**A** (0:07):
Thank you. David, you're joining us, right?
**B** (0:10):
Yes.
**A** (0:11):
Sit at the end. Yep, on it. All right. Wow. What an honor to be here. What a day. This is probably the number one side event at East Denver, I'd have to say. Bitcoin's taking over. Let's go. Incredible panel, Incredible panel we have in front of us. We're going to try and adhere to the time. We have Jeff Ren, partner at okx, David C at Babylon Dovey Wan. We have Jason Trend back at the Cosmos hub, Sunny Agrawal at Osmosis, and of course, Sandeep from Polygon Superstar panel. I'm thrilled to be moderating Jhan as well. So the story here is about bitcoin's evolution, change and regime for bitcoin. And you know, historically, bitcoin's been an island. It's been on its own, doing its own thing. The question is, can it be integrated into the greater crypto ecosystem? And in particular some of these proof of stake chains. Can bitcoin security be inherited? Can bitcoin converge with other blockchains? So let's start with Sonny. Actually, Sonny, what are your plans to engage with bitcoin? Overlap, Bitcoin, Cosmos. What's the relationship look like there?
**C** (1:35):
Yeah, you know, I mean, I've. I started working on Cosmos 6, seven years ago because I wanted to build the app layer for bitcoin. You know, I was working on some Ethereum stuff and I was really excited about what's going on there, but I was like, what is this eth shitcoin like I want to build for bitcoin. And you know, Blockstream came up with the idea of sidechains and never really executed on it. And so I was like, I saw this Cosmos thing and I was like, oh, this makes so much sense. A network of app chains at all. And then, you know, bitcoin is the money app chain and like bridges via secure bridging to all of these other app chains and becomes the money of this ecosystem. You know, it took a while to get there building out the causes ecosystem. But you know, now the Cosmos ecosystem is like probably like number two or number three, like, you know, probably neck and neck with Solana as like the largest ecosystem. But unlike the EVM ecosystem that has like eth as a base money, Solana has been doing a good job at making sol recently as this, like, you know, it's giving, it has a run for its money, right? Cosmos, we don't have anything, right? And it's like we have one of the most vibrant developer ecosystems but no base money in our ecosystem. Meanwhile, there's a trillion dollar base money that does not have a vibrant ecosystem right now. And this is like a match made in heaven, right? Like Bitcoin will be the money of the Cosmos ecosystem.
**A** (3:03):
Jhan anything to add to that?
**D** (3:06):
Yeah, I've been working on shared security stuff for, you know, about three years and I think my vision is that, you know, and I've vision of Babylon as well is that you'll be able to secure proof of stake with like many different assets. And so with Cosmos Hub we're doing with Atom, there's also, you know, Ethereum. But Bitcoin is like, you know, obviously the biggest digital asset that can be used to secure proof of stake chains. So with Babylon, we're trying to build towards that and kind of give people the framework with Cosmos SDK to build the chain and then with the Cosmos Hub, the validator set to run it and bring that together with the largest number of staked assets. Bitcoin probably being the largest one of those.
**A** (3:52):
Sandeep, I'm so excited you're here. What are your plans regarding Bitcoin? I didn't even know there was anything underway.
**E** (3:59):
Yeah, so for me, like, you know, as Sunny was saying that, and you also said that Bitcoin is the granddaddy of this whole industry. Right. Due to Bitcoin, everybody is here, including Ethereum. And you know, Bitcoin is an island which is not connected to this, like broader web3 ecosystem as you would. And what Babylon is doing is using Bitcoin, you know, restake Bitcoin to secure proof of stake chain. And what we believe is that EVM as a virtual machine has a lot of adoption. It will, it can attract a lot of developers from the Ethereum community into this Bitcoin community chain. And you know, Polygon has expertise in, you know, ZK proving. So for Ethereum community to fully rely and also be comfortable in, you know, bridging over to this chain, we want to provide those ZK proofs which, you know, provide this trustless bridging and execution proofs to Ethereum. And so for me, the most exciting thing and for Polygon is that if we could be that bridge which brings these two communities together.
**A** (5:06):
Let's move to David quickly. So you have an amazing set of builders on this panel. You know, Babylon's been an idea that's been in development for some time, but now we see real traction in and the real potential to bridge it over to these other blockchains. Use it as you Intend. What does it mean to you that you have the likes of Polygon Cosmos now using your technology to leverage bitcoin security for other blockchains?
