[00:00:00] Hi, welcome to Exploring Solana with Jupiter. I’m Ben Chow, one of the co-founders of Jupiter and the host of this podcast. For those who don’t know, Jupiter is the key swap aggregator and infrastructure on Solana. Giving you the best price swaps for any token, and with almost 10 billion in- trade volume and representing 2% of Solana’s daily transactions, we are one of the most popular DeFi protocols on Solana…
[00:00:26] So in this AMA series, we’ll talk with key crypto folks in the Solana ecosystem and deep dive into the important topics, prompts and stories of the day.
[00:00:34] Joe: Hey, hey! Joe here.
[00:00:38] Ben: Joe! Awesome, man. Great to have you on.
[00:00:42] Joe: Yeah, of course. I’ve been looking forward to this one.
[00:00:45] Ben: I know. Um, it’s, it’s not VR, but uh, hopefully again-
[00:00:50] Joe: Yeah, hopefully, hopefully fewer technical difficulties.
[00:00:55] Ben: That’s how, you know, you’re early in the, in the, in the tech curve.
[00:00:59] Joe: That’s right.
[00:01:00] Ben: You know, actually, honestly I prefer audio myself, but I thought it was a fun experience to try. You know, it’s kinda funny.
[00:01:07] Joe: Yeah, it was. The first time I ever did a, a conference panel, then VR. It’s pretty cool. Yeah.
[00:01:13] Ben: Yeah, dude. You are good. You’re a natural man. You’re a super pro I bow down to your skills.
[00:01:21] Joe: Well, I I’ve spoken at a few conferences in my career, so having a Oculus on my head was the only difference.
[00:01:30] Ben: Yeah, I can’t wait. I actually want to do one with the head tracking. Like that gets the facial expressions. I’m big into that. DR influencer SIM space. I think that’s going to be super cool. Right. So just as a. We are not only just doing this on Twitter spaces, but we are also streaming the spaces to our, to our community discord.
[00:01:54] And so there’s another 70 or so people in and growing, following along and discord, and there’s also a text channel there. So people will be able to ask questions and, and I’ll feel them in our, in our talk. So
[00:02:08] Joe: I didn’t even know you could do that. You can pipe it directly in a discord.
[00:02:12] Ben: We’re, we’re pretty, we’re pretty, uh, Uh, it’s not that sophisticated, actually just basically someone, one of our awesome mods is, um, using OBS to record the Twitter spaces and stream it to discord.
[00:02:28] So it’s a constant experiment us to, uh, you know, cause we also want to record this and have a good audio quality so that this will go onto our podcast. So, yeah. Cool. All right. Let’s get started. A lot of people who are, by the way, a lot of people are a fan of yours and following they’re really eager to hear from you and they’ve already been throwing me a bunch of questions.
[00:02:50] So usually I’d love to, just for anyone who doesn’t know you, uh, if you could give a quick background about you and, and also like, you know, what got you into Solana. I think that’d be awesome.
[00:03:01] Joe: Yeah, sure. So I have been or I am, I should say a technologist and a trader going on a whopping 22 years now.
[00:03:12] So, uh, you can get a sense of how old I am relative to the rest of the people in crypto. Yeah. I started programming and trading in the year 2000, which is right around the.com bust. So it’s an interesting time to learn both of those skills. I have a degree in philosophy though, with the focus in logic, it doesn’t really get you a job, but it teaches you how to learn things.
[00:03:34] So picking up new things like programming and trading was kind of, I don’t want to say it was definitely not second nature, but it was definitely something that I had the ability to pick up on my own volition, which I’m very grateful for. Uh, used to trade on wall street years ago left the trading desk in 2007.
[00:03:52] Cause I was just kind of convinced that all the trading was moving into machines and algorithms. So I went into tech full time and left finance and joined a startup on, uh, 30 in Manhattan, um, in 2008 and then within about four years at a few different jobs and ultimately ended up becoming the CTO at, uh, the, the top ad agency in New York city called mother New York.
[00:04:15] Um, and like kind of through that four year journey of joining a startup to becoming a CTO, I had spent a lot of my time investing and in researching a lot of new technology trends, missile gets in the Solana discussion in a second, the three big kind of like bets that I made in my career. Which probably sounds a bit like hindsight bias, but genuinely I was interested in cloud computing in mobile tech and open source, particularly in open-source project called Node.js, which I was very early, too.
[00:04:44] I did not invent it to be super clear. I just saw it and had a feeling that, you know, this thing has the potential to be a massively disruptive technology. So I was super early inactive and then Node.js community I joined this kind of crew of Node,js experts called the node firm and ended up turning it into a commercial business.
[00:05:05] So kind of farming out the world’s top. Node,js developers to fortune 500 is to train them on this new technology. And we ended up closing a big deal with PayPal when PayPal decided that needed to train 3000 of their engineers on Node,js. And that was a strong enough signal to me that, Hey, this is a real legitimate technology.
[00:05:27] It’s time to go commercialize this space and really make an a first-class technology solution. So I co-founded a company called node source, the Node,js company with my co-founder Dan Shaw. We bootstrapped the company, you know, got two pretty decent size revenue into the millions. Very, very quickly decided to get raised some venture capital.
[00:05:46] Um, and it ultimately ended up raising over 40 million in venture through 2018. Sold the business in 2019, we had customers ranging from Goldman Sachs and Citadel, uh, MasterCard America, uh, Delta airlines, uh, NASA Symantec news for Conde Nast, Netflix, you name it. Every company that was adopting this technology, um, we were, uh, you know, kind of their primary provider, Node,js for what it’s worth, uh, became the most popular and widely adopted open source project of the last decade.
[00:06:19] And in fact, nearly every crypto and web three project protocol uses Node,js in some capacity. Now I know Jupiter uses it. I mean, everybody more or less uses it, some in some where in their kind of tool chain. So super proud of that. I don’t take all the credit, but we definitely had a material impact on the growth of Node,js as an open source and ultimately ubiquitous technology.
