Bankless Interview with Solana: Saga, BONK and Economic Ecology

Original title: Anatoly Reflects on Solana In 2023 & 2024

Original compilation: Sharon, Joyce, BlockBeats

Editor’s note: The last time Bankless interviewed Solana founder Anatoly was after Solana Breakpoint 2023 on October 30. In the past two months, the Airdrop project of the Solana ecosystem, Saga mobile phones, Non-fungible Tokens, meme and other hot spots have shown the development potential of Solana to the community. SOL also climbed from $36 to $100.
On December 26, Bankless host David had an interview with Anatoly Yakovenko, co-founder of Solana and Solana Labs, about Solana’s harvest in 2023 and future development in 2024, including the story of Saga’s mobile phone, the “surprises” brought by BONK, and the development direction of Solana’s economic ecology in Anatoly’s eyes, BlockBeats Compile some of the contents of the video as follows:

**David: It was a pleasure to speak with Anatoly Yakavenko. Recently, Solana seems to have turned a new page, with Jito Airdropping $200 million into more than 10, 000 different Addresses. As new addresses and new TVLs continue to break through, the Solana ecosystem seems to have really recovered. This has caught the attention of many in the crypto industry, including myself. So we’re going to have a conversation with Anatoly today that doesn’t have a script. **

**David: Solana seems to be going very well lately. **

Anatoly: yes, it was a surprise for me and others. After the collapse of FTX at the end of last year, I was mentally prepared at the beginning of the year that Solana would not succeed. I was like: Oh my God, this is what our failure looks like. My emotions have also become very negative and the ecosystem is at a lot of risk.

As far as we are internally at Solana, all the core engineers are saying that no matter what code I’m writing, the problem still exists, and I still need to get the job done. I think it’s good that for the vast majority of companies in the Solana ecosystem, they get a fight or flight signal, and most companies choose to fight, just to build a better product. But it takes a while for people to go from “shocked” to "Alright, people are really building. I don’t know how that happened.

David: It’s been 13 months since the FTX incident. And what does dealing with the collapse of FTX mean for the Crypto Assets industry and Solana, and Solana in particular? What is the impact of all this on the Solana ecosystem now?

Anatoly: Double down. The collapse of FTX will cause people with lower beliefs within the Solana ecosystem to leave, and those with higher beliefs to double down on their bets. If you can survive, it’s the best thing that can happen to the ecosystem.

We’ve got a very core, hyper-connected, strong team with a very deep belief that they’ve been building all year long, and they’re just seeing it as an opportunity. Now I have more space, less noise and fewer competitors in my product category. It’s actually a huge win.

Some people see that, oh, this biggest competitor is now spread across five different ecosystems, and it’s going to get tough, and they can’t stay focused. This is a once-in-a-lifetime opportunity for those with this energy. Seeing them being rewarded for the effort they put in, I think that’s the best thing that can happen in the ecosystem.

Because the effort that people put in is really rewarding. It’s like the beauty of Bitcoin’s PoW, and through game theory, it does it anonymously, which is magical. This doesn’t always work.

Solana’s technical design

David: Builders could have had better options at the time compared to other ecosystems with higher throughput, what do you think kept people for?**

Anatoly: I think it’s probably because the technology that Solana relies on is special. The technology it uses is very different from the others and has some unique properties. This is obviously more risky. It’s like if you do a bunch of “weird” optimizations, people will think you’re crazy at the time, but after years, people will see that the technology has matured.

Just like those who have a deep understanding of technology, they understand why we make these choices and appreciate it. In fact, many people feel that being part of the ecosystem is better than running their own L1. So a lot of people made the choice, I think for technical reasons.

When you have a good team, there are a lot of people around you who want to build. I think one of the best things about Ethereum is that you like talking to Dankrad (a researcher at the Ethereum Foundation) and you get the feeling that this person is really Satoshi. This is like Ethereum’s best selling point.

Subsequently, we started to see this happen on Solana. I don’t think researchers are the cornerstones of Ethereum, but a bunch of ordinary developers who can hone in on something really cool.

David: What do you think is the most important element that drives the entire Solana ecosystem, and why is it?**

Anatoly: That’s a very good question, but it’s also hard to answer because I don’t know. I don’t know if we have a super Satoshi thing, I think maybe parallelism, we were able to solve problems through failure and experimentation, and I think this is a really cool innovation.

