The Endgame Landscape of L1 Blockchains w/ Alejo Pinto (Pontem Network)

**Speaker A:** Hello and welcome back to the Strange Water Podcast. Thank you for joining us for another conversation. Today's guest is Alejo Pinto, Chief Growth Officer of Pontum Network. Pontum is an Aptos based studio who works in close partnership with the Aptos foundation to onboard users, makers of products such as Liquidswap, Pontum Wallet, and Lumio L2. Alejo and Pontum have developed a deep understanding of Aptos. During this conversation, we spend a good amount of time understanding Pontum and the Aptos ecosystem. But then we shift into some of the largest questions in crypto. Questions like, what will the L1 landscape look like in the blockchain endgame? Or which of today's players are at the center of crypto? Or my the big one. What is the role of bitcoin? One more thing before we begin. Please do not take financial advice from this or any podcast. Ethereum will change the world one day, but you can easily lose all of your money between now and then. All right, let's bring out Alejo. Alejo, welcome to the Strange Water Podcast. **Speaker B:** Thank you for having me. **Speaker A:** Of course. So I'm super excited to talk about all the crazy things going on in Pontum and in Aptos and in the MOVE world. But before we get there, I am a huge believer that the most important part of every conversation are the people in it. So with that as an opener, can you tell us a little bit about yourself, how you found crypto and then maybe how you found yourself into this like, kind of weird niche ecosystem? In an already weird niche ecosystem? **Speaker B:** Yeah, definitely. So I got into crypto more than 10 years ago, entered Bitcoin around 2014. I brought it to my professor and he essentially looked at it and said the technologies, you know, relatively simple, but the fact that it works is really interesting. It's mostly game theory, like the. The hardware and the technology itself is not as complex. So yeah, luckily he told me to watch it closely, you know, set up recurring buys since then and you know, around 2016, it. It really picked my interest when, you know, started taking over my portfolio. And then the e ethos around decentralized money. Satoshi's vision, I think almost became like a religion for me. Just kind of following in his footsteps and building out these trustless financial systems where anybody in the world can just connect and not have to worry about even state level actors coming in and meddling with their money or their ability to transact with each other, which I believe is a fundamental freedom that we should all have. So yeah, from there, you know, I I was relatively conservative in my career. I entered IBM, went into IBM blockchain for about two to three years, then transitioned into crypto working. At the time Meta was working on the Libra Diem project. It's a. It was a huge distribution channel. So, yeah, that became interesting enough for us to want to pursue. We were raised funds. Initially, the vision was to make a decentralized version of diem. Diem was going to be a permission network. So we wanted to enable the same technology on a decentralized system so anybody could connect into it and then if they wanted to apply to be allowed into the DIEM system. So aptos and Sui around the same time started forming. They raised around $400 million each. So we started building applications on top of Aptos in partnership with them, and so far we built out the top AMM and the top wallet there. And now this next product that we're building essentially goes back to the original vision of enabling this technology to be more broadly used. So what we want to do is essentially enable anybody to build with MOVE applications, but also expanding beyond that, Solana VM applications, and if there's enough demand, webassembly so that we start to bring virtual machine and language diversity and agnosticism to Ethereum. So the goal is to create a credibly neutral layer so that anybody can deploy with any language that they want and still make use of the best features of Ethereum, which in my opinion are the decentralization and security that it brings. **Speaker A:** Yeah, awesome. And I think we'll obviously be unpacking a lot of what you're talking about and specifically, like, what Facebook was doing with Diem, how that, you know, created the move movement and then like, what's been built on top of it since. But while we're still in this kind of background section, I would love to hear any insights or reflections that you have coming from something like IBM or any of these very not web three native companies that were developing teams to look into it. Can you just like share kind of like, what's the vibe like? Like, do you feel like companies like IBM, you know, at the time and maybe today, were they understanding something cool was here and really exc. Accepting the vision? Were they chasing after just some narrative and trying to hire some, like, young guns who would only take the job if it said blockchain? Like, how do you understand holistically what it means when a big company is looking into blockchain? **Speaker B:** Yeah, it's a really good question, in essence. So there's two components I Think one is general hype that you know, this new technology can bring, I think we saw similar with AI and then two is the application of it to real use cases solving real problems. So specifically for blockchain this was like around 2017, 2018 when we had the ICO mania coming out of Ethereum enabling all this. So there's definitely a general market positive sentiment towards this technology. I think where specifically for blockchain there needs to be some separation, where more conservative companies need to be, I guess careful in how they go to market is around the topic of cryptocurrency. So specifically Bitcoin and eth. Even at that time and up until recently Bitcoin was kind of solidified as a commodity and then Ethereum as we know even now apparently Ethereum foundation is being investigated or essentially I would imagine to try to dig into whether there is security or not. But fundamentally there's just regulatory on clarity which for a public company is a huge risk, especially for their stock price. So to that extent, you know, separating out kind of like the red tape and the vision from, you know, the, the bureaucracy that undergoes on one of these large companies for getting projects through. So this is where IBM I think found a niche in building out permission blockchain use cases. So the way that a lot of the large enterprises work is you have certain innovation teams and those innovation teams have budgets. And then you know, at large companies if you don't spend your budget that year, you know, you don't get the same amount the next year. So I would say arguably most large companies went through some form of proof of concept or MVP to test out blockchain as they would with AI or any other emerging technology, IoT, et cetera. And IBM was at the forefront of helping enable a lot of these. The approach that they took was essentially with the