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- [00:00]
Ansgar
Foreign
- [00:04]
David
nation. I'm here with Onsgar and Casper. These are two of the many co founders of ETH Labs. Ansgar, Casper, welcome back back to Bankless.
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Casper
Good to be here. Hi, David.
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Ansgar
Yeah, hi.
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David
So in the same week that the EF has explicitly positioned themselves as just one node in the network, we have the launch of ETH Labs, a new research and development army under the leadership of you two, as well as a few other names that people would recognize out of the Ethereum ecosystem. Talk to me, what is ETH Labs?
- [00:37]
Ansgar
Yeah, so ETH Labs is a nonprofit D lab. And very simply put, our mission really is just to make Ethereum and ETH win. As simple as that. Right. And to say a little bit more like, I think we have this very strong feeling that right now Ethereum in particular, crypto as a whole, but really Ethereum in particular is in a very small, unique moment in time. The first 10 years of Ethereum there was a lot of infrastructure build out infrastructure in the broadest sense. The chain itself, things like Defi, all these, all the rails. Now it's ready for adoption, it's ready for primetime. The global economy is coming on chain and we see two different paths how that can play out. One of them with Ethereum at the center. We think that's better for the world, but that's better for Ethereum and we think there's a clear shot on goal here and we intend to take that shot.
- [01:24]
David
ETH Labs is a new R and D lab. The only other R and D lab is the Ethereum Foundation. So now we have two research and development labs for Ethereum. Talk about that. Is that correct? Maybe there's others that I don't know about, but this is really kind of like the main second research and development arm for the Ethereum project, is that right?
- [01:46]
Ansgar
Yeah. So we are a new org and so far a lot of that work, especially up in the pipeline, so more like towards the road mapping the early, earlier stages research. A lot of that has been relatively concentrated in Ethereum inside of the Ethereum foundation. It's not as binary. There have always been other external orgs that have contributed. I myself started my journey actually at an org called Quilt. That was a minor role, but we really believe that in this moment in time that that old setup no longer quite works. And actually I think the Ethereum foundation also believes that. And so now is the opportunity to really like start decentralizing that layer of Ethereum as well.
- [02:27]
David
The timing of this is obviously going to be very, very interesting. The EF is talking about downsizing both in the team, the headcount and also the budget of the Ethereum Foundation. And this is being discussed at the same time as the rise and the launch of ETH Labs. Talk about that opportunity for ETH Labs and also the talent that ETH Labs has, who is in ETH Labs who are like the actual team members and just the shift in the power center of Ethereum and what ETH Labs represents for that.
- [03:02]
Casper
The Ethereum foundation has put out a new mandate at the beginning of this year and has kind of come forward with a lot of clarity and what it intends to work on. And that includes basically reducing its focus to some extent and really double down on crops. So censorship, resistance, open source privacy and security. And that's at the end of the day why we're all here. These are the core properties that give us credible neutrality. And so naturally by double downing on one core mission and the choice of sort of focusing your attention to that comes also kind of this reduced focus. And I think I would, yeah, put those reduced size efforts into, into connection to that basically. And what this also means is that as for the Ethereum ecosystem, that means there's other things that if we care about them, we need to make them happen. And as these labs we basically here to see kind of see that gap and actually fill that. And yeah, we think it's a unique moment and we're here to fill it.
- [04:14]
Ansgar
Yeah. And I mean just because we keep saying it's a unique moment, I think it's actually good to briefly unpack this. Right. Like, I think really if you look back, like I think you can maybe point, pinpoint it to maybe two years ago or so. I think when we really, it's of course a transition, but I really think it's probably the single biggest pace change of crypto as a whole really going from this like these early years of really figuring out how is this infrastructure even supposed to work. Right? Like how, how do chains work? Like how do you bring assets on, on the chains? How does trading work? AMMs all these things, like every, all of these things were, were being built out and, and now it's ready for prime time. And it, it has been for a while. Stablecoins is the first major real world asset kind of has been ramping up for, for several transition into the spirit of adoption is just asking new questions, making new demands of what I would call ecosystem stewards. Right. So that's the Ethereum foundation, there's many other orgs of course that all collaboratively there's distinct entities like Etherealize consensus, right? The Ethereum ecosystem has always had this plurality of different orgs, but the Ethereum foundation of course always played a special role there. And in this new time period there's a lot of new expectations, a lot of new needs for Ethereum. And I think we've also seen over the last year, with Tomash being at the ef, Tomash and Xiaowei as coeds for a year, the EF really trying to figure out what is our role in this new time period. So I don't think it's an accident that it's now just random. It is really the F, I think finding its identity in this new, in these very changed circumstances. And now I think what we're seeing is really like the ETH has made their choice, has communicated this early in the year and is now executing towards really like reshaping itself around that new mission. And as Kasper was saying, in many ways that's exciting because that is really about like. Well, the way I would say it is the F maybe stands for the things in Ethereum that need to stay the same, right? Like that is like this, this kind of, this core identity of Ethereum that we had like under no circumstances could like must ever lose, right? And that need reinterpretation all the time, like security. Ethereum is secure today, but with quantum on the horizon, you need to actually do a lot of work to keep it secure, right? So like it's not just a steady state, like, but it's the same constant values. And then I think where I would say like what, what maybe where there's well, opportunities but also like the need for other people to step up and where we saw the need for us to step up is really to like the areas of Ethereum where Ethereum needs to evolve, where Ethereum needs to fill, fill a new role and like really needs to, to, to change how, how it is set up. And yeah, so, so that's why like it's not just a random moment in time. It's not just like struggles of the Ethereum Foundation. It's really like, I think a very clear like shift in the environment and a shift in the org. And as a consequence, in 2024, emerging
- [07:02]
David
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- [09:54]
Ansgar
