Balaji Srinivasan 0:00
All right, so I’m here with my friend Akshay, who is a very senior person at the Solana foundation. As you guys may know, Solana, over the last year or so, has sort of risen to become arguably the number three coin in the world, from essentially a standing start, launched in 2020 in the depths of COVID, basically, right, as COVID was getting locked down, was starting.

Akshay BD 0:20
Thank you for having Balaji. Yes, you know, it’s funny that during the march crashes when, actually the main net, march 2020, crashes when the main net launched in the back of people basically saying you should wait, wait it out for markets to get better and things like this. But yeah, it’s been quite a while, right? Since then. Hey, Lily. What’s up, guys?

Balaji Srinivasan 0:39
Hey, hey, Lily, so we’re with the network school audience. She’s a hardened veteran of both the US and Chinese and now European tech scenes, and very senior at Solana. Last year, I think you flipped Ethereum indexes and you’re number one indexes.

Akshay BD 0:55
Yeah, that’s right, depending on what like if you’re looking at Dex volume, that’s right.

Balaji Srinivasan 0:59
That’s right. And I think on the order of 7500 developers in 2024 which actually more than Ethereum. So new devs are going into Solana, rather than Ethereum, you had the visa deal, PayPal deal, Google Cloud deal, a few other deals I think of as fairly significant. Token extensions are a big thing, right? Where you went from just normal send and receive to confidential transfers and like, triggers and hooks that you could run on token sends. If I’m not mistaken, then there was the fire dancer thing. So you basically rebuilt the validator so you could blast through more transactions per second. Now, dpin, like, I’d like you to talk about this. This is like decentralized physical infrastructure networks. I’ve been kind of skeptical about this broadly, but I’d love to hear, let’s talk about that in a bit. Desci, of course, decentralized science, and then there’s some stuff, like AI agents and futures. Is that a roughly good summary of, like, the last year or so? Anything else you’d add to that?

Akshay BD 1:55
Yeah, I think that captures quite a lot of what happened, what is happening on chain. Essentially, it’s like a high performance engine for you to build anything from consumer apps to trading applications to, as you said, there’s some of some of these more bespoke, decentralized physical infrastructure networks. We can talk about that, if you like. But basically it’s the ability to use crypto incentives to bootstrap physical infrastructure, or, you know, these sort of networks, if you will. I think the using crypto incentives to bootstrap sort of physical infrastructure or marketplaces are an alternative to using venture capital, right? And because venture capital is abundant in the 2010s because of low interest rates, you sort of were able to throw a lot of money at these marketplace style companies. Whereas, you know, in a world where you don’t have infinite venture capital, you may need the participants of the network that you’re building to accept essentially ownership in the network, take some risk to build those out. So an example of this would be something like Hive mapper, where, you know, these are these folks who are driving to work every day, or, you know, they’re maybe professionally driving on Uber, they buy and install a dashboard camera, and that dashboard camera maps the roads in real time, giving you this sort of crowd sourced mapping data that insurance companies can use, real estate companies can use. It’s sort of like a lot of these enterprise use cases for real time mapping, and today, Google Street View is as old as sometimes as old as 10 years old, or it’s super expensive for folks to access them, and so it creates this alternative crowd sourced mapping network that mapping data that companies can use and access, and in exchange, these folks who are Mapping get paid in the native tokens of the network, and so in some ways, they’re getting paid in the ownership of the network.

Balaji Srinivasan 3:46
Yeah. So this is basically, this is a dream. You were early Uber, and one of the dreams was riders and drivers could get a share of the network, and that would help bootstrap it. And that was like the dream 10 years ago, and now it’s starting to come closer to reality. That’s exactly right. Yes,

Lily Liu 4:01
Balaji, we were talking about some of these things back in earn. Remember, we were talking about the many machine market, and then IoT and like an API marketplace, machine payments, yeah, people just use different words for a lot of these things. Crypto and ai, ai agents are going to be using crypto to pay one another. Obviously,

Balaji Srinivasan 4:21
yes, all that is now happening. And actually a big part of it was solving the theoretically, or like conceptually simple, practically hard problem, which is just being able to blast events on chain.

Lily Liu 4:33
I mean, you know, now I’m gonna do my obligatory plug, which is that you needed something like Solana fridge work.

