The Epilogue

**Speaker A:** Hello and welcome back to the Strange Water Podcast. Thank you for joining us for the last time. **Speaker B:** Strange. **Speaker C:** Six years ago, I left my job. **Speaker A:** At Anheuser Busch InBev, unsure of where I was going, but sure that I did not fit into the corporate world. For a long time, I was truly adrift in Strange waters. That is until May 2021, when I heard Hayden Adams explain Uniswap and Ethereum on the Bloomberg Odd Lots podcast. Since that day, I've been captured. **Speaker C:** Although it took a couple of years. **Speaker A:** I eventually realized that this was not a fluke that podcasts have a special power. Last year I started my very own podcast, this one. For me, Strange Water has become so much more than just a podcast. It is by far the most important way that I stay ahead of the deluge of research and ideas that come out of this ecosystem. **Speaker C:** Over the last year. **Speaker A:** Strange Water has become my professional identity in this space. And so I could not be more thrilled to announce that the Strange Water Podcast is being acquired by Blockworks. Although this news comes with the sad announcement that we will be sunsetting Strange Water, it is far overshadowed by the incredibly exciting launch of the expansion podcast. Expansion will be everything Strange Water was and more. Backed by an incredible co host, no Sleep John, and the formidable brand, resources and experience of Blockworks, I couldn't be more excited to join Blockworks. I had the incredible fortune to visit the offices and meet the team over the last few months and I'm utterly floored. There are few moments in life when you walk into a room and you realize that you're the dumbest person in the room. Those are the moments that you should chase because those are the moments that you found the right room to be in. And that's what I experience being at Blockworks. Today we have our final episode of Strange Water, a lovely transition into a very exciting journey. You're about to hear an interview between myself, NoSleepJohn, and the co founders of Blockworks, Mike Ippolito and Jason Janowitz. Thank you Mike and Jason, for everything you've built and for everything that you've done for me and for Strange Water. I could not be more excited for this next chapter. **Speaker C:** And so for the last time, let's. **Speaker A:** Get started with Strangewater. **Speaker C:** Expansion was kickstarted by a grant, the Celestia Foundation. Nothing said on expansion is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions, not financial advice. Rex, John and our Guests may hold positions in the companies, funds or projects discussed. **Speaker B:** All right, everyone, welcome back to another. This is a special episode. Actually. This is is a mashup of Bell Curve and Empire. And we've got a special announcement for everyone today because we are formally welcoming the newest member to the Blockworks podcast. Drum roll please. ASMR Expansion. This is our newest podcast focused on the modular ecosystem. It's hosted by Rex. Rex Gershman. No sleep. John. Fellas, welcome, welcome. **Speaker C:** Awesome, man, thank you. **Speaker D:** That was a beautiful. You know, we have like, we'll do that now for us. **Speaker B:** Would you believe it that I ad libbed all that? **Speaker C:** That's what you get with expansion. You get sound effects, you get thought out. Introductions. It's the works. **Speaker B:** Exactly. Full nine yards here. Full nine yards. All right, guys, so yeah, maybe I could put, you know, the two of you on the spot, maybe no sleep, if you want to give us like a little bit of an overview of what the expansion podcast is. **Speaker E:** Yeah, so expansion is going to be a podcast on the modular ecosystem. So we're talking about modular blockchains, Celestia, anything in that vein. I don't know if you guys seen modular expansion on Twitter or X these days. Modular expansion is like this idea of this design choice of building blockchains and crypto with different modules and different combining them with different pieces together to build something way better. So there's going to be unique roll ups and products launching super fast with the modular stack and there's this opening for a modular focused podcast and that's what expansion is. There's a lot of leaders and thought leaders in the modular ecosystem that we want to elevate. We don't want to do another academic podcast. We don't want to do another podcast like rehashing the data availability problem. So we want something that can elevate builders while introducing a new idea to people on the podcast. **Speaker C:** Yeah. Awesome. And I think from my perspective, especially as behind the scenes here a little bit, we've thought forward a lot of episodes and done a lot of research already. It is just becoming so clear to me that the end game of all blockchains looks a lot more similar than it does different. And so I think, like, it's a really cool opportunity to be able to tell the story of like, what is blockchain, what's the purpose, what are these architectures look like? But through the lens of like this specific path, which is, you know, the modular path, let's like create as many Lego pieces as possible and let people build as opposed to the more monolithic, or I guess if you're on that team, we're calling it Integrated now. But that path of, like, let's maximize the capabilities and then let's figure out how to make it more modular after. Again, I see these things as like the same result, but there's so much about the story to get there, and the modular story that is going to provide a lot of awesome content. **Speaker B:** Yeah, I think the thing that's cool about this particular moment in time in crypto, when you look out at these different architectures, is modular is like a very. It's the design choice and philosophy and, you know, no sleep. I know you mentioned that it's sort of associated with Celestia, which it. Which it was in my mind as well, but also is much broader than that. Like, you can look out into different ecos. Like the Ethereum, you know, sort of modular eth. Rollup scale is a great example of that. Now you've got Bitcoin L2s. You've got, even down to some of the work that Georgios is doing with reef, like the very clients themselves, you're starting to build in these sorts of, you