← The Peel with Turner Novak
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- [00:03]
A
Toli, welcome to the show.
- [00:05]
B
Thanks for having me.
- [00:07]
A
Thanks for doing this. Really excited to have you on. So, something super interesting that I saw was happening recently. SpaceX, before it went public, people were trading SpaceX on Solana. What was going on there? And what does that even mean? How do you do that?
- [00:22]
B
There's a lot to unpack there, basically. I think what you have to kind of understand first is what are tokens? And anything can be a token. It is literally just an entry in a database. And Solana is a blockchain. And the only thing that it does is it really makes sure that everyone has the same copy of a database instance. It's exactly as dumb as it sounds.
- [00:53]
A
The simplest definition, a public database.
- [00:56]
B
And it can't really make sure that that's true. It can only give you, you as a user of this public database. It can give you a guarantee that enough other people agree that you have the exact same copy as them. Right? You basically constantly submit attestations that you have the same data. And you can see that, okay, two thirds of the people all agree that we all have the same copy as I do right now. So. So I'm still synchronized. That's all it does. It's as dumb as email. So when people say they're going to trade SpaceX, somebody has to create an entry in this database. And the database itself is not aware that this is a SpaceX docs or anything. It's just here's some entry and it's got a jumble string that's a public key that doesn't mean anything to the database or to people. It looks like just a bunch of ones and zeros. And then they say this represents SpaceX literally. Somebody has to say, I'm a company or an issuer of this token. And when you trade it, you will have some kind of claim that is related to the real SpaceX stock. And then the some kind of claim is where we got a hundred years of securities law and a whole bunch of other things that are very complicated to unpack. And I think it could be a cash claim on the opening price or a whole bunch of ways that you could derive that claim. But the best final version of this, a true version, is if it's actually a claim on real stock ownership that connects back to the cap table that the company and the government recognizes as belonging to the SpaceX corporation.
- [02:49]
A
So this is maybe a dumb question, but some people still might be thinking this, why don't you just buy the SpaceX shares directly? Like what's the benefit of you can buy it on Solana instead To again,
- [03:02]
B
this kind of goes back to, I don't know, more than 100 years ago, to the railroad boom.
- [03:08]
A
Why?
- [03:09]
B
Why are things the way they are? Like, so basically a lot of the US financial system was developed pre Internet, really Pre World War II. And it's quite excellent. And the reason why it's really good is because it failed a lot over a hundred years ago during this massive railroad boom. And when people think of the AI boom today, it's huge. I think the railroad boom was twice as big relative to the gdp.
- [03:34]
A
I've seen data around that.
- [03:36]
B
Yeah, yeah. The amount of just capital and money and steel and everything and the economy that went into it was astronomical. And at the tail end of it, first of all, a lot of railroads got built massive amounts. And at the tail end of it, a bunch of bad stuff happened. And that bad stuff was that like your neighbor could sell you a stock certificate to some railroad company. You don't know if that's a valid start stock certificate. You don't know if the railroad company's valid, if they're actually building anything, and if the railroad itself is profitable. All these things have a layer of indirection for you to actually go verify to be certain that what you're paying for is a real thing. So the US financial system and the really smart regulators at the time basically created separated regulated entities that could operate in one layer at a time and they had to go get certified and yada yada with the government and get licensed effectively. And because of how narrow each one of these slots was, the government could assess their ability to do a good job in that narrow slot and that interface between all these layers and the fact that there are different people operating and all of them created this safety where if one of them catches a bug, it doesn't propagate to the final person, that is the retail user that's buying a stock certificate from their neighbor.
- [05:12]
A
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- [07:15]
B
Well, literally I create a fake. Like your neighbor writes, creates their own fake stock certificate. It just doesn't. There's no company, nothing. It's just totally fake.
- [07:26]
A
Like the Turner and Talley railroad or something.
- [07:29]
B
Yeah, none of it exists. And you're like, here's a railroad, it's really hot in Kansas and you're in like the New York and you're like, I guess it's hot. I'm going to buy it.
- [07:40]
A
Yeah, the price is going up. It looks like the price is moving.
- [07:43]
B
Yeah. So they create a fake one of a fake company, they create a fake one of a real company, somebody creates a shell that is all real company. Everything's rigid. But they don't actually build any railroads. They just take the capital and run a whole bunch of ways that this thing could fail. So this is kind of what a blockchain solves in this little layers. And I forget the terms of all of these. There's a transfer agent, there's a broker dealer, there is a depository company and the issuer, and there's probably a couple more that I'm. That I'm not aware of. But the who you interface with when you buy a stock in the US Is usually the broker dealer. The Robin Hood the E Trades backpack is one of them. And they have to go talk to the transfer agent to transfer stocks that the users eventually bought. They have to go to a transfer agent. I think Ben has to tell the depository company, hey there was this. A bunch of transfers happened this week. Can you go literally move the physical box of issued shares from bucket A to bucket B?
- [09:00]
A
Are they still doing that in 2026?
- [09:03]
B
They did. They actually would fly them around on airplanes until 9 11.
- [09:10]
A
Holy shit.
- [09:12]
B
And because of that failure, they realized that that could be catastrophic failure.
- [09:17]
A
Oh, like you'll lose them all.
- [09:19]
B
Yeah, you have to go make them electronically tracked.
- [09:23]
A
Wow. It's crazy that that's the thing that made us finally digitize it.
- [09:27]
B
Well, don't fix it until it broken, right?
- [09:31]
A
Yeah, that's crazy.
- [09:32]
B
A system that works at trillions of dollars is hard to go and like make changes unless you can point to a credible threat. Right. So yeah, I think why people want to trade these is because a lot of these layers have not been digitized and they're very hard to interface with. And these are paper systems that have like a API call that takes a week to complete.
- [10:00]
A
And that's basically what we've done, right, Is we've like wrapped these like paper fax machine processes with just like APIs that are still manual on the back end.
- [10:08]
B
And on the back end there's a person and there's sometimes real physical stock certificates and things like that. Once you have a token that you can guarantee reliably settles to the real thing at the end. But like once that process of settlement is infallible. Right. Doesn't matter what happens on chain, but like once you have this thing, eventually that stock ends up in a box that's moved from one place to the right spot. That's the settlement portion. You can effectively then bypass all these other layers and the system becomes much faster and cheaper and 247 and things like that. And this is where the reason why there's demand for this is basically the world is getting wealthier and the companies that are making the world wealthier are actually, then we're blessed that they are American companies, the Googles, these big tech companies are creating massive value in the world. They have the cheapest, best products that are globally scalable. Consumers benefit a lot from them everywhere. And people want to trade Them as they get wealthier, they want access to investment into these great products. And you now have this global demand for US equities that is creating this unmet pressure. So there's been a bunch of these attempts throughout history to go figure out a way to bridge global liquidity. Blockchain is the latest one and it's, I think, the one that is inevitable and the stickiest because the, it eliminates people in the same way that if you remember the 90s, this is, I'm an UN. This is like dating me.
- [11:54]
A
I, I kind of remember in the 90s.