**B** (5:35):
Yeah, so I think I completely agree with what these other folks were saying is that in some sense bitcoin is the first blockchain. But all these more recent proof of stake blockchain is really a way to sort of get away from the limited capability of bitcoin and to do something else. But what we're doing here is that hey, all these technology have advanced a lot in this proof of stake blockchain when we bring them back to benefit the bitcoin ecosystem as well. So I think that's the sort of marriage made in heaven.
**A** (6:06):
Jeff, let's go to you here. So ok, X has been on the forefront of building for bitcoin. I would say has really established itself as one of the larger exchanges that's been extremely progressive with supporting some of these new developments on bitcoin, whether it's ordinals, inscriptions, other things. Tell us from the exchange's perspective how that calculus went and some of the interesting things you guys are doing there. And then also as an allocator, how you think about this new season two Bitcoin L2s.
**F** (6:38):
Thank you. First of all, we are the proud investor in Babylon and thank you David for the allocation. It's a tight round and Nick was saying that bitcoin was an island. I think Columbus used to think the Americas were an island. Right. But as it turns out it's a big continent. I think bitcoin is a continent, is the world. And I think folks on this panel we're continuously building on this. I remember we used to have this narrative making distinctions between bitcoin, crypto and blockchain. Right. But now we see the convergence of all these efforts together. We are the exchange with probably one of the, with the longest history and still around. And in the past few years we put in tremendous resources in building out web three related initiatives and products. And OKX Wallet is as we understand, the only wallet that support four different signature types for bitcoin as well as Cosmos. And I think there is a strategic synergy there for us to continuously work with bitcoin. Looking back, we are probably one of the first exchange that listed stacks. Folks here remember them and I think they performed very well lately. And we also supported Miami Token and NYC Tokens coins at the time. And that is the use case in America, you know, for bitcoin related ecosystem. And I think exchange is really the place to trade not just the crypto assets, but also ideas and different efforts, staking, restaking, so on, so forth. And it certainly is a challenge for centralized business to play in the web3world. We are very new, we're early and we want to continue to work with Babylon and our friends here at different layer ones and and public chains to support the efforts altogether.
**A** (8:59):
Thank you. Davey, let's go to you. You're one of the people I look to to understand the Asian market. Frankly I don't understand at all. But what I do know is that this bitcoin season two has seen a lot of divisions between the east and the west in terms of what people are doing with bitcoin. Obviously in the US it's all about boomers buying the etf. Thank you for that, boomers. We appreciate that. But there's a lot more to the story. Tell us about what is happening in the east and how that's actually catalyzing a lot of some of the new developments we're seeing on bitcoin.
**G** (9:35):
Yeah. So I think this season two and so the origin is definitely from the west initially like Oodie and a bunch of other friends. And then so we basically have this whole ordinal just a frenzy in early last year. Right. And but we have just a hidden army and behind the entire ordinal inscription BRC 20. And so those are all in Asia and then so primarily in China. And then so thank you for Jeff and then so for the whole OkX team and then really make a big push for that. And so what we have seen is when it comes to the ETF flow, right? And like ETF flow is actually for now it's like like still not institution. It's still more like smaller checks and then from like western retail and when it comes to like the eastern retail and like the eastern retail they have been like degening like all the bitcoin NFT like since like early last year. And so I think like the divergence here is. And then so like bitcoin for just like bitcoin as like a culture or like as like asset like in the western retails impression is about just say like hedging like just a hedging inflation. It's about the macro. So it's about generational wealth. And then so like that's why. And I think it's a little bit more like that. So it's a. So it's a little bit more like stagnant when it comes to like the dynamism on top of like bitcoin and then so we Asian we love to speculate, right? And so like that that's why unfortunately like like the two of the biggest DJ for like last cycle like Do Kwan Suzu like they're all Asian. So we Asian we love to DJ and so we are very open minded when it comes to like you know like anything that's like casino related. And so so like that's why the dynamism and I would say the dynamism is always on the ground from like Asia side and like with all the push and then so like with all the push from Chinese miner because like Chinese miner like benefit a lot from like all the transaction fee and and and then like also OKX and then so like the other like just a wallet providers out there and then so most of these are even like wallet providers for inscription for just like automation of like playing with like all these new ordinal nft. They're all Asian builders and then so we have a lot of Asian builders and just like quietly building on top of bitcoin. Like recently we made another two so two more investments in Bitcoin layer two and then two of them are all Asian founders and so they basically quietly acquire. One is Merlin Chain and then so they quietly acquire more than 2 billion TVL. And like Nick, you just heard about it yesterday, right? And like the other one is a bounce bid and and then so like they have now like 500 million TVL as well. So I think it's a kind of interesting like back in 2014 like the first discussion about POS and pow on bitcoin implementation is from Vitalik. It's from Vitalik 2014, 2013 and I think now with Babylon and we will probably gonna really make Ethereum and then all the other PoS as Bitcoin layer two. Just I think about this mental model, right? So it's essentially bitcoin going to be like the monetary layer 1 or like the monetary like M0 right? And then for the other roll ups and like POS chain and so they becoming Bitcoin layer two. So like that is like my mental model is like of how the future going to evolve.
