Ethereum at 100,000 TPS: StarkWare Discusses the Future of Layer 2 Scaling

Key Takeaways

  • StarkWare uses Zero-Knowledge Rollups to develop scaling solutions for Ethereum.
  • StarkWare’s STARKs allow scaling to be completely trustless and can be deployed in either Rollup mode or Validium depending on the use case.
  • Layer 2 projects like StarkWare could help Ethereum achieve 100,000 transactions per second with significantly reduced gas costs.

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StarkWare co-founders Eli Ben-Sasson and Uri Kolodny sit down with Crypto Briefing to discuss how their project’s STARK-based technology will bring down the cost of using the Ethereum network.  

What Is StarkWare?

StarkWare is one of several crypto projects that leverages Zero-Knowledge Rollups to help scale Ethereum. Unlike other Layer 2 scaling solutions, it uses ZK-STARK proofs, otherwise known as zero-knowledge, scalable, transparent arguments of knowledge. StarkWare’s President Eli Ben-Sasson and Chief Architect Michael Riabzev co-invented STARKs. 

StarkWare’s has an application-specific scaling solution called StarkEx that uses STARKs to achieve scalability. StarkEx powers several major platforms including the decentralized exchanges dYdX and DeversiFi. Over the past six months, it has settled over $250 billion worth of transactions and with significant gas fee savings for users. 

Starkware is currently developing a multi-app Ethereum Layer 2 solution called StarkNet. The product will let users hold their funds in a single wallet and interact with multiple applications on Layer 2. Additionally, StarkWare intends to launch the current StarkEx platforms as so-called “Layer 3s” on top of StarkNet, making it easier and cheaper for users to interact with these applications. 

STARK-based technology offers several key innovations over existing Ethereum scaling solutions. STARKs offer a way to use Ethereum permissionlessly at a high speed and low cost. STARKs are also the first cryptographic technology that allow proofs to be verified without any form of trusted setup. 

Crypto Briefing caught up with StarkWare co-founders Eli Ben-Sasson and Uri Kolodny to hear about their plans to scale Ethereum on Layer 2, and they discussed how the technology offers security for users because it is completely trustless. “The math that we developed prevents anyone from stealing funds—it’s impossible,” Ben-Sasson said. “We can’t steal funds from our customers even if we wanted to, or even if we were hacked.”

“We can give Darth Vader or the Bogeyman access to our servers, and there’s still no harm that they could inflict on users’ ownership and custody of their assets,” Kolodny added.

StarkWare’s goal is to unlock blockchain technology’s true potential. While cryptocurrencies have attracted more mainstream than ever in recent months, blockchains like Ethereum are constrained by high costs and limited data availability. As a result, most newer users are currently priced out of the network. Other Layer 1 chains increase transaction throughput by running fewer yet more powerful validators. However, this method increases centralization as users need to trust a small set of validators for all transactions on the network. StarkWare is aiming to stay true to Ethereum’s founding principles of decentralization and accessibility through its scaling solutions.

Ethereum mainnet currently handles about 15 transactions per second, and more complex smart contract interactions can cost hundreds of dollars at peak congestion. StarkWare says that StarkNet will reduce gas fees by a factor of 100 to 200, while Ethereum co-founder Vitalik Buterin has previously stated that rollups like StarkNet will help the network achieve 100,000 transactions per second. 

Staying True to Ethereum

StarkWare is currently responsible for proving and sequencing all transactions on StarkEx and StarkNet that are sent to Ethereum for confirmation. While this has some benefits, such as limiting the potential for MEV, it doesn’t fulfill the company’s vision of decentralization. 

By the end of 2022, StarkWare plans to make the sequencing and proving software open to the public, allowing anybody to participate and secure transactions made on StarkNet. Ben-Sasson shared his optimism about the shift to community validation, stating:

“I think it will likely look very much like mining on Ethereum in the early days. You’ll have to get off your couch, learn a little bit, install some things, and run a server. But hopefully, you won’t need to build a facility in Iceland next to some geothermal plant or something. It’s going to be within reach.”

Like many other successful crypto projects, StarkWare will need to have an incentive structure in place to get people engaged with proving and sequencing on StarkNet. Similar to how miners receive block rewards and transaction fees for validating transactions, StarkNet will also incorporate similar monetary incentives. “There will be fees that will go to, among others, the operators, provers, and sequencers, and then beyond that, we’re deliberating on other approaches,” says Ben-Sasson. “It will be a fully decentralized network that will require coordination and governance mechanisms,” added Kolodny. 

Crypto projects often issue tokens to achieve decentralization and add governance mechanisms. In 2021, several popular Ethereum projects such as dYdX, Ethereum Name Service, and ParaSwap launched their own tokens with airdrops for early users. Many Ethereum users have speculated that Layer 2 projects such as StarkWare will also issue tokens to encourage adoption, but Ben-Sasson and Kolodny did not shed any light on whether StarkWare was planning to launch one.

One of the key reasons for Ethereum’s success has been its commitment to decentralization and accessibility. Anyone with a few graphics cards can start mining blocks and validating transactions, and even running a node requires simple hardware. By emulating Ethereum’s accessibility, StarkWare is also refusing to compromise on decentralization as it works toward its vision of a secure and public scaling solution.  

Security and Cost

StarkWare’s STARKs can be deployed in one of two data availability modes: Rollup or Validium. The differences between these two modes highlight the compromise between security and cost in Ethereum scaling. 

In Rollup mode, every transaction or change of state on Layer 2 is “rolled up” together and sent to Ethereum mainnet in a validity proof, meaning that they all benefit from Ethereum’s security. As this method uses more data and thus more block space than Validium, it costs more gas.

On the other hand, Validium does not report every change in the Layer 2 data to Ethereum. Instead, it relies on a data availability committee to confirm they all have the same state, before signing off the transactions along with the Merkle root of the new state. The small compromise in security results in substantial gas savings compared to Rollup mode.

Currently, applications such as dYdX run STARKs in Rollup mode to take advantage of its enhanced security. As the dYdX exchange handles billions of dollars in trading volume, it makes sense to pay for extra security. While Rollup mode currently reduces transaction costs by a factor of 100 to 200, savings that will increase as more people use the network due to gas cost amortization, there is still a linear limit to how much they can scale. It’s with Validium, though, that the true potential of Ethereum scaling can be unleashed. 

Validium uses validity proofs, meaning the network only needs to send a proof confirming the difference between two states back to Ethereum mainnet. For example, a proof could capture every transaction in a one hour period and demonstrate that all of the changes within that period are valid. As such, there is no limit to the number of transactions that can technically be included in the proof.As such, there is technically no limit to the number of transactions that can be included in each proof. “We do not know of an upper bound,” Kolodny remarked, explaining how the concept of Validium scaling blew his mind when he first learned of the details.

Additionally, when more transactions take place between the proof updates to mainnet, the gas cost gets split between more users. In other words, the more users Validium attracts, the cheaper the transaction fees become. 

The NFT-based soccer game Sorare already runs STARKs in Validium mode to finalize transactions. As games are likely to be some of the most gas-intensive protocols on blockchains over the next few years, Validium’s limitless scaling offer huge promise for blockchain gaming. Kolodny said that some game developers have already started to see the potential of the technology. He explained: 

“Gamers are telling us, in a very explicit fashion, ‘for the first time as a developer on the blockchain, I can actually focus on the game I want to build, as opposed to the computational resources I’m constrained by, or by the “gas ceiling” that’s hanging over my head. The question of ‘what was that game we wanted to build on Ethereum’ is not the relevant question; the real question is ‘what was that game that we actually dreamed of.””

StarkWare and Ethereum’s Scalable Future

StarkWare’s application-specific scaling solutions are already proving that STARK-based Layer 2 solutions could be a game-changer for Ethereum and the crypto space at large. StarkEx applications are already settling over six million transactions weekly, while the total value of transactions settled has surpassed $300 billion—orders of magnitude higher than other Ethereum Layer 2s such as the Optimistic Rollup solutions Optimism and Arbitrum. 

Ethereum’s roadmap is geared toward building out Layer 2 to help the network scale (on the completion of Ethereum 2.0, it will also add 64 new chains called shards). Vitalik Buterin has long discussed how Ethereum of the future will leverage ZK-Rollups. Kolodny summed up StarkWare’s ambition to help the blockchain achieve scalability, commenting:

“What we’re doing with validity proofs is making the most succinct use of this public utility—the blockchain—that we are aware of, allowing others to use this resource in a far more effective fashion.”