know, interchangeable modules. And it's. It's really bigger than any one ecosystem, I would say. And I think it also is very cool because I know, Jason, you were actually the one that called my attention to this, but you guys might be interested to know that modular versus integrated was a debate that they had in the Internet back in the day. And it's actually very cool that this. This sort of moment in time when people are considering these different ways of building blockchains actually rhymes with the way that they built the underlying infrastructure for the Internet, which I just find fascinating. **Speaker E:** You know, it's funny that you mentioned that modular is bigger than Celestia, because when Rex. Rex told me that when he first joined this podcast, like, starting this project, he was under the impression that Ethereum was modular. And, like, he didn't really know about Celestia yet. So it's pretty funny that you mentioned that, Rex. **Speaker C:** Okay, let me rephrase that. **Speaker D:** Jump in, Rex. **Speaker C:** Yeah, I look like. I think that, like, what Celestia is doing is, like, really incredible. And I agree with everyone that Celestia has created a, like, modular meme on which a lot of energy is, like, moving towards. And I think that's totally awesome. But for me, like, when I heard modular, this brought me back to, like, cards on the table. I'm class of 20, 21. **Speaker F:** Right. **Speaker C:** This brought Me back to a bankless episode that I heard while I was still being like crypto pilled, where Ryan and just. Sorry, Ryan and David. David, you can see how out of practice I am. But Ryan and David were talking about basically Solana versus Ethereum in this monolithic versus modular. And how I understood in 2021 what modular meant was, okay, we're realizing that in order to scale Ethereum, one option is just to increase the computing capabilities. This is the same as the block wars of Bitcoin. Or instead of rerunning that entire conflict and the entire play, let's look for opportunities to take things out of the core decentralized protocol that don't need to be decentralized and trustless and let's build modules that give us back that capability, but without putting like all the onus on like this hopefully super decentralized low powered computing network. And so, you know, that's always the frame that I've understood modular to be, which is like, we understand what we're trying to do with blockchain. We are trying to create a credibly neutral space upon which we can build identity and property. But like, the way to get there is like, you can make the space just as performant as possible. You can make this space dynamic and modular and like maybe siloed. So people can do different experiments. There's all sorts of different ways. And for me, like, modular, like yes, maybe back then was attributed to Ethereum. These days it's attributed to Celestia. And like next cycle will be attributed to whatever crazy like company like take center stage. But for me, exactly to your point, Mike, and I guess your point, you know, before that, which is like, this is not blockchain, this is not a blockchain conversation. This is a computer science conversation. And like always, phase one is like build a system. And phase two is like, how do we modularize it so that different people can work on different parts of the stack? **Speaker E:** I actually come at it from a different angle, like modular. I think it's like a design principle. Like, like Rex said, it's a way of building using like module different smaller pieces or modules. But I think in crypto especially, it's becoming something bigger. It's almost like a cultural movement. It's becoming synonymous with Celestia. And this way of design, it's like a way of thinking. It's become modular is becoming almost like a noun. It's like a culture and ecosystem. It's a new form of collaboration across the blockchain stack. It's Accelerating experimentation, new use cases. It's an avenue for app developers to achieve sovereignty on the entire blockchain stack. And it's growing really fast. So expansion is the idea. **Speaker D:** No, no Sleeping Rex, have you guys ever dug into the. The 1990s, the pre. Pre crypto stuff? The monolithic versus modular debates of the as the web was getting created in the Netscape Mark Andreessen days. **Speaker C:** I mean what's funny is that like I'm very familiar with the like the 90s histories of the Internet and like that specific frame like wasn't on my radar until this conversation and now that we're talking about it makes a lot of sense. I will say that just like my degree was in computer science and like literally like the first class is about like how object oriented programming and that is like essentially we need to program modularly and not like just like all in one like code dump. **Speaker F:** Right? **Speaker C:** And so again like John, I hear what you're saying and like I do believe that we, that a movement is building on top of like these very basic computers science design principles. But to me this is just like we're talking, okay, like what's the right way to build a car? Like oh, you use assembly line. Like that's what modular means to me. **Speaker D:** Yeah, I actually if you go back and read from the 90s, it's. You're both. I think both of you are right. There's a technical decision. And then there was also like like no, I couldn't agree with no sleep more. Like it was a religious movement. Like if you look at. So like the monolithic arguments in the 90s was like early ARPANET protocols, like NCP, like the web applications were all built in this like monolithic way. And then like the integrated development environments, like the IDEs, like that was like one frame of belief. It was like the same people who believed that like AOL would create, you know, maybe 10 years later, like the people who that believe that AOL could create this beautiful walled garden and that that was totally fine. And then there was like the modular examples would be like tcp, ip, World Wide Web which was like HTML and HTTP in the browser and then like on the architecture side like the microservices and I think tech from a tech perspective that went out but from a religious and like cult like movement that also won out. So I think it'll be interesting to see how you guys explore and tying it all back to this podcast. Like there's