[00:06:44] In fact, today, if you even download the no jazz binary, you’re still getting it from node source. So, you know, we’ve, we’ve been we’ve, we’re still contributing back to the open source community with solving a really passionate. Um, however, in 2018, I actually transitioned out of the CEO role and into the chairman of the board role, which I like to joke is a much easier job.
[00:07:03] Um, attending a board meeting once a quarter versus, um, you know, running the business, but I had some free time. And instead of, you know, smoking pot and hiking, Woods of Marin county, where I was living. I decided to write quantitative and systematic trading strategies for crypto. So I had been, I knew about Bitcoin very early on, but as a trader, I just didn’t see a market.
[00:07:24] So I kind of like waited until there was some market for it. Sadly. No, I did not buy Bitcoin in 2011. But, uh, I started trading crypto in 2016. Got really active in 2017, just given how fundamentally dislocated these markets were. Uh, you know, you had these like 10,000 basis point arbitragers, that would last for weeks.
[00:07:44] You know, this is how Sam had at had that FTX and Alameda really, you know, candidly made a ton of money and built the empire that they have today, but it was begging to be programmatically access, meaning you can write software. That could do this for you. And this was a fundamental shift relative to wall street.
[00:08:02] Uh, you know, in crypto, everything is available via API, whether it’s through centralized exchanges, whether it’s through data providers like Quinn, Gecko or, Messari, there’s tons of open source projects that enable you to run your own bot. And furthermore, there’s all this on chain data. And so this is a complete 180 from wall street where everything is walled off.
[00:08:23] You have to pay, you know, a quarter million dollars a year for Bloomberg access. If you want a prime broker, you have to jump through all these hoops and have a certain amount of money. And it’s just very gate tapped. And crypto is the opposite of that. So that was really inspiring to me to start building a bunch of these quantitative systematic trading strategies.
[00:08:40] And I ended up getting recruited to build out a quantitative and systematic trading desk. Pretty well-known hedge fund in San Francisco called passport capital founded by a guy named John Burbank. Who’s a kind of a legend in the space. So it was very fortunate to join them, built out a bunch of strategies there ultimately really left in 2019 to really just kind of continue pursuing my own kind of path into crypto.
[00:09:05] What I wanted to do, that was a great experience at passport, but I just wanted to do other things. And that got me into digging again, really deep into the tech. And so this kind of is full circle with respect to what I should be doing in 2009 and digging into mobile cloud and open source. I started doing the same thing with crypto.
[00:09:23] And so I wanted to understand, you know, what is the developer ecosystem like in Syria? You know, they clearly have a commanding lead. They had a bunch of tooling and infrastructure. They had consensus, which is the company to kind of back them back to the tooling and infrastructure to exist. There were a number of other projects probably.
[00:09:40] Um, IPFS and file coin, you know, all these other various that were, that were popping up. And ultimately I ended up finding Solana because I had heard about it when they were raising their seed round. When I was at passport was skeptical. Like everybody was skeptical in 2018 and 2019. It was such a brutal bear market.
[00:09:59] You just had to be skeptical of pretty much every. But I started to dig back in, in 2019 and more deeply in 2020 when I was looking at the actual technology. And so I’d read the source code. It’s extremely well-written rust. Um, it’s. Holy is. Probably one of the top five, maybe, you know, worst case, top tens distributed systems engineers on the planet, and to build a scalable blockchain, you kind of need to understand distributed systems at scale.
[00:10:31] And his experience at Qualcomm definitely sent me down the rabbit hole of looking at how the technical architecture of Solana actually was built out. And my view on it was. If they can do what they say, this thing can do this thing. This thing is massively undervalued and also will be a gateway for potentially, you know, tens, if not hundreds of millions of new users into crypto.
[00:10:57] And now more colloquially called Web3. So that’s kind of like the Genesis of how I got into Solana was I’m just doing the same thing I’ve been doing for the past, you know, 12, 13 years. Which is one pursuing things that I’m interested in Solana was super interesting from a technical perspective and two just following developer ecosystems, um, you know, in their early days,Node,js.
[00:11:20] We started to kind of monitor, uh, loosely, like how many, you know, NPM packages were being produced and how many companies were now listing job offers as Node,js developers needed to come into the workforce. These were signals to us as to whether or not. Um, you know, this, this open-source technology was gonna last and we’re seeing something similar, but different with Solana and certainly other ecosystems by the way, but seeing with Solana and also the way that their, what I call their developer go to market, how they attract developers to the platform is just totally different than Ethereum.
[00:11:57] So again, this is not like a judgment against the Ethereum, but like the Ethereum . Vitalik is a genius. He made probably the biggest leap in computer science in decades with a smart contract programming and what he was doing with solidity and the EVM. But it is primarily focused towards like what I call academic engineers.
[00:12:17] These engineers. Super giga brains that are no figuring out these new primitives and these new patterns, but they’re not necessarily building a product. And Solana has primarily doesn’t mean there’s not academic engineers in Solana or there absolutely are, but they primarily focused on product engineer.
[00:12:37] So, Hey, we’re going to enable you to build really cool products with this super fast scalable L1. You don’t necessarily have to be a PhD in computer scientist to make inroads in Solana. And so that’s another thing that really attracted me to Solana is that the, the total addressable market of product engineers is an order of magnitude larger than academic engineers.
[00:13:00] It’s just the nature of how software development has evolved over the past 20 years on the internet and certainly mobile devices. So with Solana, I was like, look, killer technology, ridiculous founding team. Moreover, their developer go-to-market is actually targeting product engineers. Like you put all these together and you’re like, how do you not.
[00:13:19] Get exposure to this, whether it’s through investing or through participating in open source or building applications, et cetera. And that’s been kind of like my, my approach, which candidly, I don’t think is like super sophisticated. It’s just kind of how I’ve always done things and it’s really, really worked out for me.
[00:13:37] Ben: That’s great, man. That’s that’s fantastic. Yeah. I love the framing too. When you said about. You know, Solana being filled with a product, you know, really product more of a product focused platform on chain. Right. And I actually, I think one article I was writing, like they, they, uh, uh, I mean maybe it was even Anatoly saying it or some quoting him, you know, they’re taking a very practical approach.