The next step for StarkWare is to bring StarkEx’s scaling power to its multi-application network, StarkNet. Once launched, StarkNet will unlock more possibilities for scaling, including cross-Layer 2 bridges that immediately make funds available to end users. This should help pave the way for shared liquidity across multiple Ethereum Layer 2 instances, improving efficiency and the cost of capital further than any other Layer 2 scaling solution. 

As the crypto space has grown over the last few years, Ethereum has soared in popularity. However, it’s also faced many well-documented scalability challenges. Thanks to StarkWare, the leading smart contract network may finally have a shot at becoming a truly scalable base layer for Web3.

Disclosure: At the time of writing this feature, the author owned ETH, IMX, and several other cryptocurrencies. 

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Solana’s Phantom Wallet CEO: 2022 Will Be Huge – Mobile App, NFT Features, Possibly Native Token (Interview)

Solana is undoubtedly amongst the fastest growing ecosystems, as well as one of the hottest networks. There are hundreds of teams building various projects ranging from financial applications to non-fungible tokens and blockchain-based games. It has managed to successfully position itself as one of the main competitors for Ethereum.

The vibrant and dynamic ecosystem was perfectly represented during the Solana-dedicated conference that took place in Lisbon earlier in November: Breakpoint.

During the conference, CryptoPotato had the chance to interview Brandon Millman – the CEO and Co-Founder of Phantom Wallet – the leading non-custodial wallet on Solana. We talked about the exciting intricacies of building in this thriving environment while also discussing some of the challenges businesses face.

We wanted to start by asking why Phantom chose the Solana blockchain, but the vibe of the conference gave it all – there are so many projects, filling up the conference hall, building a variety of applications in a multitude of market segments: From gaming and non-fungible tokens (NFTs) to financial apps and wallets, there’s been a bit of everything, and it was a pleasure to see.

First Time to Meet In-Person, the Phantom Users

With this in mind, we asked Millman what was his impression of the conference and if he’s seen anything like it before.

“The conference has been really awesome. I feel like there’s a lot of really awesome energy and part of it is people being tired of COVID and whatnot. I think it’s the first conference for many people in a while. And I think people are just kind of extra enthusiastic.

But yeah, it was the first time for me to meet so many people who use Phantom in person. So that’s been really awesome.”

And while we all knew that the Solana community is strong, seeing it live is an entirely different ballgame. Millman said he “was also pleasantly surprised.”

Brandon Millman, CEO of Phantom

Now, it’s worth noting that Phantom recently revealed that they are working on a mobile app, so we were eager to understand what’s the next big thing to expect from Phantom. 

Millman: “We’re aiming to get a beta by the end of the year. So real users will be able to use the app before the end of the year, and then, we aim to launch the mobile app sometime in early 2022.

There’s a couple of things that we’re looking at for later: We’re also looking to add more NFT specific features like being able to buy and sell NFTs or that sort of thing. We’re thinking about some of those.

And then, probably earlier next year, we’re thinking about adding support for EVM-based chains like Polygon. Right now, we are very focused on the mobile app.”

5 New Fake Android Phantom Apps Added Daily

We also wanted to talk about some of the phishing and scamming attempts that Phantom had to deal with and the lessons they’ve learned from it.

“We’ve kind of got hit by such a large growth of users recently that we’ve become a very big target for phishing and scamming. So, it wasn’t an actual security breach or anything like that – just a lot of phishing and scamming.

The main lesson here is that anti-phishing and anti-scamming have to be a core part of the company moving forward. Scamming is only getting more sophisticated, so we’ll basically need to be able to play this sort of cat and mouse game.

For example, there are five new fake Android apps coming up every day. We’re working proactively with an external firm to help take those down as soon as they come up.

That’s just something that we didn’t really anticipate. The other common scam is when they take out Google Ads under the Phantom name and make people go to a fake website where they give them something called a rotten seed phrase.

Basically, it’s a seed phrase that they already control, but they’re giving it to the user as if it’s a new one, and then they go, and then they ask the user to download the app and then put the phrase in there.

From one side, we, as the community, want to make crypto more accessible to everyone. But on the other side, when more users or new businesses come into the industry, we can expect a lot more phishing incidents and security incidents. Where is the equilibrium point between the two?

“I think there’s a couple of different things that we can do to try to solve some of this. A big one is education. Investing in user education, whether that means video series or articles and stuff like that, is important, and I think the entire industry can help with that.

The other direction that we’re thinking about as well is just rethinking. I talked a little bit about this on my panel yesterday (i.e., during Breakpoint conference 2021), but basically, there are non-custodial wallets where you just give the user the private keys, and they manage it themselves. And then there’s the other end of the spectrum – custodial wallets where the company itself is managing the private keys.

But there are some interesting solutions that are sort of in-between. For example, social recovery or multi-party computation where we can experiment with some sort of in-between solutions.”

Rising Contingent of Users from Southeast Asia

We also discussed some interesting facts about Phantom’s user base. Millman revealed that the majority of them are coming from the US, but “there’s a rising contingent like Southeast Asia and Russia, more specifically, has also been growing. 

In terms of usage, all of the hypergrowth on Solana has been related to NFTs like drops and secondary marketplaces. These have been the most popular applications that just dwarf DeFi usage as far as we can tell.

Do you have any plans to integrate multi-channel capabilities and data networks apart from Solana?

“Actually, when we started Phantom, it was originally conceived as like a multi-chain MetaMask competitor, where you would be able to use the wallet to access DeFi apps no matter how they’re implemented, and that’s still the long-term goal.

We wanted to get to a point where if someone wants to use a DeFi app or an NFT app, the first thing they should do is download Phantom to be able to access those things no matter what blockchain they live on.

But that being said, we’re very focused on Solana right now, just because of the awesome growth that’s been happening. And we’ll probably be focusing on Solana for at least the next six months or so. It’s hard to tell, but I think next year we’ll think about doing EVM-based chains like Ethereum and Polygon.

I think the EVM compatibility will be cool because we can add things like Arbitrum and Binance Smart Chain (BSC) – that’s something we’ve been thinking about for the middle of next year. It’s interesting, the team – the three founders, we used to work at a decentralized exchange company called 0x on Ethereum. So, Ethereum is like our bread and butter – where we come from.”

Phantom Wallet – When Token?

With the increasing trend of decentralized governance and many companies airdropping tokens to their communities and early adopters, we couldn’t help but ask the question if Phantom has something similar in store.

“I’ve definitely heard the rumors […] I’d say it is not on our roadmap right now. But it’s probably something that we’re keeping an eye on. I think that, nowadays, we have not just normal tokens, but we have NFTs as well. And so, I think there’s a lot of room for experimentation in terms of what types of tokens might make sense with the wallet. But right now, there are no concrete plans.”

Speaking of NFTs, we also wanted to know how Millman sees the future of Solana – whether it hides in the non-fungible tokens or the newly emerging play-to-earn field.

The vast majority of the growth, recently, has been NFT-related. I think that because of the cheap fees, Solana really lends itself well to that specific user base – a lot more casual users who are not necessarily moving around in big numbers. So, I think NFTs will definitely continue to grow.

And I’m also really excited about the play-to-earn and gaming stuff coming up. I think there’s a couple of really cool teams that are building things on Solana right now, but it’s just taking a little bit longer. There’s a bit of lead time required because they’re building like full-on game experiences. I think that will be the next wave of activity on Solana, hopefully early next year.”

Do you see Solana competing with Ethereum in the long term? Do you think, eventually, it will be like a winner-takes-all scenario or whether there will be networks working with each other? 

“It’s hard to tell. I think that right now, blockchain apps are serving such a small set of users, and already, the supply of blockchains is not really able to keep up.

If we are actually going to start bringing on tens of millions of users, I think that we’ll probably see multiple networks spinning up to serve that demand, at least in the near future. So, I think there will be multiple chains, just because I feel like we haven’t really even seen how the blockchains deal with tens of millions of users.”

From Twitter Dev to 0x and Phantom

Last but not least, we wanted to know something more personal – how Millman got into crypto and what would he say to developers and entrepreneurs who are looking to join the industry. Is it too late? 