We’re basically seeing all of these ecosystems now, all with inscriptions on them, and some of them have high gas fees. People who use Blockchain see not just inscriptions, but entire Blockchain saturated to the point where transactions cannot be completed. It’s actually liveness failures, isn’t it?

Let’s say, you work for a large web company and you have a database. It’s true that you’ll get these heats when everyone wants to order something weird at the same time, but all your other payments won’t go through because there’s a huge queue waiting to be processed for some random viral stuff.

This happens in every database system, but it took me a long time to see it, to take it apart and realize that this is a thing that has something like a computer science problem in the real world. I relate it to economics to deal with related economic issues.

In fact, we’re lucky that Solana has the idea of the access list needed for every transaction, which is required for every transaction. We do this for performance reasons, which is the fastest way to build the runtime. But having that information allows us to do that now in every part of the stack and in its own economics.

Like I’m thinking, what’s the fastest virtual machine? I’ve copied a design that I know works in DSPs and GPUs, and the developer goes through a very painful process of telling the system that this is exactly the memory I’m going to touch. I mean, I have the experience to work for a full decade and know that this is the fastest thing, but I don’t know that this is the most critical part of Crypto Assets.

When we see these failures, we have to address them, or I think, the idea of a single global public chain where many shared applications use the same state is a bit outdated. If we could, if gas fees skyrocketed across the globe, parallelism wouldn’t matter, right?

So luckily, we took the right steps, failed the right way, and the solution was obvious. I think that’s probably what’s unique about Solana – we’ve gone through a long journey and I think we’ve found the right answer on how to build a shared, permissionless system into the system.

David: What’s the term for this technique?**

Anatoly: I think the technical term in the database space is isolation, which means you want to have transaction isolation. So one transaction is segregated from another. When you achieve isolation, you can execute these transactions in parallel and get the exact same result regardless of the order in which they are executed.

What’s cool is that once you do that, once you specify in the transaction that the information is available in the mempool, then your block producer will fill the block with the highest priority fee; while at runtime, the virtual machine will say that all of your USDC, UNI, etc. transactions that may enter a particular market are saturated.

You can’t add any more content to the Block, but you still have Block Space for other things, then the Block Producer can skip all the fees with high priority and postpone them to the next Block, but then take away all the low priority fees, but then take all the low priority fees that don’t touch the saturation pool.

That’s why the segregation and localization that incurs this expense, because you have this heat, everybody will occupy, everybody will still be greedy. So they’re filling the hottest market, but they’re going to think: I still have space, so I’m not going to accept all the other stuff like noise. So, that’s what we found had to do so that we could support multiple payment methods, Non-fungible Tokens, and Decentralized Finance, which are the top three use cases.

I think everybody might be looking for something that works for Solana, and I think the gap is closing, but for a variety of reasons, sometimes what you think can be done in six weeks sometimes takes six months. Anyway, I think Solana has entered a new phase of its own.

**David: After the Jito Airdrop, Solana also has more projects that are getting attention, and governance is going on at the same time. **

Anatoly: yes, that’s cool. How do we make sure that the updates made by Jito don’t affect the Mainnet, that the labs do that don’t affect Jito, and that they don’t delay Firedancer, that’s why I’m writing more documentation. Alignment is now an issue.

How do I get all these engineers, like experts in the depths of the stack that they’re in, to go deeper than I can and make sure that we’re trying to get to the roadmap. This is definitely a new problem, which means that there are a lot of people trying to move the ship.

David: Just like Ethereum, with all this infrastructure built around Ethereum governance, Solana now also hosts all core developer calls every two weeks. What does this coordination infrastructure look like?**

Anatoly: The conference call that Jacob Creech runs, there’s a validator call, it’s more of an operating model system thing, there’s a specific core developer call between all the teams, all the different channels for different teams aren’t aligned, and now there’s a SIMD process, and the Solana improvement documentation, which you publish on GitHub, and everybody reviews them.

**David: Solana’s prototype is very powerful. There are database designers like you. And now with the whole phase of Solana changing, Solana’s evolution to something greater, a new archetype is now needed, just like the governance archetype. But I don’t know if engineers have a lot of governance capabilities. **

Anatoly: I think when necessary, you’ll start building something like a constitution or a motto. For Ethereum, it’s like the cheapest piece of hardware. How do we make this verifiability as accessible as possible? Everybody who’s building is thinking about that.