[00:14:02] You know, how, how do you make this useful? How do you make this very practical for folks? I’m sort of curious. During that time that you’re doing the research and diving into Solana. Were there other chains that you looked into? Not just like maybe alternative L1s that were trying to solve. Similar things either then or now.
[00:14:22] And, and, you know, did you feel that the what did you think about them? You know?
[00:14:27] Joe: Yeah. I mean, absolutely. You know, it wasn’t like, I just got super lucky and chose a chain that happens to be super fast and also very valuable. I absolutely, I mean, I’ve written solidity apps just to kind of like test it out.
[00:14:40] And so part of my kind of process was. You know, look, uh, there’s something to be said about like the technical kind of proficiency of how technical and how robust is the technical underpinnings of any new material technology, which is great. And that’s kind of like alluding towards that academic side of the engineering, you know, uh, spectrum.
[00:15:04] The difference though is for me is, well, that’s great. You know, like there’s a programming language out there called Erlang, which is probably one of the most incredibly powerful performance, efficient programming languages out there, but there’s very few developers that use it. Why? Because the learning curve and the amount of friction to get going with writing an early application.
[00:15:30] Is incredibly high. It doesn’t mean it’s not worth pursuing. It just means that like most people avoid, you know, friction in any process, if they can avoid it whatsoever. And so with a Ethereum, I’m in the early days, this is totally different now, but in the early days of Ethereum, just to kind of get your environment up and running and just to kind of.
[00:15:51] Get a smart contract deployed and connecting to a node. There was just so many kind of steps involved that I saw this as a detriment towards developer adoption in mass. It doesn’t mean my soul likes to be clear. Our theory has like a massive market share of developers. I was just looking at it, going the amount of friction involved just to get something up and running, let alone.
[00:16:15] You know, try and send some things out and production can be extremely expensive. And, you know, one of the things that has developed or evolved, I would say in application development more generally in the past college, 15 plus 10 or 12 years is developers tend to like to see progress really quickly. So I’ll give you an example, like if you’re building.
[00:16:38] A standard Java application, you know, 10 years ago you’d write some code, then you have to compile it and you’d have to wait to see kind of like what happened and then you would debug it and then you would do it again. Right. That kind of developer like inner loop. Which slow developers tend to avoid it and, or they’re just less productive.
[00:17:22] And to be clear, like that’s, again, Ethereum has done an amazing job of this now, but in the early days, it was just full of friction. That didn’t really inspire me as a developer to want to really dig deep and dive into building a truly immersive application on the chain. And that was the same. Seeing that I did for other chains, I don’t end up looking at was with whether it’s near or avalanche or its cosmos.
[00:17:47] Like it was there a lot of friction and getting up and running, was there enough tooling or best practices out there that said, you know, skip these steps or press this button or whatever. And on the one hand, Yeah, abstracting away. A lot of that is a trade-off because you see this with frameworks where you have a framework that makes it easier for you to build an application, but you may not understand kind of like the underlying core essence of the program that you’re building, but the other trade-off is.
[00:18:17] Productivity and, and inspiring developers to build applications. And so that’s one of the things that really drew me to something like Solana is that I just felt like I could get up and running so quickly. And furthermore, because it’s so cheap and it’s fast, like you can kind of try stuff out and suck up a number of times, and it’s not going to drain your bank account.
[00:18:36] That is like a, kind of a very compelling selling point to developers that are just trying to build interesting products. And this was one of the reasons why I think you see now we’re starting to see new types of products that are being built on Solana. That’s fundamentally cannot be built on other chains.
[00:18:52] So dialect is a great example of this dialect is a smart messaging protocol. I am an investor full disclosure. I’m an advisor full disclosure, but this is something that is literally like doing push notifications. On-chain. You literally cannot do this on Ethereum, L1 Ethereum. You can’t. It will, it will never scale.
[00:19:11] It’s not fast enough. And it is, it is way too expensive to just ensure that this message is actually sent and received. This is only possible currently on something like Solana. And so this is what’s really cool to me about like, when I was digging into these various L1s. Most of them were basically like you can build a DeFi application that ensures a level of integrity and security.
[00:19:38] Whereas Solana is like, you basically build any application and you just have this, this, uh, freedom of expression on the types of apps that you want to build that again, for me, I just gravitated towards it relative to the other things that were out there.
[00:19:54] Ben: Yeah, that’s really interesting by the way. I completely agree with you.
[00:19:57] Uh, of course. Uh, and, and, and also we’re friends with the dilate guys. We love them really sharp team. I would say too, that like speed is, I was a doubly triply important in, you know, when it comes to DeFi and finance, right. Because of information asymmetry and like, you know, I think in order to. Really tap into like the real potential.
[00:20:19] You have to be able to support that this level of speed or you know, that the Solana is aiming to get to. So I completely agree actually. And one reason why I feel like Solana , you know, a lot of DeFi, you know, I, I do wanna ask though, because it’s interesting that you say that. Uh, you saw a lot of potential too early on, like, you know, building on Solana.
[00:20:40] I mean, everyone talks about chewing glass and some of the early days of sonnet. I mean, I think in the early days it was still pretty raw too. Are you saying it was still better than say the early days of some of the L1s?
[00:20:52] Joe: Yeah. So here’s why it’s, it’s actually a pretty, pretty simple theoristic. So, if you look at Ethereum they number one, the talk effectively invented a new programming model smart contract programming.
[00:21:09] I have written about this in a, in a Web3 piece. That’s pinned on my Twitter profile in more detail, but in essence, for forever software developers, when they would develop an application, you could effectively pass in arbitrary inputs to a function and get some arbitrary. Output as a result of that function execution.
[00:21:31] So there was no concept of like tokens and, and transactions and kind of assuredness that something actually got executed and was able to be tracked. So our contract programming completely changes the program of model, where your inputs are tokens. And the outputs are transaction IDs. So receipts verifying the fact that that execution happened and it’s recorded on chain.
