Joe Lubin: The Metropolitan Ethereum Ecosystem Is About to Reach Escape Velocity | Joe lubin

[Music] gmgm up next huge speaker we have the co-founder of ethereum Joe Luben the Metropolitan ethereum ecosystem is about to escape philos moderated by Bradley from axios what's up everybody how's it going good to see you eth Denver oh wow listen to that a little better energy than yesterday I guess you know earlier in the day good to see you guys uh I'm Brady Dale I'm the crypto reporter at axios I read the axios crypto newsletter get out your phones real quick and just just subscribe right now you know save yourself some time uh we're here with uh Joe Luben uh co-founder of or I think founder of consensus head of it and uh famously a co-founder of ethereum one of the guys there in the room as the second largest crypto Network in the world launched uh welcome Joe great to see you again hey BR hey everyone um [Applause] we're going to talk about the future of ethereum of course um but you guys had some big news yesterday that's relevant to the whole Industries maybe we could start with that what happened yesterday uh so much happened yesterday you're talking about uh this discussion that we've been having with the SEC for a while exactly um do you want me to go into it so the big news um uh we are no longer being sued by the SEC um very excited about that uh we are we are no longer on a monthly basis uh scooping up millions of dollars and throwing it into the furnace um we're no longer taking our attention and similarly directing it uh towards slev null um it's a nerd joke um and uh so effectively our legal team has been working with the excellent new SEC um that that we are uh having a very constructive relationship ship with now um we agreed that we wouldn't sue them um if they stopped suing us so we're all good now all right and it maybe you could give us a quick rundown of you know your company's been around for a while what was your experience with Clayton what was your experience with gendler and then what's your experience with the you know I guess Mark you at until the new chair takes over yeah so um the J Clayton SEC Administration uh was just trying to figure things out for a while they were totally clueless uh when they came in um we reached out at one point and said hey if you want to understand the these token things um we'd be happy to um to have discussions with you um we did some of those uh and uh they got up to speed very quickly um and um some people in our industry did not appreciate uh the J Clayton Administration we thought they were neutral to positive uh so no no real concerns about them uh chair Gensler as you're all aware um was an esteemed professor of blockchain at at MIT uh we're not sure how he got that job um but he learned blockchain uh while he was teaching blockchain um and he formed certain opinions and those opinions were 75% of these tokens were definitely not Securities including ether um and he had some favorites uh but he came into the job as as chair um and he petitioned Congress uh for a mandate because he said very explicitly I have no authority to regulate these digital assets and so please write some rules for me so I can do my job Congress did nothing as it as it does so well um except except in certain moments um and that was an opportunity it was an opportunity but for banking lobbies it was an opportunity for the pressive Wing Elizabeth Warren particularly seized on that opportunity Progressive wing of the the Democratic party seized on it um and um Banks wanted to keep winning a rigged game uh the progressives who wanted to big government to regulate granularly every aspect of of human life felt that uh decentralization and disintermediation um were inconsistent or um would make it difficult ult for for big government to control everything and and so they set about trying to kill slow or co-opt um ethereum technology what was it like going to like a meeting uh in the gendler era like what what were those conversations like um so they were not uh friendly um warm discussions um I don't know if our lawyers have consented lawyers ever met in person with the SEC because it was so adversarial clearly that uh that we had representation um um and so um we your lawyers had lawyers to go to them our lawyers had had special uh SEC whisper or lawyers who and and the SEC was uh was not hearing The Whispers very much um the sec's agenda uh appeared to be to um make us spend so much money and make people across the ecosystem spend so much money that'll really slow our ecosystem um and um you know VCS are smart uh when when VCS see the SEC trying to kill an industry uh and um there's an opportunity to fund a Growth Company they're they're going to run away from that and so funding um in the VC space was was all about funding uh small projects essentially that they could get out of pretty quickly uh and so we uh began to detect that the SEC was trying to to kill our ecosystem when they just started subpoenaing uh researchers and Engineers um at the ethereum foundation at consensus in other places uh with the idea that they could land um a reclassification of ether uh from non-security to security uh and then tie our company consensus to um to being promoters of this sort of reissuance securitizing of ether and so now that that's effectively behind us uh with the new SEC Administration um we we are unstraight