“Me personally, I joined the crypto industry in 2017 – basically the last hype cycle with a lot of ICOs and that sort of thing. I used to be a software developer at Twitter before that. I found myself reading all these whitepapers and becoming so interested in this crypto stuff that I was spending more time learning about it than focusing on normal work.

So I took it as a good signal just to sort of dive in. I started at 0x and worked there from 2017 to 2021, and as for tips – I’d say to people that it’s still really early.

I think it’s the perfect time to join, and if someone finds themselves really interested in this stuff, but they are just having a little bit of trouble getting that final push over, I’d say just take the leap. It’s a really exciting industry – there are so many different projects out there, so many different things going on, and really a lot to learn.”


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Kevin O’Leary Discusses Crypto’s Path to Institutional Adoption

Key Takeaways

  • Kevin O’Leary is an entrepreneur, investor, and popular TV personality.
  • In recent months, O’Leary has dedicated most of his time to crypto.
  • He spoke to us about crypto’s road to institutional adoption, the promise of DeFi and NFTs, and more.

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Crypto Briefing sits down with Kevin O’Leary to discuss crypto as software, DeFi, NFTs, and institutional adoption of the asset class.

How O’Leary Sees Crypto as Software

Kevin O’Leary is best known as Mr. Wonderful on the ABC TV series Shark Tank, but his career spans more than four decades. A successful entrepreneur with an eye for technology, O’Leary has always been ahead of the curve in one way or another. He famously founded SoftKey Software Products, which went on to complete a series acquisitions, before it was sold to Mattel for $4.2 billion. Since then, he’s been involved in various profitable companies, written three bestselling books, and invested in countless successful startups.  

Nowadays, O’Leary is deeply focussed on the world of crypto. He’s openly discussed his interest in Bitcoin and DeFi, and more recently has been paying attention to NFTs as the technology has entered the mainstream. When Crypto Briefing caught up with him for a rare telephone interview, he revealed that he spends around 40% of his waking hours on crypto, from looking at potential deals to scouring new tokens and DeFi opportunities. He was particularly enthusiastic about crypto’s road to institutional adoption, remarking that institutions could be a catalyst for trillions of dollars to flood into the space.

While O’Leary is an entrepreneur and investor through and through, his character defies the stereotypical “big money” type. His hard work has afforded him the opportunity to allocate more time on his interests, which include collecting watches and wine, playing the guitar, and cooking. These interests are also reflected through his professional endeavors. For example, he runs a wine business called O’Leary Fine Wines that aims to make high-quality wine more accessible for regular people.

O’Leary’s avid interest in crypto derives from his keen eye for groundbreaking technology. He says that he sees cryptocurrencies as software, rather than Internet money. “I simply look at cryptocurrencies as software,” he said. “It’s productivity software.” While Bitcoin can be described as both a blockchain and an asset, for O’Leary, it’s “not a coin.”

O’Leary spends a lot of time watching how the space develops and weighing up the fundamentals for each crypto investment he makes. That’s how he reached a decision to invest in Polygon after seeing Ethereum’s skyrocketing gas fees.

Institutional Crypto Adoption

O’Leary’s crypto thesis is also underpinned by a belief in one of the space’s favorite mantras: “the institutions are coming.” O’Leary says he thinks that many major finance players could enter the space over the next decade, though there are challenges ahead. According to O’Leary, institutions are not so focused on the decentralization or performance figures that Ethereum and Solana fans like to debate over. Rather, it is “compliance infrastructure.” As O’Leary pointed out, it’s difficult for any institution to make a 1% allocation to Bitcoin on their balance sheet today.

“In my own case, at the beginning of this year, I was 3% weighted in our operating company’s portfolio to crypto,” he explained. “And I spoke to my auditors and my compliance department, and said ‘I want to get to 7% [weighting] by year-end.’ It took six months to figure out a way to do it.”

O’Leary added that compliance measures limit many institutions from allocating more than 5% weighting to any one equity and more than 20% to any one sector. That would prevent them from going all in on Bitcoin or Ethereum. O’Leary said he hopes that clearer regulations emerge so that institutions have a way to access crypto technology. 

O’Leary spent time watching Taproot, Bitcoin’s first major upgrade in four years that could theoretically allow for smart contracts to run on the blockchain. However, he takes a similar view to many others in crypto, viewing Bitcoin more as a “digital gold” store-of-value that a competitor to Layer 1 smart contract platforms like Ethereum. O’Leary said he thinks institutions share his view on the asset.

“My read on Bitcoin is that it is being perceived at the institutional level, which has not even bought it yet, not as a currency, as simply a store-of-value, in the same way you would think of gold or you would think of real estate,” he said.

Institutional adoption also comes hand in hand with increased regulatory oversight. O’Leary said that this is a positive for the space to assure that institutions are complaint, rather than acting like “crypto cowboys” with people’s money. O’Leary has previously said that he thinks the genie is out of the bottle when it comes to crypto. In other words, he thinks it will not be eradicated by any regulator.

O’Leary said that regulators care about facilitating innovation and productivity, while filtering fraud (of which crypto has seen its fair share). He added that while U.S. regulators are doing a good job so far, guidelines need to be clearer so that everyone can use the technology. “Tell me what’s compliant, and I’ll use [it],” he said.

DeFi and NFTs

While Bitcoin often dominates the headlines, one of the bigger points of focus for U.S. regulators over the last year has been DeFi. The SEC has expressed concern with the use of stablecoins in the sector, often under pressure from politicians in the Senate. O’Leary reflected on the rise of stablecoins, noting USDC’s parabolic growth in recent months. “To watch something like USDC go from $1 billion to over $30 billion in such a short period of time tells you there is market demand for it, and that it should be regulated,” he remarked.

Alongside DeFi, the other crypto niche that’s seen a meteoric rise in recent months is NFTs. Musicians, celebrities, meme artists, and digital artists sent the technology mainstream in 2021, drawing amazement, confusion, and ire from onlookers.

O’Leary has been watching the space with consideration for one of his biggest passions: watches. O’Leary has a massive collection of luxury watches and travels with no less than 16 at a time. He stores the rest in bank vaults across the world. He says that he wants to tokenize his collection so that they can live on the blockchain.

As watches usually have small imperfections under the dial glass, technology exists to analyze them and create a unique “fingerprint” for every watch made. This fingerprint could theoretically be tokenized as an NFT, which would provide verifiable ownership and authenticity. That would also prevent counterfeiting.

Digital fashion is already big business, with major brands like Adidas and Nike recently announcing pivots toward the Metaverse. Whether Rolex and Patek Philippe will join them remains to be seen. O’Leary said that the biggest obstacle preventing him from tokenizing his own watches concerns trading platforms. To date, none of them have been willing to allow NFT trading without getting the watchmaker’s approval. O’Leary explained: 

“If you go to FTX and say, ‘OK, I want to trade an image of a Rolex,’ they’re not going to let you do it, nor would Binance, because they don’t want to be offsides with the Intellectual Property… So what we have to do now is develop a whitepaper that would agree on what the protocol would be the standard by which all of us who minted NFTs and created them could agree to.”

Nonetheless, O’Leary said that he thinks fans could have a chance to own a fraction of one of his watches in the next 18 to 24 months. 

Throughout our conversation with O’Leary, we had the same impression we get from watching him as Mr. Wonderful on Shark Tank: what you see is what you get. O’Leary is a blunt and honest character, which has partly helped him find success as an entrepreneur and investor. In recent months, it’s informed his crypto investing thesis. According to O’Leary, crypto is world-changing software, institutions are interested, and it’s not going away anytime soon. While he spent a long time discussing the benefits of DeFi and NFTs, it’s also clear that he believes the world’s biggest cryptocurrency, Bitcoin, still has a bright future ahead. When we wrapped up our call, we concluded by asking O’Leary whether Bitcoin was now too big to fail. Responding in his usual candid tone, he said: “It has already created its value.”

Disclosure: At the time of writing, the author of this feature owned BTC, ETH, and several other cryptocurrencies.

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Binance Has Incubated Over 100 Projects Since 2018: Binance Labs Director Chase Guo (Exclusive Interview)

Binance is one of the most recognizable names in the cryptocurrency industry. After all, it’s the leading exchange and forefront for the entire field – a place where many newcomers begin their cryptocurrency journey.

However, what a lot of people don’t know, is that apart from its popular exchange, Binance also runs a whole lot of other initiatives, each one of which aimed at furthering the cause of crypto.

