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Speaker A: Hey guys, welcome to Debrief after our episode with Danny Ryan on the case against Lido. So we did in defense of Lido with Hasu, and this was the sequel a couple of months later. I think it just took us some time to put this episode together and fit with Danny's timeline. Actually, I wasn't really sure who t... |
Speaker B: Well, Danny wrote that article forever ago, the risks of lsds and while he is, I don't think we actually fully fleshed out why we say lsts, not LSD's. Derivatives is a legal term that imparts legal consequences upon these tokens and the producers of these tokens that we do not want for our friends and famili... |
Speaker A: Yeah, it means the CFTC gets to regulate everything according to the CFTC, I. |
Speaker B: Think everything that's safer for everyone if we just do tokens, not derivatives. So that's what was the thought process there, I think, to kind of start off this conversation, Ryan, I think, I think I've said this to you before, the way that I consider Ethereum. Think of Ethereum, concentric circles. You ha... |
Speaker A: Yeah, I agree. These prisoner dilemmas, these centralization vectors, these tragedies of the commons, they pop up in all sorts of areas. And so basically, the ethereum community, the layer zero, and that's why Danny has such an emphasis on the Ethereum community, has to play whack a mole and just be like, oh... |
Speaker B: Yeah, I think that's right. I think really the crux of this issue is does the Ethereum, layer zero have the power and strength and conviction and coordination ability to fight Moloch under our own terms against the market incentives, or are we giving up and just leaning into the market. And that's kind of wh... |
Speaker A: I think so. |
Speaker B: I probably pissed somebody off, right? |
Speaker A: Well, I would just say, I would just say one thing I would say about this is I don't think a blind optimism works. And I think anytime the Ethereum community is just like blindly optimistic that we'll resolve this, then it's a problem. |
Speaker B: I do think self stake. |
Speaker A: I think there's like the starry eyed dreamer. Criticism of Ethereum is somewhat valid, and I don't think that necessarily helps us. I see where Ethereum is at its best is it balances the optimism with the pessimism and it breaks that down into really smart protocol designs. There's no one better at this, by ... |
Speaker B: Very light touch way. Yeah, he's really very light touch. |
Speaker A: He's really good at that. And the cult group, I'll say now that's probably offending somebody, but I mean that in the best way possible. This group of followers that he has surrounded himself with, particularly the other Ethereum protocol researchers, are also disciples of his and are master class at doing t... |
Speaker B: Right. |
Speaker A: And that's why it's so Barnaby was mentioned on today's episode. He's one of those disciples, Justin Drake, who we've had on so many times. Like, these people are world class. Danny Ryan himself, they're world class at getting us out of these, like, moloch traps, these binds. I have no idea how they do it. R... |
Speaker B: Right. |
Speaker A: You know, the whole, like, appeals to stop. Everybody stop, you know, staking with, um, Lido. How has that worked for us so far? And the answer is not very well. So I feel like ultimately this has to get embedded in some protocol design, protocol incentivization mechanism to push more in the, in that directi... |
Speaker B: Yeah, yeah. Uh, the whole, uh, we can totally, like, hold hands and band together and, like, solve this problem. Socially will fail in the given enough time. Like, maybe you succeeded in the short term, maybe you can hold your breath, but you are holding your breath. Eventually you need to bake it in formall... |
Speaker A: Yeah. Do you think, first of all, we're going to have millions more people join this movement for Lucky, they're going to have more pluralistic ideas on this and a more diffuse set of values won't care as much about Ethereum's decentralization as us. And then also, David, like, at some point in time, we're t... |
Speaker B: Yeah, well, so anyone at the EF gets to do whatever they want, from what I've gathered. Like, working at the EF, like, you're pretty free, like, you gotta work, but, like, your specific narrow. You don't have too many narrow constraints. So, like, you're allowed to have an opinion at the EF, right? The EF do... |
Speaker A: Orange, David. |
Speaker B: Yeah. Yeah. On a very large scale. He. He was second to biggest. |