- [11:56]
B
I remember some of it. You were not able to type in your credit card information safely on the web because there was no encryption. So you would get. And people would steal your credit card numbers when you type them in. And there's this dumb standard SSL that everybody just now is not aware of. But it's the lock on the website when you like type in your thing and your URL bar has this little lock on it, the browser's telling you that it's safe to type in your credit card information, that it's not going to get intercepted. So similarly, a blockchain is cryptographic database. Every transaction is tracked. If I have a token and I transfer it to you and you give me potatoes or money or whatever, we complete a trade. You can actually see cryptographically where this token came from, who issued it. This entire chain that is like eight different people in the trap financial world can trace back all the way to the issuer. That's the ideal outcome is it literally goes back to SpaceX. When the SpaceX domain signed it, Elon said, this is really my stock. We're not there yet. Right now I think the best version of this is we are actually pretty high up in this layer where the brokerage like backpack that can transfer stock between brokerages issues a token. So there's a backpack version of SpaceX that they issued. You can now deposit tokens in and out of backpack. You have a guarantee through the regulated side that you can actually get your. The SpaceX token can become stock in your brokerage account and backpack. And between that brokerage account and backpack you can transfer to E trade. So it's the real stock. As far as all the US regulations and regulatory bodies are concerned, that's the best version of this product that we have yet. There's still a whole bunch of layers to remove there. But we're basically, I think the hard part is done now. Like we're 90% of the way there the, the last 10% is going to take twice as long and 10 times more work.
- [14:06]
A
So why is it going to take, you know, 10 times more work and twice as long? Like, what's that hard aspect?
- [14:11]
B
I think that the cynical view of this is that there's a lot of middle layers that earn money there and they don't want to give it up. But I think the more nuanced view is that these layers provide a lot of safety to the US financial system. And when you have a new technology, it's going to just take time for it to be proven to be as robust and for these systems to slowly get integrated. And this is why you still have checkbooks. It never makes sense in 2026 to write a check, but we still have checkbooks. And every once in a while, somebody you're interacting with will send you a check and you're like, what am I doing this now? At least you can take a photo of it with your banking app.
- [14:56]
A
Yeah, that's fair. My grandparents live in Canada and they'll send me a money order for my birthday of 100 bucks or whatever. And it's like, ah, what do I do with this thing? But I guess I can take a picture of it.
- [15:08]
B
So, so it's basically like these financial systems are in the US are very, actually relatively cheap, very secure and very safe, but they're pre in and out. And the rest of the world is kind of moving ahead. Like, India has a better payment system than us.
- [15:32]
A
Upi? Is that what it's called?
- [15:33]
B
Yeah, because they built it after the Internet. It's just their entire, like most emerging economies were able to leapfrog United States on a whole bunch of things.
- [15:46]
A
And I mean, I feel like it kind of begs the question because this is something I always talk through is like, do you actually need blockchain to do this? Can't you just. Because it adds this extra step, it's public. The existing financial system, it's like, it worked. It was pretty Internet. Like when you come and say, okay, let's put it on the blockchain, like, what's the necessary piece of that that makes that the required step to make this work.
- [16:11]
B
So the reason why you need blockchain is because whenever there's people involved and these systems are inside their little economically incentivized boxes, like corporations or whatever, they're all trying to earn money.
- [16:30]
A
You.
- [16:30]
B
It's hard for all of them to coordinate in a way that is safe and fair. And every once in a while you get like, I don't know if you remember Archegov's failure where this trader basically told one bank he didn't reveal all his liabilities. He was basically I don't have these loans, I only have these assets. And he told five different banks he had the same unencumbered assets. They all lend him money because he has his history and reputation and none of them could see into each other's ledgers and see that he was lying and he borrowed like $50 billion and blew up. So every once in a while like these human run systems will get hit like this and regulators will then go try to figure out how do we tweak this very complicated set of rules and regulation in a way to prevent this failure but not cause another one. This is constant like kind of like possible problem to solve for them which if all these things were tokens, all the liabilities and the numbers are all directly issued in one database. You eliminate a bunch of these layers. Everybody knows exactly all the numbers. It's a constantly settled every 400 milliseconds like everybody sees the exact balances triple accounting system, it eliminates a whole bunch of these bugs without the need of regulation simply by through construction and math.
- [18:03]
A
But then there's the incentives of like hey I this isn't a public thing that everyone can see, so I can't make as much money hiding it. Like is that also part of what's going on?
- [18:12]
B
Not for anybody that is not malicious. Like you can effectively have the kind of privacy that a merchant or a banking system needs to operate and make money from their strategies without revealing like too much about them. But while still like guaranteeing the triple accounting thing. Where this becomes really complicated is more on the true like first Amendment like our rights as private citizens to keep information private from the government. There's a whole bunch of complicated nuance there because of OFAC and stuff. And I think we'll be arguing about this for the next hundred years.
- [18:58]
A
Really. Okay.
- [18:59]
B
Cash is actually the most private system. The fact that I can give you a hundred bucks and nothing is recorded anywhere is the feature of cash. Right. It's the most private system. So as soon as you have a public database. My biggest fear isn't that malicious actors are going to use it is that it's impossible for like private good intentioned people to use it because all your information is public by default.
- [19:27]
A
I mean that's a big, I've been a big knock on crypto like the whole way is just like it's only used for fraud, buying drugs et CETERA but all the data is public. Technically, you can see what's going on.
- [19:40]
B
If you look at analysis from any of the firms like Chainlink or whoever, the rate of malicious activity is actually smaller than in traditional finance because of this, because it's public data. And as soon as it's there forever. So there is no record deletion.
- [19:59]
A
Should you commit a crime on the blockchain, it's like a permanent crime. It doesn't go away.
- [20:04]
B
Not only that is your counterparty. If they commit a crime, it's traced back to you because there's now they, they find one person in the chain of events. They literally just go back up the chain until they got to you right? Like. So law enforcement has I think the most kind of like hardcore super tool with public databases that they never had before without needing to go like. Because right now when you do this, every bank, every intermediary that you talk to, you have to go through a whole bunch of paperwork and people and it's a slow process. You talk to Katie Han, who's a federal prosecutor who runs like a Han Ventures. She would spend like six months talking to a single firm to get the list of transactions to then figure out where they came from and go talk six months to the next firm. This is all instant now on chain. So I think my, my biggest worry isn't so much law enforcement isn't going to have the right tools to go do their job. It's private citizens are not going to.
- [21:14]
A
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- [22:40]
B
Democracy and like true, like First Amendment, like human freedom doesn't work when you don't have privacy.
- [22:51]
A
So like if I donated to Joe Biden or Donald Trump's campaign, the other person won. I'm. And I get persecuted because I public, you can see that I donated, you
- [23:02]
B
get canceled because it just happens to be the political winds shift one way or another. You are no longer able to publicly participate. You're not able to participate in the public sphere without fear, retribution, even from not even the government, but just from like the organizations and institutions that we all participate in. And that, that's like a really negative side effect. That's effectively how Bolsheviks ran the Soviet Union is you would, you don't have to get thrown in jail, you would just get canceled effectively from your job, from your school, from whatever. Right.
- [23:41]
A
So I think maybe a good time to talk about going back to when you first started Solana. What was kind of like the inspiration for getting everything off the ground two pieces.
- [23:51]
B
One is I had this true eureka moment. I had tea, coffees and a beer Cafe Soleil in San Francisco. And it didn't sit well with me as you can imagine. I was up till 4 in the morning and had this like oh my God. There's a way to encode time as data. So passage of time. I could create a data structure that you can compute how much time has passed to generate it.
