Joe what a day to have you. What a week.
It seems that it is going to be on a scale of one to 10 one being extremely
nervous and 10 being highly confident. How are you feeling right now about the
merch. I am 10 highly confident.
We think it's gonna be probably nothing and probably nothing is a playful phrase
in our ecosystem that indicates that sarcastically that we think it will
be enormously impactful. But it'll also be very likely nothing in
the sense that there's no disruption that's going to be experienced by end
users. There's virtually no disruption that's
being experienced by software developers.
It'll be as smooth as if your iPhone or your laptop has upgraded its operating
system automatically overnight. OK.
In terms of impact in the history of our ecosystem there've been two major events
so far. The advent of Bitcoin and the
development of a theorem a much more programmable and expressive block chain
technology. The slots in as number three.
My opinion. Well Joe you're kind of painting a
picture of smooth sailing. No one's going gonna notice it's going
to be seamless. Yeah.
This also isn't necessarily real world proven yet.
What is your biggest concern about things that potentially could go wrong.
Tiny little concerns. There's been so much testing that the
merge itself is overwhelmingly likely to be very smooth.
But we haven't tested it in the context of the whole big ecosystem which is
becoming an economy in its own right. And so there are lots of little projects
that maybe read from the block chain or depend on
it. In some ways it's possible that some of
those little projects 7 to upgraded what they need to upgrade to in
order for their own smooth transition. But all the major services that depend
on the block chain have already done the work.
I think that's a good question. We've been talking a little about those
concerns that maybe some of the exchange exchanges have.
And the reason perhaps that they're pausing withdrawals and deposits
including being layer two is and how they interact with the theory on after
the merge. Are there changes that need to be made
for any projects that are tied to a theory that may need to also make
changes to really react to this merge. Well as many have said we've been
telegraphing this for for many years and telegraphing it very explicitly for many
months. And so as I said all major exchanges all
major infrastructure have done the work. And so there's nothing to be concerned
about. So you mentioned the ecosystem around it
to Joe. I mean how what is your expectation here
about how the economics change when you move to proof of stake.
Is there a sense of how much people are going to stay kind of in the initial
months of the merge and what that will mean for what your home is worth.
Well there's already an enormous amount of ether staked in the beacon chain.
The mergers are essentially moving the consensus chain on the execution chain
together into a single system. So there's already a huge amount of
ether staked. And we anticipate that with the
reduction in this overhanging uncertainty
once the merger is complete that many more actors including institutions
financial institutions will take that as a go sign that the coast is
clear that they can treat ether a yielding asset as something that they
want to participate in as correlated or uncorrelated asset and an infrastructure
that they already consider potentially
systemically important in the future and need to gain expertise in.
And so we're reaching out. We've spoken to many financial
institutions that are that are ready to dive in.
Well Joe you talk about the future and of course this is a major upgrade.
No doubt. But it also the idea sets the stage for
further upgrades down the road upgrades that could do things like improve
transaction speeds. Do you have a timeline as to what
upgrade is going to come next. And when you say so
the amount of ether that will be issued by the protocol will be reduced by about
90 percent. And further it won't actually be movable
off the consensus change. For a while we implemented a minimum
viable merge fork so that we could just ensure that we get everything right.
And so we've delayed some other pieces to subsequent forks and it'll be a bunch
of months before any of the newly issued ether is able to.
Leave the addresses that it'll be in and so that's going to be very interesting
for supply demand dynamics where the supply is of new ether is essentially
zero for quite a while. The next major upgrade will add what's
called data availability guaranteed data availability shards.
And so we've seen the term network split up into a security module an execution
module and soon a data available availability module.
The execution module has already brought tremendous scalability in the form of
these layer to roll ups that run transactions above the chain.
But with the full security guarantee of the security layer adding this third
module data availability will enable these layer to roll ups to be bigger
faster and more plentiful. Joe I we only have about a minute left
here. I'm really curious here about staking in
some of the dynamics here. Do you fear that staking as a business
as you see Coinbase doing more of an as you'd like to see more financial
institutions do to encourage more staking to built this network.
Do you think it can come under scrutiny from regulators who fear that this is a
yield generating product that this is causing liquidity mismatches as we've
seen in some other yield products and a crypto space.
No. It is under scrutiny by regulators.
Everything we do is under scrutiny by regulators.
And since the start of the advent of our
ecosystem we've been progressively decentralizing what we do.
We didn't start out massively decentralized and that is the goal.
And every time that hackers or attackers within the rules in our
ecosystem to try to exploit certain systems for monetary gain or regulators
identify weaknesses in some of those weaknesses are in the form of
centralization in our technology. We take that as a teaching signal and
that's where we focus next on on making things more
rigorously maximally decentralized. And so.
OK. We already have a lot of work underway
to decentralize every aspect of staking consistent.
I just want to squeeze this in quickly. So one word answer one.
Do you think the flipping might happen. Sam.