jacketed uh we were afraid to say certain things publicly um but now we can um return to being uh very vocal um highly energized stewards of the ecosystem so on that note let's let's shift towards the future now um I know you have and always have had a very bullish take on ethereum right now we were just talking backstage about how you see um strength coming in the L2 world and and sort of all that power that's been built by these additional networks sort of all acre back to ethereum so what's your big picture of view on what's going to happen soon with l2s and why this is going to be great for everyone so um there will be lots of different kinds of Next Generation databases uh in web 3 uh just as there are lots of different kinds of databases in web 2 um um and uh these databases will have different superpowers ethereum superpowers are progressive decentralization to to rigorous massively rigorous decentralization censorship resistance and a bunch of things that come with that we did not focus on U massive scalability um initially uh we uh are now focusing on infinite scalability uh which sorry we've now achieved effect L infinite scalability and I can break that down a little bit uh and so uh having um built horizontal scalability with all these l2s and and the ability to improve the l2s and and build l3s and l4s Etc we've achieved horizontal and vertical scalability the internet is a very big place and we're going to move all the internet and web stuff onto web 3 and we need a massive um infrastructure uh for that um we now are focusing as our two major goals on a beefing up the scalability at layer one I can break that down and uh essentially um taking what we created uh which you can think of as a bit of a problem and and a bit of a feature um uh in achieving great scalability we introduced fragmentation across the ecosystem uh and we essentially lost the easy synchronous and near synchronous scal uh composability uh of functionality and smart contracts that we used to have so there are so l2s are going to play better together soon l2s there are many efforts right now many Technologies right now many commitments uh from different L2 teams to work together to both beef up figure out how to beef up layer one but also create uh extremely satisfying interoperability across the layer 2 networks and is is there something people are working on to make l2s Play Better Together to compose better that you are particularly optimistic about yeah there there are lots of things um the two perhaps most impactful things are um you can beef up layer one um and turn it from one ethereum virtual machine to a lot of uh ethereum parallel ethereum virtual machines so that's creating taking this rollup technology and making it into native rollup technology where the the rollups actually move in inside the ethereum protocol and then there will still be rollups on top of that and this thing called based sequencing where you have validators uh help sequence transactions at layer twos and higher um is is a very clean and Powerful way to to in you know bring back composability based sequencing can get very complicated so you can imagine uh a couple of layer 3es having their own sequencer there's a layer two that they're sitting on it has their own sequ sequencer they're all communicating so that uh uh when you're sequencing you want to see even more uh of the transactions around you so that you can compose them together make everything more efficient and so with this hierarchical and lateral scheme we can figure out how to bring together exactly what needs to be made composable I think everyone wants to see uh based ethereum so I I think uh folks will be psyched about that let's talk about something else uh pretty based it's um you know when folks act ask me what the most important blockchains are I always say um to me it's Bitcoin and ethereum um and that's because they have the strongest cultures you know they they are blockchains that really have an ethos to them that that are people aligning around some collective ideas um I know you're excited it consensus about building some technologies to further strengthen that in ethereum so let's let's talk about Network States and what you guys are doing there sure so um in order to do powerful things um people need to get together into groups um or let's say intelligences need to get together into groups cuz some of those people will be machine intelligences uh going for it and so uh Collective action has evolved from being families living in caves to tribes uh to city state Villages city states uh Nations States joint stock corporations multinationals uh monarchies um the next Collective organization is going to be the most powerful yet and that will bring in diverse intelligences to define a set of goals uh to create Magic internet tokens for different purposes money Equity loyalty utility governance um Define your goals and then use these tokens to incentivize Behavior Uh to achieve these goals and so uh consensus itself is moving itself uh evolving itself uh to become a network state uh consensus software will remain a company um but we're going to become more permeable or porous U and enable uh lots of other actors to to be sort of more intimate um in intimate relationships with us uh as members of our Network state so it's like ethereum right now uh is a nation on the internet and you guys Network State what's