**A** (13:06):
Sunny, you're nodding vigorously over there. Anything to chime in, anything to add. You also have to pass on the mic.
**C** (13:15):
No, not really. I mean I just, I'm excited about that vision. You know I don't know if Ethereum itself is going to switch but I think we're going to see like an ecosystem of like pos like Bitcoin Restate chains that is going to like rival the like Ethereum ecosystem. And it's probably all going to be built on the Cosmos SDK stack for the most part.
**A** (13:36):
So Sandeep or Jay Han, feel free to take a stab at this. You know, I noticed a cultural change in the bitcoin landscape, which I think is very overdue. We were focused just on lightning for about five years and lightning's not a dead end. But it also hasn't achieved the objectives that I think the bitcoiners saw had for it. Is there something, a catalyst or a trigger that has led you to reconsider bitcoin as building terrain for the first time in this last 12 months or so? Was it something that changed or is it a matter of technological unlocks like Babylon for instance?
**D** (14:11):
Yeah, I think Babylon unlocks a lot by having the bitcoin script that allows for restaking and double signing detection, which was pretty mind blowing when I first learned about it last year. But yeah, my opinion of bitcoin, I think I've certainly in the past year come around to the idea that a store of value asset is actually a very good thing. I come from kind of the PoS, Ethereum and Cosmos space. And so I didn't really think about store value. But if you look at the world, you look at gold, you look at everything. Store value is actually very important and I think it can provide the basis for really big ecosystem. I think that's what Bitcoin, you know, has always been. So yeah.
**E** (14:55):
Yeah, so about that thing like you know, let's say whether ethereum will become L2 to Bitcoin and all that basically like L1 or L2. This debate is more like, I think it should be seen as like settlement layer versus the execution layer and Bitcoin. Like Bitcoin is store of value and Ethereum is for us, like how we see Ethereum is the settlement layer, right? Like the programmable settlement layer. And it is built in a way where like it has like now probably 50, 60,000, you know, validators and the censorship resistance capabilities. And you know, the decentralization is, is pretty high. And for a bitcoin based chain, Bitcoin restake chain like Babylon to become that level of like high quality, like hard settlement layer, you would need to like, you know, work to get to that decentralization levels. So that's why like, you know, for that settlement thing, I think like Jury is still out there. Like we have to see over time how it goes. But I definitely feel that these bitcoin staked execution environments, like where Bitcoin community can use those execution environments to engage with, like, these Web3 activities, DeFi NFTs and all those things. And also, like, I feel like I've debated with the professor that, you know, how can you actually bring BTC on? You know, like, we have had, like, this wrapped BTC and all that, which everybody, like, nobody really likes it. It's not that secure. Whereas, like, if Babylon can ensure that, like a wrap BTC version, which is like the money can be brought on chain and which can move around in the wider Web3 ecosystem and then becomes the money of the larger Web3 ecosystem, I think that's the thing I am most excited about. And that's what like, Polygon wants to contribute into it. That if we have like some sturdy btc, highly like, like billions of dollars, probably hundreds of billions of dollars, BTC worth of BTC secured wrapped BTC on chain for Web3 activities, that's very, very exciting for us.