Balaji Srinivasan 4:40
The thing that’s nice about Solana is rather like, of course, I love Ethereum, I love Bitcoin, but the thing that’s nice about Solana is you can just blast events on chain. You don’t have to have other l twos, and that means your conceptual overhead of you don’t have to have bridges and backs and forths and so on and so forth. Just hold all the relevant state on chain. Would you agree with that? Is that roughly part of the value prop, I

Lily Liu 5:02
think that’s a big part of it. I think another very simple analogy, no analogy is perfect. It’s kind of like, remember when we are all on dial up modems? I mean, I guess you and I are old enough to remember that, like, the mystique of like, doo doo doo doo, right? And then we would do all, we’d all be doing these cool things that we’re like, wow, this is gonna be amazing when we, like download videos and chat with our friends, and be like, Oh my gosh, you can see the Mirage on the horizon. But what had to happen is high bandwidth internet. So the whole like bridging type of thing, it’s like having a whole stack of 56k modems in your closet, and be like, that one’s gonna be for chatting, that one’s gonna be for watching my videos, that one’s gonna be for doing email. And that’s just not the way it worked

Balaji Srinivasan 5:40
out. Yeah, that’s right. I think, I don’t know, we may go back to the future, and there might be app chains or what have you, but I think for a while, a lot will happen on Solana, the other thing I was going to ask is, with the deep end stuff, I’ve always been kind of skeptical about this, is this is, like, the idea of, you have some physical infrastructure offline, and it’s like mapped on chain and so on and so forth. And, you know, maybe the canonical example is not infrastructure, but it’s like gold. Infrastructure, but it’s like gold, like physical gold bricks, right? To me, the hard part was never the on chain part. The hard part was the redemption of actually mapping it back and forth and actually having somebody who would take that on chain asset and map it for gold or vice versa, right? And so, like, the hard part is actually the legal interface and custody of those assets and all these jurisdictions, not the crypto part. That’s why I’ve always been somewhat skeptical about deep end. But maybe I’m wrong about that.

Akshay BD 6:26
Yeah, well, I think the whether it’s in hive mappers case or helium case, you expect the person participating in the network to run all the physical infrastructure, and it’s an if x then y style sort of network where, if you run the physical infrastructure correctly, whether it’s a dashboard camera or it’s a helium hotspot that provides mobile network coverage, if you run that accurately, and you provide resources to the network that are used on the other side, then you get paid. So all the all the responsibility of running the physical infrastructure, just like Uber right where the drivers are required to run their required to run their own physical infrastructure. Uber does not run or maintain the physical infrastructure, which is the cars in this case, so the operators are the suppliers are expected to do that in exchange for

Lily Liu 7:13
payment. Yeah, I think Balaji, what you’re also getting at is the long running critique of the whole Oracle problem. Why is it that fractionalizing houses on chain might not be a great use of blockchain. Putting houses on chain doesn’t make a lot of sense, because you could buy the on chain asset, but then who’s actually living the house ultimately is going to prevail, right? I think it’s a little bit different with deep in networks, because the nodes themselves, meaning the camera, the Wi Fi module. Those are not the assets. Those are part of the infrastructure. So I think putting the infrastructure on chain and using crypto to coordinate the incentives around that infrastructure, that is something, I think that makes sense. Whereas I agree with you a lot of the things around tokenizing gold bars and tokenizing luxury handbags and tokenizing, uh, fractionalizing the houses on this block, or something like that, taking real world, like physical assets, and tokenizing them. That one, I agree with you, is a little bit more skeptical, but deepens more about incentivizing the hardware, network, the infrastructure.

Balaji Srinivasan 8:13
So the smarter the device is, maybe the more networky type stuff it can do to kind of validate that it’s actually being used in a proper like a It’s got an image, or it’s got a GPS signal, or it’s something like that. So you can track these assets. Yeah, yeah, it’s compute resource slightly switching gears for a second. So we have actually a bunch of people coming on campus in a few weeks for the ignition month at network school. So do you want to talk about this, and like the super team member school in May, so all these builders and hackathon winners,

Akshay BD 8:46
okay, so super team is a community that is a group of developers, you know, engineers, marketers, founders around the world that are building something on Solana and so they’re typically regional communities, India, the UK, Germany, Nigeria, pretty much any country that has a technical bench strength and has a crypto community will have a regional super team. It’s a way for people to learn how to build stuff on chain and eventually earn money right through. It could be through bounties, through jobs, through grants, funding projects. One of the awesome things about crypto is it allows for a multiplicity of participants, as opposed to just you don’t need to join the company to work on the network. And so there are many ways to contribute to the building the network out, whether you’re an individual, a small project team, and you can get funded through various means, from bounties to grudge. So we really think that people should earn their first crypto, not buy it like that’s the foundational philosophy of this. And to earn your first crypto, you actually need to learn quite a bit about how this stuff works. And we think that that best positions people. Not to be long term contributors to the network, versus buying something and trading money and losing it, right? So yeah, so the very excited to finally make this collaboration happen between the network school and the Solana community and super team. So we host the largest hackathons in crypto by numbers, and every year, the number of participants has only been going up into the right and so this upcoming hackathon will be one which also has a physical node, I guess, where people can congregate and and build. Okay,

Balaji Srinivasan 10:32
awesome. Yeah, so that’s going to be May 20. Then let’s talk about forma. Yeah.