a tech argument here and then there's like a cultural argument. **Speaker C:** Here as well. **Speaker E:** Yeah, especially in like crypto where everything's a cult, every single blockchain ecosystem is a cult, like Solana, Bitcoin, Ethereum. Everything's occult really. So everybody's up to this. Up to last year has been very focused on this monolithic way of thinking for building blockchains. And there's like a small pocket of cosmos people that have been ahead, like four years ahead of their time with app chain and super modular blockchain stack with Cosmos SDK. But only recently did it really break into the mainstream of crypto thought with this rebrand of app chains into the modular and sovereignty like these different principles here. So yeah, like this way of thinking is something that we're going to explore in the podcast. Very excited about it. **Speaker B:** I think the, the technical, the way that the technical architecture of these blockchains and the religious fervor that like builds around them, they're related because it's a very small number of people in the world that actually do understand these technical trade offs. But because of the way that blockchains work, which with forks you need a lot of people to buy into one particular architecture. And so you tend to get these arguments that stem from very specific technical trade offs that evolve into these broad. This like it's like modular integrated or it's big blocks or small blocks and that it becomes this like religious sort of movement when it's. Actually, we're really arguing about something very specific here. And I think basically almost every big argument in blockchain you could trace back to the block size war. Like we've, we've spent all, all of the time that we spent building infrastructure has been solving the fundamental trade off that the big versus small block scaling approaches have introduced. So yeah, I think getting into that and teasing that apart on this podcast is going to be super interesting. And to that end, I think the, if you f, if you fast forward the clock from 2017 when the block size war was occurring, the tech looks really different now than it did back then. **Speaker F:** Right. **Speaker B:** Like the early, early trade offs of the, of the block size war were really rough and like bitcoin cash was kind of just like, hey, what if we just made these blocks way bigger with, with no, you know, no way to obviate any of the negative trade offs there. We have a lot of stuff that we didn't have back then. We have things like data availability, sampling. **Speaker E:** Right. **Speaker B:** We've got zero knowledge like ZK tech, we've got frankly like roll ups where a zero to one innovation in terms of extending security from different types of. Across different types of blockchains. So maybe we could get into some of the, you know, I think this technical and cultural argument is going to be something that we're going to dig into and explore on the podcast. But what are some of the, you know, these sort of sectors or tech changes that have impacted the world of modular over the last couple of years? And like, what are we going to give us a little bit of a flavor of what we're going to be digging into on the pod on that front? **Speaker C:** Well, Mike, I'm a little concerned about having this conversation because I don't think I can afford the royalty fees required to talk about. **Speaker B:** Shots Fired. Shots fired. The ZK trademark. Yeah, we're not gonna. Gotta be careful with that. **Speaker C:** Yeah, yeah, okay, so we'll, yeah, we'll. We'll settle up afterwards. But yeah, I do think look like one, one just to like to draw like the, to put a bow on the point about the block size wars. It was either today or yesterday. Vitalik just wrote a blog post on like, reflecting on the block size wars. And it's like, pretty interesting to read that. And from Vitalik, buterin like one of our, you know, like one of the few guys who could understand any of this. And that is like a treatise on like, basically giant egos and community dynamics and like, things that are really unrelated to like, the underlying technical reasons. And I think that, you know, there, there's something like, pretty profound in that, in that like, you can, you can argue until you're blue in the face all day about like, the technology stuff. And like, that's not really what is, like, driving what's happening in this industry. And especially like, when you look back in retrospect, there's just like so much more happening off chain than on that. That's like, where your attention needs to be. And by the way, like, the reason mod, in my opinion, the reason the modular Internet won out over, like the monolithic Internet is like, it's super simple. Like, one is explicitly saying, we are inclusive, Come build on us, come add to us, and the other one's saying, come pay, come pay to use it. And so like the one that just says, like, hey, not only can you use this, but like, you can create your own fortune off it. Like, that's just gonna win in the long term. **Speaker B:** Rex, Rex, can I poke at that though? Because what the. If you actually look at the way that the Internet looks today, it actually does look a little bit more monolithic in terms of the entities that ended up winning out. **Speaker F:** Right. **Speaker B:** It is Google and it's Facebook and it's, you know, Amazon and it's the. It is these sort of web giants that have taken. This reminds me of that quote that all of business is just bundling and unbundling over and over again. And it kind of started out as this, you know, Cambrian explosion of these open protocols that there were tons of different websites and innovation, and now it is kind of like re. Monolithicized over time, if that's a word. So I don't know. What would you say to that? **Speaker C:** I take your point especially, like, at the business slash, application layer of the Internet. I don't think we're anywhere near that in terms of our analogy and blockchain. And like, let me throw this back at you where it's like, do I think the Internet is decentralized? Yes. And why is that? Because I think there's one way to measure decentralization. Is there any one man, woman, or entity on this planet that can decide that they don't want something to exist on that platform and then make it happen? And so, like, yeah, you can get