- [24:15]
A
Was that not a thing anyone had done before?
- [24:17]
B
I couldn't Google for it. I couldn't describe it in a way that could find me the org people at Stanford working on it and the fact that I didn't was like thought that I had something so unique that it was worth to build. Like I had like a nut that I could go and build something around of. So it was the part of like not knowing like health, like didn't block me.
- [24:44]
A
Yes. I got ignorance.
- [24:46]
B
Yeah, the ignorance was bliss because a lot of like people that are too educated, I would say not too smart but too educated, they just know too much. They discount the value of just like the grit and human labor that it takes to build a company and they kind of think it's it's more your idea or something like that. Like, it's like almost thinking, okay, I can. The. I have the idea for reusable rockets. Right. We probably take a lot of failure. Yeah, yeah. It's going to take infinite amount of failure to get it to work. So I had the idea for the reusable rocket blockchain, like a really fast blockchain. Everybody had that idea. The fact that I. I thought my idea was unique gave me the kind of internal drive to go do it. But that idea in itself was not the core piece that. That made it work.
- [25:44]
A
So. So the existing blockchains were slow or like, what. What was the issue?
- [25:48]
B
Yeah, this was 2017. Bitcoin had kind of hit its, like, first big cycle, and transactions were $70 per person because it got so congested. Same thing with Ethereum. Like, you had, like, cryptokitties. You had, like, the first semblance of an app with any users. Made the fees on Ethereum hit, like, these astronomical numbers. And I spent my entire career prior to that point, like, working on performance optimizations, like, virtual machines, operating systems. And I was at Qualcomm for most of that career. And if you remember, like, old school, if you remember your physics class, radio waves interfere, right? Two waves at the same frequency that transmit at the same time, will they,
- [26:37]
A
like, knock each other out?
- [26:38]
B
They collide. You can't tell what information is being passed. So the first protocol people built for cellular networks was called time division multiple access, where they give each transmitter a clock and you're only allowed to transmit during your slot. And FCC goons will drive their truck to your tower and shut it down if it's out of sync.
- [27:01]
A
Really. And this is because you're messing up other people's commercial activity of, like, generating business and shooting their wave out so people can use their product.
- [27:12]
B
Yeah. So in blockchain, you have a similar problem. Two bitcoin miners make a block at the same time. The network is in a noisy state because now you have two paths and it has to resolve. And it takes like, 10, 20 minutes.
- [27:26]
A
Really, what's going on? Like, it's just all electronic. It should be instant, shouldn't it?
- [27:32]
B
Well, the problem is this idea of Byzantine fault tolerance. How do you resolve this noise without FCC goons? How do you not rely on a trusted third party to go make sure that everybody can agree on what the final state is? So that was the nut that Nakamoto consensus solved and what made Bitcoin so trustless and scalable globally and kind of gave it that if you have to rely on a trusted third party, you're picking a layer in that eight layer brokerage cake that you're relying on to resolve that part. Why Bitcoin was so revolutionary is that it used purely math and cryptography and algorithms to where if I transfer you Bitcoin to my neighbor here and you receive it, you know that you can get that same bitcoin anywhere in the world without ever relying on any trusted third party. So you don't need any of these rules and regulators. And this was like the big why it worked as money and why it has any chance of working as a store value alternative to gold is because of this property that you never have to rely on a third party to guarantee that your Bitcoin always works. But the way that it solved it is like has a 10 minute wait time which is 10,000 times faster than moving a box of brokerage stocks from closet A to closet B.
- [29:09]
A
But still that's 10 minutes. That can be kind of annoying. You're like trying to do something and you're sitting, waiting. It's like, did this work? Did it go through?
- [29:15]
B
But you as a user, you never have to deal with that because the brokerage deals with that after they accept your trade and tell you that it's, that it's done. So you as a user, you're not aware that actually things take like a week later to clear out and they're bashed. And that's what makes that system scalable to 300 million people. But Bitcoin solved that problem, but has no way of solving the user to user, normal peer to peer problem. But this idea of time was kind of through my osmosis at Qualcomm kind of popped into my head and I thought, okay, there's a way to do it in a way that borrows a lot from existing solutions to similar problems and scales it up to where in my back of the annual calculation was like 10,000 times faster.
- [30:04]
A
So what are you actually doing? What was the thing when you're like, here's what I'm building into the code, Was it like some kind of timestamp that went to like the millionth degree? And it's like, this is the exact time this thing occurred and like this is who got it first.
- [30:17]
B
So we forced the block producers to alternate by time without relying on a trusted third party clock. So we use this data structure. So that data structure that I came up with called the verifiable delay function, that's what you can Google for now. I didn't know what to Google for. It basically uses like, it loops over and generates data in a cryptographic manner that when I send you this data, you can tell that it took real time to generate because you cannot predict the next output. Does that make sense? So there's no way for you to like cheat the math problem and get ahead of it. No matter how much computer power you have, what you can do is you. And the limit there is. Because the best manufacturing firms can only make chips so fast, they're limited by their 2 nanometer process. Even if you super cool it, that's as fast as it goes. So I know that when you generate this piece of data, it took you at least 400 milliseconds to generate.
- [31:26]
A
Hmm. Okay, so there's like, I think you called it like proof of time or something like that.
- [31:32]
B
Proof of history. Yeah.
- [31:33]
A
Oh, proof of history. Okay, so it shows like the length of time period that it took to do something versus making it up or lying about it.
- [31:46]
B
Yeah. How do you prevent somebody from transmitting data or saying that it's my turn to make a block and then making it? And there's a bunch of different protocols to do it. And bitcoin does this 10 minute back off thing with the proof of work, which is really slow. You had more traditional Byzantine fault tolerance where the entire network has to agree. Okay, Turner just spoke. And he's done speaking. Has everyone agreed that he's done speaking? Okay, now it's Anatoly's turn. Okay, now Anatoly, you start speaking. Oh, wait, he didn't actually say anything. He timed out. Did we all agree that he timed out? Okay, we all agreed that he timed out. Right. So you have this like multiple round thing where the entire network has to agree. And these are called practica, Byzantine fault tolerance, or tendermint, if you ever heard that term. They were the first to implement that style of protocol. And then I had an idea that didn't require all these extra rounds of communication and it was able to be fast enough for trading. And on my back in the envelope when I saw, okay, this actually works for trading. Prior to why I was so kind of interested in trading is because I spent as a side project, just for fun, I wrote all these algorithms, like trader, like hadn't connect to interactive brokers. None of them ever made any money. So it was all like, for fun. They all lost money. And when I thought I had something working in back testing and I saw those opportunities in real markets, the data would take a little longer to arrive and my orders would take a little longer to submit. And it's not even anything to do with the. That system being malicious. They were actually, you know, front running and Q jumping. All these tricks that people were doing were not necessarily malice. It's just the incentives were there for you to like, build your system in a way that would induce this behavior.
- [33:57]
A
This is like the whole building as close to the exchange as you can to get, like your data in quicker or whatever.