For me, I’m trying to get to the bottom of everybody, how do you make it faster? When you have 50 different options, you have to choose one or the other, which one is more scalable, faster scaling, and more cores, which forces all the discussion to pick out the permutations of each configuration. I think it’s a real way, like a religious slogan that everybody repeats.

David: Along the “North Star”, which is a long alignment, what is the “North Star” of Bitcoin in your eyes?

Anatoly: yes, that’s right. This is not meant to attack Ethereum in any way. I think once your ecosystem gets to a certain size, you have to pick the core PTO efficiency points that we highlight and align everybody in that direction.

I think Bitcoin has chosen its own place, which is a limitation of the supply cap. It’s like you’ve been given a piece that no one can change, and you can hide in your bunker, just like calculating properties in your ledger. Right? Despite everyone’s criticism of Bitcoin Core and the community, it’s still been a success for them. If Solana were in that state, I wouldn’t believe it. In my opinion, it would be insane.

David: What are some of the more important processes in the Solana ecosystem?

Anatoly: I think the trade-off between fixing bugs and improving and Firedancer faster transfers is a very difficult issue because I feel like we have some glaring flaws that haven’t led to catastrophic failures yet, but things like storage charges are hard-coded.

As the price itself goes up, it becomes more expensive, which affects the developers. At some point, a simple solution is like having a governed, effective hard fork process to drop the amount of hard code until the actual solution is released after Firedancer. It’s like engineers don’t like that, because we know we want to fix its bugs.

So it’s like this, bugs need to be fixed and other stuff needs to be fixed, but you also have to coordinate. So I think there’s a lot of talk like this basically revolving, I know what the problem is, like how do we fix it? But how do we make sure that Firedancer ships? In my opinion, reducing the points of failure of the code base is the most important thing right now.

David: How does this become a single point of failure? Because of the cost of storage?

Anatoly: No, not having a single Solana codebase is a single point of failure, Firedancer is the highest priority, but it takes two teams and us to solve the problem at runtime, even if we know what the problem is. If we want to have a solution, it will only take six weeks to achieve, but the real answer will not be available until six weeks later. We’ll act fast.

Just like we’re having an alignment conversation right now, we have the design, we have our own “North Star,” and that’s how everything should work. I think for everything Crypto Assets needs this year, I believe Solana has adapted to my needs.

So my point is that we can postpone improvements until Firedancer comes out. But it’s really nice to have a design discussion now and find out all the holes, and it would be great if we had done everything that should have been done three years ago, but we can do it now and have a very good design that everybody agrees on.

The developers of Firedancer are amazing, they develop some optimizations on their own, because they see where we’re only halfway there, and they’re like, why don’t you guys do that? So you can see that they’re doing a cool job.

Collaboration with Jump Crypto

David: When Jump Crypto became a Solana customer, the response from the Solana community was that Jump Crypto was famous for withdrawals and didn’t want these “withdrawal gurus” to build withdrawal clients, what do you think about this?

Anatoly: First of all. In the financial world, exchanges are the extractors. People like Jump Crypto pay a huge price to operate on exchanges, they put their own capital at risk, use their brainpower, try to minimize the delay and all the noise of all the information in the world, find all the right signals, and get them to the exchange as soon as possible.

I think what these systems that we’re building, permissionless open marketplaces, is giving them equal access. So now my words as a retail trader, I can race against Jump Crypto without paying interchange fees and without permission. I think that’s pretty cool.

Secondly, I think it’s going to actually squeeze fees across the financial industry because it’s going to be more competitive. I think the flip side of it is that it’s all open source code, like a bunch of Apache 2.0 code. And then everybody can access it across the ecosystem and Crypto Assets, and if they’re interested, all the optimizations they’ve done can actually be applied to Ethereum.

So from my point of view, it’s just code, it doesn’t matter who writes the code. I think what’s more interesting is that Jump Crypto can influence the direction of Solana to create an environment that can be better.

David: Just like governance?

Anatoly: Yes. I don’t think governance is going to be equity-weighted, but I think the core engineers have a lot of influence, just as Linus has a lot of influence over Linux, even though he’s just one person, he can make a lot of big design decisions. Jump Crypto can propel Solana to a place where it somehow provides an advantage to incumbents like Jump and Citadel.