Speaker A: I gave him five options. I gave him blue, yellow, orange. Yeah, he picked the, you know, the second worst. |
Speaker B: Right? Yeah. I. I don't know. I can't perceive for myself how theoretical versus practical this threat vector is. I was kind of chatting with Mike neuter about this is like, all right, what is the future of, like, the LST? |
Speaker A: Another. Which was another kind of designer. Yes. Researcher that, you know, kind of in real life. Right? |
Speaker B: I do, yeah. Rock climb. Rock climb in Brooklyn. And I was like, I kind of think in the fullness of time, nothing really happens. Like, we debate, yell at. It doesn't even fix itself. It doesn't break. It's not fixed. |
Speaker A: But what do you mean by either? Isn't it a sign of it? Like Danny would say, it's a sign, David. It's a sign of it breaking. If we pass 33% and then if we pass 50%, you can't tell me it's not broken. That is actually definitionally broken, because then you have this whole surface area for corruption that can... |
Speaker B: I'm saying, like, even if we do get there, and, like, the corruption vector is present, the corruption doesn't set in. And even though there is, like, the three door knock on problem, no one actually knocks on the doors. |
Speaker A: But that, to me, feels like a statement of faith. And that's a more like, it's just. |
Speaker B: A little bit about, like it's making. It's an assumption. I'm not saying it's a statement. I don't think it's a statement of faith. It's just like, yeah, it's just like. And things are just, like, left alone and nothing. No, no corrupting force comes. |
Speaker A: I think Danny would say that that's apathy. We can't let it get there. I mean, I think the argument would be, wait, so we're okay with that? Getting to 50% without putting up a fight and then opening up this door? And so what? It's not, you know, like, it's not corrupted or used in sort of year one or year t... |
Speaker B: I don't know. I feel like, I feel pretty foggy beyond, beyond, like a few years away on this. |
Speaker A: I think it's interesting to me how there have been many contingents of the Ethereum community who have made this basically a hell to die on. It's very important to many ethereans. The fight against Lido is sort of a defining characteristic for many. There have been others who have said, hey, this is market f... |
Speaker B: Yeah. One of the things that's made this harder to navigate is a lot of the biggest Lido detractors out there. The Lido. The anti Lido people out there are also the rocket pool people. |
Speaker A: Yeah. |
Speaker B: And so, like, of course you guys are anti lido. Like, duh. |
Speaker A: That's why actually so objectively if, like, you ask me of who are the most, the least biased people in the entire Ethereum community, or at least have their bias towards the success of Ethereum over the longest time period, I will tell you every time it's going to be like eth core developers, it's going to ... |
Speaker B: That's what his most recent article was. I'm pretty sure his, hey, here's the philosophy about enshrining things into Ethereum was written as a result of people being like Vitalik. What do you think about Lido? And that was way of him speaking, answering that without actually answering it. |
Speaker A: Yeah, but it was very much like, I don't even know if he mentioned Lido in this article. I'm doing a search. |
Speaker B: You talked about enshrining lsts. |
Speaker A: There's one mention of, actually. Is there? |
Speaker B: Did he get back to me? I asked him to come on the podcast yesterday. |
Speaker A: Liquid staking mechanism. No, actually. Oh, Lido. Yeah, he mentions it a few times under enshrining liquid staking. Yeah, I really feel like that's what we ultimately have to do is. Yeah, something like that. |
Speaker B: Okay, so Hazu sent me four questions, two of them you heard me read on the podcast, but the other two, well, one of them was. In what sense do you think enthroning LST in protocol solves the problem of stake centralization? It seems to me like it would achieve the opposite. You force competition to happen on... |
Speaker A: Yeah, I think that's really like a next episode, basically, or a next, like a piece of white space. And this is. Hasu is more of a protocol researcher than I am. Right. And like, you know, he's less of one than like many on the EF. But if we enshrine it in some way. And by the way, when I say enshrine it, I ... |