things de indexed from Google. Like, yeah, you can maybe like, get registrars to not host, like, specific websites or something. But, like, based on the incredibly horrifying shit that you can find on the dark web, like, yeah, the Internet's decentralized. And like, that's kind of what I'm gesturing to. **Speaker B:** Well said, man. Yeah, I don't really have much. Yeah, I think that's actually a really strong litmus test for. For decentralization. And one of the things that I'd maybe to be a little bit selfish about and talk about why blockworks is really excited about this podcast. Like, putting on my Blockworks hat is like, it's honestly, it's a combination of. You know, in a way, there's a. This is the most interesting cultural and technical argument that's happening in crypto right now. So, like, here's like, putting on my Blockworks selfish hat. Blockworks looks for parts of crypto that, like, on underserved audiences. And when you look at something like modular, like, the. The cross ecosystem aspect to it is super appealing. **Speaker F:** Right? **Speaker B:** Because, okay, like, clearly, you know, no sleep. You're a little bit more excited about Celestia Rex. You're more in Ethereum. Solana's leaning into L2s. Bitcoin has L2s. Something about this, like, design philosophy just makes people say, I'm part of this. And it's a Huge, like almost like invisible, really underserved ecosystem. And the cultural component to me is fascinating. On the technical side, I think it's. Yeah, I like relate a lot back to the block size wars and the two different ways of scaling blockchains, which is to make the boxes bigger or to move the compute onto other boxes or in another computing environment. And I actually, I would say I'd be curious what both you guys would think about this. I think both of those are still open questions because Solana is kind of taking the bigger boxes route. But eventually you run into the problem of, okay, you're successful enough that you bring on enough demand and then you make the boxes so big that it isn't centralized. And then in the modular approach, on kind of ethereum land, okay, we kept this one set of boxes small, the validator boxes, but then we just made other bigger boxes, sequencer boxes, relay boxes. So is that even worth the trade off? And so I think both of these are unanswered questions. So it's just a really healthy mix of the cultural stuff, the technical arguments. That's why I'm like jumping out of my seat for this. I'm super pumped about it. **Speaker E:** I think under discussed part of the modular thesis is the sovereignty aspect. So you can decide all those design choices. You don't have to go either or you don't have to do super big blocks, super small blocks. You don't have to decide. You get to decide which side are where in between you want to be. So with the modular stack, you can own the full stack. You can control the direction of your chain, which upgrades you want, which optimizations at the execution environment level. You can add compliance, you can add permissions, monetization elements. All of that can be added there in your own roll up or your own chain with the module stack, because it's so much easier to build it this way or build it with these modules that are really easy to swap out in and out. And you get to decide all this because you're sovereign, it's modular. That's like the big idea here. **Speaker C:** Yeah. And I think my joke aside, right, I do think the answer here is zk, right. I think that. Mike, I just heard you on Bell Curve this morning and talking to the Framework guys about the promise of ZK has been like in front of us for like half a decade now. And if you believed it back then, like you missed a lot of good stuff. And like I hear that for sure. But like also the actual science and the mathematics and the technology is like, it is moving so fast that it's like unbelievable to people that are even in the tech industry. And like, I can tell you so many stories about like, professors who are like, inventing this shit, saying, like, I've, I've been in technology for 40 years and I've never experienced anything like how quickly an idea turns into a company, or I've never seen the amount of just like, advancements we've made in such a short amount of time. But for everyone who, like, doesn't really understand why this is such a big deal, like, the reality of what ZK is bringing us is the ability to do like, arbitrarily a complex amount of computer, like on these huge boxes that you're talking about, Mike, like on super centralized servers, on aws, whatever. And then just by like putting that proof onto a blockchain, you're. If that proof verifies, you're essentially able to like, project the computing from that centralized place into this new blockchain environment. And so, like, I think what the rollup centric roadmap, but like all of this is really pointing to is like, we need to create one base layer, or maybe one per ecosystem, right? But one base layer of crypto economic security. And like, that means different things to different people. Ethereum, it looks one thing like looks one way, Solana looks another. But it's about how do we create this trustless trust and then how do we use ZK to just jam as much functionality into those boxes through the power of cryptography rather than through the power of, like, actual compute. **Speaker B:** And so I'm complet. You know what I'm very curious to see, Rex, is what, you know, what we haven't seen quite so much in crypto thus far is tech moves really fast, and every once in a while it makes something obsolete. And I think ZK makes some of the stuff that we have been working on in crypto thus far somewhat obsolete. Here's an example that I'll give you. The way that I'm very interested in what's going on. I've always seen a lot of similarity between Bitcoin and Celestia as ecosystems, because it's very kind of the base layer is very dumb, right? It's not a settlement layer. There's no smart contract logic that lives there. It's very simple. And the big difference is big versus small blocks. But both of those ecosystems are saying, hey, with this zk, you can have these ZK accounts on the base layer. And exactly what you just described, these big Computers can do things off of the base layer, but then prove it to this thing down here. And that looks a lot like the ETH rollup version of