**A** (17:02):
David, let me move to you. You're one of the most cited academics on blockchains. I mean, top three, top one, maybe. And so you've been around the space for a very long time. What was it that persuaded you to jump into the arena and launch Babylon? Was there a catalyst or a timing thing that you perceived that made you feel like it was an advantageous time to do that?
**B** (17:28):
Yeah. So my career has been a researcher career. Before blockchain, I was an information theorist. So in information theory, there was this One paper written 70, 80 years ago by a guy named Claude Shannon who completely revolutionized the field. The fact that we all have cell phones, wasting so much time on it is due to him for good or for bad. And so in 2018, I saw this Nakamoto's white paper, and I feel like, whoa, 70 years later, there's another paper of that caliber that could change the world. And so I decided to completely change research area, build up a totally new group at Stanford on devoting myself to consensus protocol research how to build better and better consensus protocol. And so we worked pretty closely, actually, with Vitalik's team on improving their proof of stake Ethereum protocol. But then my first love. Everyone has a first love, right? It's still Nakamoto's white paper, which is Bitcoin. And if you compare Ethereum proof of stake protocol to Bitcoin, Bitcoin is protocol is really striking because Bitcoin is so simple. The protocol and you theorem proof of stake protocol is so complicated. And so simplicity has always been My North Star in research. And so that's why I decided to build this project Babylon to make bitcoin great again.
**A** (19:00):
So Jeff, to you maybe, you know, we've talked a fair amount about Babylon on this panel and I think we're all very excited about it. When you consider bitcoin season two, I think we're seeing more venture activity in bitcoin than we've ever seen. At least from my seat, that's what I perceive. There's a plethora of different approaches being considered here. EVM focused L2s on Bitcoin, ZK roll ups, optimistic roll ups. What are you seeing in the Bitcoin L2 space additionally? What excites you there beyond just Babylon?
**F** (19:35):
Yeah, I think a lot of discussions or discourse around here. We use BTC and bitcoin interchangeably. But I think we all know that, you know, bitcoin is the bitcoin network, is the real deal and BTC is another real deal. That that is the native token. And as the result of the powder mechanism, I think there are a lot of talks about like etf, PTC Spot and all that. To us, you know, that's great, but that's another attempt of the traffi world or the mass public to try to get access and understand BTC itself. But there is a long way to go, right? Long way to go for them to understand the network, how it works, as simple as it is. And because ideologically I think there is a big leap in faith for a lot of folks. So starting from last year, I think because all the good hard work our wallet folks have done, we are the first one that supported BRC 20 and we as a business that captured all these spring or the early spring in Bitcoin Season 2. I guess that is the inscription and what's amazing about that is that when people all talk about etf, I'll talk about the hypes, the price and all that, we still see good people, developers, bitcoin developers that still working on innovation on this rather old or seasoned network around, right? One of the oldest public blockchain network and that give us a face in the ecosystem. And we have long forgotten that bitcoin is a network that there are a lot of developers, a lot of OGs as well as the new grads or new kid, new boy right on the street that wanted to attempt this. So that's very exciting. So I think my team is working on reviewing probably over 30 so called Bitcoin layer two projects and we made a few attempts in Investing and working with them and trying to understand and from a centralized business support perspective, we supported the staking of bitcoin in our wallet and other services to our users. So I think in short, all I want to say is that we're open and we're very supportive of the development and the developers altogether and we welcome all the exchange of ideas and interaction with the ecosystem at large.
**A** (22:19):
David, I'll turn the question to you. You have a great finger on the pulse and you were just telling me about a Bitcoin L2 that has 2 billion TVL that I hadn't heard of. And it's my literal job to hear of these things. So that's a huge problem. Sandeep, you want to grab it?
**E** (22:37):
Is this about Merlin? Yeah, that's built on Polygon cdk. Also shout out to Voltaire.
**G** (22:43):
That's a good shout out.
**A** (22:44):
Always be selling dovey. Tell us about some of the other approaches to Bitcoin scaling Bitcoin L2s that have caught your eye, you know, in recent months.