Akshay BD 10:37
I mean, forma is the it’s a Solana economic zone. It’s essentially a pop up which it’s like a pop up village, but it’s special. It’s specifically geared towards integrating crypto within the local economy. And that involves, you know, typical, involves going to a crypto friendly jurisdiction and working with local regulators, the local community, local businesses, local developers, to integrate crypto into their existing infrastructure. And so the first one was in Argentina, the second one is in Sri Lanka and and, you know, we’ll probably do two more this year with that team. It’s a very talented team. And so we think that the best way to engage with progressive countries that are pro technology, pro crypto, is to bootstrap a local sort of economy with them on crypto rails.

Balaji Srinivasan 11:27
So salon is last year. It’s now number one in defi. It’s now number one in devs. It’s done the form of pop up city. It’s got all these token extensions. It’s got very significant GDP came all the way up from nothing in COVID Lillian actually have built it out. And, in fact, it’s been very international. It’s been actually internet first, more than, quote, America first, because it’s been building out all around the world, as opposed to, mainly only the US. Is actually the last kind of spot for it, in some ways, even though it was found in the US. So I want to take some questions from the audience. You know, questions on Solana, you know, questions on the Solana ecosystem, on

Speaker 1 12:04
crypto equities, because I agree with you, Balaji, it makes a ton of sense. I’m curious, for Lily and Akshay, you guys have a strategy to talk about internally for how you’re going to actually encourage companies to make that transition? No.

Akshay BD 12:17
I mean, if you think about what internet capital markets are, right, it is the ability to do two things. Well, it is to reduce the barrier to launch assets on the internet. So in five years from now, if you’re taking your company public, you’re just going to say, I’m going, I’m going public online. Like, it’s, where are you listening on the internet? What do you mean, right? Like, that’s sort of what it’s going to be. And so it’s reduced the barrier for issuers, and on the other side, it is to reduce the barrier for investors. A great example of this is if you wanted access to US dollars outside the US, you either needed to have cash or you needed to have an offshore bank account for which you had to fill like reams of forms and eventually get approved. But today, you download a browser extension or a mobile wallet, and you get a USB right? So that when you scale access to something, it fundamentally changes the nature of that thing, which is, you know, you don’t need KYC anymore. You can just download a mobile app and get us dollars because you put it on the internet. So taking on chain equities onto the on like taking equities on chain is not merely tokenizing it. It is changing the very fundamental nature of what it is, which is democratizing access to ownership and creating a cap table that you can scale infinitely, effectively and trade effortlessly and on the global Internet, right, like changing hands and legal titles effective, effortlessly online and so I think that’s sort of how we think about this class. And in so far as tokenizing equity is concerned, I know, I mean, Lily has a team that works on this, and so maybe she can talk to the more specifics of it. But the most exciting part about that is reducing barriers to issuance. For me personally,

Lily Liu 14:03
yeah, on the supply side, also on the demand side. If you can even take 100 million people and the liquidity that comes from that 100 million people and point it at this thing, it’s gonna go nuts in the same way that taking all the eyeballs of humans across the world and pointing at various content made that go nuts as well. And so now maybe we can get some more quality things in there that are more deserving of that time, attention, capital. But you know, another observation that we in crypto have made for a long time is, in order to have access to the better investment assets, you already have to be rich, and it’s those gating, those gating factors, right? You’re an accredited investor. That means you either have a million of net worth and or you’ve made $200,000 a year for the last two years, and you’ve got to, like, sign all the stuff, and you want the really good stuff, you got to be a qualified purchaser. So you’ve got a 5 million of net worth. How many people in America, much less the world, have access to those levels of wealth? And. Therefore the really cool, bespoke, unique investment opportunities very few. And so part of this is broadening, enabling the supply of these things to come on certainly, and also broadening just capital markets access, not just for retail investors, but also for smaller companies. So you know, there are quite a number of of high quality companies around the world, where you could say, let’s say the best company in Brazil is probably a better in terms of just a company asset, market position, so on and so forth. Probably a better asset than your mid tier, US Small Business, right? But because they’re in Brazil, they don’t have access to the capital markets of America, and so therefore that asset gets priced at a much lower multiple than you know, your your Heartland America small business. Is that an efficient market? I’m not sure about that. So you know, part of this is getting non accredited investors access to stuff, okay, in the US context. But then there’s also a big part of it, which is, you could call it non accredited small businesses around the world that want global liquidity. And that’s a whole other part of the supply side that every time you talk about this internationally, people are like, I am listening,