- [34:02]
B
You get the biggest baddest connection there's. Once you start rubbing up against physical limits, you end up like, people fight over like the physical bandwidth, the real estate, all of this stuff that creates. Not even out of malice. It's just like if you do the same, you'll make more money, even if it creates a more worse shelling point for the rest of the market. Right. So the fact that the system was completely open, all the data was purely open. Anybody can participate by spinning up validator. It felt to me that I would at least understand how the black box works. And I could see where these physical problems arise in an open way. And me as an engineer, I can then like decide do I want to put the resources to go and get to the same level playing field as jump trading or Citadel or not. Right. And that's totally fine. But in traditional finance, I just. It's a black box. You have to kind of like. It's all very dark web, I would say. Not, not dark web. It's just. It's not open. Right. It's not open source. It's the opposite of that.
- [35:14]
A
They're literally called dark pools kind of. Right. They're these like closed pools that they'll do or like, no one can see what's actually going on.
- [35:21]
B
Dark pools are actually trying to avoid that. It's literally just a group of people that trade a lot, that decide, okay, we're going to trade on our own pool without going to these systems that we don't have control over. That is kind of the opposite solution to that.
- [35:38]
A
Okay.
- [35:38]
B
They're trying to avoid these, like, open lands that are congested.
- [35:43]
A
Okay. Okay. So you're. So this was like in the coffee shop at 4am yeah. You were like, thinking about all this stuff. Okay. It's like, well, then what happened?
- [35:51]
B
This was at home at 4am after the coffee shop. Two beers and a coffee or two coffees and a beer. And like, I was just couldn't sleep. Had this eureka moment for what later became Provistry. And then as soon as I decided, okay, I'm going to go build this. The first thing that I thought of that it could work for U.S. trading and that it could revolutionize trading because of these cryptographic guarantees of value transfer. You can literally shortcut this entire chain, this eight layer cake of finance to SpaceX directly issuing tokens on chain that you and I have absolute cryptographic guarantees or real tokens. And to me that meant like that is the end state of finance, right? Like that's real fine, that's Internet and finance finally bridging together and you don't have all these intermediaries and cost for finance go down. Like you know, those are the benefits to people at the end of the day.
- [36:50]
A
This episode is brought to you by Monaco Monaco is the first revenue engine built specifically for startups. Monaco's AI native platform replaces your legacy CRM and sales point solutions. It has everything startups need all in one place. Monaco helps build your tam, generate demand, run outbound, capture every interaction, manage pipeline and automate follow ups all in one tool. They pride themselves on an effortless onboarding white glove activation and get you to value in days, not months. And the product practically runs itself with built in agents that are always working for you. Start growing your revenue faster with Monaco. Try it now@monaco.com so what did you do to like make it? How did you start building it? And like did you like click a button? It was live and like everyone started using it or like how did, how did things go?
- [37:41]
B
I mean since college I had like, I've been working on some dumb idea. None of them made money, they all lost money. None of them were a taxable event. My wife actually was at a Facebook competitor at Columbia like way back when and she told me that we had a child at that time. So basically I had to pick two. A kid, a job and a side project. The kids non negotiable. I was, I couldn't do the side project and the job at the same time. And her advice was that when you have this moment where there's like kind of railroad level investment into something. In 2017 it was blockchain, today it's AI. You have this massive capital flowing into something. Before that it was social networks and mobile and Internet. Like we go through these cycles. You have like a six month window where capital is relatively easy to get, where people will fund an idea that seems like solves a lot of the current problems that the technology is facing. And if I waited six months or something like that for a better time before, like if I proved out the idea first and did like my homework, it would be too late. So the big benefit of being in the Bay Area as a founder is I, when I went to Dropbox and told them, hey, I'm quitting to go do the startup, they literally told me, come back in six months if it doesn't work out. So there's no other place in the world where I think you get the same kind of like many layers of executives and founders and companies understand where the like innovation comes from. It's from people taking those dumb risks and failing and allowing for failure and like being fine with it. So that kind of gave me the confidence to give myself six months. I had a kid, we're in a tiny 800 square foot apartment. Like my wife was the breadwinner and I hustled. I don't know, it felt like a thousand meetings with VCs to go.
- [39:53]
A
Was it actually a thousand or it felt like it?
- [39:55]
B
Yeah, I think a thousand is probably,
- [39:59]
A
that's like our headline fortune cookie like number. But it was probably like a couple hundred.
- [40:04]
B
Yeah. So you have to like, if you're really serious about raising, you have to be, I think in the barrier because it maximizes your odds. And you make a list of every event that is just relevant to your industry. Go to every event, talk to every person there. Like figure out who the VCs are, pitch to them, do the elevator pitch, get like an intro, get, ask them if their fund doesn't invest, will they write like an angel check? If you get a lead, like just do everything you can to work the network and within two months you will talk to everyone because that is their job. Like all the major firms have analysts and people who just literally spent 24, 7 and going to these events to look for deals. So that's, that's where you meet them. And as you do this, you refine your pitch. And if you cannot get funding during that time, it means it's not, it's not going to happen during that cycle.
- [41:06]
A
Well, I think it's interesting because I know, I know a 16Z invested, but they, they didn't at first. So you pitch them and how did that go? And then what changed?
- [41:16]
B
They literally like had. The guy that invented verifiable delay functions, Ben Bome, talked to me and I am not the cryptography expert, so I could not meet, I think they could not validate my idea on a technical basis, which was their like kind of biggest blocker.
- [41:37]
A
Well, so like, what happened? Did you just like, okay, I gotta keep talking to other people. Did you just find other people that bought in.
- [41:42]
B
Yeah, you talk to as many people as you can. And we got funding from like Flow Ventures from Sam and Foundation Capital and Multicoin and a bunch of really good VCs. So they eventually invested at I think a thousand times price of C. Brown.
- [42:01]
A
Oh, wow. Well, that's their fault then. That's how it goes.
- [42:07]
B
The thing is they have an impossible job because they literally have to go and talk to a bajillion founders and a bajillion ideas and make a couple bouts and. And their fund operates in many layers and if they're wrong at stage one, they can reposition in stage two. Like this is how they work. So I don't fault them for saying no. I think the fact that they said yes afterwards is great. That's like. I think the best the fund can operate is like really understand that you're taking the most risk at the earliest stage and you can only batch so many and then figure out as things to risk. Running a fund I felt would be like a dream job. It is, I think one of the hardest jobs.
- [42:56]
A
Yeah, it's challenging because you basically talk to really smart, really ambitious people who tell you these kind of crazy big dreams that they have and pictures of the world and most of the time it probably won't work. And you got to kind of pick which ones well.
- [43:10]
B
And then some of them fail, but you have to know that one of them will.
- [43:15]
A
Yeah.
- [43:16]
B
And then it's like size it wrong. Like it's just. Yeah, it's really hard.
- [43:20]
A
And then you're like, man, that guy like the, the one that did became Salon. You're like, oh man, I thought it was really smart. But I, you know, I didn't. I had a question around like the, did he actually understand it technically? And so I didn't, I didn't give many money and it was a really good idea. But like. And I could totally see why I got this wrong and I invested in something else that didn't work. And like it's just that over and over again.
- [43:43]
B
Yeah. Yeah.
- [43:45]
A
So you did get some money. So then you said trading was kind of this initial market that you thought was going to work. So what was the process of like just getting people to start using it?