And for example, what would technology choices look like? I think that’s something that the community should take seriously. When I graduated from college, I loved trading and all these small exchanges, but the connectivity was poor, their data was inaccessible, everything was terrible. I don’t want that to happen again. Innovation comes from people who don’t know they’re competing against the best competitors.

David: Exchanges are breaking down silos and becoming more decentralization and openness. Do you think that now the walls around the market have collapsed and the player is now the new leader?

Anatoly: If the exchange is doing the real work, picking the highest priority things and pricing them right, why shouldn’t they get some reward?

The world is so big that I’ve always believed that if I work hard enough, I can always find my edge and I can compete with them in a particular area of the market and then beat them, and then just grow my business properly and eventually get to their level, and I think it’s just like normal competition, as long as access is free and open to everyone across the globe. I think that’s fine, at least I don’t see a fundamental problem, or something like defeating the purpose of an open permissionless network.

**David: I guess the question is like increasing the size of the capital, but how quickly can you get the capital? Do the best traders on Solana get more returns faster than the average traders on Solana? If the gap is huge, then we’re worried. But if that gap isn’t very big, then based on what you’re saying, like at some point they’re doing real work, they’re changing Solana to paint the state of the real world, which is valuable. **

Anatoly: We’ll see. I think like people who are trying to figure out how to capture, my point is, it’s like the problem, how do we capture MEV in the protocol? People are trying to find a solution, and I don’t think it’s solvable.

So you’ll have approaches like Ethereum, which runs on a slow chain through cryptoeconomics and auctions; I think you’ll see the approach that Solana takes is like physics, how do we make the chain so fast that it’s physically impossible for similar information to travel around the world?

And then you have localization, like some kind of fairness enforced on physical distance. For example, I can submit my transaction to my nearest Block Producer, which means that the amount of information they can evaluate is only local to me, and no matter what happens, it doesn’t have full control over the global state, so we can reduce latency.

If we can do it, then it would be cool to see which one is better, maybe Solana is worse, and we’ll take our time to see what happens.

David: I think it’s a very solid way to differentiate strategies between Ethereum and Solana. Ethereum tries to maximize in protocol value capture, while Solana tries to outperform MEV. But I think the Solana theory or Solana’s strategy is that these “delayed games” are going to happen in one place in the world. These games will not be global games, but local games. And at the moment I think everybody thinks we’re taking Solana’s eco-heat to new heights. Will the influx of new users scare you in the future?

Anatoly: At the peak of STEPN, we had 2 million active accounts. What I’ve learned from this is that users like these super economic incentives, if they’re doing activities that don’t look like creating daily value or anything like that, they’re going to have a steep spike in and then go down very quickly.

These are like economic explosions. Interestingly, I think these users are basically like they’re already crypto users. Once someone figures out what to do with any Wallet, they can switch relatively easily, and their mental model is already built for it.

That’s what I think is a key part of the growth of the crypto industry, which is how many people count the seed phrase, just like the total number of addressable users. Then after that, the conversion cost of installing the extension is very low. So you can see that all the parts are there.

If the only thing we find is a speculative, financially incentive-like game, I don’t think it’s going to last. But if we find some real-world use cases that create value for those users, they’re going to be stickier and they’re here to stay. I think the latter remains unproven. I hope this bull market cycle will be able to get some progress like real-world apps, like payments and stuff like that.

Just like Helium, I don’t think the users who use it will like crypto users, they are users of the Helium Network. You can get ideas for tokens for creating map quality, at least enough for them to join the Wallet and get a mnemonic phrase.

However, I want something like Venmo. Why can’t we have a global crypto Venmo? Everyone sends real money to each other, euros, dollars, and it works like this.

So that’s my biggest story, like I see the numbers, and I’m glad it’s happening, and I’m glad that the network hasn’t crashed and the fees haven’t skyrocketed. This is already a compliment to good engineering. But we need to see real-world use cases that I think are sticky and users aren’t leaving.

**David: Do you have a different perspective on how far the crypto industry can go in terms of its utility? How would you define Solana’s place in the optimistic and pessimistic discussion of Crypto Assets?

Anatoly: I must think it’s super optimistic. I feel that if the Western world does not accept the value of the Crypto Assets industry, then it is like useless and no one cares. The only reason to have a high-throughput, low-cost chain is that it adapts to the everyday use of the average voter at the consumer level.

