Podcast Insights: Blockchain Business Needs New Metrics

Researcher’s Comment

This is the first article analyzing the podcasts published from 11.01 to 11.15. During the analysis of 78 podcasts on the Kaito Crypto AI Platform, many valuable lessons were obtained. The participants of the podcasts offered a diverse range of perspectives, including industry experts, scholars, VCs, builders, and TradFi experts. This diversity in perspectives greatly enhanced the effectiveness of examining the industry. This article has selected some of the most valuable podcasts.

1. Podcast Insights

1.1 There Needs to be New Metrics for Blockchain Native Businesses

Source: [LightSpeed 2023.11.11] What Metrics Matter for Internet Native Money? | Tushar Jain

Tushar Jain, a managing partner at Multicoin, was interviewed for this podcast episode to discuss various topics related to blockchain and cryptocurrency. He provided an optimistic view on Solana, highlighting its growth and potential as internet native money if it can focus on reducing complexity and improving user adoption. Jain also talked about the value of Solana's native token and the future promise of NFTs for use cases like ticketing, DePIN, and proof of ownership.

Looking at the broader crypto market, Jain predicted that decentralized prediction markets would drive the next major wave of adoption and growth. He emphasized evaluating blockchain projects based on qualitative measures like the unique intellectual capital behind them and number of active developers, rather than just quantitative network statistics. Jain also argued that concerns about Solana's decentralization were overblown and discussed the diminishing relevance of Bitcoin maximalism and market capitalization in the evolving crypto industry.

Regarding the regulatory environment, Jain expressed optimism that the U.S. would remain a global leader in crypto technology as long as there were no major policy mistakes. He advised startup founders to quickly validate or invalidate their theories and focus on being contrarian yet correct to succeed.

1.2 Hongkong, Talent is Flowing from Gaming Companies to Crypto

Source: [The Scoop 2023.11.02] Talent is flooding from Asia gaming companies to crypto, says HashKey Capital exec

Hong Kong is emerging as a hub for crypto and Web3, with progress in regulation and increasing interest from investors. Key players include trading platforms like HashKey Group, asset managers like Animoca, OSL, Hacks Trust and, Kobo. Investors are most excited about trading activities and NFTs. However, the market remains cautious, with decreased VC investment. Bitcoin still dominates, though some altcoins like Solana are rising. The future looks toward more institutional engagement, innovation in Ethereum, and gaming as a potential killer app. Hong Kong has potential to become a leading Asian hub for Web3 investment and trading.

While Hong Kong faces competition from Singapore, it retains advantages like its mix of traditional and crypto-native investors. Investor focus is evolving from dominance of Bitcoin to increased interest in altcoins, layer 2 solutions, and leveraging blockchain for gaming. Market sentiment has improved but remains wary following recent declines. As regulation matures, Hong Kong can leverage its financial sector expertise to drive innovation in Web3 and crypto. Significant opportunities lie ahead despite current caution.

Additionally, there is a growing number of Web2 talents from companies like Tencent in China who are moving from China to places like Hong Kong, Singapore, or other locations. Their primary focus is on building gamified or gaming-focused projects. As a result, Hashkey has also made investments in several of these talents.

2. Keywords: Solana and ETF

2.1 Solana

Source1: [Bell Curve 2023.11.01] Solana vs Ethereum: Two Paths, One Endgame | Jon Charbonneau

Source2: [The Delphi Podcast 2023.11.07] Chris Burniske: The Solana Thesis, Wisdom From Building Placeholder and The Psychology of Investing

Source3: [LightSpeed 11.07] Solana: The Global State Machine | Anatoly, Dan Albert, Amira Valliani, Noah Prince, Mert Mumtaz

The sources provide various perspectives on the Ethereum and Solana blockchains, highlighting debates around scaling approaches. Ethereum is working to scale through layer 2 solutions like rollups, prioritizing decentralization and security inherited from the base layer. Meanwhile, Solana has focused on delivering high scalability and performance on layer 1, but faces challenges around centralization and resilience. The relationship between the two networks is nuanced - they have differing philosophies but potential for mutually beneficial innovation.

Solana's ecosystem continues to grow, as evidenced by the recent Solana Breakpoint conference. Despite the bear market, Solana developers remain committed to building products and engaging new users. Upgrades like the Firedancer client aim to improve Solana's technical robustness and performance. The network also plans to enhance functionality with developments like Token 2022 and runtime optimizations. Solana aims for synergy with Ethereum, recognizing their differing strengths.

As both networks evolve, there are open debates around approaches to scaling, decentralization, and governance. Ethereum promotes community-driven progress but faces pressure to ship solutions quickly. Solana touts its high speed but must demonstrate resilience and decentralization. Striking the right balance between these priorities and values continues to challenge both ecosystems. However, the overarching ethos of open collaboration persists, alongside a recognition that healthy competition ultimately benefits the wider blockchain industry.