things, right? Which is like, hey, I've got these small boxes on layer one, and I've got this other kind of mechanism which is called a rollup and it's a trusted bridge. And that's how I, you know, talk to this other big sequencer box. But it's the same thing. And so I'm very curious to see what zk, when it gets fully rolled out and implemented, what it disrupts and changes in terms of the architecture of these different blockchains. Like, that is going to be very interesting to me. **Speaker C:** Here's my hot take. I think all blockchain VMs are about to become obsolete. Like, oh, that's EVM obsolete. **Speaker D:** Spicy take rec. **Speaker C:** And like, let me, let me put it this way. It's been almost a year and a half since RISC 0 created the, created like the substrate so that somebody ran the first version of Linux where every single thing you did, it came with a proof. And like the thought, like, of course no one's going to run Linux on blockchain. Like, that's so unnecessary. But if you can run Linux, that means you can run every single piece of enterprise, consumer, like whatever software with ZK proofs. And with ZK proofs, that means you can project it into the. To Ethereum, right? And so my question is, like, why would we care about any of like, even the move vm, which is supposed to solve all the problems of the evm, still forces developers to go into this like incredibly bizarre paradigm of like accounts and smart contracts and logic and gas. Like all of that's nonsense. And like with zk, we can finally like express it enough with trustlessness enough that like we can move on past all of this. **Speaker B:** It's a super interesting. Oh, sorry, no sleep. What are you gonna say? **Speaker E:** I was just gonna say like, you guys are giving us some great episode ideas here. **Speaker B:** Dude. I, yeah, I, that's. That would be. I haven't seen that idea, Rex. Honestly, I've never heard that idea. I think it makes a ton of sense because yeah, that's what you hear. It's like the chewing glass experience of devs and you have to onboard these devs and it takes forever. It's a cool example of this in SUI is the way that you get onboard. It's very easy. They've got a ZK email login for a bunch of their stuff. There's A proof that gets submitted and the user onboarding flow is like butter. Really small example of what you're describing, but. But yeah, I think that's like. **Speaker E:** Is that like built into the blockchain logic or however that works execution? **Speaker B:** I honestly don't know. **Speaker D:** Firstly, you're not supposed to ask these complex questions. **Speaker B:** There's no more questions like these. **Speaker C:** Well, here, let me take us a step forward so you can understand this. Is that like I was talking to Amrit Kumar from Alt Layer and I said, okay, like, how are blockchains going to develop? And what he said is, think about, let's say you're on dydx, right? And right now, so you pay a fee to DYDX to be like a market maker, taker, whatever, right to do your trade, and then you also pay a fee for gas. And that makes sense to us. We all get it. **Speaker F:** Right? **Speaker C:** But if you're not crypto pilled and you don't understand this stuff, why are you paying two fees? Why, like, why shouldn't we be creating blockchains that not only like abstract away the concept of gas, they literally don't have it. And whatever fees that need to be paid back to the L1 to do the proving costs, just include that in your protocol, in your app fee. **Speaker F:** Right? **Speaker C:** Like, that's the way the entire world works. Not blockchain. **Speaker B:** 100%. I'm sorry. Yeah, what were you going to say? **Speaker D:** No, I keep seeing all of this and like, I just keep seeing all this in like the context of the 90s rise because I've been reading too much about it and so I'll just like go back to it. But like every time you introduce something new, like there's this whole bunch of things that people have been working on for years and sometimes decades that just quickly become obsolete. So the thing I was reading about earlier this week was like as soon as you got the open standards like HTTP, HTML, DNS, like all of the other. A lot of those other protocols and standards that people have been working on for like 15 years immediately went away. Like they just weren't relevant anymore. And there was thousands of people working on these things. And so I don't know, just. **Speaker B:** Yeah, I don't know. **Speaker D:** I keep seeing things in that light. **Speaker B:** But you know what, Rex? Also something that you just maybe predicted there, maybe I'm reading too much into it. But one thing that might. Another thing that I feel like tends to happen around new technologies is there is a little bit of a fight around the way to monetize it this was originally the criticism of the Internet. How are we ever going to monetize this thing? Isn't it just funny? Cat jpegs and yeah, you get eyeballs on it, but how do you ever make money? And then Google acquired DoubleClick and the rest was history. It's like, oh, we sell them ads. And we haven't evolved that much in the business model of the web since then. And the fee discussion, I would be really curious as you know, we build out these different infrastructure layers of. I think it's still an open question of how we're going to monetize any of this stuff. And maybe another hot take would be that all these blockchain fees should eventually go to zero because you have to find another way. Eventually people will like the. Whoever is providing the infrastructure for these blockchain networks will find a way to extract value. But the way is not to just charge for compute resources. You probably can't do that. That is all going to get commoditized. **Speaker D:** Or you could do it, but the user doesn't pay. It's the application on top. It's the application that, yeah, you know, like, I don't pay AWS when I use a Squarespace website. Like, Squarespace pays AWS for that website. **Speaker E:** So yeah, this is like a big debate in modular right now. Like, where does value accrue on the modular stack? Is it in the DA layer? Is an execution? Is it in like interop? Is it in like, what zk? Now there's a bunch of other pieces in the mod, like the modular stack, like, where. Where does this all go? And like, originally people thought it was