So I feel like I’m very optimistic, and I would say I feel like legally, it’s going to basically be established, we’re going to have some way to run and launch a Decentralization system, all these things are going to happen, and every bank is going to have a stable Token.

But if I also think that in that world, a narrative like Bitcoin is very important because it’s a bit of a forcing problem. And if the cost of shutting down Bitcoin in the Western world is Orwellian, requiring mass surveillance and interference with the lives of ordinary people, then it is too politically difficult.

I think they can shut it down, but if it requires so much political capital, such a huge invasion of privacy and personal freedom, that it’s not politically viable, that means it won’t be shut down. Because I believe that we still live in a fairly representative world.

David: Solana is a cycle behind Ethereum and Ethereum is a cycle behind Bitcoin, so if the trajectory continues, there will usually be enough Stable Coins on Solana and enough applications with vulnerabilities that may have high TVL for writes. Do you think this is a sign of the end of a Bull Market?

Anatoly: A year ago, a lot of people left Solana, but there were also people who stayed to continue building. During this period, people don’t have anything else to do, for whatever reason, I guess probably because it was launched at the worst possible moment.

I think everybody’s going through a common trauma at the same time, everybody’s looking online for the next terrible news, like no one else has anything else to do, like you only have this Dogecoin. I don’t really know how these things go viral, I’m an engineer.

Saga Mobile and BONK

David: Why do so many people in the Solana community have BONK?

Anatoly: They do like to do massive Airdrops across all Non-fungible Token communities, Solana users take Non-fungible Tokens very seriously, and I also buy Non-fungible Tokens and stuff like that. So they did a really good job of screening the objects, and the whole distribution process was not zeroed. We survived that moment, long enough for developers to start building more products, just like they continue to build integrations into every Decentralized Finance marketplace, every Non-fungible Token project, and keep talking about it so that the community doesn’t die either. Although I don’t know the real reason, the only thing that makes sense to me is that the developers have released a bunch of products that attract users.

**David: But the BONK and Solana ecosystems are very overlapping. **

Anatoly: I think it’s because the developers of Solana and the developers of Non-fungible Tokens are two or two groups. However, they’re all like building web tools and a bunch of fun stuff for people to use. There is some intersection between them, but there are obviously two different types of developers. I THINK BONK CONNECTS THE TWO.

In our opinion, everyone got the phone and it was a pain to put the app in a big app store. But if our phone has something like an Airdrop of Non-fungible Token, then the person who gets the phone will spontaneously become someone who cares about these things.

This means that developers can publish an application to a target-rich environment, even if it’s small. So we like to talk to each Non-fungible Token project, we talk to the developers of BONK. In addition, the price of BONK will exceed the price of Saga phones.

During a Bear Market, no one cares about mobile phones, and BONK is worthless. We sell 20 to 30 phones a day and it seems like we’re losing them gradually. Because most Decentralized Finance protocols don’t get 20 to 30 users per day, you need to sell 20, 000, which takes years to get.

David: Was the Saga phone failing at the time?

Anatoly: No, we have a team, and we didn’t let it fail. The team was there, and we figured out how to handle it, to get people excited about it, and we spent the least amount of money to extend the runway for that team. After Breakpoint, we’ve seen a 2-3x increase in sales. We sell between 50 and 75 Saga phones a day, which is good, but still slow.

And then, BONK started to take off, and then people realized that BONK Airdrop is now half the value of a phone, and I think it’s like, the phone is actually half price, or if you have some BONK, you can sell it by the phone and get the phone equalized, so you still have to spend money to get the phone.

So, even if it’s worth $10 or $20, it will take 10 days to deliver. RATIONALLY, I DON’T THINK ANYONE WILL SAY THAT I WILL GET 10% MORE BONK IN 10 DAYS.

It’s never been as popular as doubling or 10 times the price of a mobile phone to make sense. It may be 10 to 20% more. So enough people got it, or were excited about it, that it sold out. In one day, we sold about 15, 000 units, which is strange. My assumption was that I might sell 50 or 70 phones a day. Like I think we sold at the beginning, we sold a few hundred units on the first day. Interestingly, I said earlier on Laura Shin’s podcast that we only sold 2500 units. Three days later, we sold 15,000 units. People think of it as a kind of Non-fungible Token, a club where developers now publish apps.