Yes, I would say so. Well, my answer would be yes. And I really think, I really think it's important that there is an arc that just really embraces that Ethereum wants to win, Ethereum wants to win, and ETH wants to win, and those two also are connected, right? I think maybe we can talk about it a bit more. But like, I think that those are just clearly true statements, right? And like, and there's a few more in this category, like embracing that finance is at the very core of what makes Ethereum Ethereum, right? Like these, these are like, I think very basic things, but I think having an org that just really wants to embrace them, I think that's a starting point. At the same time, I don't think it's just purely about saying that's already a very worthy mission all in itself. But I do really believe that when we say the global economy coming on chain, I really believe that there's two very different ways in which that can play out. And basically what I would almost see as the default is that you have this world of all these different independent chains that basically you have some use cases on chain one and some use cases of chain two, and maybe it's some geographic split or it's a split by use cases or by institutional coalitions, these kinds of things, and then you tie them all together with like brittle links and you try to over time, de risk these links. But we've seen this multiple times in the past, right? Bridges keep failing because ultimately bridges between independent chains can only ever be so secure, can only be ever be so robust, right? Because ultimately these chains just do not have a shared state. And the alternative outcome is one where really the global economy has one kind of central node, right? Like one central node. It doesn't mean that all the activity is on that central node itself. It doesn't mean that all activity is on Ethereum L1, but it means there's one central node that everything links back into. And it means that basically like these, these defaults are sticky once, once they set up. It means that we are in a fundamentally better state for the world when, when all these different parts of the economy can talk to each other trustlessly and, and, and without friction. And we really believe that it's only Ethereum that can play that role. There is no second best neutral chain. There's no second best chain that actually has a shot at this, but that doesn't mean it's inevitable. We could just end up in this worse world. And so basically it's about incrementally by putting wins on the board. The way you said it, I think that rang true a lot really. Just going talking to the builders in Ethereum, they have been Ethereum's core strengths. Figuring out what are the friction points, especially what are the friction points as we build towards bringing finance and these economic flows on chain more and more and just iteratively removing them, strengthening Ethereum and but like in a way it's now or never, right? Like it's not just, it's. It really now is this moment in time.
- [12:42]
David
There was a line in the announcement post of ETH Labs principles do not change the world until people benefit from them. I thought that sent shivers down my spine. I was like yes, somebody is taking Ethereum by the horns and scaling it out into the world. And so I want, I want you just to like lean into this a little bit more and specifically in the contrast or, or the collaboration with the EF in the relationship with the ef because we have this one organization that's always been there that's protecting Ethereum's soul and what the Eth, what ETH Labs is works well with that, but it's doing something different. So like talk about that dynamic where the EF has 1/2 covered and ETH Labs has a different half covered. And especially around this line of principles do not change the world until people benefit from them.
- [13:34]
Casper
Like you said, basically right, like DFs is about what makes Ethereum Ethereum. And then I think ETH Lab is E Slabs is basically about bringing that Ethereum to the world. And so we basically want to scale this credible neutrality to the world. And I think the nice thing is we can scale those to the world each in our own way. But ultimately it's, it's, it's together. Right, so scaling these properties, what does it mean? It means actually building them in the first place. It's maintaining them. It's then also building the block space to make them actually available and then it's also about having them adopted as well. And so I think DEF has squarely covered basically maintaining those core properties and strengthening them. And then ETH Labs is there to, to kind of scale them to the world as well.
- [14:25]
David
Does ETH Labs have a opinion or philosophy or stance broadly about Ether the assets? Because I think this is also something that has been left to be avoided by the EF and then taken up by the community by like Bankless in the early years. And now the community has kind of taken leadership over Ethan. It's always kind of been not really supported by the EF or at least not to the degree that we've really wanted. So what is ETH Labs? What do you guys think about Ether the asset?
- [14:57]
Ansgar
Really? Our position is actually quite simple and quite natural, I would say. Like, I think it's obvious that Ethereum and ETH can only win together. Like that is key, right? Like Ethereum is the chain that gives ETH the existence and powers Eth. And then ETH is the asset that sits at the very core of Ethereum that gives it the security. Right? Like these two are deeply synergistic and I think sometimes that hasn't really been recognized enough. I think sometimes the protocol is being developed really just as a, as a purely technical project and the outcome like the effects on ETH is a little bit of an afterthought. And I think that's just a mistake, right? Like you really need to co develop Ethereum and Eth. You need to understand like as you find the place for Ethereum in the world, like what does it, what are the consequences for eth? What role does ETH play, play in that world? And you need, you, you need to basically find, find a, A, a stable synergistic outcome for the two, right? And so there's a few very simple things. So one is just, and we've seen this with Bitcoin, like why, why is, has Bitcoin been so successful? Well, because Bitcoin. Bitcoin is Bitcoin. Bitcoin is, I always use the word inevitable, right? Like there's, there's, there's something like some sort of destiny element to it, to Bitcoin. Bitcoin kind of like has this, this aura of it will definitely kind of be there and be around. I think one first step is just Ethereum needs to be inevitable, right? Like I, that that's what we talked about earlier. The special role that Ethereum I think can play, can play in the economy. But someone needs to, needs to actually like go and make that happen. And once it is clear for everyone that like that is the role that Ethereum is certain to play, that is so that, that is step one, right? Like just de risk Ethereum is here to stay. Ethereum has the special role. Ethereum is inevitable. And so then, and then step two is once, once you've de. Risked that part, once it's clear that Ethereum is busy coming at this in a position from of strength. Then you define the specific role of ETH within that. How about value accrual? Like, like how does it all fit together? And we're not here to like today have all the answers. Obviously not right. But like the, the core insight is the very simple one is really just basically it's important that the people that work on actually like evolving the system have eat in mind when they do that. Right, like that. That's as simple as I think as that insight really gets.