Linux, I believe it was Linux foundation set up Hyperledger. Hyperledger is a open source framework for essentially enabling permission blockchains. The main difference between a permission blockchain and a permissionless blockchain is that there's permissions into who can use the network and who can access certain features. There's no coin, there's no game theory that through economics secure the validity of the past and what gets built into the future. It ends up being essentially a replicated database which still has, you know, better guarantees than a database because you don't have one database database administrator that can go in and change the record somewhat arbitrarily. So there's still, there's still benefits and you know, even, even today I believe JP Morgan and some others are using this technology for wholesale, for wholesale banking settlement at IBM for example, they use IT with Walmart to do supply chain tracking with hosts of distributors and suppliers. So yeah, I mean there's a lot of benefits that came out and that were able to separate, you know, turn this hype into actual use cases where again it, it they tended to separate themselves and maybe at a detriment now and into, you know, looking at it hindsight is this, this opportunity that existed for cryptocurrency. Even at the time they were still working to provide hardware, so servers for cold storage for centralized exchanges. That's still, I believe relatively within their blockchain division. It's still like a relatively established part of the business. So they definitely did dabble in some of this. I don't know if you remember, but they also were working on something with stellar to do a payments platform that was going to be competitive with Ripple. But yeah, I mean in essence I think just it's very hard for a large enterprise like that. And we even saw the pushback when simply just putting bitcoin in your spreadsheet hat for Tesla and some of these other companies. So I think that stigma is going away and over time I think companies will start adopting this technology more and more gladfully now today we have companies like Coinbase for example, that are using BASE and USCC natively so that we can enable the use of the actual technology and move away from centralized systems where, you know, things can go wrong. So a good example for this is for example GameStop and you know, the Meme Coin. Sorry, not Meme coins. Meme stocks that were trading where because of discrepancies and you know, how many assets or how much was outstanding, Robinhood had to halt trading. Essentially like in hindsight if everything was going on on a blockchain, there's no need to hold trading because you know exactly how much everyone has at any one point in time. But yeah, I mean, I think in general a lot of these companies are starting to come around and adopt not just blockchain but crypto in general. And hopefully that trend continues into the future. But yeah, there's definitely a lot of red tape that goes around implementing these and hopefully that changes. **Speaker A:** So we'll put kind of more the things around Coinbase and USDC and put that off to the side for a second. But just looking back at the IBM it sounds like the story there was that in this moment where we were like developing all these technologies What IBM was doing was like sitting there next to the public industry and figuring out like, okay, what here is interesting, what here can we build into products? Like whether or not it touches the public blockchain. Like we're building technology and like we'll build businesses around that. And I want to put that in contrast to what happened at Facebook with Diem, right where. And I won't tell too much of the story, I want to leave this to you. But the contrast that I see is that while IBM and I don't want to pick on IBM, while most companies were looking at blockchain and thinking like, what can we take here? What Facebook was saying is like, that's an interesting thing. What can we add into here? And you know, they were doing it for very selfish, very centralized reasons. But you know, the way things worked out with the move VM and then aptos and SUI and like where we are today, it just, it strikes me that like IBM has ended up with these private products that are being used by like Walmart and JP Morgan today, but we can't touch them. Whereas Facebook's efforts, like kind of, they're not using it at all. They sold it or they got rid of it and now it's, it's something that we all benefit from. So with that as, as like the blanket over this, can you kind of flesh put the, the meat on the bones of that story and tell us like, what is the story of Libra and Facebook and like how did that begin movement? **Speaker B:** Yeah, definitely. So, I mean I was not at Facebook, so I can just kind of tell from an outsider's perspective looking in. And just, just quick point of clarification. I'm not sure if JP Morgan is a client of IBM, but the Walmart one is definitely public. But yeah, so again, separating the technology, the blockchain technology from the use case, which is cryptocurrency, is where Facebook and then later Meta got into issues with regulated regulators. So for reference, aptos originally started as a fork of diem. So DIEM is a general purpose blockchain. It uses a lot of components that were already existing. For example, the consensus is hot stuff, which was used by Cosmos. So the researchers at Facebook, they like to work on open source, open source frameworks. You know, this is like large companies, like this is like a common occurrence that, you know, these research teams will be put onto building our open source frameworks. But Libra, which later evolved into Diem, was just at an open source project which the company saw that they could monetize in some way. But the focus was on the stablecoin and it was aptly named the same as the Blockchain which is like a little bit confusing but the Libra currency or the DM currency. And initially it was going to be the Blockchain. The Libra blockchain was going to be fully permissionless so anybody could join the validator set. And this was honestly very admirable for Mark to go in this direction initially say okay, we want to build the next Ethereum, the next Bitcoin and do in a way that's more so to the ethos of the technology which is to be fully decentralized and not wholly controlled by a small set of parties or consortia parties. So you know, definitely kudos to them as I don't think they asked any permission, they just started doing it and that's when they started running into these regulatory issues. And again I wasn't at Facebook so I can't speak for them. You know, maybe we can bring in some, some of the folks from Aptos and sui. But yeah, from, from my understanding the risk is more so around the stablecoin or the, the currency. So the structure and the first implementation and again I could be wrong, but as I remember reading the white paper, essentially a basket of currencies globally, so not just US dollar, so it wasn't just going to be USDC which is just one to one with the US dollar, but it's