David: How does the Airdrop for each Saga phone work?

Anatoly: If we ship another phone, it will be another device, but you will have a different Genesis Token, like a different product, there are 20, 000 Saga that have already been made, the production line is closed, we can’t even ship anymore. We have to make another product and then figure out how that thing works. The Saga phone is sold out, and it’s not a failure. But now I think we have to figure out what to do next.

But the thing is, if you have an app store, enough developers will ship to a place with a 100% probability of Lightning. It’s really great to have a crypto-first app store, where we own our destiny, where we’re not beholden to Apple and Google, and you can do anything. This is the biggest unlock I think we could possibly have. So if possible, it would be really cool if you could get users to really enjoy buying their phones and using them for things like Crypto Assets.

David: What do you think are the odds that the crypto industry will launch a breakthrough consumer app in the next two years, with or without Solana?

Anatoly: I’m an optimist, so I’d say 90% -95% likely. I think the next two years are going to be critical, and you should see a legitimate consumer app emerge.

I have a theory if it’s always there. For example, if I pay my coach $50 an hour, I’d rather run using the incentives I get from dopamine stimulation, kickers, trades, etc., if those incentives are basically equivalent to what I get from my coach. At the same time, certain groups of people use STEPN constantly.

But I don’t know, and it feels like this may not be fully realized. But one theory is true, like the value I get out of it is exercise, and the motivation I get from it is that I can play crypto games like Non-fungible Tokens and Tokens. Because it’s attractive to the brain. It’s like if I wake up and look at the price and competitiveness, I’ve spent countless hours on this without random resources like Ultima online trading, and no one cares.

Putting the same stimulus on someone and forcing them to exercise is a value-add for the world. But I don’t know if that doesn’t seem to be working. So I don’t know if it’s like a money-making game, learning to make money or something.

Economic ecology on Solana

David: Let’s turn to Solana economics because we’re seeing some cases like Solana fees going up, and actually you want it to be pretty sustainable. For example, when I entered Ethereum, the monetary policy was that we issued 5 Ether coins per block, then changed to 3, then changed to 2. Then EIPs 1, 5, 5, 9 were introduced, and then the previous 8 was introduced, just like the last update. If you had to draw the Solana arc from an economic sustainability perspective, where do we stand on that arc?

Anatoly: I think the difference is that a group of validators compete on commissions. So for risky users, they choose the lowest commission validators, and they basically don’t experience dilution, right? Like, but with some dilution, because many tokens are staked. So these guys effectively pay something like transferring wealth, moving from everybody to unstaking, and validators take a little bit out of that, and it’s hard to determine how much the user is affected, so it’s basically like two days an era.

Inflation is a problem, and it’s diluting some money. But how much? I think there’s a lot of nuance, and what is certain is that some of the obvious cost is hardware. So like every validator, every RPC, all of this has to be paid for with real money, just like you pay for electricity for mining blocks, I think for the sustainability of the network, the amount that you get from running has to cover the total cost of the hardware, and I think the cost right now is probably 50 million per year, the cost of the hardware depends on the provider, and all these things can be between 10 and 20, so I think the cost has exceeded the cost of the hardware, so you can say it’s sustainable.

David: How much does it cost to maintain the network globally?

Anatoly: It depends on how you calculate it. But if you choose the cheapest, if you choose the cheapest, say 350 per month, then you multiply it by 3000 Nodes, the actual result is running 10. But people aren’t going to accept that there’s a lot of different infrastructure costs, and no one wants to pay more expensive, right? So it could also be twice as much, but there’s also a lot of nuance.

So how do you calculate all these things is complicated. All costs are negative. I think the positives outweigh the negatives right now, but there’s a lot of nuance here, but I think ultimately these networks have to capture more value to compete with tech companies, like Market Cap Profits. If we have to really like comparing these two things, unless you think there’s other reason to think they’re more valuable, I don’t think so. I believe that in the end, we must create value for the world.