- [17:02]
David
The EF has talked about exactly what its focuses are and as we've talked about, it's the crops stuff, it's censorship, resistance, being immune to capture, all this kind of stuff. There's a lack of scaling, I think out of discussion, out of the ef. So when it comes to, you know, ETH Labs, a new research and development arm for Ethereum, you guys are going to be working with and evolving the Ethereum protocol. What are like the swim lanes or the tracks of work that ETH Labs is taking responsibility for? What are you guys going to do to make Ethereum inevitable? Push Ethereum into that slot that ONSGAR is talking about, where it is the one central hub of all Internet finance. So how do you guys actually do work to push Ethereum into that spot? What are you guys focused on?
- [17:51]
Ansgar
The way we start is we start with where does Ethereum go? And then we reason backwards, right? And so clearly we are not here today with all the work streams perfectly light up. We have the machinery. For me, it's seven years of experience in the core research space. For many of us it's similar. Basically we're deeply familiar with how to evolve the Ethereum protocol. So it's like the machinery of that and then combining that with the direction and then the question of what are the specific steps necessary. So, so maybe a general answer and then I can give some details. So for example, you mentioned scaling, right? So I was leading that topic at the Tim foundation for the last year and basically coming in saying like, hey, it really is important that not just the L2s are scaling with blobs, and that remains by the way a crucial priority, but also that the L1 is in a strong place. And so then we start that process with upcoming Amsterdam hard fork. There will be a huge scaling benefit coming out of that as much as like 4x kind of scaling throughput. And the more important thing is to put Ethereum basically on a, on a permanent scaling trajectory. So I've been floating this, this, this, this, this goal of like 3x scaling per year. I think that's very achievable and that's now, now how does it map to basically the collaboration with the Ethereum foundation, with eclabs? Some of this of course stay one. We, we have, we have, we have to figure this out concretely. But, but my impression at least is I don't want to speak too much for the Ethereum Foundation. My impression is that scaling is less of a priority now for the Ethereum foundation that as you already said it actually comes out of the mandate and so that's a natural topic for us to basically come in and have an impact. And then there's many other of these topics. So there is, there's things like time to finality, time to inclusion. There's things like data scaling for the L2s. There is maybe beyond just the core protocol because that's, that's where we're more coming from. But, but the way we actually we internally we're structuring it is chain which is anything core protocol related and then platform and growth and so platform are topics that are more about the direct topics at the intersection between the chain and the actual applications, the builders. So that's things like interoperability right? Like you can only actually succeed at being the central node in the on chain economy if there's actually a direct and tangible benefit to being part of that, you know united chains of Ethereum. So having like it's, it's been talked about for a long time but like practically how can you actually drive towards seamless interoperability giving L2s and Ethereum as this unified bundle superpowers and network effects. Right so that, that all the, the other chains want to, want to come join join that and how do you design it in a way that actually like brings value back to Ethereum and to eat right. Like again that's the same, the same theme that we touch upon there other kind of more like platforms intersection topics are things like block construction right? Like how basically what kinds of. You've seen the prop AMM designs. There's a lot of innovation happening there and how can Ethereum help unlock a lot of the innovation there and then on growth it's fully transparent. That's the most new for us domain and so they're really like for now it's more about putting a stake in the ground and saying like hey, it's actually really important that the people that contribute to evolving the Ethereum protocol do that with some Awareness of what are the actual applications. Right. Like we've talked about finance before. Defi obviously, like defi is the frontier of financial technologies. And like what are the needs, the constraints for defi builders and how can you propagate that back into changes to the protocol itself? And the other way around, how can you actually make the properties that Ethereum uniquely has directly, tangibly available to these protocols in a way that makes a difference? So I don't know. This was a bit of a broad answer, but hopefully it gave an initial impression and then obviously over the coming weeks we'll go into much more detail and give much more concrete examples there.
- [22:02]
David
Is it fair to say that with the talent that E Slabs has, the founding members onsgard, Casper, that's YouTube, but also Barnaby, Josh Rudolph, Julian, Julian Ma, some heavy hitters when it comes to just Ethereum protocol talent. Immense, immense amount of, just years of experience and just like talent density there. And this org was all focused on something about Ethereum. Ansgar, you've been working on scaling, I know Josh Rudolph has been working on interoperability. And so now that the EF has reduced their scope and also now that we have ethaps, is it fair to say that all of these people are simply now taking the responsibility that they once had at the ef, putting it under ETH Labs? And now that they have this new organization, they have a little bit more freedom, tolerance, ability to be maybe more aggressive in pursuing these, these goals and objectives. And it's all these people are still working on the same things, but now they're just doing it under ETH Labs. Is that a fair articulation?