One of these different avenues is Binance Labs. Those of you who are well-versed in the world of crypto VCs and angel investors have surely heard of it, but if you haven’t dived into the field of early-stage investing, it might have slipped under the radar.

In short, Binance Labs is the venture capital arm of Binance and CryptoPotato had the chance to talk to Chase Guo – its Investment Director. With a background in investment at companies such as Blackstone Group and Morgan Stanely, he also holds a Bachelor’s degree in Economics from the University of Pennsylvania.

In this interview, we discuss the intricacies of Binance Labs, their investment goals, how they choose which projects to invest in (and special tips for entrepreneurs looking to get incubated), Changpeng Zhao (CZ)’s attitude in building Binance a flat organization, and much more.

The Middleman Between 3rd Party and Binance

“As the venture capital arm and innovation incubator of Binance, Binance Labs identifies, invests, and empowers viable blockchain entrepreneurs, startups, and communities, providing financing to industry projects that help grow the larger blockchain ecosystem,” Guo explains.

“Binance Labs is committed to supporting fast-executing teams who positively impact the crypto space. Since Binance Labs is a venture capital arm of Binance, we potentially consider our portfolio companies to be listed on Binance exchange, and that some can go through Launchpad or Launchpool.

Also, many of them can work with Binance Smart Chain (BSC) to build their products. Binance Labs is kind of a ‘middleman’ who connects the 3rd party (portfolio companies) to the entire Binance ecosystem.”

Chase Guo, Source: LinkedIn

What is the current focus or crypto trend Binance Labs is looking at for projects to invest in?

“Within the crypto and blockchain industry, the market changes and evolves very rapidly. This makes it hard to predict which sector will be the next focus or trend. That is why Binance Labs does not specify one sector for investments, but instead, we look extensively for blockchain projects that have the potential to facilitate mass adoption of crypto globally.

We consider putting capital into projects that match our values. We want to invest in the early stages of the projects and HODL tokens or equities for the long term and to be a supporter of the projects we invest in. Also, we would like to contribute to these projects, adding value to them, so that they can grow into industry players, just like we did with our previous portfolio companies.”

Over 100 Projects in More Than 25 Countries

Please share some statistics and numbers regarding the recent investments Binance Labs has made.

Binance Labs has incubated over 100 projects in more than 25 countries across the world since its inception in April 2018. We are closing a number of deals regularly and this is to discover projects that can lead the market in their early stages.”

How does Binance Labs choose if to invest? What are the ‘game changers’ of whether a project will successfully receive investment?

“Binance Labs looks for top-tier teams with disruptive ideas. For earlier stage projects, the fundamentals of the team decide how the project will turn out in the future. We look for teams with good vision, strong execution capabilities, and grit. For later-stage projects, we look for strong execution in the form of operational stats and historical growth and then how they stack up against competitors in the space.

On top of that, I would like to share some questions that the Binance Labs team asks before making investments. I think individual investors should ask similar questions when they consider making investments in projects.

  • How do these projects tackle adoption by users?
  • Will this project change the world?
  • Will people like this product when it is launched?
  • What does the business model look like, and will this business be sustainable for the next 10 years?”

Besides the funding, is there any kind of support or guidance done by Binance to the projects?

“We provide full support to all projects, from day-to-day operational advice to integrations with the Binance ecosystem. We guide our portfolio companies through different products including NFT IGO, Binance Launchpad, Launchpool, listing, and more.

We have a regular incubation program that we run, and we are in the middle of Season 3 of the Incubation Program now. Season 4 of the Incubation Program will officially launch in March 2022 and projects can apply to be part of it through an application form.”

Anyone Wants to Reach CZ Can Send Him a Message

If I am a founder of a project, what tip can you give to make it and get funded by Binance Labs?

“I think fundamentals such as product-market fit, adoption of its products, and previous entrepreneurship track record are important. You also need founders who have a clear vision and mission, which will keep you and the team keeps building the product through the ups and downs.”

The Binance organization: Speaking to Gin Chao (Binance former CSO), he mentioned in his 2019 interview that Binance is a flat organization, is it still like that as of 2021? How is Changpeng Zhao (CZ) reachable in such a huge organization?

“Yes, Binance is still a flat organization. If anybody in the organization wants to reach out or talk to CZ, they can send him a message. Not only for CZ, but we also have easy access to having conversations with the senior members of the organization.”

CZ, CEO of Binance


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SERUM’s Edward Zuo: The Future of DeFi on Solana – When Will Leveraged Trading Reach DEX? (Interview)

Project Serum aspires to become a fully-fledged financial ecosystem that brings unprecedented speed and very low transaction costs to the world of Decentralized Finance (DeFi). At its core sits a decentralized exchange (DEX) which is designed around a fully on-chain central limit order book and matching engine.

Partners of Serum’s ecosystem can compose with this on-chain order book to share liquidity and match orders for both retail and institutional users.

Serum was originally founded by Sam Bankman-Fried (SBF) – CEO at one of the leading centralized crypto exchanges FTX, as well as other ecosystem partners, and is deployed on the Solana blockchain.

During BreakPoint 2021 in Lisbon, CryptoPotato had the chance to talk to Edward (Ed) Zuo, who is a senior advisor at Project Serum. We talked about the current status of Serum, some challenges, as well as what lies ahead for the project.

The Order Book that Will Power a Superstructure of Financial dApps

“Project Serum provides the underlying liquidity infrastructure for applications building on Solana that need trading-related features that could benefit from Serum’s central limit order book.” Explains Zuo. “And It’s one of the first order book-based decentralized exchanges to be deployed entirely on-chain.


The idea behind Serum is to provide the fundamental primitives that bring about a fully functional, centralized exchange experience to all of DeFi.

Serum is unique because you can build a DEX on it. You could build multiple DEXes on it, and because of the composability of DeFi, users can compose with the markets on Serum to unlock incredible synergies and bootstrap liquidity for their protocols.

Edward Zuo, Serum. Source: LinkedIn

You can imagine what happens when more and more of these applications compose with the same set of software – You can imagine how big that pool of shared capital becomes. This model, which is so simple yet elegant, can allow for this massive scaling up of DeFi.

Now, you have devs building dApps. You don’t need to reinvent the wheel every time they make a new protocol, hence, you don’t need to figure out how to get order matching working. You can now focus on the other stuff that’s critically important for your project, whether that’s building a risk engine or focusing on marketing or other partnerships or whatever.

So with Serum, it’s able to power a whole superstructure of financial dApps on Solana that can easily talk to each other – over time, we hope to quantify how much time it’s saving and how convenient this is for developers.

Importantly, it’s built on Solana, which brings about features like sub-second settlement and extremely cheap transaction costs. Whatever you build on Serum, you can achieve the user experience people are familiar with on centralized exchanges.”

Bring Solana and DeFi to the Rest of The World

Serum was launched in late 2020, aiming to be the first decentralized exchange with fast transaction execution and low fees.

It seems that Serum has managed to build what no one has created before, and in a reasonably short time. Is the team behind Project Serum now the same as the founding team?

“Project Serum was originally founded by FTX and Alameda Research. Nevertheless, they are now simply contributors to the Serum project and many others, and Serum has attracted many ecosystem supporters and contributors through its grantmaking process and its DAO.

There are many volunteers too who get involved just by seeing what Serum is doing, and it helps that Serum has always been open source. Everything is there. People just get involved.

FTX CEO, Sam Bankman-Fried. Source: Bloomberg

The people who are, I suppose, most active on Serum now include both newcomers as well as contributors dating back to the end of ‘DeFi Summer’ in September 2020.

You also see this increasing trend of more and more developer activity, as well as more and more diversity among the people actively contributing to Serum.”

About a year post-launch, what are your midterm and long-term goals?

“We are doing all the necessary steps to take Solana and DeFi to bring it to the rest of the world.

That’s why I keep talking about the issue of scalability and the fully functional centralized exchange experience, the ultimate convenience for developers and retailers – something that can bring the benefits of DeFi to the everyday user and allow them to seamlessly use it and benefit from it without having to worry about complexities and technological issues.

These are ambitious milestones and long-term ones. I think there are a few steps to get us there. One is to get institutional capital, and institutional adoption of DeFiwhich Solana can provide.”