going to be a basket of currencies that would include the Euro and a long tail of foreign assets. And keep in mind the way that these stable coins are structured and even usdc, USDT is that it's not just cash. You don't just have cash sitting in the bank. It's only a small percentage of cash. Let's say like 20% cash and the other 80% are treasury bonds or assets that are accruing yield. And this is how they make money. So 80% of the stablecoin or currency is not actually cash. So you know, this works in principle with something like the US dollar which is very liquid and we can trust that the US government is not going to default on their bonds. However, as you look to adopt a longer tail of these assets, there is a risk of these bonds not being repaid. There is a huge currency exchange risk, there's a huge liquidity risk and even on the US dollar I don't know what would imagine if. So hypothetically speaking, imagine if everybody turned in their dollars into the stablecoin or USDC or whatever we all digitize their dollars and then there was a bank run. We all wanted our cash immediately. They only have 20% of it liquid. The other 80% is in bonds. That might cause a crash in the bond market for example as people look to trade their bonds for cash. So yeah, I mean the regulators that be globally saw this as a huge risk. Facebook or Meta has 3 billion people. It's a huge distribution channel. Imagine a large portion of that money flowing into this product, which is essentially a complex financial product or derivative where if there was some form of liquidity crunch or bank run, it could potentially cause repercussions across global economy. So as a regulator I'm putting myself in the shoes of regulator. This is pretty scary because now we're having to trust the, you know, one of these tech companies to essentially now, you know, have a dependency on for our own economy. So yeah, I mean I think generally the, the vision makes sense. I think maybe if it was like a smaller company it could have like started out smaller and then maybe grown into something. But given that it was like one of the biggest companies in the world, it does, it did stand like a huge centralization risk and financial risk for global economy. So I think the technology is fine. Again like permission blockchains and everything. Regulators are not getting up in arms around that. It was more so the application of it towards a currency. So in the process of them having it be approved, Libra turned into Diem. Diem was a permission blockchain product. So no longer was it going to be a permissionless set of validators. There was going to be a permission set of validators so only trusted parties could hold the database. And then I believe they were only going to do US dollars as a stable coin. So similar to USDC or Tether. So they roll back the ambitions and then for whatever reason, again I'm not sure, I wasn't there that wasn't able to get through either. And then they sold the technology off and then given that it was open source, aptos and SUI were able to continue building on top of it. And I mean those were the core teams that were building it internally ad meta and I believe Sui is like the version 2 essentially of what DM was going to evolve into. And then Aptos was a clean fork of the existing repo that existed. But yeah, they ripped out all the permission components so there was like a root account that could still control funds which control have permissions over. So all that stuff was ripped out and just launch general purpose blockchain that was super high performance, very low cost, and was competitive with Solana, for example. So at the time that's kind of like the competition. And I mean these folks are professionals in maintaining architecture that can sustain billions of people. And there's not that many people in the world that can do that. There's people at Facebook, Google, Alibaba, et cetera that can do that. And yeah, I mean, I think they're well qualified to maintain a global state for a giant database and so far has had less downtime than Solana, so definitely competitive and we'll see it continue to evolve as it's brought into market. **Speaker A:** So cool. Thank you for walking us through the history. And from at least the way you described it, it sounds like what happened here was like we had an I, Meta had an idea and they wanted to achieve that idea and so they built a technology to like get there. And then as they were, you know, getting permission to make this idea a reality from regulators, they were told like, hey, this idea just not going to fly. We're not okay with it. And so Meta had this situation where they're like, this isn't allowed to happen, but we have all this technology and like we're going to walk away. We hope, you know, we'll sell some of it and we hope the open source movement continues to run with it. And you know, here we are years later and like that kind of worked. And so I guess my question for you is like the story of why this didn't work for Meta totally makes sense from a regulatory standpoint, but what I'm still like a little. What hasn't been filled in for me is like what did Meta create that was worth saving? Like that technology that they created to, to make diem, which like was a flat out no by Uncle Sam. Like why is that something that's so compelling that Sui and Aptos can build multi billion dollar chains on it? And on top of that, we can look at this technology as like something important for the future of like Ethereum and for cryptocurrency and not just another Alto one. **Speaker B:** Yeah, so it's important to differentiate the, the Libra cryptocurrency or Stablecoin from the base blockchain technology. I think what regulators had issues with was the Stablecoin because this is connecting to the real financial system. So you're essentially depositing US dollars or euros into bank accounts and then creating these digital derivatives of them, digitizing in essence. And again, it's not one to one with cash. And the redemption process can still Lag because you still need literally, you know, to redeem a dollar for, you know, this digital dollar in some bank or some form in some vault. So that's where regulators had issues. The technology itself is fine and what really is being built is iterative improvements over what's existing. So the team at Facebook or Meta looked at what was available, they looked at Ethereum, they looked at Solana and they said, okay, how do we build the, you know, next version of this that's going to be able to withstand billions of users? Which by the way, I don't think any blockchain today can withstand billions of use users, but it's essentially looking at what's existing and then iteratively improving on it. So for example, aptos and sui, which are derivatives of diem, are competitive with Solana in terms of throughput tps in terms of latency. So how much time between each block? They're each around 200, 300 milliseconds throughput. I think Aptos is benchmark around 30,000 in stress testing. I think between 2 and 5,000 or 10,000 tps can be achieved in production. So they're