**G** (22:56):
Yeah. So I think if we just say look at the history, right. And it's kind of weird for me as an investor to look at bitcoin like in the past few years and then so like we have been sponsoring a lot of bitcoin independent developer as like just as like public good. Because I think previously just especially around like the block size war and just decide like just like taboo. So in like bitcoin investing is like making money is a theme just like so like that's why there's not a lot of investable venture scale business when it comes to bitcoin stock startups. And so that's why for a very, very long time. So I think okay, so we would just donate money to public goods and I believe bitvm in the future gonna be like a public good as well. Right. And so I think the bitcoin founders or just like the last generation bitcoin founders and so it's kind of different when it comes to mentality to the newer generation bitcoin founder, like the newer generation bitcoin founder, they're more like pragmatic and they're not so fundamentalist and then so they're like not too cared about ideological pureness. And so that's like a really good thing to have because we really need this dynamism when it comes to innovation creation. So in our space and I think like talking about just like bitcoin investing. So back in 2017, Sunny, like do you remember like we have the Idea of like Bitcoin pack zone, so on Cosmos. And so I think there are a lot of design attempts and built from the other ecosystem. And so that's why when it comes to Bitcoin bridging and then we have seen like the OG Cosmos team are like working on it and from like Nomic and then so from like so like from like Polygon side and then so we have a lot beside Bitcoin. So like how to make Bitcoin as like an asset, like productive, like based on like so based on the CDK module and then so as a pretty efficient execution environment. And then so we have been looking into Bitcoin DA and that's also one of the very interesting domain because right now the Bitcoin DA is so limited and then so cannot support all this NFT inscription. And then just like anything that has that more like so like that has a more like, just like data storage requirement. And so it's so hard. Right? And so like that's our. But the few domain that we as investor like are exploring. But I think at the end of day it's like how we can make Bitcoin more productive and so how we can make Bitcoin more like interactive and then so how we can make Bitcoin as like a real m0 for our monetary space and then so like that's our fundamental thesis. Yeah.
**A** (25:42):
I'm glad you brought up Bit vm. That was one of the things recently that made me sit up and think, wow, maybe an optimistic roll up is possible on Bitcoin. And previously I had felt that soft forks were needed to achieve that. Of course we all know Bitcoin is very rigid at the core dev layer. At the base layer, it's very rare for us to get an update to the protocol. The cadence is once every five years, which is too slow in my opinion. Are there any things, any changes that you as a panel would support or would look to at the Bitcoin base layer, the Bitcoin protocol that would enhance its ability to, you know, support L2S. Sonny at the back, please.
**C** (26:32):
Covenants, please, please, please, please. I mean Bit VM is cool. It gives you one of N security, which is nice, but like it's different than how optimistic rollups on Ethereum say N. Because N there is like theoretically anyone here, it's still a fixed set of people. Covenants fixes this, right? You can have one of with Covenants with Bit VM you can get like truly like the equivalent security as optimistic rollups on Ethereum and then personally, a little personal one that I like a lot is drive chains. I think like, drive chains give you a lot of like, you know, it gives you like a different type of like bitcoin level security where it's like, okay, you have this certain trust in the miner set of Bitcoin, like, let's leverage that to like secure more things.
**A** (27:19):
Yeah.
**D** (27:19):
I would also say, you know, people may not think of it this way, but I think bitcoin invented rollups in some ways because rollups came out of payment channels which came from bitcoin. And I think that in the Ethereum space what happened with payment channels is people realized that they're just, they're very useful for payments, but they're sort of hard to build, obviously hard to build applications on top of because they're pretty rigid in what you can do. And so pretty much all the activity on payment channels in ethereum in the PoS world switched to roll ups. So I think that any technology on Bitcoin that can be used to verify state transitions, so AKA subtle roll ups will be very, very valuable. Because what Bitcoin does best is preventing double signs and preventing censorship. And that's exactly what the settlement layer of a roll up needs to do.
**C** (28:11):
I mean, I think one thing that gets really fun is when you start to combine like a lot of these technologies, right? Like, okay, if you have covenants, you have drive chains, you have Babylon, you can get towards a world where you can like do things like hold the miners accountable for more things. Like, you know, miners can opt themselves, they can like take their block reward, stake it on opting themselves into additional conditions. So this is how you can get like zero cons to be like feasible. Right. Miners can stake to like say that like provide transaction pre commitments and say that like, oh, as soon as I see my transaction, I get a commitment from them, it's a valid transaction. Otherwise that miner is going to get their block reward slashed. Right. So it's like when you take once you have this and like getting the, forcing the miners to be able to like add additional conditions on them, you get a lot of really cool stuff.