Speaker B: Like, fingers crossed yet again, it's a thorny problem. Yeah, and this is why I was talking about, like, at some point, solving vectors of centralization is sometimes, at some point, we're going to run up against some thing that we can't solve. |
Speaker A: Yeah, I don't. |
Speaker B: People in the ethereum ecosystem are not ready to call that now, but at some point, we will have to do that. |
Speaker A: Ultimately, Ethereum has to ossify, too. We have to, we can't leave this. |
Speaker B: Actually, I don't know if that's true. I think that less true than it once was when we were talking about Ethereum in comparison to bitcoin, at least. |
Speaker A: We have to ossify some things, right? Maybe we always have kind of this, like, we're building walls, you know, outside from the core wall. Like, we have to ossify what's in the core. And, like, the changes have to be less. Like, they have to decrease in terms of their, their scope and their, their magnitude ... |
Speaker B: But, um, it's been funny hanging around in New York with a couple of EF people. There's a few ef people that I hang out with, and hearing them chatter about, like, how they all keep themselves in check about, like, hey, making sure that they don't hang around, like, the paradigm offices for too long. |
Speaker A: They don't become corrupt. I mean, well, isn't this a story as old as time with government officials, which is like, you know, proxy for what they are. Which is basically they get corrupted by corporate interests and lobbied and they get bought, essentially. |
Speaker B: Yeah. |
Speaker A: You know, that's what happens if you leave the. The dev door open, like too wide. I think. I guess another thing I'll say is I still hold with the. The takeaway from the Hasu episode, which is there. There is. There is, you know, there is. There is good, there is better and there's best. Right. And there's a... |
Speaker B: Right. For way back when all of the bitcoin. Bitcoiner fud, when we were. When we were doing the proof of work, proof of stake wars, was saying that as soon as ethereum goes to proof of stake, there just. It's going to be a cartel of binance, coinbase, kraken and one wire exchange okx or something. |
Speaker A: Yeah. |
Speaker B: And that is not. No longer true. |
Speaker A: No, that's not happened. Instead we've got. |
Speaker B: It never was true, actually. |
Speaker A: A potential governance cartel of 29, which is way better. |
Speaker B: Yeah. |
Speaker A: Way better than any of those other alternatives. |
Speaker B: Yeah. |
Speaker A: It's actually. |
Speaker B: Although the people will say that, well, actually, Lido is still just one. It's one. And it's 29. It's one. |
Speaker A: I see. I don't think it's purely. I definitely don't think it's purely one. |
Speaker B: There is one central provider of the value of being a lido node operator to the 29 node operator. |
Speaker A: Did you hear me solve it, though? I solved it in the episode. All lido has to do is give all eth holders the right to veto. That's the extent of protocol design I'm capable of. Anyway. I do think that Lido is not bad. This is what turns me off. The tribal conversations is when rather than engaging, there's j... |
Speaker B: That guy's a bad guy. |
Speaker A: Yeah. So I think it's important that we engage in a healthy way and not just shut down the conversation. |
Speaker B: So I should have known this. I feel like I'm embarrassed to say that this is a fun fact, but maybe this is new for you too. A handful of the 29 lido node operators are eth to client teams like prismatic labs. They are getting money for their role of staking and they are Ethereum client teams. I don't know. I... |
Speaker A: Yeah, that's a great point. I don't know who the node operators are. In fact, that's probably another area of research. But you mentioned. |
Speaker B: Yeah, that's important information. |
Speaker A: I know. For instance, attestant is one. They've been a pretty Ethereum aligned staking services company. You as well, like. They're definitely chorus. |
Speaker B: One is one. |
Speaker A: Yeah, there's definitely some long term ETH aligned entities there as node operator, so. Yeah. Anyway, that's it. Do it. Where do we go from here, David? Is the conversation done or what do you think we just let this one rest for a bit? |
Speaker B: Marinate. As this one marinates, the right guests will come. Barnaby's definitely on the shortlist. I would say maybe a panel or conversation. |
Speaker A: Well, bankless citizens, you tell us if there's more to continue this discussion and thanks for hanging with us during the debrief. Cheers. |
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