just building kind of like what's top of the line and being competitive with what's existing. And I think the top of the line at the time and even today is Solana. So they're just building iterative improvements over Solana. I mean, the architecture is definitely very different. For example, we can go into the virtual machine component where again, kind of like a lot of the hype comes for aptos and SUI with the MOVE virtual machine. So as I mentioned, most of what was built into aptos and SUI was somewhat already existing or research had already been done around it. But one of the novel things that came out of it was the MOVE virtual machine. The Moov virtual machine is designed after Rust. Rust has inherent safety properties like its static type. It's built for low level. It's a low level language that's built for mainly like hardware. So it's like very performant and safe. It's used a lot in mission critical infrastructure. And this is important because a blockchain, financial applications need to be performant. They also need to be safe. And it borrowed a lot from Rust. So again, maybe looking at what's existing out there, Solana VM uses Rust again, more performance, safer static type language, not you don't have this, you know, you don't have dynamic type and in essence building on top of it, iterative improvements. So one thing that sucks about Rust is that it's very difficult to work with. It's not intuitive or expressive for developers. So when you're building business logic. So if you're familiar with JavaScript or TypeScript languages, it's very intuitive or expressive as you're building out. Even as like a non engineer, you can look at the code and generally understand what's happening. Whereas with Rust Solana developers describe it as chewing glass or just being very difficult to work with. So move essentially based off Rust build frameworks for blockchain applications so you can very easily move assets without them being deleted or copied. For example, you create like standard libraries which you can pull from to again do standard sets of things that you would expect to do with blockchains or smart contracts. So it made the barrier to entry or the adoption a lot better than it is for just Solana VM or Rust. Proper building application smart contracts with Rust and I mean solidity is well known for this. Solidity is also very intuitive and expressive and the business logic can be easily understood by people. So Sam Blackshear who worked on this project there, he's literally computer linguists, like a PhD in computer languages. And yeah, I mean I would imagine and I think he said this in conversations, is looked at what was out there, kind of took the best of everything and then built something that was purpose built for blockchain. So in essence what they're doing, and this is how technology also evolves, is just iterative improvements over what's existing. So if Solana is top of the line, how do you build iterative improvements to improve Solana? So the Move virtual machine is one component, whereas the Solana VM is very hard to work with, but it's still using Rust. Move also uses what is called optimistic concurrency. So concurrency is what enables this paralyzed transaction execution, which is also a very hype thing that people are including into the EVM even nowadays. Whereas Solana uses pessimistic concurrency. So with pessimistic concurrency you have to know which parts of memory you're going to target and then you lock those up. Whereas with optimistic concurrency you don't have to pre lock those memories, the memory that you're going to access. So this gives performance improvements and again this is relatively iterative improvements over what's existing that overall make a better user experience. Another one is a fee market for a memory pool. Solana in this moment, over the last few weeks has had issues with duplicate transactions. There's no standard way to do memory pools. I believe all the endpoints where people submit to have to manage transactions in some format. Whereas Aptos, I'm not sure about sui, I believe they do too have a fee market for memory pool. And this is a standard wave that, you know, Ethereum also works where essentially there's a memory pool and you say, you know, I'm willing to pay this much for my transaction to be included. And then the validators just kind of sort by price and say, you know, I'm going to include the ones that are paying me the most first. And this helps to set almost like a orderly line of things that are going to get included into the blockchain. And you can just pay more if you want your thing to be included fast, faster. You know, this is like a small architectural design that is now coming back and making Solana very difficult to use and they're having to find ways to fix this. So again, I think it's competitive and they're making iterative improvements over what's existing. And they're just some of the world's best professionals that are able to build infrastructure that billions of people are able to use at the same time. So, yeah, I mean, in essence, I think what's made them successful is that they're making improvements over what's happening, you know, top of the line and, and, you know, continuing to develop and, and research and upgrade, you know, that technology so that it continues to be the best that it can be. **Speaker A:** So let me just summarize what you said and tell me if I'm wrong, but it sounds like from your perspective, that the top of the line blockchain is Solana, which I very much disagree with, but I'll take your, what you say and it, it sounds like what, what you're saying that aptos and swe, but really like anything that comes from the like, lineage of DM is essentially like we are taking all of the cool things that Solana did in order to increase performance and keeping that, but we're adding in a lot more layers that just improve developer and user experience so that like, you get all the performance of Solana but with like, a lot easier time, like developing and maintaining code. Does that sound right? **Speaker B:** To a certain extent. So it's not like they, you know, they use a Solana code or, you know, they force a lawn air in any way. A lot of, you know, technically there's a lot of differences, so the consensus mechanism again, is very different. But what I would say is just at any point in time there's like the latest advancements in research, right? And then the people that are applying that research to build, you know, these theoretical things onto like real world applications will take, you know, what is furthest along or what is, you know, hypothesized to be the best. And Facebook just does that. You know, the people, engineers at Facebook do that really well. They're able to analyze all the research and then apply it into a product so that they can build, you know, what's, what is the best possible thing that can be done at that period in time. So yeah, I mean, it's not like they use a lot of components from Solana, but they learned a lot about high performance, high throughput, low latency, you know, cheap transactions