[00:21:57] So number one, as a developer, you have to, if you’re, if you’re new to software development, then it might even be easier because you’re just like, this is how I know how to build apps, but if you’re been building apps prior to that, you have to fundamentally change the way that you think about programming to adopt this new model.
[00:22:16] So that’s hurdle number one. Hurdle number two is solidity is a new programming language. Now it’s not a difficult programming language to learn, but it is a new programming language. You, you have to, you have two hurdles to get over now to build a theory and based application one, you have to figure out the new programming model and understand what that means.
[00:22:39] And then two, you have to learn a new programming language. Now, as you look at Solana, Yes, this is smart contract programming application or platform, right? So you still have the hurdle of learning this new programming model, but it uses rust and rust has been, I think for the past seven years now, the most loved programming language in the stack overflow annual developer survey.
[00:23:04] Which to me is such an obvious sign as to why more and more people would be adopting Solana versus something else, because there’s already a decade plus of tooling, best practices. There’s infrastructure in place. There’s code editors. There’s extensions there’s plugins. There’s linting there’s security analysis tools.
[00:23:28] None of this stuff really existed for Ethereum it’s because Ethereum never existed. Right? So it’s not, again, it’s not a judgment against Ethereum , but it’s just the fact that Solana, chose shows rust gives a tailwind, pushing developers more easily into this space. You only have one hurdle, not two, the one hurdle being changing your mindset for the programming model.
[00:23:50] So. Yes in the early days, it wasn’t like rust is not a trivial language to learn, but there’s so much literature in tooling and infrastructure in place that if you’ve ever written a systems of a programming language before picking up rust is not. Terribly difficult, but more importantly, you’re not going to shoot yourself in the foot left and right.
[00:24:12] Because there’s all of these tools that are already been created for us developers. So to kind of like wrap up the thought in the early days. Yeah. It was still really difficult. Paul X has a great blog post, which I think is now kind of labeled the Bible of Solana. To create like an escrow escrow program, just to kind of get familiar with how Solana actually works.
[00:24:31] And now of course we have the anchor framework, et cetera, but they were all, it’s all using rust. And so you get all of these benefits out of the gate that, that kind of acts as this propellant for development on Solana, which to be clear, like Solana would mean that . You know, two years ago, you know, Ethereum has been out for three times that long.
[00:24:53] And the fact that we have this much developer interest and adoption, I think has a lot to do with the fact that rust is the program, the primary programming language for building a Solana program today.
[00:25:05] Ben: Well, it was a very interesting perspective. Yeah, I hadn’t thought about that, but yeah, that makes sense.
[00:25:10] You know, the, the very mature tooling and rust is a good sort of. Uh, platform for developers to get started quicker.
[00:25:21] Hey, Ben Chow here, you’ve been listening to Exploring Solana with Jupiter, where we talk with some of the key crypto folks in the Solana ecosystem for their founder, investor, builder, community, or marketer as builders ourselves. We go behind the scenes on some of the important crypto topics, problems and stories in Solana.
[00:25:40] So if you liked what you’ve heard, follow us on your favorite podcast app.
[00:25:48] That’s cool. How has, uh, has any of this thinking informed how you invest in projects in Solana? I’m just kind of curious, you know, do you have any thesises, how do you pick, how do you pick. What do you look at
[00:26:03] Joe: That’s a good question. Um, so look, my edge is not like video games. I like to me, my favorite video game to play is trading crypto.
[00:26:15] I’m not a video game expert, but. I will still invest in certain video games for as, as an example because of a combination of a few things and just kind of outlines how I think about investing. I think more broadly one is what’s the tactical acumen of the team. Like, are they technical, technically capable and most investors in the space?
[00:26:38] And I love all of my former or, you know, all my colleagues that are BCS, most of them are not technical so they don’t, they can’t really get down into the weeds of discussing pay. Uh, when you, like, how do you think about managing the UI when the garbage collector walks the thread for the UI? Like, I’m just giving you an example.
[00:26:59] You’re never going to hear this from a VC, except maybe from me or like marketing, right? Like it’s very rare, rare. You’re going to hear some sort of technical question and I don’t do that. So I poke at them. I’m trying to assess where they are in their kind of technical acumen journey so that I can right-size the investment, whether or not like.
[00:27:21] I may not be an expert in video games, but holy shit, these guys are built unity games. They understand the entire tool and he goes system, they’ve worked with third party providers for 10 years plus or whatever it kind of de-risks the investment. And then secondarily. Just using the video game. Cause this is by far the area that I’m the weakest in.
[00:27:40] They don’t want to look at like what’s happening with culture. And I’ve mentioned this in a couple of podcasts and Twitter spaces in the past that as culture starts to adopt crypto or just any new technology, not even crypto, it acts as like this huge. No propel it, tailwind momentum pusher into the space.
[00:28:00] And so like I did, I’m an investor in defile and I’m an investor in monkey game and I’m an investor in Gino pads. And each one of these are fundamentally different games, but they’re all tapping into the culture of video games and people love to play video games. And you know, what you’re seeing now is like step in.
[00:28:19] That, that thing is blowing up. And it’s literally an app that pays you to go for walks, right? Like they’re gamifying certain aspects of just regular human interaction and, and, and sort of like your daily, your TAVI routine. So, so I kind of look at, I look at the technical acumen that the kind of the, the team itself, their background, what they’ve done in the past.
[00:28:42] And then also, like how does it fit into this sort of cultural narratives? Conversely, if it’s, if it’s like a, a DeFi project. So I’ve, I’ve, I’ve seen a lot of what I call DFI 2.0 projects. A lot of them are in Solana. Because you literally can’t do this stuff on other chains. So, um, you know, I’m an investor in a bunch of different projects.
[00:29:04] I think Delta one just literally announced their, their seed round, which I participated in with like Alameda and Raj and electric capital and Chris McCann and Solana ventures, et cetera. Those guys have a super deep financial background, but they’re also programmers. And so this, when it’s a Defi related investment and I kind of look at like, Hey, what is the thing that they’re trying to do?