that ethereum is a network State all right well I'm going to call it a nation and you guys are building are filling out a way to build like cities within that right like individual chunks of people that's a great way to think about yeah um and we can think of web 3 as essentially um taking on a societal architecture that looks a little bit similar to nation states and and provinces and states and cities Etc um and uh the difference is that it will not be directly dictated by geography uh and that people will be able to be citizens or netizens of different network States um by choice rather than by birth and is there a really early stage kind of um Endeavor that a kind of a young entrepreneur or young sort of excited person might be able to do with this kind of technology that you're looking forward to seeing uh absolutely so um in one specific instance uh our Network State uh will be resident on Linea digital real EST State Linea is our layer 2 ZK evm Network and Technology um and we're working with a bunch of projects to either land their projects on on Linea and many are there already or to even use Linea to to build their own um networks uh and so uh we have a project where we will be incentivizing um young entrepreneurs young Builders uh with linear tokens and maybe even nation state tokens uh Fiat tokens um to make proposals um and come and build what you want to build they will be requested and required to make use of our agreements framework uh it's an agreements framework built by so. part of our uh Network State um and they will sign on to the agreements framework their Pro proposal will be memorialized on chain there will be Milestones there will be specific payouts um and the first cohort of Builders will be requested and required uh to build out around the agreements framework um so make the agreements framework better add a negotiation construct uh to it add a structured decision making piece um there are identity constructs and reputation constructs that we're also going to be providing at people could try to build those and that would be a thing yeah we're so come and eat the dog food with us and we'll manufact more dog food for uh more Builders to eat as we build this thing bottom up very exciting um I was talking with a uh another founder yesterday and he made the argument to me that the reason why things are a little more abund in the crypto world now now I mean obviously it's been good in a lot of ways um but there still is uh you know people are a little not as excited as they once were is because it's still it's all abstract and folks are waiting for blockchains to interface with the regular World um so how far out do you see that what's been the problem and why why what might change that soon and do you I do you agree with that thesis too I guess yeah so I I think it seems abstract to people from the outside that's because um for a decade we've been building enabling infrastructure so we know what we're building we're constantly kicking the tires on what we're building so we think there are applications in our ecosystem those are infrastructural those are defi applications those are enabling um we don't have a lot of mainstream users and that's why it so we really haven't begun we've just um gotten to the point at which we can now go mainstream because we're now scalable enough we're now affordable enough in terms of block space and blob space transaction fees uh we're now usable enough and we're going to get extremely usable in 12 to 18 months as user interfaces incorporate AI it's going to be delightful um it is now uh legal in the United States of America uh to be a blockchain company um and that is going to thank you SEC um and that's going to bring the best and the brightest Builders entrepreneurs from web 2 from trafi it's going to bring institutions uh whose GC said there's no way you can touch tokens right now there there's regulatory uncertainty so I love this new Reg atory uncertainty that that we're laboring under we don't know what where the boundaries are yet I hope to see some boundaries but uh essentially um it's on and we're going to have uh so many applications built so um there are ways that uh that our world and the traditional world are already interpenetrating um some of these use cases are real world assets um some of the most important real world assets currently are stable coins um defi rwa stable coins are most uh or the ethereum layer one and the ethereum ecosystem are are the most dominant in those high value use cases um I love those use cases and I think we in the traditional world can embrace them and build on them I also caution our ecosystem uh that they are potential levers of control if we start building all sorts of uh applications on stable coins for instance that uh are backed by US dollars or treasuries um there could be a shifting of the wind in government and uh and a rug pull potentially so what we do need to pay attention to is building stable coins and building infrastructures around real world assets where the stable coins are backed by Ether and by Bitcoin uh real real de calized economic bandwidth and the real world assets are controlled by decentralized organizations all right well thanks a ton Joe Luben thanks all of you for being here and uh keep an it's all going to turn around ethereum soon uh keep an eye on all of that and uh we'll see you later peace [Applause]