- [22:57]
Ansgar
I actually don't think that's, that's quite, I think a. I don't want to speak too much for the Ethereum Foundation. It's also like of course currently reshaping and that means that some of the work streams that we started and or owned there will continue also inside of the foundation. It's not, not, not, not as black and white and we will in some cases also just collaborate on these then. But also it's not going to be the case that we will continue all the, all the work that that would have done in the past. It really is important. We are starting as a team of five. We have plans to hire beyond that, but really stay ultimately very lean, very, very talent dense. And so there is really a limit of we basically we have to be very selective at the work streams that we take on. There's a lot of new work streams that we've not done in the past that we want to take on. So it's not just a direct continuation. The one way in which I do think it is going to be at least to some extent true, of course, is that all of us, we didn't wake up yesterday or like you know, last week and all of a sudden had all these new ideas, right? Like a lot of this had been already self selected. I mean I was really pushing very hard for scaling last year because I believed it was important back then and I still believe it is important today. So of course there's a lot of continuation of beliefs around priorities.
- [24:03]
Casper
Maybe just to double click on that collaborative nature here. I think it is kind of deeply collaborative between ETH Labs and df. Just last week actually we were kind of participating together in a research off site. And so I don't expect this to be as clear of a split on all fronts and just, yeah, deeply collaborative and synergistic as well.
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David
What opportunity does being under a new organization, in a new organization afford ETH Labs? Like what can you guys do now or are excited to do that you weren't able to do prior under the older old organization?
- [24:42]
Ansgar
I think the Ethereum foundation really is very much shaping up its own role and that just like means that some of the things already, some of the things that we have been doing are now less directly in scope for the organization. But then also like many of the things we would be excited about starting to do, right? Like specifically say having a very clear vision around like the role of Ethereum in the future of these, of these financial systems and really like going and talking to the finance builders and figuring out like how can we just unblock them, right? Like just like very simple. I mean we've had conversations with already Hayden from Uniswap, just like very simple. Just like, hey, what, what, what concretely right now would make your life easier, right? And these kind of things I think are just not things that are not like an orc. Like yeah, they always needs to be like the ultimate neutral guardian. I think I would maybe describe it a bit like a monastery, like the Vatican of Ethereum. And that's very powerful. The Vatican has played a very important role for the last 2000 years. It's an important role, but it's also of course like the Vatican doesn't do everything. And so being able to just really lean in to topics when we see them being able to just have opinions, you know, have opinions on eth. It's not like we didn't have them when we were at the F, but while we were at the F it's maybe we're less able to act on them. Right. So basically like it. It just seems like on, on many, many in many different dimensions also just culturally being able to just really lean into the synergies between maybe different ways of approaching helping Ethereum. I think there's, there's a lot of opportunity of just having different orgs that approach the topic from or the challenge from very different angles.
- [26:18]
Casper
Obviously having the benefit of starting fresh also means we're small, we're lean, we can bring that startup culture a bit. We're nonprofit but we can operate a bit differently just by virtue of size. And I think one thing we're also incredibly excited about is kind of yes, operating with that accountability, with that mentality and being a talent magnet and operate in this lean and exciting environment.
- [26:45]
David
What I'm hearing from your guys answers is that it's what I'm hoping to hear is that ETH Labs is going to be responsive to market forces. Now like you guys have said the word startup mentality. Even though you're a non profit, you are lean, you can ship fit fast. These are all like startup words. And what I, what I think the broad Ethereum community wants and what I would like to see in Ethereum is something like the EF that responds to market forces and is aligned with the market and is like pro markets and pro growth. And again pro points is that kind of the philosophy of ETH Labs is thinking like a startup, thinking about how do we make Ethereum relevant to the marketplace, respond to market interests and desires and wants. Is that what ETH Labs is for?
- [27:36]
Ansgar
Yeah, I mean I like this a lot how you word this. Right now I think we are very clearly pro markets, we're very pro growth. Now of course we need to prove out what does that mean in practice. Right. Like I think what does it mean to be responsive to market forces to eth? I think, I don't know. I actually had CoinMarketCap open earlier today at a look and I think right now it actually surprised me to see there's only eight. If you take out the stablecoins there's only eight crypto assets above $10 billion market cap. That's not a lot. And there's only two above 100 billion Bitcoin and ETH. So in many ways of course Ethereum is already in a unique position. Right. Like Ethereum has in many ways had a lot of success. Now the problem is it had that Success five years ago, right? Like we already were at that exact level five years ago. And so the market is right now expressing like hey guys, yes you, you kind of won round one, but what's round two? Like what's your next goal? Like what actually like you know, like there's nothing, it doesn't seem like there's, you're not necessarily growing towards anything more ambitious now. And so really to me internally at least our prompt has been what does it take for ETH to become a trillion dollar asset? Right? Like that's, there's not actually that there's not that many trillion dollar assets. There's a bunch of trillion dollar asset categories. There's not that many individual trillion dollar assets on earth. So what does it take for ETH to be a trillion dollar asset? And for us that will be one of our north stars. And again it would I think be a bit full of ourselves if we came up today here and we had like the answer for how to make ether trillion dollar asset. That's going to be a huge project. It's going to be a project for the entire community. But I think it is important that we are in a position where we can be that bridge, we can, we can be the, the part, the entity that goes and talks to the people that actually really want to take on that mission and then we can go and we can actually talk and with the, the other people that actually help steward Ethereum and we can work together to, to, to make that outcome happen.