and applied it to, you know, at the time it was work, it was at DM or, you know, Meta or Facebook. And now that same technology is not being taken into market. Kind of curious to hear your thoughts on what you think is kind of like, you know, the top of the line today and, you know, what, what metrics you're measuring by. **Speaker A:** Yeah, I mean, so look, I think that the point of our industry is we're trying to create a single shared computing space. One, right. And like, I, I don't believe in alt L ones. I, I think that Solana is essentially like putting lipstick on AWS and calling it decentralized when essentially you're just paying like ridiculous fees to like run in just like someone's playground. And so like, for me, literally the only thing that matters with blockchain is like one, like we can talk about like this whole like settlement versus execution, blah, blah, blah. Like that aside, like the only thing that matter, like how credibly neutral is your space. And like, I don't believe that this is going to work where we're creating multiple different credibly neutral spaces. And so like on starters, like, I understand the point of crypto to be like, like Ethereum, not like Ethereum. It's our job to make Ethereum better. Like our job is not to go say like that. That's like saying like, oh, like in regards to pollution, like this earth is bad. We're going to go create a new one. It's like, no, this is the one we have. We need to make it as aw as possible. So that's like my base case. And then if you're asking like, what's the most interesting, what's the top of the line performance right now, I'd probably have to say starkware. I probably like would gesture at Polygon. Although, like, there's some interesting stuff going on with zkevm. But I think that if you're not talking about like building on top of Ethereum and like leveraging the trustlessness that comes out of Ethereum, then like you're not even in the same category and you that you might have the fastest, like it's like it's hyperledger the same thing as Ethereum. It's not. Or is the same thing as crypto. It's not. And in that same vein, I don't think that Solana is the same thing as crypto. **Speaker B:** Yeah, I mean, I generally agree with you. You know, I'm very conservative coming from, maybe even more so. I would argue Bitcoin is even more decentralized and more resilient than Ethereum. **Speaker A:** I just think that bitcoin is like Bitcoin was the promise. It was like, oh, we can have this decentralized space, let's build computation on it. And then we got into these like stupid wars about digital gold and whatever. And so like we had to start over in order to get like this shared expressive space. But like, if I could go back in time and I was in charge, like bitcoin would have turned into Turing complete and that would have been the one shared space. Instead it just became political and it's now about gold. I don't even understand this gold thing. **Speaker B:** Yeah. And I'm happy to go down the rabbit hole of bitcoin, but take a look at what the bitvm. So bitvm is enabling fraud proofs on Bitcoin without changing bitcoin. So after the taproot improvement, and I haven't done as much deep research into it, but it seems possible to do fraud proofs. So then you can run executions off chain similar to L2s on Ethereum without having to change Bitcoin L1 at all. And I mean, the reason why bitcoin culture is so conservative is because to your point, it's like a power struggle. So even if you're able to, let's say, and going back to the block, increase wars, change the block space from 1 megabyte to 2 megabytes. The number is arbitrary. It doesn't really matter. Satoshi picked 21 million arbitrarily as well. It's more so about who controls it. Right. And the idea that someone or some entity or some force of power can change the code is very dangerous for all the reasons we outline about decentralization. So it's better to just stay still, do nothing. If it works, it works. Any changes might even introduce vulnerabilities. **Speaker A:** Sort of. But that's assuming you've already built the perfect thing, right? Like, here's a vulnerability for bitcoin climate activists. Like, if we don't change that at some point, like someone is just going to create a problem out of that, right? And, and we can come up with like, okay, that, that will create clean energy and this. But the point is, is that like stability and not changing is a choice. And like, I think that's ultimately why I don't believe in bitcoin. Like, I really don't. I think that they ha. They took Satoshi's vision and then instead of progressing it, they like kind of stopped. **Speaker B:** Well, I think that's the point. It's so decentralized that nobody can change it. And if it works, if it works today, it should work in perpetuity. On the topic of climate change, I think bitcoin will push us to build a Dyson sphere. So there's no reason that bitcoin miners need to be on Earth. You could just go put up satellites and mine the sun and then we'll evolve as a species overall. But I mean, so on this it's kind of funny because the same analogy you're making about Solana aptosui is kind of like you could go back in time and say Vitalik was doing this. Why is he trying to build a new thing separate from bitcoin? **Speaker A:** Well, because he tried to move bitcoin first and bitcoin wouldn't move with him. **Speaker B:** Right. I mean, he tried to implement smart contracts, something akin to colored coins. But anyways, I mean, my point being is at any point in time there's conservatism and innovation or kind of moving towards newness versus just staying put. And that constantly evolves. Right? So now at this point in time Ethereum is more conservative, whereas these other ones are more kind of like more innovative. **Speaker A:** I don't know about that. But look, my point is that I don't think Solana is interesting. I do think that Eclipse is interesting, which is how do we take the technology of Solana and create it as an L2 on Ethereum? And so like, I believe that all, like I love having this conversation about Aptos and about all of the alt ecosystems because I do believe that technology benefits from like all of the, like, you know, technology is one of those places where one plus one equals three. But to answer your original question of like, why don't I think that Solana is like the top of the top in terms of the top of innovation in terms of Blockchain right now, it's like. No, I just don't. **Speaker B:** Yeah, what you're saying is definitely aligned with kind of like my own values around decentralization. The true test of decentralization is whether the founder or the foundation can die. So Bitcoin has proven out that it's decentralized. You know, Satoshi is no longer around. Bitcoin's running smoothly. You know, one could argue, and I don't, you know, I don't think that's the case, but one could argue if Vitalik were to die or, you know, the Ethereum foundation were to be shut down, maybe Bitcoin, sorry, maybe Ethereum development would halt or, you know, Ethereum would stop working. I think