David: About the burning of Tokens. It’s like the whole Ethereum point is that you burn it because it’s money. From Solana’s point of view, you want to minimize it because Solana is like an application platform. **

Anatoly: I don’t care about Token burning. My concern is that expenses like this don’t skyrocket for no reason. So the problem with Solana is that because it’s not one, we don’t have a second layer, just like the second layer isn’t on the roadmap. You can build a second layer in Solana, and the whole point of a single unified state machine is that you don’t need them. If you have a single one, if you have DeFi Arbs, it increases the cost of accessing the network, and the bid must be higher than the cost of DeFi Arbs, which means that the payment must have a separate application chain.

If you can’t solve the problem of economic isolation, then Solana’s premise doesn’t work. But I don’t think you need to burn to prevent validators like spam itself from weird spam attacks, and to be able to price users a bunch of stuff for free, 1, 5, 5, 9 is actually a very Satoshi way to prevent this. But I don’t think it’s necessary to burn money to capture value.

Anatoly: Later you’re going to have a completely different environment, if there’s a problem with Rashit, everything is falling, instead of $1, you don’t actually have a Hedging, you can’t issue more, you’re like you’re in a death spiral, if you issue more, you’re going to die, if Ethereum shouldn’t be asked whether we burn Ethereum or give it to some validator or public good, we should convert it to USD and keep it like any other asset that’s completely separate from Ethereum, in case something goes wrong.

**David: But you can’t do that because these are the economic systems that don’t trust, like the Terra Foundation and the Luna Foundation, I think we’ll have Bitcoin and whenever we need to defend the peg, we’ll deploy. **

Anatoly: The code you’re not targeting isn’t defending the hook, the goal is to pay the engineer to make it better later, but that’s a completely different thing. We built Cryptography, a tool used by 10 billion people in the rest of the world to coordinate decision-making. It’s much more difficult than where to burn. The whole point of cryptography, is what we’re building, is connecting 10 billion people, right? So they can all immediately coordinate decisions on a global scale and do something more powerful than funding Open Source software.

**David: I think there’s maybe an opportunity to find governance. So do what we can to find a system that resonates completely with everyone. However, there is a saying that democracy is the worst form of governance, in addition to all other forms. Like one of the best forms of governance is that there is no governance at all. That’s what Ethereum is all about, you don’t interfere with the Block Reward. **

Anatoly: I’m not against it and I wouldn’t recommend anyone to try this on Solana because it’s too complicated.

David: Okay, so I think it’s like a big difference between the Ethereum view and the Solana view, and I actually think in this part of the spectrum, like what Bitcoin represents, money is an application that lasts, and that’s part of the bankless theory that we’ve been working on, and we’re here with Crypto Assets to “make new money.” Does Solana think the same way?

Anatoly: I don’t agree. When people start talking about things like FTX, it’s as if everyone has an instant immune response that property rights are sacred and don’t change no matter what happens. And I think it comes from the ecosystem. So I don’t think it’s possible for Solana to do that either.

David: Believe in property rights because it’s like a core tenant of Crypto Assets. What’s the use of your Blockchain if your Block Space doesn’t have property rights? But I don’t think the Solana community is interested in money, the concept of money, and its role in the world. **

Anatoly: I think that’s probably a very nuanced way of looking at it. But I don’t think I like the idea. Charging a fee and then spending, at least for me, is contrary to my notion of property rights, and it feels like I’m being taxed and then everyone else benefits just as much as being charged.

David: So I agree with that, like Ethereum charges a fee and then burns it, rather than just deciding that this public body is better than that, it feels good because no one’s rights are violated, because everyone is treated equally. **

Anatoly: Correct. I think most of the Solana community would agree with that, like we all like Lark liberals, right? But I think the reality is that there are more complex things in the world that you want to solve them, and I think cryptography offers a way to really change governance and achieve all of our dreams in the post-crypto world. If we are too afraid to do it ourselves, then it is impossible for the world to do it.

David: Do you like to see this as a thought experiment worth thinking about, or do you really think we can build a monetary system with governance as an integral part? What I see in the broader discussion is that Solana members don’t emphasize the role and importance of money as much as Bitcoin, and a large part of Ethereum certainly does. Like we asked you, what is soul money? You would say that the soul is not money. For us, I’m like, that’s the problem. We start there and expand outward. But if your underlying chain doesn’t turn into money, then you can’t scale outward. **

Anatoly: Just like human intelligence, I’m very optimistic, human intelligence, human kindness, the ability that they like, as long as there is enough communication to make the right decisions. I think it’s a very difficult problem to solve, and I hope someone can fix it.