- [43:56]
B
Oh man, that was impossibly hard. And I think we got a lot of. It was a bit of luck with timing. So I, I think my biggest strength here wasn't like my weakness wasn't. I wasn't like a PhD academic that understood cryptography inside out and this is what Dan Bonet could easily smell through. It's really smart. My strength was that I had like decade plus experience building live systems with, you know, millions of users and low latency. And I was able to pull really smart engineers out from Qualcomm. Literally folks that wrote the LTE standard, that the GPU runtime, like all, all of these like really low level, high performance systems that run on cell phones. We were able to leverage that knowledge and that expertise to build Solana. So this was our differentiator. I think at that time a lot of teams that did get funded with these like a hundred million around million rounds were coming from academia and they, you know, to their, I think as any founder that gets funded their first round at 100 million, you get like blinds, you get blindfolds on. You think that you're right that you. It's really hard to pivot and try to understand real PMF and things like that. And the fact that I raised barely enough money for us the last two years gave me that like kind of animal hunger that like we have to build the smallest possible set of like dependencies to prove that the sink can be fast for trading. That's it. I didn't care about Block explorers or anything else. Like we literally just bare bones everything else. We had a command line wallet when we launched.
- [45:51]
A
What's a command line wallet versus a non command line wallet?
- [45:55]
B
Or do you use crypto at all?
- [45:57]
A
I mean a little bit. I have a Coinbase account, I have a MetaMask I haven't logged into in a while.
- [46:02]
B
Okay, so like MetaMask is a UI where you click buttons to transfer. We had a thing in the terminal you'd have to type in Solana transfer because we didn't know how to build UIs really.
- [46:16]
A
Okay, so this is the very, very. So then who used it? So like who was, who were like the first people that were like, oh this I'm going to start using this super weird command line crypto thing.
- [46:28]
B
This was basically we were running out of money and it cut us to the bone. Like layoffs in December 2019, like end of the year and Covid happened in 2020. The markets crashed by like 70% and the day before everything crashed or two days before, we announced that we're launching and we're going to have this auction to sell the token initially and we had a group of superfans that participated in the testnet and boot up and the network was a thousand times faster than anything else. It was instant. We had this demo app that we built called Break, where you hit keys in the browser and each keystroke is a transaction and you'd see it send and it lights up. As soon as it confirmed, it was like kind of rainbow bright. So we had this like tiny duno was useless. You literally. Here, look, you can just slam the keyboard and every keystroke is a transaction. Super cheap and super fast. And the people that saw it, it was like, this can't be real. You guys are cheating. Or like, no, look, it's like fully the whole thing. We had the small group, everything crashed, and every VC that I talked to was like, I don't know what's going on. The world might be ending for all I know.
- [47:56]
A
So this was like March of 2020.
- [47:58]
B
Yeah. And we launched and barely cleared a little below our last private round price. And that was the bottom of the market. So the fact that like, you can never time markets, it's impossible. But as soon as like a major catastrophic event happens, the probability of it happening again is pretty low.
- [48:26]
A
Probably not going to be another global pandemic right away again.
- [48:30]
B
So you're launching at the bottom of the market and that is the best time to launch.
- [48:35]
A
Why is that the best time? Because you could argue that's the worst time to launch.
- [48:39]
B
Why was that the best if you can survive it? So because our team was so small and because I never raised a lot of money, we did everything in the bare bones. We were like a great entry price for people that wanted to participate, for developers that wanted to build stuff. It was a new technology that was ahead of everyone. It was all green space and it could only get better. You could build the first explorer and then get users and get traction that way. We had nothing. So for the. For the people that had like an easy time building wallets or UIs and things like that, to them it was an opportunity to go differentiate with something totally new. And defi kind of started to kick off and we got traction with a bunch of traders and people building markets.
- [49:32]
A
So people were kind of creating their own, like, crypto coins throughout 2020 and 21.
- [49:40]
B
Yeah, coins, but more specifically markets. So they were building their own. Like, do you know what a constant function, constant product market maker is like Uniswap.
- [49:53]
A
Oh, I've heard of Uniswap. Yeah. So Uniswap is built on Solana technology.
- [49:58]
B
No, it was built on Ethereum, but it was expensive and slow. And it was based on this math paper, I think, from the 80s or something, where you kind of get rid of jump and citadels and all these people that are providing liquidity and use math instead. And it never took off because of us Markets are really efficient. So even if you're like half a basis point less efficient than that, it's really hard to compete. But on blockchain you don't have other competition. And it's innovative in different ways that it can bring liquidity together for assets that are on the tail end of popularity. Like things that are like really early in their development, like meme coins, whatever. Things that are super risky or to price. It is actually really, really good for that that traditional finance just doesn't care about. So you had this kind of explosion of defi summer. Like defi summer literally happened in 2020 and we were just launched early enough, much cheaper and faster than all the competitors that delayed even that we were able to get that initial traction. So I think the lesson there for founders is like pmf. When you have pmf, people will. They will like bend over backwards to overcome all the kind of painful problems of onboarding that they can overcome themselves over like a weekend. So you don't need to solve their like weekend problems that like a dedicated like engineer can go work through that solve those problems later on. Like see we. But the problems that you need to solve are the ones that are like, take six months to a year to solve and require coordination from multiple people, which is like make the stupid blockchain fast. That was the hard problem. It takes years to solve that. We only solved that problem. And that's it. We left everything else to third parties, open source developers. And the really good ones were like, oh, okay, I have to do everything. The command line, I have to code in Rust, all the. There's no docs, I have to read the code. This is not a blocker for a good engineer. It sucks, right? But like it's because it creates a barrier to entry. You actually had green field for really smart people that could overcome it. So this was like the weird, the weirdness that happened in Solana or like the opportunity that we had was from that, that it was hard to build for, but it solved a real world problem.
- [52:44]
A
And so what was so hard about the thing that you were solving? Because it sounds like it was actually kind of difficult for people to use it, but you solved something else that was even harder. So they got through all the other hard stuff. So what was the really hard part about it that you were solving?
- [52:59]
B
Remember that physics radio lesson? So the way bitcoin solved it is that basically the difficulty and proof of work means that the average time it takes to find the proof of work puzzle to solve it is about 10 minutes. And when you solve it, that gives you the right to propagate a block, meaning that when you accept a block from a node, you will drop it. If they didn't solve the difficulty challenge, you basically ignore blocks that don't solve it. And the difficulty challenge is kind of set up for this 10 minute period so you have a low probability of collisions, so you don't have two blocks happening at the same time. They call them orphan blocks.
- [53:44]
A
But they were slow because it took 10 minutes.
- [53:46]
B
Yeah. And Ethereum sped it up to its maximum, which is 12.5 seconds with a whole bunch of tricks that Bitcoin people will never implement. But that's still 12 seconds is too slow for trading, but sort of fast enough for some payments, like backend. 12 seconds too slow for cash register. Right. So you have like they bridged the gap a bunch to where dedicated super nerds could go, build an experiment, build Uniswap and things like that. And they were happy to play around on their sandbox, but it's not enough for the normal retail user. And to go from 12 seconds to 400 milliseconds took. We basically took a guess, because ignorance is bliss, that our idea would work without any proof. Only now do we have proof of protocols that can accomplish the same thing with academically guarantees that are equivalent to what Bitcoin can do. And that took literally six more years of Solana showing, hey look, this can work. And a professor from Zurich called me up and said, not 100% sure it worked, but this is how you would actually solve it.
- [55:04]
A
And she had to go back and adjust based on what he said.
