186 - The Blockchain Trilemma - ETH Vs SOL Vs ATOM with Mike Ippolito
Sep 4, 2023
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Mike Ippolito, co-founder at Blockworks, discusses the Blockchain trilemma and how Ethereum, Solana, and Cosmos chains attempt to solve it. Topics include scalability, decentralization, validators, liquid staking, and the concept of an 'invisible hand' in decentralized systems.
Ethereum, Solana, and Cosmos have different approaches to solving the blockchain scalability trilemma.
Each ecosystem prioritizes different aspects of scalability, decentralization, and security.
Ethereum focuses on solo staking, Solana relies on professional validators, and Cosmos combines solo validation with professional node operators.
Ethereum's ETH remains the economic security for the ecosystem, while Cosmos and Solana face challenges solidifying the value and utility of their tokens.
Deep dives
Ecosystem Convergence
Ethereum, Solana, and Cosmos are converging in their strategies to solve the blockchain scalability trilemma. Each ecosystem is aiming to optimize their approach to scalability, decentralization, and security.
The Role of Validators
Ethereum prioritizes solo staking and encourages users to validate the network themselves. Solana expects professional validators to handle the validation, while Cosmos falls in between with a mix of solo validation and professional node operators.
Strategies for Scalability
Ethereum is adopting features from app chains and rollups to enhance scalability. Solana's parallel execution and localized fee markets optimize for high throughput and low latency. Cosmos tackles scalability by promoting interoperable app-specific chains.
Economic Security
The ecosystems compete to establish their native tokens as money to provide economic security. Ethereum's ETH remains the economic security for the ecosystem, while Cosmos and Solana face challenges in solidifying the value and utility of their respective tokens.
The Future of Rollups and Superchains
The conversation explores the relationship between Ethereum rollups and superchains, discussing the trade-offs and incentives for different configurations. They discuss the concept of sequencers and how they define the boundaries between different chains and ecosystems. The potential for shared sequencers and cross-domain MEV extraction is explored. The role of governance and value capture in these systems is also discussed, highlighting the need for further research and development.
The Challenge of Catching Up in Crypto
The hosts address the difficulty of keeping up with the rapid pace of developments in the crypto space, particularly for newcomers. They advise finding something that genuinely interests you and learning more about it. They also suggest curating your Twitter feed to follow knowledgeable and insightful individuals. Additionally, they emphasize the importance of podcasts and other educational resources for staying informed and engaged.
The Power Dynamics in Blockchain Ecosystems
The conversation delves into the various power dynamics present in blockchain ecosystems, specifically focusing on the Ethereum, Cosmos, and Solana ecosystems. They discuss the role of sequencers and how they can shape the boundaries and value capture in these ecosystems. The concept of proof of governance and the potential for shared sequencers are explored. The relationship between rollups and layer one chains is also examined, highlighting the challenges and opportunities for MEV extraction and cross-domain activity.
Excitement for the Permissionless Conference
The hosts express their excitement for the upcoming Permissionless Conference in Austin, Texas. They highlight the unique value of the conference in bringing together knowledgeable and passionate individuals in the crypto space. They encourage listeners to attend and engage in the conversations and discussions taking place at the conference.
Today we're joined by Mike Ippolito, co-founder at Blockworks, who's here to breakdown his take on the Blockchain trilemma and how Ethereum, Solana, and Cosmos chains all attempt to solve it.
0:00 Intro 6:13 Intro To Mike 11:16 The Three Frontiers 19:11 Recap and Overview 25:58 Different Approaches to The Scalability Trilemma 31:42 Explaining PEPC 36:13 A Point By Point Walkthrough 45:29 Ethereum Vs The Invisible Hand 56:58 Should The Free Market Be in Control? 1:01:11 Moloch 1:08:13 Solo Validators 1:10:31 Defining Decentralization 1:15:49 Power Law Winners 1:19:03 Roll Apps vs App Chains 1:29:09 Defining Soverign Rollups 1:33:29 Sequencer Incentives 1:36:20 Exploring The Superchain 1:41:31 Price Discovery on Chain 1:44:15 Making Crypto Accessable 1:48:50 Permissionless Panel 1:51:29 Outro and Disclaimers