[00:29:26] Are they just copy and pasting something from Ethereum. Or they actually doing something materially more different. That’s interesting. That’s really only feasible on say Solana for example, and then B like, how good are you at writing rust? I’m good. Are you like understanding like the Solana uh, uh, accounts model, like these types of things are heavily influential in the way that I kind of make the decision.
[00:29:50] I’m not, you know, it’s not a, it’s not a perfect strategy or litmus test because in some cases. You know, it’s the founder like sometimes, like when I met Sam, who’s the founder and CEO of , Xebec I was just like, I’m in this guy is going to plow through walls to be successful. And he’s proven to do just that. Now he happens to be technical.
[00:30:11] He happens to have his brother. His CTO also has, you know, 20 plus engineers, um, in their home country of Nepal working on. Their protocol and writing rust, but like, there are some, there are, there are sometimes there you meet a founder and you’re just like, holy shit, this person is just going to absolutely crush, no matter what they do.
[00:30:31] And that only comes candidly from, I think, genuinely being a former founder, being a builder yourself, putting yourself in somebody’s shoes or remembering, remembering what that’s like. And it’s one of the reasons why, when I do talk to founders, you know, whether it’s as a, as an angel investor or an advisor, I always tell them like, look.
[00:30:47] My view and take it with a grain of salt is the best investor you’re going to find is somebody who’s literally built a company like no disrespect to anybody. Cause I have loads of friends that have like MBAs and went to business school. I’m not saying that that was like a waste of time, but like the best way to learn business is to start one.
[00:31:04] Period. And if you have built a business, whether it’s venture backed bootstrap, the combination of the two, you’re more empathetic to a founder situation, and you can better relate to them as to what they’re going through. Like the whole fundraising song and dance. Like, you know, if you can, a lot of the folks that I advise.
[00:31:25] I basically tell them the stuff that you’re never going to read on a medium blog post from a VC about how they actually operate and function and how to benefit from that and certain things to watch out for. And so that’s kind of like, I think it’s one of the reasons why I’ve been very fortunate to have a lot of founders reach out to me about their product.
[00:31:44] Because I’m an open book. I’m a former founder. I built a company around a largely successful open source project. Crypto is super open source. And so that kind of relationship also tends to favor me working with these awesome founders. And it also candidly influences my decision-making. If, if I, if I get like a level level of arrogance or, you know, free tends from a founder, it’s an immediate no, for me.
[00:32:09] Yeah, I just don’t want to spend my time working with people like that. And it’s, it’s rare that that happens. I think, especially in crypto, most people are, they’re pretty, I would say grounded, even though working in crypto is a psychotic decision to make, but, um, but that’s also another major thing that I look for is kind of, you know, what’s the person’s disposition and are they going to be, are they going to be smart enough to run a business?
[00:32:33] Are they humble enough to get advice where they fucked up or whatever that, that actually absolutely factors in as well.
[00:32:40] Ben: Yeah, that’s really great, man. I have to say, like we, I mean, one of my personal factor considerations working in crypto is, uh, you know, I, I, I like to follow the builder culture and where we’re builders are.
[00:32:52] Right. And, um, by the way, I also came from web to. Uh, sir, entrepreneur was one of the early social gaming guys. So, uh, I, I totally agree. I actually, I feel like, like the, the builder culture is such a, an important one, you know, and, and actually for us to like, uh, you know, w we also invest in ecosystem projects and, um, you know, talk to, because some projects, because I think in the same way, like, you know, founders make good investors.
[00:33:18] I think other projects make good. There’s so much synergy and leverage you can have when other projects invest. And that’s part of the reason that we do it too, is because we want to, uh, you know, grow the whole ecosystem and help the whole ecosystem and make this easily, we can a hundred X, this thing, uh, Solana and, and the whole ecosystem and the volumes and everything.
[00:33:44] Joe: So, yeah, I mean, it looked like, you know, the thing that I talked to a lot of folks about is like, Total crypto market cap right now. Let’s just call it roughly $2 trillion. Okay. Gold is $20 trillion. Gold. It’s a rock, right? Do we see that we can five X, total crypto market cap in the next five years. Yeah, I think there’s a super high probability of that.
[00:34:13] I’m not saying it’s a guarantee, but yeah, I think there’s a high probability outcome that crypto is at least the trend potentially in our asset class. In the next five years, I have absolutely been wrong before, but I’m putting my money where my mouth is, because I believe that to be true. And there are others that are enabling this to happen right now, you know?
[00:34:37] Uh, a sideways or bare market. I get that people have the negative wealth effect. You got taxes, God, you know, people’s scamming, et cetera. Like it sucks. Right. But let’s be clear. Last year we saw. More venture capital deployed into crypto startups. Then the previous 10 years combined, that was one year. In addition to that, if you just look at the last quarter of this year, Q1 of 2022, the amount of money being raised.
[00:35:10] For venture capital, token funds, hedge funds, is astronomically large. And then finally there’s true institutional investment coming into the space, whether it’s through pension funds, endowments, they all now have mandates that they have to invest in crypto and web. So again, I’m not guaranteeing that the outcome is going to be a five X total market cap in the next five years.
[00:35:37] But man, there’s a lot of, uh, there’s a lot of ammunition coming in to support this industry. And I think, especially as you’re seeing what’s happening with the broader macro texture around the digitization of money, through central banks, central coins to, you know, the sad thing that’s happening in the Ukraine right now, but that being an accelerated for crypto adoption, All of these things are happening, whether we liked them or not.
[00:36:02] And I got to believe that there’s a really good chance that this goes significantly higher. And this kind of, you know, tick by tick day by day, looking at charts that are all down 40, 50% from their all time highs, you got to zoom out. And if you’re, if you believe in this space longer term, the, the dollars that you’re seeing, or the prices of certain, you know, high quality tokens that you’re feeling are under valued
[00:36:28] yeah, you’re probably right.
[00:36:30] Ben: Yeah, I agree with you. I think what you said about, you know, gold being a dumb rock, right? I mean, you can liken that to, um, you know, investing in maybe like real estate versus stocks. Right. You know, on the one hand. You know, like really, really smart people looking to improve and increase value, you know, versus something that’s not going to, it’s just, it’s just, uh, it’s just a property.