2.2 Crypto to ETFs

Source1: [Empire 2023.11.07]mpire Debates: The Solana Comeback and BlackRock ETF Playbook

Source2: [Bankless, 2023.11.02] Bitcoin ETFs: Bullish or Bearish? with Alex Thorn

Source3: [Empire, 2023.11.10] Institutionalizing Crypto & The Return of the Bull Market | Roundup

The potential approval of a Bitcoin ETF in the US is expected to have significant impacts on capital inflows and price appreciation for Bitcoin. Analysts estimate that a Bitcoin ETF could lead to $14.4 billion in inflows for Bitcoin in the first year, increasing to $26.5 billion in the second year and $38.6 billion in the third year. This level of persistent yearly buy pressure is forecasted to cause the price of Bitcoin to appreciate by 74.1% in the first year alone. By opening up access to Bitcoin for wealth management channels like broker-dealers and banks that currently have limited crypto access, a Bitcoin ETF could expose the top cryptocurrency to a much larger pool of institutional capital.

In addition to discussing the impacts of a Bitcoin ETF, the sources also explore the institutionalization of the crypto sector more broadly. The podcast episode covers various industry developments like upcoming conferences, the potential restart of major exchanges like FTX, and increasing deal flow and investments in blockchain projects. The conversation highlights the importance of factors like branding, security, and liquidity for exchanges to succeed. There is also discussion around the strategies of different blockchain platforms such as Ethereum and Solana in attracting developers and users.

These podcastd analyzed both the near-term price impacts that could result from a Bitcoin ETF approval as well as longer-term trends in the growing institutionalization and maturation of the cryptocurrency market. Analysts remain bullish and enthusiastic about the future potential for disruption and adoption as mainstream accessibility increases through vehicles like ETFs and as the community development of key networks and platforms continues. However, they also acknowledge the risks and volatility still inherent in this emerging crypto sector.

3. Project Interview

3.1. Elusiv, Privacy in Solana

Source: [LightSpeed, 2023.11.10] Why Solana Needs Privacy For Mass Adoption | Elusiv

Privacy is crucial for mainstream adoption of cryptocurrencies. Traditional financial systems lack privacy, while projects like Zcash and Monero have failed to achieve widespread adoption due to usability issues and compliance difficulties. Zero-knowledge proofs allow users to prove knowledge without revealing private data, and can be implemented through technologies like confidential transactions, Merkle trees, and privacy protocols. Integrating privacy protocols into applications like MarginFi is important for default privacy in transactions like taking out loans.

The future of cryptocurrencies will likely see the majority of transactions being private by default. Advancements are being made at the protocol level, such as Solana's development of pre-compiles for efficient zero-knowledge proof verification. Technologies like multi-party computation, homomorphic encryption, and privacy features in Solana like Token2022 and confidential transfers can provide privacy while balancing usability and security. Widespread adoption will depend on addressing trade-offs between privacy, user experience, and regulatory compliance through continued innovation in privacy-enhancing technologies.

Elusiv is building a privacy layer for decentralized applications using secure multi-party computation (MPC) and FHE. FHE allows computations to be performed directly on encrypted data without decrypting it first. Elusiv implements an MPC protocol in two phases. In the preprocessing phase, parties encrypt their private inputs under an FHE scheme. In the online computation phase, the parties evaluate functions on the encrypted inputs using FHE's homomorphic properties. This allows privacy-preserving computations across decentralized applications involving multiple parties.

3.2 Eigenlayer, Unifying the Security Layer of Blockchain

Source: [0xResearch, 2023.11.02] EigenLayer: The Endgame Coordination Layer | Sreeram Kannan and Soubhik Deb

Pooled security is an important concept in the crypto ecosystem where $100 billion staked across 100 differnt protocols provides collective security. EigenLayer aims to build on this by creating a platform for decentralized protocols as services, similar to SaaS. On this platform, users can delegate their stakes to trusted operators who run the services, while restaking allows capital allocation across multiple services and provides security with it. Governance is still in development but may involve trusted execution environments to enhance trust between stakers and operators.

EigenLayer will use a dual token model of ETH and native tokens for security and utility. Various applications can be built on it like rollups, watcher networks, and AI inference engines. A public testnet is expected this quarter with the mainnet planned for Q1-Q2 next year. Pooled security currently lacks attributability but upcoming Eigenlayer V2 mechanisms aim to address this. Enshrining certain actions into Ethereum requires careful consideration.

3.3 Superstate, Trillions in RWA to DeFi

Source: [The Delphi Podcast, 2023.11.13] Robert Leshner: Superstate's Strategy of Integrating Trillions in Real-World Assets into DeFi

Robert Leshner discusses his concept of SuperState, which aims to integrate trillions of dollars in real-world assets like US Treasuries onto the blockchain. This would allow crypto participants to access risk-free yields through decentralized finance applications. Leshner believes this evolution aligns with crypto's goal of creating a programmable financial system, and could have significant impacts such as establishing a risk-free rate that filters into AMMs and borrowing markets. However, challenges include the need for off-chain components given custody and compliance issues.

Leshner also addresses criticisms that incorporating safe assets violates crypto's narrative. He argues both sides must articulate their perspectives on tokenized assets' advantages and disadvantages. The conversation covers topics like the potential effects of stablecoin growth, lessons from Compound, and SuperState's aim to provide institutional-grade products and hiring needs.

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Thanks to Kate for designing the graphics for this article.