- [29:35]
David
Trillion dollar assets are rare. At its peak ether was at 600 billion which is somewhat within striking distance of a trillion dollar asset. So I think the proof of concept is proven out at least sufficiently enough for you somebody to suspend their disbelieved and be like yeah, I could imagine a world where eth gets to 1 trillion. I wanted to take this framing back to the idea of Ethereum is a special blockchain. There is a place, there's a placeholder, there's a slot, an empty slot in the world for a single global hub of Internet finance that is you know, interoperable, strong, super secure, highly scalable. And you guys want to take Ethereum and put it there and once it's there, you know, once the key goes into the lock, maybe we unlock the trillion dollar asset. You know, some few, a few steps needs to happen I'm sure for that to happen. But nonetheless making Ethereum shape, be the shape to fit into the lock and unlock that opportunity is I think your guys goal. What does that look like? In terms of, let's say we go into like 10 years from now and ETH Labs has done the protocol upgrades that it wants to do to Ethereum, it's talked to the defi developers, it's talked to Wall street, it's asked what their problems are, it's learned what their problems are, it's incorporated them into eips and it's shipped it into Ethereum and that this is over the next 10 years. I know you guys have a lot of like market research to do in order to answer some of these questions, but I think we have our intuitions now like what of what Ethereum needs to look like to unlock that opportunity. So paint me a picture of what you guys want Ethereum to look like as a protocol in about 10 years from now. What can it do, what it has it achieved and then we can talk about what properties that imbues Ether the asset.
- [31:26]
Ansgar
I mean the ingredients are clear, right? Like so basically as more and more of actual financial flows, you know, the global economy, however you want to say it comes on chain, it's clearly not all just going to be just all within a single kind of like layer like all on Ethereum L1 that's obviously never going to happen. So it, there's always going to be a structure of there's going to be more permission zone, there's going to be more app specific zones, there's going to be more for all different kinds of use cases, geographic specifications. So we will see this continued explosion of activity in all kinds of different ways and formats. And for Ethereum to in that world be in a special and strong role. I think a few things need to be true about it and then we can talk about what specific properties are there. So one, I think it's clear that it needs a very strong chain at the core. So what does it mean for Ethereum to be a strong chain? Well scaling is one you can't, I think even at today's throughput levels that's just not good enough. You need to be able to really have a lot of L1 available block space. You need to have a lot of the actual interconnecting activity happened on the L1. So that is like the, the liquidity a lot of the, like the, the actual like trading, trade balances, balancing between, between the individual zones has to happen directly, has to be able to happen directly on the L1. And of course you need to have an asset and for now again the question is how do we get there? But you have to have an Asset that is valuable enough to actually be able to secure the entire load of. You know, like I think Justin once gave a talk, I'm not sure if it's online but like I think it was called like one quadrillion. You know, like something, something like Ethereum to one quadrillion. Because I think if you roughly sum up all the assets in the entire world, you maybe get to like $1,000,000,000. And and so like how do you basically secure $1,000,000,000,000? Well, you know, you need an asset at the core. There is this kind of, this multiplier. Like you don't need literally a quadrillion dollar. Like so sorry to disappoint.
- [33:27]
David
It's not one to one.
- [33:28]
Ansgar
It's their yes, ETH won't swallow the entire value. But, but you do, you do need like you can't do it with today's market cap. That's just like that, that wouldn't be good enough. Right. So like in that success case, if we just describe it before we talk about how do we get there, each will have to also have found a role that makes it very, very valuable. And, and it has, it means that interconnections between the individual like parts and I, I keep saying zones because L2S is like the, the way that works today, but in a way that's an implementation detail, right? Like that could even be like just, just special gated parts of the L1 directly. It could be all kinds of different construction, it doesn't really matter. But the interconnections, the interlinks between them have to be like very strong, very robust and very efficient. So what that means is like basically like if I have an asset on any part of the Ethereum of you know, united chains of Ethereum, it needs to be like instant to transfer that from there to anywhere else without having any kind of worry that there might be a link that's breaking that gets corrupted. That, that, that, that makes my asset kind of get lost, lost in transit. It means that I'm able to like reuse my asset that I have on in place A as collateral in place B. Right. Like all of these types of like just natural network effects. Right? Sometimes we, you know, we, we've started talking more and more with, with, with different builders in Ethereum. You talk to the L2 builders and they are all very open to, to talk about value accrual and how can Ethereum more benefit from these relationships. But they also say hey, how do we also like this needs to be mutually beneficial and being an L2 today is good but somehow it hasn't fully realized its full potential. Right? Like, like, like we, there's so much more of superpowers, so much more network effects that, that you need, that you could get that you need to get from being part of this construction. It needs to be a no brainer that if I come on chain, if I launch a new chain, a new whatever, it needs to be a no brainer that of course I do this in Ethereum otherwise I'm losing out on all of these benefits. Right? And today it's not a no brainer. Today the friction is also too high. But, but more importantly the, the upside is not, is not clear enough. And so, so that, that, that all needs to be fixed.
- [35:29]
Casper
We need a super strong L1 and then there is just no way that Ethereum will be the special chain if we do not solve Interop once and for all. So I think that will be quite exciting to, to work through.
- [35:43]
David
Now I know that there are is now like a delegation of responsibilities that we think is harmonious. ETH Labs wants board. The EF wants to preserve Ethereum soul. Each, each organization can optimize for what they think is important. And that's, you know, the beauty of having separate organizations at the same time. There's only one metaphorical steering wheel on the ship and only so many hands can go on the ship. There was a pretty interesting article from Trent, another former EF member who really talked about the strength of the legitimacy around the Ethereum Foundation. The Ethereum foundation has the ICO Fund, it has Lindy, it has Vitalik, it has literally www.ethere.org it has the @Ethereum handle, it has the, the process of knowledge of, of submitting EIPs and coordinating hard forks. And so ETH labs I want, and I think you guys want too ETH Labs I want ETH Labs hands to go on the steering wheel as well. And that means that like there's a little bit of tension. It's like are we going left or are we going right? What I'm, what I would like is I want ETH Labs to pick a direction and step on the gas. And I don't always know if the EF is all maybe they want to hit slam the brakes. And so when it comes to actually creating EIPs, shipping them into Ethereum, merging them into the blockchain, how does ETH Labs think about this question of who calls the shots?