[00:36:59] It doesn’t do anything. Right. So like, and in crypto you have some of the smartest people working on really important problems. And so, I mean, I have to agree with you too. Like if there’s not, not only that, but the more software that’s. That composes on top of each other. That’s no longer, you know, like the faster, the rate, the rate of growth and the faster things should, you know, there’s, there should be a really good flywheel effect that keeps pushing everything outward.
[00:37:27] Uh, so. I mean I’m with you on that same bet, I’m on that same bet with you. I think an interesting question. Since you were also very early, it was like, have you seen, how have you seen the, the Solana the Solana, The ecosystem change over time? Like, do you still, are there, are, are there certain beliefs or things that have changed for you since, you know, the growth of Solana and sort of.
[00:37:54] The cycles it’s gone through so far.
[00:37:58] Joe: I don’t think it’s Solana per se. Um, so, you know, I guess I’ve been trading for over two decades now. I’m I’m by no means an expert, but I just seen a lot of market cycles and the reason I’m like the least bit concerned with any of the current price action is largely based on what I just said about.
[00:38:21] You know, how much interest in money is coming into the space. And that’s when the longer term nothing has really changed from my like investment thesis for crypto or web free more broadly. And in addition to that, there is very interesting stuff happening outside of Solana. No. I think that the Terry ecosystem is just, you know, we hear about the deep hag risk and anchors incentives and yada yada yada, and crypto Twitter is notoriously wrong.
[00:38:52] So you can just tune that stuff out. But there is, there’s a lot of interesting stuff happening in the terry ecosystem. There’s some very brilliant engineers over there, even in the cosmos ecosystem, the feta upgrade that they had rollout, I think last week, They now basically have enabled each one of the application specific change to more or less exposed API end points on their chains.
[00:39:15] That’s like, that’s an incredible, like if you look at the growth of platform related companies, how did they become platforms by exposing APIs? Now you have literal applications, specific chains, exposing APIs. So like, this is the time to kind of, you know, Dig in and learn more about these spaces, whether you’re technical or not, but it’s just trying to keep up with the progress that’s happening.
[00:39:44] Can influence a lot of the decision-making as to where you would be investing or trading now relative to 12 to 24 months from now. Because unless, you know, we are in some sort of like awful global crisis. You know, it was certainly possible. Um, it just, I find it very hard to believe that in two years from now, you know, crypto market cap, is it half projects have gone to zero developers have left.
[00:40:13] I just don’t see that being the case. In fact, if you were around in the 2018, 19. Uh, was brutal because like the prices just kept going lower. This, like when everybody finally capitulated, including the OG traders, once everybody capitulated, then things started to move back up. But during that time, that’s where a lot of stuff was being developed.
[00:40:36] That is now benefiting from that. Uh, the R and D. In the 2018, 19 timeframe. So we’re seeing the same things now. So I think the long answer longer here around like, you know, do I think it has anything really changed? Not really, at least from like my perspective, you, you continue to follow what developers are doing.
[00:40:56] You continue to follow the underlying tech, these of these projects and just make a few assumptions. Drive some probabilities to those assumptions and see what the outcomes could potentially be. And, you know, first of all, specifically, I think one of the most underappreciated, which is now getting appreciated pieces that they released recently, is Solana pay.
[00:41:18] This is a, I think an incredibly disruptive piece of technology just in general. The fact that it is on Solana is, is great for us, a lot of rules, but like we’re talking about merchants no longer having to rely on these 3% fees to visa, MasterCard, which by the way, are trying to increase their fees even further.
[00:41:42] And they’re starting to now get sort of political headwinds in Washington DC about whether or not this is fair to consumers. So consumers are gonna start looking for an alternative choice, let alone the merchants. Right. So if you’re a merchant. And you’re giving away 3% of your top line. Every day to be Visa MasterCard American express.
[00:42:01] And there’s an alternative where you don’t give up any of that. I mean, it’s hard for me to see folks not wanting to at least try adopting something like that.
[00:42:09] So this is, like, why I think what Solana is doing is right in the immediate term. One, they’re working on scaling a chain. That’s the tactical work that needs to be done, but two, the way that they’re going to market with developers and enabling people to… You want to build a video game? You know, they just signed up a huge gaming agency out of South Korea. Uh, you want to do NFTs? Metroplex’s road map is unbelievable. And yes, I am, full disclosure, an investor in Metroplex, but you look at what they’re going to be offering to creators. Now you can do NFTs that are dirt cheap.
[00:42:43] You can’t do that on ethereum. You can’t do that on most chains. Right? Now, you move into something like e-commerce and payments. There’s not even another chain that really isn’t set up to do this. And you could look at like the lightning network as an analogy or a comparative, but at the same time, you have to transact in Bitcoin.
[00:43:04] There’s no USBC, which consumers are not going to be calculating 0.0 0 0 3 1 7 9 Bitcoin for, you know, their, their sandwich from the local deli. Like they’re just not going to do it. So anyway, that’s kind of why like more specific to Solana. I just think there’s, there’s so many categories that they are firing on all cylinders on to enable more people to get into crypto on the builder and trader side.
[00:43:30] But it’s just really hard to ignore where this thing’s probably going next.
[00:43:34] Ben: If you were to step back a little bit, like. Uh, how would you categorize it? Where do you see Solana? Like, like in relation to the other chains then? I mean, is it, is it, is it just going to be the more just on the ground practical, like consumer-friendly chain?
[00:43:51] Is that what you’re saying? Or.
[00:43:54] Joe: Yeah. Yeah. So, so it’s a great question. I was actually on the phone with the founder of a very, well-known like a hundred billion dollar hedge fund the other day about this. And he was kind of asking me like, Joe, are there going to be like a hundred L1s? And I was like, You know, there could be but, um, I, I don’t think that, you know, a hundred L1s that are a material size and usage is like certainly possible, but I, I see it as a low probability, but the way I think about it is a little bit different and.