one could definitely, you know, again, I know I'm saying it's probably unlikely. I think it would continue because it's reached, it's reached, you know, escape velocity. It's reached escape velocity. Maybe at the very onset, you know, if consensus or the Ethereum foundation or Vitalik died, you know, like six months into the project, then Ethereum would be dead. Similarly here I don't think the argument stands for if Solana foundation or Aptos foundation or whoever went bankrupt or died that like, these projects would continue. So, you know, it's, it's something like, I guess what I would, what I would say and maybe like, I'm not trying to change your mind, but just kind of like a framework to think about. It is decentralization is a spectrum and conservatism is also a spectrum. At any point in time that's going to keep evolving. I personally don't think that proof of stake is completely proven. We just transitioned to it on the largest network on Ethereum and they bootstrap with proof of work. Right. If he was so bullish on proof of stake, why didn't he bootstrap with it? Because we all know that there's attack vectors to proof of stake. If your thing is not worth anything, if you don't have a monetary premium as to the asset that is securing your network, then your network is not secure at all. So I think Ethereum is getting a monetary premium. It's starting to be deflationary with usage. People are holding it as a store of value. But yeah, Phantom, right, like Lisk, all these are, are now becoming L2s because, you know, their coins aren't, you know, worth much to secure whatever's on top. And then even the question would come, like, what happens if one of these stable coins or, you know, one of these net One of these coins that is on Ethereum becomes more valuable than eth itself. Like, is Ethereum now able to secure something that has something else that is worth more than what it's securing if it's one third? Theoretically it couldn't because you just use one third to halt or I guess. **Speaker A:** I just don't ever see a world where there's more stable coins than there is Ethereum. How would that even happen? **Speaker B:** Yeah, I mean, I'm saying that's a cap, that's like a limit. Because of that you can't. Let's say Ethereum, let's say ethereum is worth 200. Let's say Ethereum, what is it worth now? 200 billion. Let's say you want to put a trillion dollars of real world assets on Ethereum. Like, how are you going to secure a trillion dollars with 200 billion? **Speaker A:** Well, I guess my thought would be like, if you want to put a trillion dollars onto Ethereum, then almost by definition Ethereum is going to be worth more than $200 billion at that point. **Speaker B:** I know, yeah, but this is, I mean this is all theoretical I guess, is what I'm saying. Whereas like the security of Bitcoin is literally physics. It's you know, electricity that's expended, it's asics or machines that need to be built. Whereas, and this has been debated ad hominem, kind of like the nothing at stake attack, where again, if your coin is not worth anything and there's no collective belief that your thing is worth something, then those network security essentially goes to zero. So I'm still a believer on Ethereum. Obviously we're building on it. I just think it's healthy to have the skepticism so that we don't just create a bubble that doesn't allow us to see potential attack vectors. **Speaker A:** No, no, yeah. And I do think that that like is the ultimate value of diversity in this world. That seems to have a lot of opinion about diversity. Like the, the reason it's valuable is because like all of us have our biases and blind spots and like you bring people with different backgrounds together, like you get a more holistic understanding of what's going on. So man, totally hear you on that. And just to bring the conversation back home, so you do keep talking about how like building on that, you building on Ethereum and so maybe like to, to bring us back on track, can you talk to us about the relationship between, I guess like the move VM or aptos or sweet, like how, how should we understand that building with These projects is also building with Ethereum. **Speaker B:** Yeah, so you can take several components of what's already been built and settle onto Ethereum. So post data to Ethereum so that you can essentially use ETH native liquidity. The easiest way to do this is similar to Eclipse. So what we're doing right now as a first version is just take the virtual machine component and make that compatible with Ethereum settlement so you do the same fraud proving that optimism or Arbitrum is doing. You could do ZK validity proofs and essentially do these off chain computations with a separate virtual machine. Doesn't have to be the evm. These programs can run paralyzed transaction executions. You can have more performant execution that then eventually settles onto Ethereum. So yeah, I mean there's value in bringing this technology that was developed for alternative blockchains and then making it compatible with Ethereum. The execution layer or the virtual machine component is one good example of this. Along those routes. Aptosui or Solana for that. You know, if we, if we look at, okay, if we look at the current, the current state of L2s, the sequencer component is one that's socially acceptable to be centralized. Like most of these are sent are single sequencers. You know, they're, they're in roadmap, you know, to become decentralized sequencers. **Speaker A:** Yeah, but that probably won't happen. **Speaker B:** I mean, I hope so, I hope it does. **Speaker A:** I actually don't care. I think that that's not important for Ethereum. Like I think the whole reason that you're settling on Ethereum is so that it doesn't matter how decentralized your sequencers are because you can always interact with it on mainnet. **Speaker B:** Yeah, but I mean you run into a whole host of issues like what if the, you know, sequencer is compromised, then you know, it's like a race to get out, you know, and that's going to cause a huge, huge backlog. You have liveness issue. **Speaker A:** Yeah, no, the hope would be that the code is written so that even if the sequencer is compromised, they can't actually mess with like your assets. **Speaker B:** Yeah, you can still force withdraw your transaction. Yes. But that's not like a seamless process. So if a single validator is compromised or goes down, then you will still have a host of issues. So yes, your assets will probably still be safe. You'll be able to access them eventually, but there's still a whole host of issues that come from having being just a central point of failure is something you probably just don't want to have in general. But I mean, yeah, to a certain extent, yes. And again, we should be trying to push the boundaries on what's possible. So arguably, what's better than a centralized sequencer? And again, we can debate it, but a decentralized sequencer would arguably better than a centralized sequencer. A central point of failure. A decentralized sequencer could be like an alternative L1. Right. Like