- [55:07]
B
No, we hired him. And two years later I think Alpenglow is about to be going live, which is the next generation protocol. So all the stuff that I develop is getting ripped away. But the problems that we solved were the key problems. So the solution was good enough at that time. And what we were lucky on is identifying that the bottlenecks are this round trip talking between all the parties to get agreement to go to the next block that doesn't work. Or this 12 second to 10 minute way to resolve congestion that doesn't work either. So you need to kind of build this idea of a continuous block producing protocol which, which we solved.
- [55:55]
A
You like essentially made it instant. Like you essentially made it so that instead of like this waiting period in the payment settlement layer, you got it down to essentially instant or what felt like instant for everybody else.
- [56:07]
B
Yep, okay.
- [56:09]
A
And then that's what people were then building a bunch of other things on top of this, like instant payments layer
- [56:16]
B
or execution and settlement. So in that 400 milliseconds you get guarantees that everything executed and you have the correct state of the blockchain and the correct state of the order book if you're building markets. And that meant that trading is now still slower than finance, but the gap is much, much lower. And while New York Stock Exchange or CME or these financial firms will say they have nanosecond trading, the physical reality in the world is that information has latency. So some event happens in Singapore that has relative importance to markets. It is 80 milliseconds away from New York. No matter what, no matter how fast you have your Bloomberg terminal, wires, everything configured, that still has to go. That news wire has to go to New York to get fed into the algorithm to go take a trade. So even if the exchange is operating in this very fast system, once you get below 400 milliseconds, you actually can provide prices that are as good as centralized exchanges.
- [57:31]
A
I guess then today you said you ripped things out, you rebuilt everything. I guess how does that feel to have to remake everything and then what people kind of build on Solana today.
- [57:43]
B
My entire career as a software engineer, I always wanted to work in open source software. I like fell in love with Linux as a teenager. Super nerd in the 90s because you could see the entire stack. You have this full transparency of how the system works. And I was always a tinker. I would be the person that would overcome the weekend problems to get something to work. And that was, that's what drew me to both Linux and to then build Solana the way it is to be completely open so that a hobbyist that is trading can actually, if they want to spend the time, they can actually have the exact same access as Citadel or Jump as the biggest traders in the world. And I think to me that always felt important. And Linux is never done, it's always changing. So my. I'd love to see my code getting replaced. It means that there is a new generation that is taking it on and adjusting the system that I thought would work five years ago in the world to the what the world needs now. So it means it's not dying. This is like change is good, like change in software is great.
- [58:55]
A
Well to the point of like the legacy financial system like it, it's also had to change and sometimes it's Good
- [59:01]
B
to just force the change much, much slower. But yeah, yeah, yeah. So starting getting to see like the core parts of the protocol get ripped out and replaced with next generation stuff. I think that's awesome.
- [59:17]
A
Did some of that then enable what people are doing with it today.
- [59:20]
B
What's funny is that nothing really changed from launch in terms of what people do today. I think there were a lot of ideas about blockchain can accomplish and build and these are like these massive big ideas of changing the world. I think that will happen. I was right that trading is really important and tokens are really important and all it does is it's a system for moving tokens around and escrowing them in different markets. That's what's going to as finance moves over to blockchain and becomes this open system. All the other stuff that people had ideas about like banking the unbanked and all of this bringing the world to the same fair open financial system, it's going to happen. It's just much, much slower. That's running on human speed. Everything else is running on finance or trading speed, which is a bit faster. So what's happening now is I think to go back to the start of this conversation, you had this company Backpack licensed brokerage. It has full transfers. You can transfer your SpaceX stocks from E Trade to Backpack and mint it as a token on Solana and is on the open global rail. So you can transfer to anybody else in the world and they have full cryptographic guarantees that they can go back to E Trade. So we've effectively eliminated 130 years of problems from the railroad boom software. Finally that's pretty cool. And that's a slow. It'll slowly get propagated to the rest of the world and you kind of see like early adopters like Robinhood running full steam ahead with things like this. But as finance matures, as the rest of the world gets richer and wants access to American stocks, this will start happening faster and faster.
- [61:22]
A
I think I saw there's something like 30, 35% of all stablecoin volume is on Solana. Maybe I got that stat wrong. So what does that mean for somebody who's not really in the weeds of that transfer volume?
- [61:38]
B
So money being moved between addresses. It's hard to. Again I would look at these metrics as look at them relative year over year as things go up, not in terms of like does this mean that each one of these is a different individual person? Very likely you have power, law, distribution where you have like entities that are fully Onboarded on chain, have a bunch of accounts across a bunch of different financial institutions that they have to rebalance all the time. And that is a really great use case for blockchain. And otherwise you'd be paying wire fees and waiting for delays. You need money in point A, but now you need point B. Do you wait for two day wire, pay the fees there? Do you do it on something on channel? Right. So like for anyone in finance that is operating in multiple places in the world, those costs are real, right. The time that you have to wait is real. It all translates into like eventually cost to consumers. So velocity is kind of what we always thought was the important part, which is how much volume, how fast you can move it, because that is where you have real customer demands and that's where finance makes most of its rate. Like they charge on transfers and things like that. Unless so much and holding it.
- [62:59]
A
And so essentially by using stablecoins to manage your global money supply, you are able to as a person that's holding the money and owns the money.
- [63:10]
B
It's usually companies that operate in multiple places have suppliers in one spot and retail or whatever, you need to pay somebody here and your balance is over there. The fastest way to do it, the stable coins are now the cheapest way to do it. And what I suspect will happen is people think, oh, disrupt Visa or MasterCard. I actually think that the more retail facing companies are not going to be disrupted because they already have the customer relationship, but they will be able to squeeze their costs down by using stablecoins across like all of these different layers.
- [63:50]
A
So it actually might be. So somebody might say, oh, Visa is going bankrupt because of this, but it actually might be that Visa makes more money or is more profitable because of stablecoins.
- [63:58]
B
Exactly. And that means that competition should eventually mean customers get better service.
- [64:05]
A
Yeah, that's fair. I think another thing like you're, you're pretty, you're pretty big on, on one, one lens of this, you could say AI is stealing all the jobs, the world's ending, blah blah, blah. The other end is you already have jobs. Like what's the other. So what's actually, how do you actually think about this? What is actually going on?
- [64:26]
B
We went through the largest transformation during the Industrial revolution where like 80% of the human population, kids even were farm workers.
- [64:37]
A
We used to send kids into like coal mines. They'd like die, like they just get trapped down there.
- [64:42]
B
I think that was probably like the end of the last bit of the Industrial revolution. But reality, it was like prior to even needing coal jobs. We had farm. Farming was the thing that you needed. Otherwise people starved and people starved on the weather like change and screwed up the yield and stuff. So we were blessed in that loss of 80% of those jobs or 95% of those jobs. Like motors, like mechanical motors displaced 200 billion jobs. There's only 8 billion people. The reason why the world is so wealthy is because motors and mechanization displace 200 billion jobs.
- [65:26]
A
So it placed 200 billion jobs even though there's only 8 billion people in the world right now.
- [65:31]
B
Motors have. Yes.
- [65:33]
A
Oh. So over the course of human history.
- [65:35]
B
No, imagine the world right now without motors and us living at the same standard of living. There's 200 billion workers somewhere that are toiling away for us to have all this wealth.
- [65:52]
A
So enable us to get to places we wouldn't have been even able to get to with the current population of the world.