[00:44:23] If you could look it like What is the value prop in, in a nutshell of each individual chain, but you could look at the Ethereum, it’s like super high level of integrity and verification and security, right? Cause it’s, it’s, it’s like you can have a raspberry PI in your garage. So that’s kind of like a theory was value profit, and I’m totally generalizing here, but like for the most part, like Ethereum is like this really, they have super strong guarantees for the software that you want to run on chain.
[00:44:53] You can look at terra, then you’re like, well, it’s an application specific chain on cosmos. And they’re trying to be basically like the money supplier for all of crypto. So what can you do with that? Well, there’s tons of stuff you can do, like liquid, the central banks do like they, they juice all the other banks to enable money to flow through the markets very easily.
[00:45:15] Then you look at something like Solana and for me, I look at it and say, this is a, this is an . This is an execution platform. This is like an execution engine. And I’ve seen this movie before, literally the same thing with no JS. Uh, it was, it’s an app. It’s an application runtime and execution platform that enables developers that typically don’t ride back end applications to now, right back end applications.
[00:45:39] What’s so long. Is this kind of super fast, highly scalable. The execution platform, not just settlement, right? So like on a Ethereum, if you want to write an application, you know, you, you include the, the application logic, the execution of whatever it is you’re doing coupled with the, the data slash state all within the contract itself.
[00:46:02] And so there’s a lot of work has been done to like hyper optimize. The instructions that are being executed and in each one of these contracts, so that there’s cheap as possible. You don’t really have to do that with Solana because it’s inherently cheap by default. And so this opens up kind of the, the flood gates, if you will, for the types of applications, that can be what I call truly immersive apps.
[00:46:27] Um, so, you know, I’m not suggesting you’re going to run a 60 frame per second call of duty game on chain, but the fact that you would have a, an application that needs to have more frequent updates that doesn’t take 10 minutes or five minutes or a minute and costs 50 to $500, depending on gas fees actually execute.
[00:46:47] It just opens the door up for so many other different types of applications. And so from my perspective, you know, you look at salon, it’s an execution environment. It’s an execution platform for true hyper immersive applications that just can’t be really built currently on any other chain. And there are some absolutely brilliant people, uh, and, and very like thoughtful and considerate and, and welcoming folks.
[00:47:10] I love the cosmos ecosystem. Um, what’s really cool about what they’re enabling is maybe you need your own chain for the application that you’re building. Right? So I was an investor in this company and an investment is gonna be called our project called region, which is a. carbon credits marketplace on chain. Now, could they have built this on another chain?
[00:47:31] Yes. But what they determined was they just want to build their own chain that utilizes Cosmos’s security model, and then they can program specifically what they want the chain to do for this particular carbon credits marketplace. Like that’s fascinating stuff, but that’s the part that’s like the value that cosmos actually brings in the case that you need your own application specific chain.
[00:47:55] Then you can just utilize the cosmos ecosystem and cosmos SDK and Tendermint to do exactly that.
[00:48:01] Ben: I’m curious about what you think, you know, cause we’re talking about the potential of Salada and how fast and scalable it is. Do you have any opinions on, you know, all the recent congestion that’s been going on?
[00:48:17] Does that change your, does it change your outlook?
[00:48:18] Joe: Absolutely not. Um, I love, I love having this conversation because. There’s a co there’s two, there’s typically two types of people that kind of like cry about this stuff. One, the one type of person is someone who’s not technical that has bags under water.
[00:48:36] And they look at something like the congestion as this, thing’s a piece of shit and a token prices that are going to rise, et cetera, et cetera. And then the other person is typically someone who’s technical, but not experience. With the progress of open-source projects and how software development actually works in a, in a broader kind of lifecycle.
[00:48:56] And so here’s how I kind of, I view this, this problem as like insanely bullish or Solana because let’s be clear. If it’s a, if the network wasn’t wasn’t congested, that means there’s no one using it. Right? So like an analogy that I use is Twitter used to have, and this is me dating myself. They used to have, they used to go down all the time, like all the time.
[00:49:22] And it would be whenever there was like a huge spike in tweets, you would go to the page and you would get like a 4 0 4, you’d see the sale. And it was happening over and over and over again. But eventually by learning from the stuff that happened only in a production environment, they were able to figure out they had to rearchitect their, uh, their stack to enable this kind of hyper scaling and caching and optimization of, you know, the, the, the API and the website itself.
[00:49:52] That’s the same story with Solana and probably any chain that actually starts to get real traction is due to the demand on the network. Like, let’s be clear, you can’t like in traditional web two programming, you have an application, but you have like three, at least three environments where you deploy it.
[00:50:11] You have your test environment, your staging environment and your production environment, where you can test things in test. You promote them to your staging environment to make sure everything is still. Uh, on the up and up, and then you promote it to production. Well, an L1 doesn’t really have that capability.
[00:50:28] Certainly, certainly something like Solana. Yes. There’s tests and there’s dev net, but let’s be clear. The activity in the real-world environment is next to impossible to replicate in a development or test environment. So you’re literally learning things in production and as painful as it is in the short term for post.
[00:50:47] Nobody wants their transactions to fail and their fast and wallet, it’s like a terrible experience, but this is part of the process of an open source project that happens to be a globally distributed network that’s running in real time. This is part of the process of it actually getting, seeing improvement.
[00:51:05] I would actually be pretty bearish. If we didn’t have any activity, if we didn’t have people trying to spam the network, because then we don’t actually discover the bugs and the scalability issues that exist to propel the chain to be a massively scalable platform.
[00:51:22] Ben: Yeah. Like a hundred percent agree. I see the same things I’ve had similar, personal.
[00:51:27] Experiences too. Um, I remember actually when we were doing the social gaming thing and we had, we had, we had just tried a whole bunch of things for two years, that didn’t work. And then as soon as we hit our hit games, the thing hockey stick, and I, I spent two months, I didn’t sleep for two months because our shit kept breaking because there’s, there was just more user demand than we could anticipate or have capacity for.
[00:51:51] And. Literally was, uh, uh, restarting our servers, like all the time, while we refactored and rescale the whole thing. So to me, that’s just proof of, you know, you’re capturing market demand and you’re at the right place in sort of the technology. If it’s too easy to scale. You’re probably not solving a hard enough problem.