if you already, if you already trust that a more centralized component of the tech stack, you know, is acceptable and Solana aptosui are more centralized. So like why not use them as a decentralized sequencer, for example? You know, they already have billions, quote, unquote, billions securing through proof of stake. They're a decentralized network. So yeah, I mean, I think there's creative ways here where we can still use data availability is another example. So there's, you know, does the settlement. The guarantees on data availability are not as important on settlement. Right. Because you know, you still want access to your eth. But yeah, the, I guess what I'm saying is there's value in, in still advancing these. And what we're both saying is their valley is still advancing these alternative technologies so that at the end of the day we can settle on eth. But the main reason you want to settle on ETH is because ETH is valuable, right? Like you want to be able to access ETH as a native asset and you could really only do that on Ethereum. Yeah. And I would imagine similarly as we start to put real world assets on chain, the stuff is now mission critical infrastructure, like financial mission critical infrastructure. So if a state level actor can take down Solana, can take down Aptos, then that's a matter of national security that we're now putting ETFs on chain. Whereas it would be a lot harder for a state level actor to take down Bitcoin. Right. Like how many times has China tried to ban bitcoin? So you could argue that it's state level actor censorship resistant and that makes it safe for the US government, for example, to put a Bitcoin ETF or even like an S&P 500 ETF on Bitcoin and hopefully also on Ethereum. But if I was a national security advisor, I might not advise it to put on these alternative L1s because all you need is 1/3 of the servers which are hosted on public clouds to go down and then you lose liveness. That's definitely the most important thing I think the censorship resistant decentralization. But even to your argument around the centralized sequencer. So if a state level actor can take down a centralized sequencer, then that you might still have access to your funds, but it would definitely cause chaos. Enough chaos for it to be impactful. So yeah, I think just like building decentralized resilient architecture is why we're here and at the L1 is definitely the most important, but we should also try to push the boundaries on the L2s and the L3s, et cetera, so that it continues to be more and more resilient as the L ones that they're built on top of the. **Speaker A:** Yeah, for sure. And I think like my ethos just comes. So I'm an eth staker, right. And that means I run a computer with a constant Internet connection and like have panic attacks every time I miss an attestation. And like, I'll just be frank with you, like 4% or whatever, it's just not worth the amount of like time I spend thinking about it. Right. And so what I get nervous about in terms of decentralizing the entire stack is at a certain point we're going to run out of like people like you and me that are so passionate about this. We're willing to go through that. And so for me the name of the game is like figuring out what is the most important, like what is sacred for decentralization and then figuring out how to make that more and more decentralized as opposed to like looking at the vertical stack and figuring out how to inject decentralization at every component. But I think that you and I are skating towards the end and the same end state goal, which is like, I don't care if you're the richest person on the planet, I don't care if you're the scariest government on the planet, I don't care if the us, North Korea, whatever. You have to play by the same rules as everyone else. **Speaker B:** Okay, but arguably Ethereum didn't really abide by that during the Dow hack, right? They rolled back the blockchain. I don't know, just invite you to look a little bit more closely at Bitcoin because the fact that nobody, you know, the fact that it's so stale that nobody can control it or make upgrades, I think is what makes it decentralized. And you know, if it works today, if China can't ban it and you know, you can do all this, you know, turn complete, you know, computations off chain and then fraud proof them or validity proof, then I say like, why not? **Speaker A:** Okay, yeah, I mean That's a huge if, though. And if that is true, then I'm like, I'm honestly with you a lot more than I am today. But the way that I look at it is, is like really like, bitcoin is like a horse and buggy. Like, someone figured out transportation and that's awesome. And then when we got to like, hey, there's actually internal combustion engine, like, we should build the next vehicle. Like, we should do vehicles with this. Bitcoin was like, no, we're like, it's sacred to do horse and buggy. And like, I, I feel like Ethereum is like, okay, let's. Let's get us to this point where we have, like, general purpose capabilities and then we settle into what our purpose and what our goal is. **Speaker B:** I think maybe a rock or gold is a better analogy where someone discovered gold and then Ethereum. Maybe it's like someone discovered how to do computing. And then if you could put a computer on top of gold, then why wouldn't you? **Speaker A:** Well, let me put it this way. Why would you put a computer on top of gold? **Speaker B:** So you can make programmable gold. So you can, like, there's a trillion dollars in bitcoin right now that's sitting idly like it's not being used. That's a trillion dollars that could be used to create stable coins, to create defi. So, I mean, it's just idle capital. Whereas maybe Ethereum with ETH discovered silver and silver. **Speaker A:** Well, I, I don't think it's silver. I think ETH discovered oil. **Speaker B:** Yeah, yeah, that's a good analogy. Yeah. Oil. Yeah, that's a good analogy. Gas for running. Yeah, like a combustion engine. Yeah, yeah, that's a good analogy. But hey, don't you need gold to make chips and to make, you know, computers? I mean, we're just getting too upset here. **Speaker A:** Yeah, I mean, yeah, now you're, like, tricking me on physics. Like, the money part of gold has nothing to do with the chemical structure of it. **Speaker B:** Yeah, yeah. **Speaker A:** Anyway, with the last few minutes here, let's, let's take us back home and like, let's look to the future. So, like, especially in regards to the types of stuff that Pontum is building, but really just in general with like, the future of decentralized computing and of like, crypto, what, like, maybe in the next cycle. Right, so next one to two years and then in the next 10 years, like, what are the things that you are most excited about and that you, like, are most, like, confident that the world is going to change? Because of this technology. **Speaker B:** Yeah. The first step is bringing the virtual machine diversity to Ethereum. So Ethereum is an infinite garden. We're planting the seeds for alternative VMs to just work. Our approach is to make them