- [65:58]
B
The fact that we're talking real time through this magic machine is because they have 200 billion virtual workers that are motorcycle. Are motors effectively running on electricity and fossil fuels or whatever the wealth that exists in the world is from that. And AI will maybe do a hundred billion more if we're lucky. And if you. The median American I think lives on $80 a day in terms of spending consumption, the world is I think around 8. So for us to bring the rest of the world to the median American, we need to 10x productivity. We roughly need to displace 80 billion jobs. Does that make sense? We need everybody in the world to still work every day as hard as they're working now, but to be ten times more productive. And that would bring the rest of the world, that 8 billion population to be at the median level of American. So this idea that AI is taking our jobs is dangerous because it can do real damage. Like if we don't increase productivity, we're, we're prolonging extreme global poverty. We're prolong, prolonging extreme poverty like everywhere, not just in the US it's like do whatever you want with your life. Be selfish. But to prevent other people from like being more productive is cruel. Like the, the global economy so interconnected that productivity improvements in the US that it allows us to become richer. Lift people out of extreme poverty everywhere. Like this is that. That's like US companies make money everywhere. They don't. They don't. They're not insular in, in United States. Like Apple makes a phone in China. It's assembled in China. Those people have jobs. And then Sold in Southeast Asia. And we are blessed that somehow they pay taxes in the US that they hire American designers and engineers. Like we get a major benefit from that and capture a lot of the wealth there. But the people that benefit benefit everywhere in the world. And I think it's kind of this like Luddite miserly nimbyism that's driving this like anti fear. They see their share of their pie shrinking even though the pie itself is growing. And this is what's driving that kind of selfish need to protect your little share of the pie as opposed to thinking if the rest of the world gets wealthier and they just get to the same level as a median American, the median American is going to be double in wealth easily.
- [68:51]
A
Yeah. It's kind of interesting though that it feels like the average view is we shouldn't be building data centers because they pollute or it's loud or there's the
- [69:04]
B
least polluting industry ever build a phone.
- [69:11]
A
But the whole narrative is like they use all this water or something like that.
- [69:15]
B
They can make them air cooled but. And in your town and your city, you, you can live in your beautiful town that is wants low traffic and doesn't want to grow and that's totally fine. And be selfish there because myself, I cannot possibly tell you how to value that and like do whatever you want in your local community but to prevent another one that is growing so taking on the risk and building productivity improvements for everyone. That's cruel. That's not being selfish, it's just being actively cruel. So places that want to like do whatever they want locally, that's great. I think preventing Texas from building data centers is suicide and like literally cruel to not just the people of Texas, but to everyone, to the, the lowest extreme poverty stricken people. I think. I don't know. Like I, I was 11 when we left the USSR so I still remember it and we were well off relative to the Soviet Union. And I think when I did looked up the stats, I think it was like $20 per relative to $80 spending today and purchasing power. USSR was at like 20 or something like that. What that meant was that we had a shared apartment with three other families. There was a single bathroom that everyone used with one toilet for all the families. And this is bizarre. When I told my kids, they didn't believe me. You had the toilet seat was hanging on the wall with the last name of your family written on it. So you would put on your family toilet seat on the toilet.
- [70:57]
A
That's insane.
- [70:59]
B
That was upper middle class USSR and this is higher than the median standard of living globally. So like, I don't know if you have anti data center listeners or whatever. You're being cruel is my message to you is you're being cruel to the rest of the world.
- [71:18]
A
Yeah. Well, it's interesting though, like the beauty of capitalism is like, all right, you don't want them in any like in your town in Texas. We're going to put them in space. Like, we'll just, we'll figure out a way to do this because the incentives are like.
- [71:31]
B
But that's a cost. It slows us down. Like that is every 1% of like the GDP. Global GDP growth that's short means millions of people remain in extreme poverty. That's like the like, people need to put on their like a little awareness hat to think about. Like how do you actually lift out of people out of extreme poverty? You have to improve productivity, which requires risk. Risk has to be underwritten by capital. Somebody has to go build that new motor, that new whatever way of insuring crops or fertilizer, whatever. Like somebody has to go figure it out. And to do that you need all this growth. Otherwise like in I had six years of Soviet communist education. Emancipation of the proletariat can, can only come from massive productivity improvements.
- [72:27]
A
Well, what was the biggest culture shock when you moved from the USSR to
- [72:31]
B
the US I thought the entire United States was like Manhattan, like end to end.
- [72:38]
A
It's like, okay, big building. You just like saw one of those maps and you're like, this whole thing is just like big buildings.
- [72:49]
B
Because that was like the idea of modern America was that like New York, super busy, like hyper capitalist dense place. And the biggest culture shock to me
- [73:02]
A
there's like end of the Soviet Union like right before the collapse. So you were like, I mean it was probably like the worst it had been before the collapse. Right? Like it just.
- [73:10]
B
No, it was the highest GDP USSR had was like a year before it collapsed.
- [73:16]
A
Really. So things were great, relatively. Right?
- [73:19]
B
Yeah.
- [73:21]
A
Okay. Well, relative to where it had been for the ussr. So what was going on? If things were. GDP was going up, but things were the worst.
- [73:29]
B
When the government directs the economy, the people, the GDP that measures personal spending is measuring spending that people want that. I want to buy this thing, I want to buy this donut, I want to buy this, I don't know, Crocs shoe or this Botox treatment, whatever that means, I'm willing to spend money on this. And when that goes up, naturally it's very correlated to the spending that people want to do, which means that they're serving their needs and they're happy. When the government spends money, it's spending on our behalf and it's trying to do its best in the most optimistic light. Right. It's trying to figure out what is it that we want and spend it. But there's an error there. And the bigger the government budget is, the more dislocated is the GDP number from. I'm spending stuff on what I want and I'm satisfying my needs. You get this like distortion. So US USSR economy was 100% government spending, like maybe 95%. You had like 5% small Portland level, like everything. Handmade businesses and people were unhappy because they didn't have like the stuff that they needed. Right.
- [74:48]
A
So they just had what the government thought they needed, which might be right. But there's also going to be some stuff that's wrong in that assumption.
- [74:54]
B
It can only be right on like very macro, large scale energy, that kind of thing. Like even then, like I think. But it's just very, very hard for it. Like you think of like, can the government solve housing? Can they build thousand apartments next to your home? Like this is how they would, they, they would, they would place the apartments in the wrong spot at the wrong quality and the people that would get them would not be happy. Right.
- [75:25]
A
Like, I want to share this toilet with four other families.
- [75:28]
B
Exactly.
- [75:30]
A
But in theory, like you got housing for the people. It's just not what they want necessarily.
- [75:34]
B
Yeah, yeah.
- [75:36]
A
Interesting. And I mean, for example, I know you play underwater hockey. Like you might love, you might want to play under underwater hockey. But like we just built soccer fields. You gotta play soccer.
- [75:46]
B
Yeah, exactly.
- [75:48]
A
So that actually sounds like a, like a fake sport. What is underwater hockey? Because I grew up, I'm Canadian, so I grew up playing hockey. But like, how do you play underwater?
- [75:56]
B
There's actually a really great Canada like team, like group that plays really.
- [76:03]
A
Okay.
- [76:04]
B
It's in places with a lot of pools. It's six on six. You wear fins on snorkel, you hold your breath and you got a stick about like a foot long and a puck that looks like a puck, but it's got a lead core. So you fling it around in the pool. On a flat pool, 8ft deep.