DeFi is Going Nowhere Without this Institutional Capital

Zuo continues, “There are several ways we’re doing this: One is to keep letting market makers, high-frequency traders, and other large institutions feel more comfortable coming on-chain and letting them do their own thing on Serum because, without this institutional capital, DeFi is going nowhere. That’s an absolute fact.

Familiarity is only one of the issues for these players. The other issue is regulatory. Even as we wait for more regulatory clarity, it’s also clear that all these institutions need to meet existing regulatory and compliance requirements.”

Because if you can think about what these institutions want: these are players with an ever-increasing appetite for DeFi exposure, but if they trade with the wrong counterparty, we all know to understand these risks reasonably well. They need to be careful, and they want to be compliant. I personally think it’s great that ecosystem players in Serum and Solana are finding ways to allow for the institutional adoption of DeFi and letting these players come in.”

Raydium is the first AMM on Solana, with the initial aim to settle trades on Serum order book and their platform.

Raydium’s daily volume is much higher than the volume on Serum DEX, which is consisted of trades from Bonfida, Mango Markets, Raydium, and others. We recently saw higher volumes on the Raydium platform. Do you think that users prefer to trade on AMMs rather than order books?

“Automated Market Makers are a very different type of market to a central limit order book. Each has its pros and cons. if you look at what Raydium is trying to offer, it’s an experience with reduced slippage, among other benefits, but how do they achieve that part? In part by composing deliberately with Serum and sending orders to Serum’s order books, they can provide their users the best of both worlds.

Raydium is only one among many very popular GUIs built on Serum, and the latter is powering not just Raydium but many apps out there that bring value and traffic to Serum.”

Maybe this means that the user experience on Serum is yet to be polished as much as a centralized exchanged experience?

“Well, Serum wants to provide something that allows people to build whatever they want to build, whether it’s a DEX or a derivatives protocol or another kind of trading dApp.

Derivatives are actually quite interesting because  Serum Core (a new upgrade developed by Bonfida) unlocks a lot more flexibility for developers building these products.

There are all kinds of teams building incredible derivatives and risk hedging tools that are going to bring more and more interest and value into Solana and Serum ecosystems. So that’s something to look forward to. It’s not just about one or two key players. It’s really about having the whole suite of offerings for anyone coming to Serum.”

When talking about derivatives, leverage trading is a point that comes up naturally as it has become very popular among Bitcoin and crypto traders.

As of now, the volume of leverage trading is much higher than spot trading. Asking whether he sees leverage trading coming up soon on Serum, Zuo replies:

“There are people building things like margin solutions, and this is the kind of fun part about Serum because everyone kind of sees their own place in the ecosystem.

You have primitives like an on-chain order book (that’s Serum), you have wallets, you have AMMs. Okay, cool. What’s next?

Well, I think it sounds to me like borrow-lending was the next step, and then margin services afterward that will allow for leveraged trading. After that, how about perpetual futures? Your futures require margin. Now you have, not just futures on crypto underlying, but also cross-chain underlying when you bring bridges into the mix, or perhaps even real-world underlying when you bring in oracles.

It’s not just about Serum doing everything – it’s about what Serum inspires. It helps get all of us there, but we leave it to the expertise, wisdom, and guidance of the community.”

The total supply of SRM is 10 billion, though the circulating supply is around 130M. The fully diluted valuation of Serum is approximately 80 billion USD as of today (data by Coingecko).

Currently, 100% of the fees from traders on the exchange go to buy, burn, and staking yield. It seems the volume on the Serum exchange needs to be high to justify the fully diluted valuation of the project.

Keeping in mind the project was constructed in the best interest of the token holders and the community, we can’t ignore the enormous non circulating supply. How do you see it moving forward? Are there any plans to address this issue?

“There’s a number of reasons that governance has been put up. Part of it is to tap into the wisdom of the community, and I guess the question then becomes, well, what is up for governance? What is up for voting? It’s a lot of things, a lot of important aspects about Serum.

It could be the fee parameters, for instance. It could be about default settings on the GUI. It could be about the tokenomics and the form of the utility and the governance of SRM tokens, and this is critical.

People have been discussing issues like this for a very long time. They matter to Serum’s community, its volunteers and contributors, and users. And SRM, of course, matters for things like grant-making and other critical initiatives by Serum to inspire and guide further ecosystem development.

So people have passionate, strong, well-founded, and often very mixed feelings about tokenomics. That’s to be expected. I think that’s the case with many projects.  Serum offers a venue now for people to discuss this and to really come up with whatever it is that makes the community most excited and most empowered. These things can be iterative, and they take time.”

Do you not see it as a risk for the short term for Serum?

“Well, I think it depends who you ask. Some people are very bullish on the amount of volume that SRM can generate, while other people are perhaps more conservative, and that’s fine. That’s why we take it to the forum for discussion.”

One of the greatest virtues of blockchain is its composability aspect. The ability for project Serum to use Solana’s blockchain in a permissionless way, or the ability for dapps to use Serum’s order book to settle trades and get a cut of the fees.

How do you expect the ecosystem around Serum to evolve? What will it look like in 5 years?

“It’s a very good question. I’ll try not to let myself digress too much. When you look at what an ecosystem needs versus what direction it may end up taking, you find that those are actually two slightly different questions.

I think it’s fair to say that, in the future, we’re going to need risk hedging solutions. People are building great examples of that. We’ll also need increasingly sophisticated wallet solutions and more TradFi-like solutions for non-crypto native users – maybe something like borrow-lending that also kind of interfaces like a bank account with a fixed period yield generation, which is being explored in the Serum and Solana ecosystem already.

People are building all of these ‘obvious’ things, borrow-lending, oracles, bridging, margin services, options, and futures and perps. These things are very easy to predict. But other things like the NFT craze, no one could have predicted that.

Also, the play to earn model derivatives on top of NFTs and all the augmented reality and other immersive interactive app supported by Web3 innovations. Some of these things you just can’t predict at all, and that’s why it’s best to leave it to the community and help steer resources towards the right places to build all these cool things.”

Anyone Should Be Able to Use DeFi

“I look forward to a world where these different dApps, whether they’re financial services or something else, are all kind of powered by Serum and Solana in the background, but their users are not necessarily DeFi native,” Zuo concludes.

“So, what do we do to get there? I think a lot of it is what you can call ‘uninformed flow.’ Anyone should be able to use DeFi, including people like my parents or people who just don’t care about the blockchain.

I couldn’t give you a good lecture on how the internet works. I’m not an expert, but nevertheless, I benefit from it. I enjoy the internet. So the next wave of applications, I think will be more and more user-friendly and immediate benefits to any user.

The UX challenge is not easy to get right. You want the app to feel extremely seamless to pick up and start using. This applies whether it’s e-commerce or mobile gaming, or whatever. So it’s not about pushing new technologies onto people. It’s all about getting people to come and use it without realizing.”


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It’s Like Email on the Internet: Enjin’s CTO Talks About Blockchain Gaming (Podcast)

Enjin is one of the leading projects involved in the currently booming play-to-earn and metaverse space.

In Layman’s terms, Enjin helps teams tokenize all aspects of their digital journey. In essence, the project provides an ecosystem of blockchain-based gaming products that are interconnected. Its flagship offering is the Enjin Network.

With this said, the entire project is garnering massive attention and is coming to serious prominence as of late because of the recently booming play-to-earn space, as well as all the hype surrounding the metaverse concept.

In this interview, we sit with Witek Radomski, the CTO of Enjin – a long-term cryptocurrency proponent, an early adopter, the author of Ethereum Improvement Proposal 1155. We discussed many exciting topics, including Enjin’s focus, the current hype behind the P2E space, and what’s the metaverse all about.

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From Bitcoin to Ethereum and Enjin

Radomski revealed that he first heard about Bitcoin back in 2011-2012 from a friend who “is a sort of futurist guy.” Ironically, he shared how his friend was all fired up about its whitepaper and how “one day it will be on par with the dollar.”

The price back then was a lot less. It’s funny how things progressed in retrospect. At this point, he checked it out but wasn’t really impressed with the overall UX.

“I went on and installed the Bitcoin QT and it was that really crappy experience. I thought – who’s going to use? It looked like just another one of these digital cash coins.”

Radomski admits that back then, he didn’t really read the whitepaper – admittedly, a mistake. However, even at that time, he noticed that many people were buying graphic cards to mine Bitcoin, which is when he started learning more about it and becoming a part of the community.