Akshay BD 16:17
yeah. And one of the things Balaji, I would say is, I think you’ve talked about this, this IPO crisis, right? Like the number of public companies have actually gone down over time, and today, the, you know, the reason, like, this wealth gap exists in the US is because the average retail investor doesn’t have the ability to own the growth in public companies anymore, because these companies are staying private longer. You know, Bill Gurley has talked about the sort of like the tech IPO crisis, as just a lack of, you know, like, so the best tech companies just prefer staying private as long as possible, because private markets are infinitely liquid, right? So as a result, what you’re ending up with is people suggesting things like UBI, right, universal basic income, whereas actually the solution should be something where it’s universal basic ownership versus income, where you can have the ability for people to own assets with the push of a button. And I think that is the fundamental sort of outcome that putting capital markets online will achieve. I’m curious,

Balaji Srinivasan 17:19
what are your super thoughts on the current AI? Solana,

Lily Liu 17:25
what? Oh, sure. I mean, I think this is the third AI and crypto kind of like trend that we’ve seen now. And I feel like for a while it was render and it was GPU compute networks. What I think about these? I think that with all of these like kind of trends that last for three or four months, there’s always a seed of truth in there that is going to play out at some point, whether it’s in three years, six years, nine years, whatever. And so I think this is probably one of those AI agents who are going to automatically pay for your help you figure your bills, pay your bills online, do your E commerce for you, whatever. That’s cool. And I think it’s, I think it’s yet another one of those times where there’s a seed of truth, you’re going to have a huge amount of focus as an industry, and a lot of companies starting this period of time, and then, and then they will get winded out, and there’s going to be a crash at some point as well, right? This was the same thing with render and IO net in 2324 we’re going to see that now with AI chat bots. It’s interesting. Do I think that now, forever, it’s going to be like straight line up of adoption interests? No, because we’ve seen that so many times in crypto now, still, the majority of the

Speaker 2 18:39
applications, even in the surround ecosystem, are made for a desktop when, if phone first application, maybe the retail wouldn’t be that much

Balaji Srinivasan 18:49
interested. So basically, her question is, if I had to paraphrase, why are there not more good mobile phone apps for the salon ecosystem, specifically in crypto in general,

Akshay BD 19:00
yeah. I mean, I think the the apps do exist, like, the, you know, like, I think Solana, by far, has the best sort of product community in crypto and and, you know, whether it’s fandom or these other apps that were held back on the app store because of some of the App Store sort of regulation. So I think we’re just going to see more of that. And the other thing that’ll end up happening is, like a lot of FinTech companies that already have really slick user experiences and apps will start to integrate stablecoin, you’ll start to see more of that. It really depends on, sort of what you’re what kind of apps you’re talking about, but on either end of that spectrum, you’re sort of seeing a mobile app, first experience on the you know, sort of like the functional FinTech side of it, as well as the more crypto native, crypto economy type

Balaji Srinivasan 19:47
apps, I can give some color on that as well, which is Apple is very small, C conservative, right? And so they have never been a big fan. Their culture is not a crypto culture, right? Um. And their culture. Well, first of all, even with other technologies, they’re often the last mover on it. They adopt it last years after everybody else. And the App Store is a very hermetically sealed environment, and a lot of web two and tech people just didn’t get crypto, and still kind of don’t get, roughly speaking, web three is to web two as web two was to Microsoft and Redmond, right? Like the whole PC ecosystem, only some of the people made the leap conceptually to the internet right, and only some of the people conceptually from the internet companies made the leap to web three because it’s a mindset shift. It’s a first it’s a geographical shift, for example, from Redmond to Silicon Valley and then to the internet. It’s a back end shift from like, a local PC to a database to a blockchain. It’s a like, revenue model shift from like selling, like, you know, discs, to selling SaaS to selling an asset. It’s like so many different shifts at once that most people can’t flip that many parts of their experience, right? And so Apple was small. So I mean, there’s some funny stories, lots of funny stories and lots of unfunny stories, but they would just use their guidelines in a very peremptory way. And so bit by bit, the things that got through were the exchanges where there were enough exchanges, they had enough collective so you can buy and sell an asset and so on and so forth. And now you have farcaster, and you have a rainbow wallet. You have a bunch of wallets and stuff, a lot of exchanges and wallets. This is great. Any parting words besides go to Solana and check out [email protected]

Akshay BD 21:38
Balaji, can you just send, can you just tweet the word Solana,

Balaji Srinivasan 21:43
unfortunately, that would get a lot of engagement of the wrong kind. But yeah, all right. Great guys. Thanks very much. Thank you.