[00:52:18] Joe: That’s right. Yeah. That’s absolutely right. I mean, look like, I want to be clear, like I’m not like stoked that the network is having consistent congestion problems, but I am very grateful that number one, we’re identifying these bugs out and to. There’s a killer team of open source developers that are contributing to this to make it better.
[00:52:41] And like, I think people deeply undervalued that are under appreciate it… Like it is non-trivial to get people to contribute to an open source project. And the fact that people come together so quickly to identify bugs, squash them, and then upgrade their validators to be running the latest version like that is a non-trivial feat to pull off.
[00:53:03] And it’s another reason why I’m super bullish longer-term Solana because when you have a community like that, it is you can’t even quantify how valuable that is.
[00:53:13] Ben: Yeah, I agree. I think though, the thing is what happens is like people who are not builders. Can’t know like how good a team is, you know, like from, from the outside.
[00:53:24] And it’s a similar problem I’ve seen in the health space, like with surgeons, right? Surgeon skill is strongly determinant of, of great outcome, but no one actually really, unless you’re a surgeon, you actually don’t know if a surgeon. Like there’s no information capacity there. And so, yeah, dude, there’s been fascinating.
[00:53:42] You’re a, you’re a great speaker. We’re getting, I wanna, I wanna be respectful of your time. So I’m gonna throw like a random question or switch it up. I just want to see what, what do you think of, um, the dig, dig founders project, Kevin Rose. He’s got that new NFT project and this idea of NFT as a new way to invest in startups instead of actually selling equity or token.
[00:54:11] Have you heard of this?.
[00:54:12] Joe: Oh, yeah. I heard about this a while ago. And in fact, I’ve invested in a project that’s been operating in stealth. I think they’ll actually, I think they’re gonna make some noise either later this month or early may, they literally funded their business by selling Nazis. Now it’s a video game and here’s, what’s really interesting about that way of raising capital.
[00:54:35] What is an NFT? Well, it’s, it’s still kind of TBT. Isn’t a security. I don’t think so because there’s typically only one of them. Um, you know, that’s the unique, that’s why it’s NFT is so it’s not tactically a security. Uh, if you buy NFTs from a company, You’re literally buying goods. So, you know, I am not a tax professional or an attorney, so don’t take this literally, but like, I look at this and go, this is a business expense.
[00:55:07] You’re actually buying some, I dunno, commodity or some good, or you’re buying a good from a company. And you now own that. Good. And it’s, it’s technically an expense on your balance sheet as a business. They use that money. However, they see fit, right? They’re selling goods. And if they decide to use that money to build a business, or in this case, build a video game, more power to them.
[00:55:34] I think it’s extremely powerful. People will absolutely get scammed by this it’s guaranteed to happen. And so you have to be really. You know, careful and smart about how you do it, but I think you will start to see a lot more creatives actually utilize this to bootstrap a lot of their projects. And, and actually we, we saw some of this.
[00:55:57] There’s a really awesome project called cyber samurai. The founders is awesome and he’s creating a comic book. Like, how could you fund a cup? Like you’re going to go raise money from Silicon Valley’s VCs to do a comic book, no fucking way. It’s never going to happen, but he did it in a tea drop. And he’s now utilizing that to help kind of build out this creative vision that he has and it’s happening.
[00:56:22] And so one of the interesting things to me about, and FTS is a form of fundraising is there’s really no rules around it… But more importantly, it opens up creatives to fundraising, which was typically gate caps to candidly technologists. So now you have creatives that are all of a sudden able to kind of bootstrap their projects in a way that people buy ’ .
[00:56:48] You know, they actually have skin in the game and they have some sort of economic association with the health and grows, adapt particular creative idea and project. So I think we’re going to see a lot more of this I’ve been in I’m, like I said, I’ve been involved in one of these since I think Q3 of last year.
[00:57:03] This is Kevin Rose is just an incredibly popular and well known figure. So he’s probably bringing it, I think, to the forefront here, but it’s been a thing for a while.
[00:57:14] Ben: Yeah, I, I, so, so the collection that I guess has popped up on the, on, on crypto Twitter is moon birds. Uh, and cause they, they, they, uh, I think the men price was, I dunno, 2.5 east or something, but they, they raised a bunch.
[00:57:28] I think they might, for me, I think what’s interesting. I think that they’re promising utility, like. You know, from whatever they built, if you own that NFT, which is interesting because I think that makes it a security. Um, but what intrigues me is like also just the whole idea of it being sort of membership the, all the social aspects that you get within NFT and the membership side of it along with being an investor.
[00:57:57] I mean, I don’t know, it’s whatever. And then a date you’re right. It’s like you bought the NFT as a good and it’s whatever they promise. There’s no other really contractual thing to it, but totally. I hadn’t thought about the creative aspects. I think you’re super on point that this might open up a whole new world of interesting creative, artistic projects that you know, that that can actually.
[00:58:23] You know, ideas that can, that can thrive and maybe be sustainable for creatives in, in a way that’s never been possible before. So I think this is pretty amazing. Um, awesome, man. Well, thank you for the time. This has been amazing. You shared a lot of great stuff. Any last things you want to say to the community audience, by the way, we’ve we’ve.
[00:58:44] We hit over 90 in the, in the discord on top of the top of the Twitter spaces. So it’s been been well-attended. Yeah, I mean, um, I would say, uh, I’ll be making an announcement next week. So pay attention. Alrighty. Well, you heard it from the man himself. Uh, I would say like, go follow, go follow the aren’t following Joe.
[00:59:04] He’s got a great announcement.
[00:59:10] Anyway. It’s been great having you, man. We definitely do more of these things. Uh, thank you everyone for listening in. Thank you, Joe. It’s been awesome. We’ll see you in the next one. Everyone have a good day.
[00:59:25] Cheers everyone.
[00:59:28] I’m Ben Chow and you’ve been listening to Exploring Solana with Jupiter. Thanks so much for listening again. If you enjoyed this podcast, subscribe and let us know with reading.