Even then, though, he expressed interest in capabilities that are really similar to what Ethereum smart contracts are now. It wasn’t until 2013 that he got really involved, and he revealed that the concept of Ethereum was particularly mind-blowing to him.

“Ethereum’s concept was pretty mind-blowing when I first heard about it. I still didn’t understand ICOs.”

The Enjin CTO said that he was thinking about writing smart contracts and what Ethereum did was revolutionary. This seems to be the reason for which the transition towards the smart contract community happened seamlessly. However, he also told us that Enjin back then was a company trying to put interconnect gaming guilds and online clans, providing server solutions, and whatnot, and were among the first the introduce BTC payments.

Enjin and Efinity: A Foray into Blockchain Gaming

As explained earlier, Enjin’s goal is to enable anyone to tokenize every part of their digital journey without hiring an entire team to do so.

“Our end goal is for when people go into a virtual universe or the metaverse or a game, they can send and receive tokens, they have a digital identity that will have their assets and they can persist this for thousands of years because blockchain is not going to shut it down.” according to Radomski.

He also gave a very clear and painful (for many gamers) reference where a lot of the games that he played back in the days are already shut down.

“All that time I spent in the games – all that is deleted, it’s gone. I would love to have, even just for nostalgia value, but to have my whole digital history persist with me… […] Blockchain lets you have that kind of thing and it gives you full control over your assets. All that time and effort and money you put into the game stays with you.”

As CryptoPotato reported earlier in November, Enjin launched a $100M fund to tap into the Metaverse realm and support teams building in it.

Speaking on it, Witek said:

“We want game developers who are experimenting with interesting ideas, anyone who wants to go into the metaverse, to have some support.” According to Radomski. “A lot of the times, if someone has an interesting and experimental metaverse idea it might be difficult to get funded with traditional means.”

The Trending Metaverse and P2E

Regarding the current state of play to earn (P2E), while it is undoubtedly one of the hottest current trends, it also can’t go without saying that the UX and overall gameplay of existing games are just… scuffed, to say the least.

Amongst the many things that Radomski said on this topic in our interview was the fact that the current games are still rather experimental and are in no way capable of competing with the gameplay of legacy games from triple-A developers: “It’s Like Email on the Internet,” according to him.

However, he also added that “it’s all about inspiring game developers on how they can use blockchain in their current games. I’ve been speaking to the larger game developers across the space for the last few years, wondering how this could fit into their games… […] Now they are actually really starting to take this seriously.”


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Solana’s Anatoly Yakovenko Talks NFTs, Scalability and Where Solana is Headed in 5 Years (Exclusive)

Solana is one of this year’s hottest topics, surging in value, popularity, and overall usage. The cryptocurrency itself is up over 13,000% so far in 2021 and this comes on the back of over $14 billion in value locked in the various decentralized protocols built on Solana.

This growth drew the community’s attention and Solana quickly became one of the most commonly discussed blockchains.

We met Yakovenko on the second day of Lisbon’s Breakpoint 2021 – a 3-day conference dedicated to the Solana ecosystem. Yakovenko must have definitely been happy and proud to see the thousands of attendees and projects, presenting all sorts of dApps and protocols on Solana.

Prior to the conference, Solana held its hackathon, which resulted in more than 500 projects getting $5 million in funding.

An event of this scale says a lot about the Solana ecosystem and brings further notion to the question of whether it’s ready to compete with Ethereum on being the leading Layer-1 smart contracts network. We also pick Yakovenko’s brains on this matter later in the interview.

Solana and Scalability

One of the greatest attributes of the network is the improvement it made in scalability and speed, alongside the improvement of the hardware used by miners. Approximately 2,500 transactions per second (TPS) are already used by the network’s users, according to data provided from the Solana block explorer. The max throughput is around 50,000 TPS and we’re still far away from it, though, the ecosystem is growing exponentially.

We asked Yakovenko about how far are we from the next meaningful improvement in the scale of the Solana blockchain and if he thinks the need for capacity will outpace the speed of hardware improvement.

Yakovenko: The way Solana works is that it tries to account for all the load on the network by moving as much of the operations through the transaction pipeline.

Yakovenko. Source: Twitter

So even consensus votes are part of transactions and that’s because running a node is like running applications that are subscribed to a real-time state. That application costs bandwidth to the networks, it needs to pay for it. So that’s like the design: you kind of have X amount of capacity to play with, and then you can split up the load to whatever demand is.

What we’ve seen right now (i.e., November 2021) is that we can verify the software at like 50,000 TPS with the hardware that we launched with and with the set of validators when we launched.

However, we see now that the latest and greatest chips like AMD, on a modern system exceed over 100K – 200K TPS. To get that performance in the network, you would need to take this high-performance system deployed globally to every validator. That will happen if there’s enough demand. If we ever get to a point where there’s a sustained load of 10,000 TPS, people are going to want to start upgrading. And we see that this is almost happening.

Humans are bad at generating load. So normal human operation doesn’t do a lot of work: like all of Twitter is about 5,000 tweets per second. But there’s a lot of work to scale the read structure, the data, and all that other stuff. The chain doesn’t have to do that.

If you are running markets like Project Serum, as the depth and the size of the markets increases, market makers are naturally going to take positions much faster. They’ll want much more.

So, that’s where it might run out, and if that happens, it means – go get hardware as fast as you can to ship it everywhere in the world.”

But he doesn’t seem too concerned about the above.

Yakovenko: “We’re also making improvements to the software to be able to leverage more hardware. Things like using GPU’s for signature verification, which in the future should be possible to, as GPU’s structural smart contract execution.

However, you need to have enough meaningful load to compute itself right now, if you look at all of the graphs and our metrics dashboard, most of the load is just network IO ops, it’s just sending packets in, verifying them, sending packets out. But those are good problems, bring them on.”

Layer-1 Solutions: Room for Everyone

As we can see, there are some leading L1 solutions, including Solana, that are rapidly chasing in the footsteps of Ethereum. However, apps built on different chains don’t seem to be as seamlessly interoperable, making us wonder if they ever will be.

In this regard, we asked Yakovenko if he thinks we are moving towards a siloed ecosystem and if in the end there will be one L1 chain to “take it all”?

“No, like what you see now with Audius is a perfect example, token governance stuff is on Ethereum. I think they do about a million or something transactions per day for likes and plays and follows and like user interactions.” according to him.

“So that stuff doesn’t make sense to run on Ethereum, and Solana is as good as any other network. If you’re evaluating, like where should I put my application as, like somebody like Roneil from Audius (i.e., CEO and Co-Founder), the reason they picked Salana is that it’s cheap and fast. You can almost think of a theorem as a settlement layer and Solana’s execution layer. And if you look at your application, what you’re building, you can start composing them however you want.”

Solana’s founder thinks there’s room for several Layer-1 solutions to co-exist. According to him, “you have to design spaces that are Pareto efficient. What that means is that when you make one trade-off, you sacrifice something else.”

He continues:

“You have to have a meaningful enough improvement in one aspect to where I think that you’ll have stickiness. I think Ethereum 2.0 is going for this minimum socialized cost of the hardware, they’re trying to go for the lowest possible validator to the point that the validators didn’t even hold the entire stay.

They’re just kind of holding the ratio codes. And that’s a different approach than I want to receive all the information there’s on the world from the chain as fast as possible. Which is what Solana picks.

Now you have what use case are you building and settlement governance. That’s what Ethereum is great for, but I need an effective real-time application with a lot of users, even if it’s non-financial like Audios, you want all of that data in one shard as fast as possible.

Integration is just happening without even us asking about it. It’s not like Audios had to ask us to integrate. Cryptography is the final thing that composes everything. You have a cryptographic signature on Ethereum, we have a cryptographic signature for Solana – so that thing is a composable layer.”

SBF and FTX: The Turning Point for Solana

In July 2020, FTX and Alameda’s CEO, Sam Bankman Fried (SBF), posted a Twitter thread that revealed the Project Serum. He stated that of all the blockchains available, they chose Solana.

In retrospect, it seems this was an excellent catalyst for the hypergrowth of Solana. Yakovenko doesn’t deny it was a turning point for his blockchain.

“For sure it was a turning point, but also for Serum. I think what it demonstrated was that you could take something very complicated, like a central limit order book that has never been done before, and ship it on this blockchain that no one ever heard of, at the time.”