**D** (29:01):
Yeah, I think combining something where you know, somebody's state can be slashed for violating a condition of, you know, the roll up or the state machine and that's one level of security. And then once it's settles to bitcoin, then you have the full security of the entire Bitcoin proof of work. That could be a very powerful pattern. You know, combining roll ups in Babylon.
**A** (29:20):
Sandeep anything to add any required changes to the base layer or is it sufficient in its construction today in your view?
**E** (29:28):
I mean I, I always feel that you know some sort of like in the longer term some sort of ZK validity proofs if you know blockchain starts having then you can have like fully you know, kind of like execution proof environments, you know on this one. So that, that would be.
**G** (29:50):
Yeah. So I think me as a, so me as an investor I want to be more like realistic for like the next like five years roadmap and anything change on like the base layer we know like going to be like involved like all this political fight and also which is completely just like like energy drain. And so like my biggest hope is for like opcad. So like if we can have like opcat and like soft fork happen in like in two years and then so I'll be just like so happy about that because they can enable a lot of new application out there. Yeah. Other than that. So I wouldn't so because I think like like the base layer should be just like stick with like this m0 this digital goal thing and, and then so we can do soft work based on that.
**A** (30:32):
David Babylon it works in theory today I guess we'll find out. But you know, are you pushing for any changes, softworks, anything like that to Bitcoin or are you happy with it today?
**B** (30:44):
Yeah. So when we designed Bitcoin staking protocol our number one point or design constraint is do not hope, do not build a project assuming that there will be some new opcodes. And so I think our ability to actually design the protocol without any change. And also Bit VM as you mentioned is already giving some evidence that although the Bitcoin scripting seems to be limited, with more human intelligence combined with the real scripting could actually do something very powerful. For example, Bit VM is actually built on three or four different ideas. That actually is not Robin's idea but it's built on earlier people idea. But Robin put it together in a very amazing way. And so for example verification of land part signatures, that's one of the key ideas used by Bit vm. No one knew that actually you can use Bitcoin to verify arbitrary signatures other than just spending a transaction. So that kind of. I think there's still a lot of room to play.
**A** (32:02):
Sonny, is there something to add there? Yeah. Okay Jeff, if you have anything to add.
**F** (32:08):
Yeah, the only thing I want to add on the governance point is that I think the landscape has evolved a lot. We, you know it Used to be a cult, right? It used to be a very tight community. You know, the Cordov guys and miners used to have some debates on whether there is a forking and all that. But at that time things stay at that level. But right now if you think about bitcoin ecosystem, so to speak, the stakeholders, right, you still have the dev guys, you still have the ecosystem, sorry, the miners. Now you have the holders, right, the big financial institution that continuously to buy into the market. And there is the whole lot of financial instrument built around the bitcoin and there is the new boys that are coming to the game and try to find their way and their location. Then the mindset has to change. As much as we want to adhere to the security and the, you know, resistance to the censorship and so on so forth. I hate to use the word of enemy as there's no enemy. They're all friends. But how we interact with all these friends, right, how much the core ecosystem, core dive guys, to look at all these innovation, how you interact goes beyond pow concept and to embrace the other innovation, right, that's out there, I think that's more critical and we don't see a lot of talks or debates on that. I know some good guys are doing that, but we want to hear more of that and I think that would dictate the narratives moving forward. I think the next two, three, five years are the critical moment for bitcoin altogether.
**A** (34:05):
Sonny, want to chime in?
**C** (34:10):
So the last protocol upgrade I would like to see on bitcoin, you know, bitcoin restaking was an idea I shared with David like a year ago. You know, I had to accept this into reality because it's all part of the 20 year master plan. To switch bitcoin to proof of stake. We have to solve the, you know, the reward subsidy problem. It's like the only way to do it is we have to switch off of proof of work within like, you know, 20 to 30 years. And like is proof of stake the right thing? Maybe there might be other options but like, you know, this is, it's the backdoor to incept staking into bitcoin and it'll happen.
