I learned a lot from him. So I highly recommend him on YouTube.

Ray: He’s Andreas, he does that Internet of Value series. I think I’ve seen some of his stuff.

Matty: I haven’t actually checked out that I’m more of, search for his stuff from 2013 and 2014, to be honest.

Yeah. He just has a lot of overviews about what Bitcoin is, why it was built, what the problems of the current system are and, yeah, how it could potentially solve it. So, yeah, highly recommend him.

Ray: Brilliant. Well, Matt, it’s been awesome having you on the show. Mate, let’s do part two maybe in September, right? When a part of the season’s being played out and we’ll see where Solana is and all the great work you are doing there. So are you up for part two in maybe late Q3?

Matty: Yeah. Happy to do it. Happy to jump on again. It was great chatting with you.

Ray: Awesome, Matt. Well, I look forward to catching up with you soon and you have a fantastic start to the year.

Matty: Okay.

Ray: Cheers.

Matty: Bye.

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