The fact that people were able to do that right in a very short amount of time, about for four weeks, and actually go live and have meaningful liquidity and start like running full-style DEX.

FTX CEO, Sam Bankman-Fried. Source: Bloomberg

I think that the real catalyst is that proof point. We haven’t really seen folks outside of the Solana ship, like complex projects that quickly and I don’t know if it’s just culture, or that Rust provides a better system tooling.”

When asked about future plans and developments coming out of this relationship between Serum-FTX-Solana, the co-Founder answered:

“I guess how we work with FTX or how anybody I think works with FTX, is that if you have a really good idea and you just want to get it done if you talk to them and everybody’s aligned, it just happens. That’s like the magic of working with them.”

Facebook Beware: NFTs Are Coming to Social Networks

In regards to the future of crypto, Yakovenko says he’s really excited about NFTs but sees them as these precursors to social networks.

“These narratives are going to take a few years to play out. There’s obviously a centralized market that runs up to: it’s the ad exchange. What blockchains are good at and what’s been proven in running decentralized markets? These are things for people to coordinate. It seems like NFTs are like the first foray into social networking that is not monetized by ads.

It’s purely for the community – it’s content creators. It’s just people having fun, but still able to monetize and make a living. Will they scale to a hundred million people? Right. Well, will there be an NFT site that can actually hold a hundred million people? I don’t know. But like, I’m excited to find out.”

Some Play-to-Earn Games Shipped too Fast

When asked about the most recent hot trend in crypto NFTs and the play-to-earn model, the Solana Founder replied that some just shipped too fast, which is – according to him – the most important thing in crypto nowadays.

“Games take a really long time to ship. So given that they shipped that, they shipped as fast as they could, which is probably the most important thing in crypto right now is shipping as fast as you can.”

From my personal experience, seeing and meeting great developers who currently build the next stage of Play-to-Earn, I shared with Anatoly that it is starting to feel like things are moving quickly in terms of game quality.

He agreed. “Aurory, Star Atlas, and I’m missing a bunch of games too. I’m really excited about those. I think that play-to-earn is a really tricky thing to get.

Excited about it: Star Atlas. Source: Official Twitter

It also intersects this idea of the creator economy as people that are building effectively, you’re cheating the game as a creation tool. As its own little social network, but with assets that are not fungible across, maybe the entire ecosystem, but even within that game, like you look at something such as World of Warcraft, all those things always had secondary markets for all the items. It’s tricky to get.

I’m excited to see people try it. There’s definitely this idea that, sometime in the future, maybe we were all NPCs (non-playable characters) in somebody else’s quest.”

The Governance Model of Solana

The importance of a structured model to make decisions and to implement changes to a blockchain cannot be ignored. It seems that a good governance model is a must for a dApps-based blockchain to stay relevant for years to come.

When asked to elaborate on the current and planned governance structure of Solana, Yakovenko said:

“The governance is almost like old school release engineering processes for software. If you actually look deep into it, like what we have is a governance dashboard. That was a reference implementation that the Mango team took forward and basically functions as ‘let’s propose a new release, everybody that wants to review reviews it and then boats to do the upgrade’.

That’s very much a software-real process for upgrades. It reminds me of just open-source software development. What I hope to see is that the tooling to analyze the changes be able to look at the differences and have some assertions about audits and code quality and things like that. But those get better over time.”

The Future: 1 Million TPS in 2026?

Where do you see Solana in five years from now?

Yakovenko: “As an engineer, if it’s not going to happen in two weeks, there’s a 50% chance it’s never going to happen. So we don’t have roadmaps for that reason. We call it fire-driven development. In five years, I guess hardware improvements should at least make it 4x faster. I’m hoping to break the one gig of a barrier of more than a million TPS possible, but we’ll see. So there’s a lot of time, but also a lot of work ”

And lastly, speaking about Solana’s market cap in 5 years, Yakovenko doesn’t care. “I don’t care. It’s just like I want to build something that people want to use. That’s the most important thing.”


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This is How we Avoid Listing Scams on CoinGecko: Interview with Co-Founder Bobby Ong

The crypto industry has grown exponentially over the past couple of years, attracting many newcomers who’re looking to either invest or interact with thousands of different cryptocurrencies.

One of the most recognizable resources that provide comprehensive and easy-to-track data about the market is CoinGecko. With estimated monthly traffic of $113 million, it’s one of the biggest websites in the industry and an important entry point for anyone interested in following what’s going on in the market.

CryptoPotato had the chance to sit with Bobby Ong – the co-founder and COO of CoinGecko. In the following podcast, we talk about how he got into crypto in the first place, how the CoinGecko platform works, current trends, and where Bitcoin and the ecosystem might be headed next.

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Lowering Interest Rates Led to a 100M Monthly Visits Platform

Before crypto, Bobby was studying economics in London, trying to understand how the traditional financial system works and he spent a lot of time trying to understand what causes a global financial crisis.

“Some of the things I learned was the zero lower bound, which was taught in university back in 2011 or so, and it basically says that there’s no way that interest rates can go to negative, because if it does, everyone will take their money out of the bank: Clearly – that’s not true.”

Ong said that as soon as interest rates started trending downwards back in 2013-2014, he questioned if his knowledge in economics became obsolete – the knowledge that was just taught to him in university.

Back then, the cryptocurrency market was nowhere near what it is today and Ong revealed that it was to him more of a hobby rather than something that he was devoted to.

“Crypto was a very fringe thing and it almost seemed as if the only people in it were libertarians and tech nerds, so to speak. Maybe I fall in the tech nerd category.”

He explains that CoinGecko was a side project, admitting that despite this, he and his partners “kind of knew” that Bitcoin and blockchain will change the world in a way that the internet had. He realized that they may have been too young to participate in the internet boom but they’re “all starting from scratch.” That’s how CoinGecko’s journey began.

Bitcoin Bear Markets – For Building Up

The cryptocurrency market saw a massive explosion in its valuation in 2021, as the total capitalization peaked above $2.5 trillion, seeing an influx of users coming in. And this we can tell – you guessed right – according to data provided by CoinGekco.

Ong talked about the challenges of being at the forefront of this.

“It’s a very volatie industry where the (crypto) cycles come in an instant and in a bull run everything goes insanely bullish and then the bear market comes and nobody is doing anything for 3 years.

In this regard, he remarked that bear markets are when they get the time to build and improve their systems at CoinGecko – just because there’s not too much happening. And yet, no matter how much you prepare, “you always find that when the bull market comes, the demand is just so strong that whatever preparation we’ve made and we’ve thought is enough, is just not sufficient.”

He added that this is true for the entire company – the tech stack, the support, operations, and whatnot.

The Uniswap Challenge

We were also curious about how CoinGecko tracks the provided information and makes sure that it’s relevant. From a technical standpoint, Ong explained that the majority of trading in the market happens on centralized exchanges but we also saw a major shift in the tide last year, in 2020 – when Uniswap saw the light of day.

Uniswap’s foray into the market presented a lot of challenges for CoinGecko because their app was tuned to consume APIs from centralized exchanges. The fact that there was no centralized API made it harder for the website to gather the necessary information and they had to figure it out. Bobby shared that they are using The Graph’s subgraphs which helps them index and catalog the data.

In terms of choosing which cryptocurrencies to track, he shared that there’s a request form that needs to be filled with all the information. Then, an internal team from CoinGecko goes through it and assesses it based on undisclosed criteria which, if met, will get the coin listed.

One of the things that Ong mentioned is the emerging trends in the past couple of years, as well as ones that may shape the future.

He shared that nobody expected decentralized exchanges such as Uniswap to produce so much trading volume but, in fact – it did. In some instances, Uniswap was doing higher traded volume than some veteran centralized exchanges such as Coinbase. Bobby believes that this is a trend that we’re seeing and one that will only grow bigger.

He also touched on the boom of non-fungible tokens (NFTs) and the implications they might have on the industry going forward.

From a market perspective, Ong shared that it’s hard for him to predict where the current cycle will top out. We asked him if he thinks bitcoin’s price will reach $100K this market cycle:

“I think we may, but it’s hard to say. It’s anyone’s guess, I don’t. It’s very hard to make price predictions.”

Avoiding Scams

One of the most pressing issues that investors run into when it comes to cryptocurrencies is fake projects and scams. These can be a huge capital sink, especially for newer entrants and people who don’t have a lot of experience. Naturally, one of the first places they would search price-related information for a token would be CoinGecko.