**A** (34:46):
We're going to get in trouble if you say things like that.
**D** (34:49):
Well, you know, I would say I come from the proof of stake world but. But one thing that proof of work does way better than proof of stake is censorship resistant. It's almost impossible to censor something on bitcoin because there's so many miners can participate in a very small way and get Your transaction in. And with proof of stake, one third of validators can censor stuff. So I think, you know, even coming from proof of stake, I think that would have to be solved first because I know that, you know, it's a core thing for bitcoin is the censorship, resistance. I don't know if anyone has thoughts on that, but.
**C** (35:19):
I mean, like, unless you can show up with more hash power than the rest of the network, you can go actively be censured in proof of work as well.
**E** (35:30):
Yeah, I agree with Sunny. Like, it's what, you know, 33% versus 51% attack, right? Like it's the same thing.
**A** (35:37):
Yeah, yeah. Are we doing questions from the audience? Is that something we want to do? Do we have another mic or are we just going to use this mic? Does anyone have a question? I'll take this one. Okay. Yeah. Then we'll use this mic.
**B** (36:02):
Thanks.
**D** (36:03):
Any thoughts on stablecoins on bitcoin? We developed an early version of it wasn't fully on chain, but we tried to do kind of a perp swap with Bitmex futures and hacked it together. But I'd love to see more on chain action on stablecoins.
**E** (36:19):
My answer to that is like, that's why I'm working with David to have EVM on that Babylon chain. And then we can unleash the beast. Everything can happen like stablecoins to defi to anything else.
**A** (36:33):
Anyone else on stablecoins? My view is that it's absolutely essential. I see stablecoins as the real success in crypto. The killer app. If you look at the data, 70 to 80% of all value settled on blockchains is dollars, tokenized dollars. Bitcoiners have been very slow to realize this, and for bitcoin to benefit from that state of affairs, I think stablecoins are essential on bitcoin in some capacity. We have a question over here. You and then white shirt. Hi.
**H** (37:09):
Yeah, I'm just wondering about your stance on proof of stake. It seems to me that ordinals and inscriptions have solved the fee problem. So I'm wondering what your thoughts are on. I mean, it just seems obvious to me that problem is solved now through inscriptions. So I'd just like to hear your thoughts.
**C** (37:30):
It's like, I think ordinals and inscriptions have brought in new fee revenue. But, like, the cost of mining is still, like, it's still less than the block subsidy right now. For on, like, you know. Yeah, you have momentary blips and days where it's like, yeah, the block, the fee Revenue surpasses block subsidies, but it's like still not there right now. And no matter what, like the difference in proof of stake versus proof of work. In proof of work, you're actively like, what are you compensating people for? Right. In proof of work, you're actively compensating people for like burning money, right? You have to like spend electricity. In proof of stake, you're. You have to compensate people for capital lockup, which is a much lower cost to get the same level of economic security. Like, you know, if I have to. How, if. If you have to burn $10, how much do I have to pay you to do that? I have to pay you $10 at least, right? But if I say, hey, my security mechanism is dependent on you locking up $10 for one year, how much do I have to pay you to do that? Not $10. I'd have to pay you $2 maybe, right? And so no matter what, like proof of stake will give you a higher economic security for the same amount of fee revenue. So it sounds to me you just.
**H** (38:48):
Generally prefer proof of stake. It sounds like anyway. And so I mean, is that true?
**C** (38:55):
I generally prefer proof of stake to proof of work. I, you know, having been working on proof of stake for seven years, I recognize it has a lot of flaws to it. I think that there's a world where like, you know, we shouldn't stop at proof of of stake. I think, I think the blockchain ecosystem has like settled on like proof of stake being the end state. I think it's like definitely a step function better than proof of work. But I think there's a lot of like new consensus mechanisms and like out there. Like I think you can create like web of trust based consensus systems. Right? Proof of useful work is actually something I'm like really interested in pursuing. So there's a lot of projects that are like, you know, working on exploring that. So do I think proof of stake is better than like the useless proof of work? Yes. Is it the end state? No. I think we can find something even better.
**A** (39:43):
Jaehyun, do you want to chime in there?
**G** (39:45):
Yeah.