- [76:21]
A
Does it sink?
- [76:23]
B
Yeah, it sinks. So it's almost like air hockey underwater. And it's three dimensional because you like swim over players.
- [76:31]
A
So the puck is fast. Like when you hit it, it moves really quick.
- [76:34]
B
Yeah. So you can like, you get like, you can't fling it around the side like you can in hockey, right? You can't do like icing or whatever, but you can fling it 15ft, which is like quarter way there. And the play can move really quickly. If you like one touch, one touch it across, you know, so it kind
- [76:54]
A
of sounds like water polo, but even faster and more intense. Can you like climb on people and stuff and like.
- [77:00]
B
No, no. It's like the reason why people get into it is because it was co ed in college. There is a global world championship. I was the worst player, I think, on the US Men's team.
- [77:15]
A
Oh, you were on the. You were on the US Men's team. Oh, nice. That's cool. That sounds fun. I. It kind of sounds like one of those things you got to really commit to get into it. You probably couldn't just try it, but
- [77:26]
B
actually it's so small that half the way to get on the national team is just to afford to go to all the tournaments.
- [77:33]
A
Interesting. Okay, so that's why you were the worst. You could afford it.
- [77:38]
B
I was in like ironman shape, so I was a. I had endurance. I loved running, cycling, surfing, like. But I think I'm. There's just a certain amount of athletic talent that like pros have, right. That I think us normal people, no matter how much we train, can get to do.
- [77:59]
A
You have just like quick question to close. Do you have like a favorite founder or CEO company? Maybe it's inspired Solana, maybe not. But I mean, and like as of current day or even like historical, like anything you've like really gotten a lot of inspiration from.
- [78:15]
B
Armani is the founder of backpack is this guy that. He was an FTX employee. He was like, he built a whole bunch of tools on Solana was like the engineer that I was working with. Me working on the protocol, him working there and he was going to build this company and FTX collapsed and all their funds were on FTX like 80% of their Runway and they were stuck there from backpacks. They just did this big raise. They had raised $15 million. It was like a massive round day and the company was basically dead in the water after the collapse of ftx and it was six people and they just buckled down in the worst possible, I think crypto market ever and just build really good products and recovered and now has a full exchange that issued SpaceX. I think it's an amazing recovery story of just real personal grit. So it's been my inspir.
- [79:19]
A
Wow. I didn't. I'm sure that's. Yeah, that'd be crazy. What was it like? Because wasn't FTX a pretty big holder of Solana at the time it collapsed?
- [79:26]
B
Yeah, they were like a big investor. And we just finished our conference called Breakpoint and it was the biggest conference to that day. We've been lucky that all of them have been bigger than the next. But it was like a thousand developers show up at this massive hacker house. Like 2,500 like tickets. We were like in. Our tickets aren't free, they were 500 a piece. So I always made the conference team to like, it has to be break even. This is not a charity. So it sold out and it was, we were riding cards on the plane, flying back from this like amazing conference and all of a sudden like one of our biggest builders on Solana, this like company that we've been working with closely. Just like in a. Like that.
- [80:16]
A
Yeah, like, what, what happened next? Like, did like, what did you do?
- [80:20]
B
It was like pretty gut wrenching. My co founder Raj is like a perfect counterparty for this. He loves like crisis moments. So I, basically, my biggest fear was a bunch of people had money in FTX and their Runway and if our ecosystem died, then we were dead. And we called like a bunch of founders and our backpack was one of them. So they were, they were kind of screwed, but 80% of them were smart enough that they like were kept their banks right and like they, they did the right thing. So they didn't keep their, their funds in crypto or, or on an exchange.
- [81:03]
A
A lot of advice was like, keep your like money in crypto because the
- [81:08]
B
advice they give people now is like, go to treasurydirect.gov and buy the stupid T bill.
- [81:16]
A
Use as dumb as low tech money as you can.
- [81:19]
B
Short term T bills is where you want to keep your Runway. The feedback that I got during those calls was that literally people told me we looked at other chains and they all suck and we were either gonna build our own blockchain or use Solana even, even after all this. And like it sounds like everywhere else is like worse on the technical side but equally as bad on the crisis. It just like we were like at the front of it because of how big FTX was as an investor. And like the token pricing took like the biggest, the biggest kind of drop. But because the tech was good, the product was good, a bunch of people like came in and built products during that time and to them it was like an opportunity to go invest in the ecosystem that they saw was unique and healthy. So ended up working out. I Think it's crazy to say that now, but there's no way I would have ever thought of saying it. That it probably made us stronger. Like all in all it's not.
- [82:30]
A
Yeah, it's always. It's interesting too with like the whole like SBF is this legendary venture investor. When everyone goes back like you own like 10% of anthropic or whatever. It was like big chunk of cursor Robin Hood and it's just like a crazy, crazy situation. Do you have like a single biggest prediction for the next year? Something you think like a lot of people are sleeping on that no one's paying attention to, but they should.
- [82:56]
B
I think people are going to realize that there is no like AI job losses like those haven't materialized. I think the companies that use AI the most are hiring the most because they are seeing productivity improvements from AI. That means their products are growing. That means they're going to hire. That's kind of like otherwise I think we should be in a recession if it wasn't for the AI boom. So we're kind of lucky there. I think for crypto I always kind of made this joke that there's kind of three phases. You have the punks, then the hoodies, then the suits. And we're going through this transition to the suits which is kind of more boring. But it means that it's going to be around forever. It's sticky. We're doing boring stuff. We're issuing regulated stocks on chains so people can deposit them in their brokerage accounts.
- [83:55]
A
Yeah, I think I saw like Western Union uses Solana for stablecoins. It's like that's like the most oldest boomer company you could imagine. Like sending money orders.
- [84:03]
B
Yeah, we're getting boomers onboarded. This is the prediction is that year over year number of boomers onboarded to boring crypto. Rails is going to increase by in double digit percentage.
- [84:16]
A
Nice. Yeah, that's a good, that's. I mean that's good, good for, for you guys for sure. Hopefully good for the boomers too.
- [84:22]
B
What I want to see is like this translate into like lower fees and better services for users. Like we're in this cycle where I think businesses are looking to cut costs and they're using like new technologies and stuff and like cut costs and increased revenue. But like we should start hopefully seeing lower costs and users and kind of better growth. There's.
- [84:46]
A
Yeah, well, I mean that'd be a good prediction for 2026 tooNextNext year. Well, cool. Well, this is a lot of fun thanks for thanks for coming on the show and thank you for listening. Thanks again to this episode sponsors Flex, Numeral, Amplitude Merge and Monaco. If you enjoy this, please like comment, subscribe and share it with a friend who should build their own market on Solana. Make sure to check out the back catalog of over 100 episodes with investors like Gary Tan, Vod Gill, Jathan and Eric at Benchmark and some founders of companies like Robinhood, Sweetgreen and Mercury. Tune in over the next few weeks for conversation with alamine Udden at NexHealth, Naveen Chadha at Mayfield, Michael Tannenbaum, the CEO of Figure, the first blockchain based lending company, and my friend Shenzi Danga Merge. If you don't want to miss any of these, subscribe to my newsletter. The split linked in the description to get each episode plus a transcript emailed directly to your inbox every week. Thanks Sam for listening. See you next time.