We asked Bobby how they vet projects and how they make sure scams are not included. First things first, he explained that there’s an application form that teams have to submit and after that CoinGecko’s compliance team takes over and verifies the information.

On the matter of  how they avoid scams, he said:

We do have a delisting policy. If a project gets to any financial regulator’s watchlist, they will be removed from our site. And if we do receive reports, we try to verify and check and potentially delist. Sometimes we put notices instead of complete delisting while we’re still investigating.

In general, Ong said that the definition of a scam is a tricky one fo consider because some people, for instance, think that TRON is a scam, but that’s completely subjective and not based on objectivity. Of course, there are evident scams such as when there’s a honeypot contract where users are able to deposit into but not to withdraw – in this case, they wouldn’t list the coin at all.


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Analyst Daniel Joe is Very Bullish on Bitcoin: But Here’s The Only Thing Can Change His Mind (Podcast)

Bitcoin’s price over the past couple of weeks has been on an absolute roller coaster, leaving many to wonder whether we’re still in a bull market, what’s going to happen next, and how to properly position themselves for the last quarter of the year.

Amid these turbulent times, we sit down with prominent on-chain analyst Daniel Joe. We talk about the current state of the market, whether or not we can expect Bitcoin to hit $100K anytime soon, as well as some useful advice for those of you who are just getting into the crazy world of cryptocurrency trading and investing.

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Selling Apple Stocks for Bitcoin

Daniel Joe has over 10 years of experience in the markets, starting out in equities working for a myriad of organizations spanning from small tech startups to mid-sized and big corporations.

He is currently an on-chain technical analyst at Lightning Capital and data intelligence firm CryptoQuant. If his name sounds familiar, it’s because he’s also responsible for the amazing Bitcoin price analysis here at CryptoPotato.

Joe shared that he started out as a traditional value investor, relying on secure and time-tested principles. However, he also managed to catch the “tech growth wave” by investing in Apple, Tesla, and NVIDIA.

He first heard of Bitcoin back in 2014, but it wasn’t until later on in 2017 when he really dived deeper into it, and things clicked. Interestingly enough, Joe recently sold a serious chunk of the Apple stock he’s been holding for years and invested in BTC.

“The reason I sold Apple is because for the longest time I was waiting for the market to value Apple as a service company because that would give it a P multiple of roughly 30-40 times earnings, like Google or Facebook. This year that’s when it finally happened.

[…] I held on for a very long time and realized a lot of gains and thought that this is a great time because Apple is at multi-year highs, and Bitcoin is at $30,000. This was during the May-June crash.”

Bitcoin is Undervalued

The simplest way to understand the reasoning behind Joe’s move is this – Bitcoin is undervalued. Now, he’s a technical and on-chain analyst, so we also focused on that – what’s going on in the blockchain itself that backs this up.

First, Joe takes a look at how long-term holders and miners behave during the different market cycles.

One of the reasons I keep saying we’re not in a bear market is because the long-term holders and the miners who control most of the supply, are accumulating.

He reiterates that the most recent negative price fluctuations happen mostly because new and short-term holders, also commonly referred to as weak hands, are the ones selling. He also attributes some of the recent downfalls to big liquidation events but doesn’t see any serious reasons to think we’re not in a bull market.

And yet, the analyst keeps a realistic standing and lays out the one reason that might make him doubt Bitcoin. He said that the only such thing is if something newer and better comes up, but the chances of this happening are looking particularly slim right now.

A Look Into the (Bright) Future

$96,000 per BTC by December this year – that’s the best-case scenario according to Daniel’s analysis. He also prefaced that by saying that it might also happen “sometime in Q1 next year (read: 2021).” He believes that we are yet in a bull market and also lays down further targets going forward.

Joe’s bullish target is $178K – $190K in December, Q1, or Q2 next year. If things go wild, though, he also said that we might see BTC trading above $300K and above.

The analyst made it clear that these targets are both time- and condition-based. There are a lot of targets that Bitcoin needs to conquer before we can get to those numbers. It’s also very important to monitor how on-chain metrics fluctuate while hitting these targets.

Daniel also compared the current cycle to the one from 2013 and gave some very precious advice to newcomers into the space, so make sure to take a look at the video and watch it until the end.


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BitMEX in 2021: CEO Alex Hoeptner Explains How He’ll Take the Veteran Exchange to a New Era (Exclusive)

Established in 2014, BitMEX is a veteran derivatives exchange, a pioneer for the crypto industry, which used to be the leading one for a serious period of time. In fact, the traded volume on BitMEX was much more than that on any other derivatives exchange until 2019.

BitMEX exchange had a serious impact on the cryptocurrency market as a whole, and in a sense, helped shape the industry into what it has become today.

CryptoPotato had the pleasure of interviewing Alexander Hoeptner – the CEO of BitMEX. In this episode, we talk about the ever-increasing regulatory presence in the industry, whether it’s good or bad for it, where the market is going to, how’s BitMEX doing after the $100 million CFTC and FinCen settlement, and many more interesting things.

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Crypto Similar to Traditional Finance, But Faster

First things first, it’s important to note that Hoeptner comes with a rich background in traditional finance. Boerse Stuttgart, Euwax AG, Deutsche Borse, and so forth are just some of the conventional institutions he had a high-ranked and even executive position at for years before joining BitMEX.

With this in mind, we felt that he’s the perfect person to ask about the overlap between crypto and traditional finance, whether it exists, and to what extent.

“Even if the more crypto-native folks might not like to hear it, crypto is actually, in many senses, like the traditional financial world 25-30 years ago, coming from an unregulated, unstructured world, going to a regulated one and seeing the same impacts that we’ve seen in the traditional financial world 25-30 years ago.”

However, Hoeptner also outlined that the developments that are going on in the crypto field, compared to that in the traditional financial world, are happening at a “much faster pace.”

“What we’ve seen happen in the traditional financial world in the past 30 years happened in 2 years [in the crypto industry].”

Stepping into Arthur Hayes and Ben Delo’s Shoes

A little less than a year ago, the United States Commodity and Futures Trading Commission (CFTC) charged the BitMEX owners with illegally operating a cryptocurrency exchange – a move that came as a shock to the entire community. At the time, spearheading the company was Arthur Hayes – one of the most iconic figures in the field.

Alexander Hoptner, Bitmex CEO. Image by: RYT9

It’s worth noting that the corporate structure behind BitMEX is called 100x Group. Not long after the charges, Arthur Hayes stepped down as the CEO, while Samuel Reed, the CTO, did the same.

We asked Hoeptner how it was stepping into the shoes of the previous founding team, including co-founders Arthur Hayes and Ben Delo:

“It is heritage because these are really iconic characters and I’m not them. I’m Alex, I’m not Ben [Delo], I’m not the inventor of the perp. […] I will bring Bitmex to the next level.”

Sharing more details about the current focus of 100x, as well as its structure, he said:

“Firstly, 100x is the holding company behind BitMEX, which is the operation brand. […] The plan is to move into spot, brokerage, custody, information products and surround this with an educational arm because I think and we believe that there is still a lot of educational work to be done to go toward full mass-market adoption.”

He clarified that all of this will be done under the BitMEX brand. The CEO also outlined that the focus on KYC and AML will help them transition to other products, more precisely – spot and custody.

It’s also worth noting that back in January 2021, BitMEX reported that 100% of their trading volume and the user base is entirely verified.

‘We Need to Develop the New Regulation’

The past few months saw a massive focus on regulatory efforts in the cryptocurrency field on behalf of legislative bodies throughout the world.

Hoeptner thinks that it’s “most likely” that regulators will first put crypto into the same buckets as traditional assets. This, naturally, is wrong, according to him, because of the capabilities and possibilities of the tokenized world and crypto in general. However, Hoeptner said that it’s the industry’s obligation to educate together with the regulators of the mass market and tailor the rules to fit the specifics of the field.

“This comes to us. We cannot expect the regulators to be more advanced than us on that space. We need to get to them and discuss and in a process develop the new regulation.”

Throughout the podcast, we also discussed BitMEX’s policy on adding new coins – how do they vet the projects and the specifications around it. Hoeptner also shared his plans, saying that his goal is to bring BitMEX to the next level.

To find out more about what can we expect from one of the most iconic exchanges in our field, tune in and listen to the above podcast.


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