da. Now people are less sure about that. Is it in execution? Because that's where all the community and the apps are like, where does this, where does the value accrue? **Speaker D:** Does it reframe that question. Like, I hear everyone talk about, like, where does value accrue? I think maybe a better way to think about that is like, who has leverage in the stack? That's where the value ultimately accrue. Because people are like, so where does value accrue? Like, does that mean where does token price go up? Where does. Where do fees come back to? Where who generates the revenue? And it's this like, broad question where. But I think it really comes down to like, who has the leverage in the. In the entire stack? And if you look at, yeah, like that, that's where I think it. That's where I think it gets really interesting. It's like, who's got the leverage in this modular stack that we're building. **Speaker C:** Yeah, I mean honestly like that's one of the things about like love talking about it and doing a podcast on it, but if I was like building a company in the modular space, like I would be pretty nervous. **Speaker F:** Right? **Speaker C:** Because the same thing that we're saying is so awesome about like ease of integration and plug and play and all this stuff is also exactly how easy it is to rip your stuff out of your customers apps. **Speaker F:** Right? **Speaker C:** And so like I hear all of these, these conversations about how like, oh, you can use Celestia for data availability and then like maybe Eigen DA comes along and they're cheaper so you can switch to them or maybe like whatever. But first of all, my question is like if we're able to rotate like these pieces like, like data availability through all these different systems. One, like are we, does data availability even mean anything anymore? Like what's even happening here? But two, like when you're building a business, like the things that make the system great also just make you so, so vulnerable to disruption. **Speaker B:** I agree, I think, I think, I agree with that. I also think, I think that's also why composability is overrated as a narrative. Because this is already happening. What you're describing is this is a business challenge, which is you hear this all the time in the context of Interop. Why don't we just make these damn things interoperable? You mean why don't I make it easier to churn my customers? Like that's how, that's how these ecosystems hear that question, why would I do that? That doesn't make any sense. And that's why you see more business source licenses. That's why you see Dapps moving off of main chains. The competitive pressure from the standpoint of these protocols. My ecosystem, baby. So that's the. Sorry, no sleep. I didn't mean to interrupt you there. **Speaker E:** Yeah, no worries. Wait, like, so something like I'm not going to show Initia, but like their approach to this argument is actually very interesting because they've, they're, they're coming at this as in like they're going to own the full user stack. So all these rollups built on the initial stack are going to be interoperable to the. In the sense that you have one UI that you get to use all these apps with and all the underlying infrastructure, they also integrate into their platform so they own the full stack and they can eventually, if the community gets big enough, all these users will move with them wherever they, whatever part of this whichever stack they want to move to their users go with them. So that's like an interesting idea like we're going to talk about later in a future episode. **Speaker B:** I really like the initia design, maybe a theme if I could suggest anything for the show. But one thing I'd be curious, maybe you guys could dig into is like this idea of first mover versus second mover advantages in blockchain ecosystems. And I think the L1s, if I like the first generation blockchains, let's call it like Bitcoin. Ethereum I guess long is like right on the edge. But the way that I see the, the advantage that they have is that they have a huge market cap, they have a ton of crypto native wealth and developers want to go and build things because the people crypto native wealth will do things on that ecosystem. The challenge that they have is these L1s had to make a lot of decisions in the early days about where they were going to draw the line around the L1 versus what they were going to export either to another layer or allow off chain infrastructure to spring up around. And some of those decisions weren't 100% right. And so it's interesting to watch some of these next gen blockchains that the advantage they have is that they can build, they can learn from some of the mistakes that Ethereum or Solana or whatever made. But the that the trade off that they don't have is, is they don't have all this crypto native wealth and the users. And I think that one of the things that Cosmos missed on was they prioritized the end game product like this sovereignty principle that I think at the end is like one of the defining characteristics of what the system is going to look like. But they systematically deprioritize distribution and so far I think distribution is trouncing product and this is like the first time versus second time founder thing. And that's why I think Ethereum has done so well. So I don't know, I'd be curious digging into that. **Speaker E:** Yeah, like the Cosmos. I think the Cosmos hub failing is a pretty good lesson for the modular ecosystem right now because all these rollups are doing like app specific ideas. They're doing like bunch of sovereign rollups coming out with their own ideas they want to build. But where does what's like the shelling point for the ecosystem? Is it Celestia, is it the execution layer? Is it like the initial stack or whatever? Optimism roll up stack superchain, what's the shelling Point because with Cosmos, the mindshare got so fragmented that no one even knew where to look for direction for the Cosmos SDK stack. Why does the Hub exist? There's like so many questions there. All that mindshare got fragmented and that momentum kind of died out because it got so fragmented. So how do we keep this momentum in the modular ecosystem going and taking those lessons from Cosmos? How do we learn from that? **Speaker B:** I would phrase that. Let me ask that question to both of you guys because I think