- [37:23]
Casper
In my mind it's less mutually exclusive. And I think the important thing is that we're all here for the same reasons. We all know what makes Ethereum special. And I think it's actually extremely bullish to have one org that is laser focused on keeping Ethereum special and another org laser focused on kind of exporting that to the world. And so I don't necessarily see it as mutually exclusive at all. In fact, I think the only reason why we can be laser focused on kind of scaling that to the world is because the EF is kind of so focused on, on maintaining and strengthening the core properties. And obviously, I mean there will potentially be kind of questions on like how do you prioritize a hard fork? Like what goes in into that fork and what goes into the next fork.
- [38:17]
David
Sure.
- [38:17]
Casper
But I think, I think like as long as we all have the same end vision, I'm very confident that it's not going to be too confusing.
- [38:26]
David
Does ETH Labs and the EF have the same end vision for Ethereum?
- [38:30]
Ansgar
Ultimately I'm convinced that that's the case. I think from conversations that I've had that we've had, I think there are some differences around path dependency. We really feel that this moment in time is important, that we can't just first get all the tech out of the way, make sure that Ethereum is perfectly robust as post quantum secure is everything, and then start bringing the broader financial system onto Ethereum. It needs to happen in parallel, but that's really just a difference in opinion, maybe on order of work streams and so these work streams can complement each other, can happen in parallel. Ultimately again, we are not trying to change what Ethereum's core identity is, what makes Ethereum Ethereum. I think sometimes I've seen this a lot. There's a lot of frustration sometimes in the community and I'm part of the community, I share some of the same frustrations sometimes, but sometimes that ends up in throwing the baby out with the bathwater. Like the answer is also not to like just run Ethereum like a company. I've sometimes seen this like that that is again that, that's so misunderstanding. Like well you know, then now we're fighting about like a, you know, like a pie that's much smaller than what Ethereum already has achieved. But like, like that's also not the answer. Like the answer is to just like double down on the unique strengths, just do it with an actual like excitement about adoption, about like about the achieving the outcomes. And so, so I really think that the, the ultimate vision is the same. It's just the way to get there and the things to prioritize in the short term. And so that's why we don't want to be naive and it's not going to be without attentions ever. And like, yes, there will be hard forks where maybe we have different ideas about priorities, but ultimately I think it's deeply synergistic and, and also in terms of hard forks, like we've now gone 30, 40 minutes without even mentioning core devs once, right? And like actually Ethereum has always been actually decentralized in ways where it really matters. And the EF is very, very important for charting a path, charting a course. But ultimately in terms of like what to prioritize in the short term and the actual work of making all of these things happen, that has been always distributed among a lot of shoulders, a lot of exceptional, very, very talented shoulders and those people will continue to be around. And so I think, I don't think it's like going from one to two here. It's really just, it's more going from, you know, From N to N +1.DF
- [40:54]
Casper
talks about the multi node kind of Ethereum and in a lot of ways I think you can even think of it as client diversity. So on the tech layer we actually have this client diversity and it makes Ethereum extremely resilient. And this resilience also comes at some cost, right? Like there is, it makes shipping hard forks harder. It means you have a bunch of teams that need to kind of work together to. And so basically the development process becomes a bit more expensive and there's coordination cost, but you get this insane resilience. And this resilience is also precisely what makes Ethereum special and what gives it a shot at reaching global scale. And so I think in a way this sort of multi node future is precisely kind of bringing this client diversity mentality to the ecosystem. And so yes, there will be some tensions, but I think we're all kind of working towards the same end goal. And so I think it's actually just incredibly, I'm incredibly bullish.
- [41:58]
David
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- [42:46]
Ansgar
Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Naito. He runs the Defi Report. This is the guy that sent me a sell alert before the 10:10 price drop happened. His cycle analysis has been absolute, absolutely on point. I've been following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of bitcoin and ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together. Go subscribe to this podcast, search the Defi Report wherever you get your first podcasts, YouTube, Apple, Spotify, or find a link in the show Notes. There's a new episode waiting for you.
- [43:33]
David
Now I want to ask just some like logistical questions about ETH Labs and the formation. It's a nonprofit, it's funded by Bitmine and Sharplink and a bunch of just individual contributors. Talk about just the funding element of ETH Labs. How much like Runway do you guys have as well just like talk about all of that to us.
- [43:54]
Casper
We thought a lot about it and we spoke about startup culture before, etc. And I think again it's like we want to have a startup culture, but like we're also very, very explicit about wanting to be a nonprofit. In our mind. It's like the only way to do the type of work and kind of stewardship that we want to do. And that just like requires the neutrality and sort of aligned incentives or in fact sort of. No, no incentives. Yeah, no incentives in some sense. And so that was extremely important to us. That's just something I wanted to front load on the funding side. Yeah, as you said, like there's bitmind, sharplink, Joe Lubin are sort of our core donors. And I mean from our perspective, it's like very Natural. Right. Like basically their job is buying and holding eth. And we care about Ethereum and eth. And so I think it's just a very natural kind of match here. And in general, they just also really get it right. They, they want us to be neutral, they want us to be independent and just get the work done. And so it's been, yeah, very grateful to, to. To have this kind of long term thinking also on the funding side. And then beyond, beyond that we have like, it was kind of, kind of incredible support from across the entire ecosystem from like over 50 people and entities. Sort of. Yeah, honestly, very humbling to see really. It's been a quite the Ethereum moment in a way. We had a core devs, builders, defi founders, community members. So yeah, quite, quite special. I think you touched on Runway as well. Without going into sort of the specific specifics here. We have like solid two, three year Runway with kind of ambitious hiring goals. When I say ambitious, I like, we intend to be sort of lean but just world class talent. And so yeah, it's, it's. We're here to stay as well. Beyond that.