compatible with existing L2s. It's really hard to bootstrap. So if L2s or cities is an analogy, it's very hard to bootstrap, you know, the next big city. Whereas it makes more sense to build, you know, New York City or San Francisco, where already the brightest minds, the best people. There's already network effects of, you know, markets and an economy that's there. So our goal in the next few years, the next two, three years, is to enable virtual machine diversity in the L2s, where people already are and people want to be. So that's optimism, Arbitrum, potentially Polygon, zk, Zinc, a lot of these ZK ones that are upcoming, and then I would say in the next five to 10 years, I think is pushing the performance limit. So a lot of what we learned about aptosui alongside our conversation, how do we apply that so that technology can also be applied and eventually settle onto Ethereum to get the security and ETH native assets that exist there. From my own ethos, and I think this is important because it's what you're building into the technology is you want it to be as decentralized, incredibly neutral as possible. One very pressing one that's ongoing right now. It's like there was a $60 million hack on blast, and they're talking about rolling back the transaction for a $60 million hack. And I think, yeah, I mean, they definitely have the ability. And if they don't, then maybe the US Government will come after them. Because obviously, North Korea. Obviously nobody wants to be funding the North Korea nuclear program. But, you know, in. In essence. And again, Ethereum had the same issue at. During, you know, doing the Dow hack, where they rolled back transactions or they rolled back the state because there was a social consensus layer to do it. But even at Ethereum, it was only like 3% of the eth that voted. Like, it was a very small amount of ETH that actually voted. But we. We have to ask ourselves, right, like, if. If there can be human intervention to roll back the chain, is it truly decentralized? Right. What happens if someone puts a gun to Vitalik's head and says, okay, roll back the chain, Are we going to do it? **Speaker A:** Well, today it doesn't happen. It just doesn't. There's too many people that need to be involved. That Just don't give a shit about Vitalik. **Speaker B:** Right, but maybe we have. Right, But I don't know. Wouldn't we all want to save Vitalik? Wouldn't we? Social. **Speaker A:** I think a more interesting question. So I'll put the DAO hack aside because it's. It's more. What's so perfect about this? BLAST one is like, it's cartoonish, like, how perfect this moral quandary is. So let me set it up to you, and I. Let me preface this by saying I don't have a right answer. I could argue all day on both sides, but given the situation with Blast, where there is a $60 million hack and you know without a shadow of a doubt that it is a North Korean hacker attempting to bring money in to increase the nuclear program and increase suffering on people. **Speaker B:** What? **Speaker A:** And we're not even talking about Ethereum L1, we're talking about L2. Right. So you have the ability to roll it back. What do you think the right thing to do is? **Speaker B:** Yeah, I mean, it's a really hard question. I would say if. If there is, like, some human. If there is, like, some human component that can roll it back, then those humans need to come to a social consensus. But my argument would also be you should try to build the humans out of the social. Out of the. Out of the consensus. So I think that's where I think doing a bitcoin rollback would be almost impossible. And to your point earlier, I think doing an Ethereum rollback today would be almost impossible. But, yeah, I mean, if it's up to a small number of humans, and then I think they should probably not fund the nuclear. The North Korea nuclear program, but we should also build infrastructure that is not dependent for a small number of humans. Because it is. I mean, it is a slippery slope. You know, like, today is North Korea very, you know, black and white. But what if it's, you know, the Canadian truckers or, you know, the Republican Party or whoever. **Speaker A:** Whoever doesn't like, or whichever side you want to stand on in the Israel war. **Speaker B:** Yeah, exactly. Exactly. So, yeah, I mean, I think it's just a slippery slope where the more that we remove humans, the more credibly neutral the technology is. And, you know, given that there is humans there today, then, you know, obviously the humans have to come to consensus. But for this stuff to be resilient, you have to remove humans as much as possible. **Speaker A:** Yeah, I hear you, man. And I, like. It is so tempting to say, like, just, like, roll it back and just don't Fund like the evil people who literally stole it. But at a certain point you have to ask yourself, like, okay, like, where's the line? You know? And like, there's going to be someone who sees you as just as evil and there's going to be. See some. Like, it just gets so messy the second you're making judgment calls. And, like, it's so important to remember that the reason we're supposed to care about this is, like, to get judgment calls out of here in the first place. **Speaker B:** Yeah, exactly. And I think that's why Bitcoin, I think, again, is like a North Star that we should aim for in terms of nobody being able to change anything. **Speaker A:** Yeah, no, fair enough. And I will leave. Leave you with that note going out. So, Alejo, thank you so much for the time. I know this was probably, like, a little more confrontational than you expected, but I really appreciate you just sitting through and talking through your beliefs and helping me understand one, just the space more holistically. But two, just to have some reminder of what core principles in this space are first and foremost. Just thank you. Thank you for your time and for your grace and for your contribution. **Speaker B:** Definitely. Yeah, I appreciate, appreciate you having me here and would love to do this again. **Speaker A:** Of course. So before I let you go, can you just share with the audience where they can find you, where they can find Pontum Network and if they're interested in learning more about, like, how. What it means to build and move and how that changes, like, what they're capable of, what's the best way to get started? **Speaker B:** Yeah, definitely go on X Ponto Network. You can find what we're building on Lumio I.O. or Pontum Network. Feel free to reach out over X DMs and yeah, happy to chat on all that and check out what we're building online. **Speaker A:** Awesome, man. Well, again, thank you. And again, it's just not that often in this space. It's like the people you talk to think the exact same way. And it's like moments like this conversation where it really reminds me that there's different ways to see the same thing. And both, like, be like, full all in, like, with your lives and with your career in the same space and see it differently. So, Alejo, thank you and have a good rest of your day. **Speaker B:** Thank you. You too. **Speaker A:** Bye.