that's a challenge that other modularly designed ecosystems are starting to. I think Cosmos for front ran this, they were the first ones to run into this problem, right? They had extremely this. The sovereign full stack chain has been the vision from the beginning, supported by Cosmos SDK and Tendermint and IBC and all that stuff. But now Ethereum, as it's growing and it's adopting this, like I saw Vitalik wrote this post about pluralism and multiple different roll ups. It's fragmenting liquidity and attention also. So how do you guys think that modular ecosystems trade off of the benefits that you get, the scalability and the customizability and all that kind of stuff with the sort of fragmentation and loss of a shared shelling point? Like, what do we think the way is to solve that? **Speaker C:** Yeah, I mean, I think it's tough. Like anyone building in this space and anything that like could be remotely called modular like understands that everything that's cool about this by definition also puts users in walled gardens that just make everything that's cool about crypto worse. And so I don't know, like, welcome to life. Like, everything sucks more than it should. Like, we'll figure it out. But I just, I don't, I'm like pretty skeptical on a look. I don't think like the interesting thing about any of this is the technology, right? Like, if we were interested in building like good fast computing, like, we should stop. As to my point earlier, stop messing around with all these like weird VM stuff and just like go build financial applications on aws, right? Like, what is interesting here is that we have created a credibly neutral shared space. I think we can all agree that Bitcoin, Ethereum and depending on where you're standing, Solana, but maybe not right, but that has achieved this very delicate idea of credible neutrality. And like, to me what's exciting about Modular is modular is the realization that like, with this credible neutrality, we can continue adding more technology and more features onto it without disturbing like the thing that's sacred the Thing that we're here to protect and to build and to grow with things like Initia. **Speaker F:** Right. **Speaker C:** Like, John, you said you're not here to shill their bags. I'm not here to like, on their bags. **Speaker F:** Right. **Speaker C:** But like, I, I just. Anytime you're like, okay, like all these cool things we learned in Ethereum and Bitcoin and Solana, like, we're going to take them, we're going to upgrade them, but we're just going to start over and build a new ecosystem. To me is like completely missing the point of crypto. And like, the point of crypto is about the shared trustless space that you can't just like, get a bunch of kids that are really smart and have really good memes in a room and like regenerate that. And so I like when I hear things like sovereign rollups, like, to me, what that is like, okay, by definition, a rollup is supposed to settle to a different chain. And like, if it's not on, if it's not on Ethereum, I don't think it's a rollup. What is a sovereign rollup? I think that's just an alt L1 like that for some reason has decided to use Celestia. **Speaker D:** Why? **Speaker C:** Beyond me. **Speaker F:** Right. **Speaker C:** But so like, I do think that for me, like, my North Star is the trustless space and not how do we create a new one, but how do we grow the one that we have. And like, the technology comes secondary to that, to credible neutrality and not we don't create credible neutrality by building better technology. It's the other way around. **Speaker E:** Yeah. **Speaker B:** I'm curious. I don't know. No sleep if you're going to respond there, but I've got, I actually, I got some pushback for you, Rex. So I actually view it almost opposite to that. So I view each of these. I think the interesting thing about crypto, to your point, is not just the technical architecture. I think if you boil it down, if you were just looking at efficiency, this should all just live on one box 100%. I think the thing that's interesting about it is when you expand it to multiple boxes and you accept some amount of decentralization and a surrendering of a central control, you open up different use cases that wouldn't otherwise make sense if it was on one box. I think frankly, one of the biggest use cases I'm kind of coming back around to the bitcoiner point of view is the money. That makes a lot of sense. I can very easily honestly say if Google issued money tomorrow, I Wouldn't trust it. Why? Because it's a freaking company and they're a for profit company and that's not the kind of entity that you want issuing your money. And so I think there are other use cases like that. And what these different blockchain ecosystems, how they've organized is around different values and principles. And I think it's been helpful to tackle different actual technical design decisions. So bitcoin solved that first one, right? Which is I want to create money. I need a super decentralized environment for that. How do we do that? And they got the very first version of working version of consensus with proof of work, right? Then eventually we're like, this is a pretty cool architecture. What if there were other things that we could build with these decentralized boxes? And that's when Ethereum came, right? It's like, okay, we want to keep roughly that same level of decentralization. And then a separate cultural zeitgeist grew up around that. It's like we don't want to be like these doomer bitcoin people, right? We want to be like these optimistic people. But then it was like, oh actually in addition to just reconstructing our conception of the base layer, we need this shit to go fast. Boxes need to be a little bit bigger, we need the, we need the throughput coming here and we need a little bit more focus on this execution layer. Enter Solana. And so I actually view each of these things as having organized to solve different parts of this incredibly challenging computer science, currency markets, equation. I see all of these things rebundle, like starting to become more similar. But I think they're probably going to stay separate forever. And I view that as a good thing because just like it's such a cheesy example, I've used this a couple times and people are always like, you're so American. But I'm going to give it anyway. I love America. I