- [45:55]
David
Yeah. Is. Is there a plan for just like indefinite long term financial longevity? Like maybe your funding is an eth, you stake the ETH and then you actually just consume the yield out of something like that. I don't know. But what's the plan for just existing for forever?
- [46:09]
Casper
One thing that is quite nice actually about sort of the need of. I mean, basically we're a nonprofit, right. We don't want to get distracted with generating revenue. We want to be laser focused. And so what that means is we're going to need more money eventually. Right. And so the nice thing is it means we're kind of accountable. Like we need to be impactful to, to be successful at kind of continued funding streams, generating funding streams. And so I think this accountability is actually, yeah, it's, I think it's going to be quite powerful to avoid maybe also some of the nonprofit failures otherwise. And so in terms of continued funding, yeah, I mean basically deliver impactful work on the one hand, like most importantly. And then secondly, I think, yes, there are kind of possible setups still early days exploring things like you said, kind of funding streams, et cetera. But yeah, we'll share more on that when we get there.
- [47:08]
Ansgar
We all just too aware of the failure cases of nonprofits. Right. Like it's very easy to just start. Be completely disconnected from any kind of real world feedback. Because in a company, in a startup, you get that immediately. You either find product market fit or you don't. In a startup you can for a long time just like delude yourselves about doing something useful. So we actually really like this structure where for now our plan is in a year we come back to the, to, to the community and we're like, hey, this is our track record. This is what we've concretely done for you is that, does that look as a bundle like that was that, was that actually created enough value that you would want us to keep existing and to keep funding us. And I think that's actually, that's a really good forcing function that aligns us directly with. We have a, you know, broad coalition. So it really aligns us with both the ETH holders and the builders. Those are the two categories of, you know, of different entities that will, if we are successful, that will directly benefit from our operation. So basically being in this accountability loop with them is very important. And then we are, I will just tease this a little bit. We are looking into ways in which we can maybe separately be in a place where if we are successful in the ambition to also really help eth, you know, that if basically there's like a big success case there, how can we then maybe leverage that into more like long term sustainable funding where then we, we no longer have to, you know, basically once we, once we are at the end of our, like, of our, of our path there and like it's basically okay, we actually like, we're successful there, how can that actually like then turn into more like long term sustainable funding? Yeah, but more on this later, just
- [48:39]
David
on the implementation details of the relationship with Bitmine and Sharplink. Is there an ongoing relationship with Bit Mine and Sharplink or was it just like a free and clear donation, just like everyone else's donation?
- [48:52]
Ansgar
We'll talk about some of the specifics of the funding and accountability and all these things at a later point. It's just very, very clear. There's no strings attached. There's no specific like, you know, take you will keep getting money if you do X actually as Kasper was saying, it was like a very mutually. The conversation from the very beginning. Both sides were busy. Like of course this needs neutrality, this needs independence, otherwise it makes no sense. Like if you end up being the, you know, like the Bitman entity or something like that, that wouldn't work. And we were actually, we're very grateful for that. That understanding was there. At the same time, we actively want to have direct and strong partnerships, relationships with the builders and the ETH holders and Those two entities in particular, Bitmain, Sharplink, they are the two largest individual ETH holders out there and so we will have strong partnerships with them, but they're not that, that is separate from the funding.
- [49:47]
David
Basically you guys are hiring who and what are you hiring for? What's the role? What's the kind of talent that you guys are looking for?
- [49:56]
Ansgar
So today basically who we are hiring for is, or the way I would say it is, we really wanted to put up our bad signal and we would want it to be like, hey, this is a description of who we are, what we think Ethereum needs in this moment in time, what we want to do and see is there like other people, exceptional people in the ecosystem just in general that hear this and that hear the calling and want to join us, join the founding team from the very start and actually we've been overwhelmed. We didn't expect it to be that successful. We've had hundreds of inbounds already, people reaching out and so if anyone is listening to this and hasn't heard back from us yet, please. It's a bit overwhelming. We're working through it and there's amazing talent among this. So really the first, the first step here is just to see is that anyone that we can bring on immediately that is just absolutely exceptional. Right. And then we talked about a bit earlier, I felt like I gave this a very long winding answer about work streams. Basically over the coming weeks and months we will, over the coming weeks we will basically more and more announce and define the specific individual work streams. And then at that point we will have more specific open positions, more like targeted hires for individual work streams.
- [51:09]
David
How can the community support people like me or just the average daily GWEI listener or anyone in the Ethereum community? How can we best support you to help you guys get your job done?
- [51:21]
Casper
Holding us accountable, giving feedback and kind of pointing out pain points. I think just we are really going to sort of try and be close to both the community, but also just the builders and, and kind of really leverage those insights. And then yeah, I think this is the most critical. And then obviously separately we spoke about funding. We do accept donations at easelabs. But yeah, I think more critical is like we really want to have this tight feedback loop, be transparent, work in the open and like as Anska said, we are hiring and I think honestly it's pretty exciting and I think if you're kind of an exceptional talent and this mission is inspiring, I think yeah, there's a lot to be done.