**D** (39:46):
I'm not so sure that proof of stake necessarily has higher economic security. I think it depends on how you define that term. But because if you're locking up money and you're foregoing some other form of interest, you're kind of burning, you know, the money would be getting an interest. But in any case, I think the thing about Bitcoin is that as a store of value, if it's just used as a store of value. Inflation takes away from the people storing value but in some ways they're able to pay for the service of storing the value securely. So yeah, when inflation ends there's going to have to be something else that pays for that which is fees.
**A** (40:24):
So I think we have dovey. Do you want to go?
**G** (40:29):
Yeah. So I think I'm relatively more neutral like when it comes to like pow and like POS and like the. So my biggest problem with pow, first of all there's a lot of this like misconception about POW online energy spending like whatsoever. But like the thing is like if you go to any like more advanced like mining facility right now so they can actually recycle all the energy spent from all the mining machine and then just to heat up basically all the local facility out there. And then so there's a really good economic when it comes to just like energy recycling. And so I think there's a lot of like just like. So there's a lot of good rebuttal on that misconception already. And then when it comes to like proof of stake and so there's always like an assumption that. So it's like a proof of like it's a proof of capital opportunity cost. Right. Sunny and but like the thing is I. You have to bootstrap the stake somewhere. Right. So like it like so it has to be value something. So which means that we have to print our own like private money like in order to like bootstrap that like positive like should I start with. But I think we are going to have this endless debate because it has been ongoing between like pow POS for at least that 10 years now. Yeah. So I just want to add one thing. When it comes to stablecoin I think it's relatively hard to do like a fully on chain like bitcoin stablecoin. So I don't have like too much optimism on that because it's very very hard to do like well like there are three type of stablecoin right. It's a fully clearized and then one on one pack and then we can do like algo stable and then so like that's probably not gonna work. Like we have seen like Terra and then so like there's a new camp of stablecoin that I'm currently very bullish on. Like there's a delta neutral stablecoin and so Athena basically is farming like the founding rates from ether and then going for bitcoin and then just making this a delta neutral wrapper And I think that that's also like one form of bitcoin, Stablecoin that. So I think going forward probably will have adoption.
**A** (42:45):
David, you want to chime in here?
**B** (42:50):
Yeah. I'm trying to think about this capital cost versus I think one sort of issue is that where safety you can slide slash aliveness is a difficult slash. So I think that is sort of one interesting research problem. So the researcher side of me suddenly came up.
**A** (43:13):
Jeff, anything to add.
**F** (43:16):
Just purely from like investment perspective. Right. Whether there is some risk associated with POS protocols and would you, you know, factor that in. Right. In your returns and in your risk profile? I think as long as there is a transparency, there's certainty and the clarity, you know, all the cost risks and so on and so forth associated and you know, for any rational investors, they will make their decision whether that's something worthwhile for them to pursue or not. As to stablecoin, I think, I think stablecoin because of different regulators now start to regulate them. You know, notably in Hong Kong and in Singapore they're already and I think in some part of Europe as well. And you know, Fed always has all these policy stances around the stablecoin. I think you would. We're using this terminology kind of universally but when you look at a specific project, I think certain regulators would require to vet on the network that you build on and it'll be a very novel concept for them to combine stablecoin project and bitcoin Network or any PoW network for that matter. So that would be something to think about I guess.
**A** (44:39):
Last word over here and then we'll wrap.
**D** (44:44):
Yeah, I was just going to say on the liveness versus safety thing, I think so might agree with this but I think what we're going to see with restake bitcoin in POS is that there will be a kind of pos. It was like a dual token model. You have a POS native token which can be slashed for liveness and the bitcoin stake can be slashed for safety. So that means that the security of, you know, your money being stolen is secured by a huge stake in bitcoin and then the security of having the system keep running smoothly will be a little bit smaller from the POS side.
**C** (45:18):
I just want to respond to Dovey's point about the, you know, how do you bootstrap the proof of stake? I mean you use proof of work to bootstrap, right. Like bitcoin has been running a, you know, 12 year long ICO where we're selling Bitcoin in exchange. And, like, you know, the currency it's denominated in is, like, the universal currency, which is like Jules. But eventually the ICO has to stop, and then you switch. Switch to, like, a staking system.
**A** (45:42):
We're going to leave it there. Put your hands together for this incredible group. Thank you so much.