think America is the best country in the world. My parents grew up telling me it was the best country in the world. It's awesome. But I also don't want it to be the only country in the world. I think it's really nice that there are other cultures that exist which have optimized for different values and standards. And I actually think there being different cultural ecosystems all around makes this one little ecosystem that I'm in better. That's been my view on blockchains for a little while. I think that's how I like them. **Speaker E:** I love that. That was so good. Yeah, Bitcoin has the money doomer money cult and then Ethereum has the super optimistic decentralization folks and then Solana has like the engineering focused, engineering product focused people. Right. That culture. **Speaker C:** So Mike, what's your view of modular? **Speaker D:** Oh yeah, go ahead, go ahead. **Speaker E:** Yeah, I guess like with modular, like this modular native ecosystem is. Has like a different energy this time as well. It's very interesting like the way people collaborate across different stacks. Like I work in it, I work in the modular space. So I see how everybody works together. It's very different than how like these different all L1s work together. Well they don't really. So that's really interesting. Like this different vibe is coming out of modular and that's like that cultural shift I want to talk about on this podcast that we mentioned earlier. Modular is a culture now and we really wanted to get that here. **Speaker D:** One thing that's going to be interesting, no sleep is seeing how that culture develops when modular, I feel like inevitably becomes quite successful. Like if you look at Ethereum, how Ethereum developed it was like a very like us versus them and everyone in who was building an Ethereum was very together and everyone was like, you know, in Brooklyn, in Williamsburg at the Ethereal Summit. **Speaker B:** They're still in Brooklyn. Still in Brooklyn. **Speaker D:** Brooklyn haven't. No, they've moved to soho. The successful ones have moved to soho. They have, they're all in Williamsburg now. They've all gone to soho if they've raised enough money. **Speaker B:** But New York's going modular. The soho Williamsburg barbell, they were all. **Speaker D:** Very rah rah and like we're building an Ethereum together and even though we compete, we're together. But now that they've all raised a lot of money and they're competing for the same users like optimism versus Arbitrum are not so rah rah, we're building this together anymore. They are staunchly competing and modular really feels like kind of early Ethereum where it's like we're all doing this together and you've got all these awesome companies and we're all doing it together and we're all hanging at the Modular summit and we're all listening to the expansion pod and all that kind of stuff. But if people. But it's like a self fulfilling. If you guys are. If the modular ecosystem ends up being really successful, there's going to be the same thing that happened in Ethereum probably where there's some pretty intense competition. Yeah, it'll be interesting to see how that impacts the culture. **Speaker E:** I think it also depends how fast crypto as a whole grows. If someone builds something really sick and modular with a modular blockchain and it onboards a bunch of people and we get a bunch of users in the ecosystem, we're not competing for a shrinking pie, which is kind of what Ethereum is doing. During the bear market. Everybody was fighting for the same users. If the ecosystem is growing fast enough, then you don't have to fight against each other. So that's like a really vague way of saying if we grow fast enough, it's not a problem. Eventually, once growth slows down, yeah, it's going to be some PvP. But I think for the next two to three years, there's really good momentum behind this ecosystem. And if we break through to that Next, let's say 100 million users in crypto with this modular stack and modular building thesis, then we might not have that PVP as much. That makes sense. **Speaker B:** Yeah, I agree, fellas. Well, look, I think hopefully this gave listeners a little bit of a flavor of what expansion the show is going to be. Guys, I am just so pumped for this one. And Rex, I got a shout out here. Rex is a. He's joining us here at Blockworks. And actually Rex is. I will announce this separately as well. People will already be aware of this by the time they're listening on this episode, but Rex has been hosting a podcast that Blockworks acquired, the Strange Water podcast, which is one of my favorite pods and actually how we found Rex. So very excited to be doing this with you, buddy. And no Sleep, we've got to know you through this process. It's been great to get to know. You've been a longtime follower on Twitter. And yeah, the two of you guys, this is. We love all of our shows like children, but yeah, I am super pumped for this one, which I hope came across on this. If folks want to follow you guys and just we're going to link. By the way, for folks who are listening, take this as a, as a minute here. Go down into the show Notes of Bell Carver Empire where you're hearing this. And there's going to be a link to expansion, the RSS feed, the Twitter and the YouTube. So go make sure you follow that. And we're also going to link no Sleep and Rex's personal Twitters as well. So definitely go follow them and you can get any, any and all updates there. **Speaker C:** But yeah, man, and I just, I want to turn this back at you guys and just say thank you for giving us this platform. And as someone who's been doing a podcast for a year. I know. And now that John has been working on it, like, this is not easy work. And, like, one, it's just, like, awesome to, like, be part of such, like, an amazing, like, fun, optimistic company. But two, man, like, the everyone on this call already knows this. But, like, the guests that we're getting and the content that we're producing is there's never been a podcast release opening like this. This is going to be insane and mental and, like, it wouldn't have been possible without the support and the brand and everything. So just thank you. Thank you. And so excited and, like, welcome to a new era of podcast boom. **Speaker D:** Good place to end. Go follow expansion. Listen to it, Rex. No sleep. We're pumped.