- [52:12]
David
One thing I've been thinking of when I talk with Ryan on the weekly rollup or broadly is maybe I'm a little bit impatient about the arc of crypto as a project and the crypto industry as a whole. And so I'm looking at the bitcoin chart and I'm like, man, why aren't we at like a quarter million dollars? And like I'm looking at like Ethereum and being like, why isn't all of finance on chain yet? I realized like, you know what, Ethereum is 11 years old, still pretty young. And so perhaps, perhaps the whole crypto story is just takes something closer to like a lifetime than simply a decade. And Ansgar Casper, you guys have been in my leaders in Ethereum for my entire lifetime in Ethereum. And so you guys have already contributed a lifetime of work to Ethereum and I'm very excited that you guys are going to continue adding another lifetime of work to Ethereum, hopefully. That sounds exciting and not daunting, but just thank you for taking on the challenge that I think Ethereum needs to take on as a project, as a community. Putting points on the board, I think is the most important thing for Ethereum right now. And what I'm seeing here out of ETH Labs is, is what I would hope to see for Ethereum to like complete what feels like its destiny and its quest arc that it perhaps has gotten a little bit distracted or off track with in the last few years or so. But like, I'm excited. I hope the best for you guys. I'm here to support you guys along the way. Whichever, whichever, however I can. And so those are my words for you guys.
- [53:52]
Ansgar
Before we wrap up, I actually had a question. I mentioned a little off air already, and I'm not sure if you thought it was a joke or anything, but you're known a little in the community for your paper hands. Let me put it this way. And you're like a lick of things. Paper hands.
- [54:08]
David
I don't know if eight years of holding counts as paper hands.
- [54:11]
Ansgar
I'm just teasing you, but I actually do believe. Look, I actually think much of your criticism rang true to me as well. But I really think again, it's not indefinite optimism. I don't think we can just sit back and just wait for Ethereum to win, for ETH to win. I do think though, there is a very exciting price here and I think there is a real shot that Ethereum has. And so I just wanted to, you know, just come here and just ask you like point blank, like, do you would you consider this is a good entry, entry point. Like, would you consider starting to rebuild your ETH position?
- [54:41]
David
Look, I, I'm looking at the ETH chart and I'm like, this is what a deal looks like right now. This, this is cheap. This is where one would buy. And I absolutely do take the argument that trillion dollar assets are rare. And in addition to that, Ethereum has the potential to fill that one singular slot of the center host, the center hub of all global finance. Seeing organizations like ETH Labs being like, yes, and we know that, and we're going to push the ball up the hill to make it fit into that slot. These are all the pieces of the puzzle and so there is an alignment of things that all feel directionally correct. I don't want to as Mr. Paper Hands, I don't want to commit to anything here live on the podcast, but I do see the vision and the fact that that vision is being held by effective, competent people who want to push the ball up the hill is exciting to me.
- [55:42]
Ansgar
That's good enough. I'll let you stew on it.
- [55:46]
David
Let's go, Casper. You guys have had a very busy week with the launch of Youth Labs. I'm sure next week is going to be just as busy. But what are you guys doing next? Like what's the next thing you're going to do after we log off in this podcast and maybe you're done with some of the bureaucracy of getting the organization spun up, like, nevermind all of that, but when it comes to actually pushing the ball up the hill, what comes first?
- [56:08]
Ansgar
Yeah, so of course, as you said, there's a lot of still just like the tedious things of just starting an organization, getting all of this one time thing out of the door. We're also wrapping up some continued fundraising. So all of this will take up two, three more weeks. And in parallel, we are now very actively working towards. We want to really have all our work streams clearly defined. We'll also communicate this probably on a rolling basis, like, hey, this is works when we're starting, this works when we're starting with explanations of why, why is that impactful? How can you hold us accountable for them, these kind of things and then hiring. So really I think kind of like wrapping up the getting off the ground work streams and hiring, those are the immediate priorities. And then of course not to forget to mention really feedback, feedback, feedback. A lot of people we have already talked to over the behind the scenes over the past weeks and a lot more people to still talk to jump
- [57:08]
Casper
on the Next call. Get hiring, get started. Still, day one. Infinite work and a lot of excitement.
- [57:16]
David
I don't know if the Ethereum community considers Bankless and Ethereum podcasts anymore. I still do. But you guys are free to come back on the podcast at any time to talk about what you guys are up to, what you're building, what your needs are, whatever you want to communicate. So I intend to continue to make Bakelists the best Ethereum podcast out there. And you guys are. If you guys are interested, you guys are welcome to help me out in doing that.
- [57:38]
Ansgar
Yeah.
- [57:39]
Casper
Thank you, David.
- [57:39]
Ansgar
You know what? We'll. You know what it'll take.
- [57:44]
David
Yes, sir. Thanks for coming on the show and congratulations on the new jobs. Technically, I think you guys all got new jobs, so that's. That's pretty exciting. And you guys have a pretty big job to do, and I think everyone is out here just supporting you guys.
- [57:56]
Ansgar
Yeah. Thank you very much. This was a great conversation, and now we actually have to follow through, so looking forward to that. Thank you.
- [58:05]
David
You all know the deal. Crypto is risky. You can lose what you put in, but nonetheless, this is frontier. It's not for everyone. And we are glad you're with us on the Bakeless journey. Thanks a lot, Sa.