Hashing It Out
Hashing It Out

Episode 122 · 1 month ago

Hashing It Out Personals: Lucian Stroie

ABOUT THIS EPISODE

In this Hashing It Out Personals episode, we talk to Lucian Stroie, Senior Technical Product Manager at Ava Labs and Founder at Coral.

You can also watch this episode on YouTube .

Welcome back to Hashing it Out. I don't know what episode this is. It's a personal episode. So today we have Lucien Stroy from all over the place. I don't know. You've been doing a lot. I've done so many things since i've known you. You earned a few things. Now do the normal thing and introduce yourself, tell us what about to and we'll have some fun. Yeah, my name is Lucian Destroy. I am I'm a blockchain developer now product manager. I'm currently working at Ava Labs and I'm also a startup founder. I'm the CTO of a startup called Coral and it's a music n f T social experiment really that I'd love to get in further in the episode. But yeah, we have a lot of history, and that history is really important with my formation, my foundation blockchain. I spent a lot of time growing up in this industry around you guys. How to show on this podcast about fifty plus episodes called dose there and if anyone recognizes my voice, I think I have to go a little closer to the microphone too, say hello when you welcome. This is another episode of a Dose of Ether. Oh man, we go way back. We this is a personal episode, right, I said that, do we get to talk about that night at dev coming? Oh? Man, no, no, we can, we can. We can for sure remember. Oh you don't remember because you actually went to bed. But Lucien and we went out on the Progue the Progue City. Oh yeah, yeah, we had that night. I went to my first multi layered club. It was I felt that was in the movie Blade. I was like just techno and dance music everywhere, man, And it was raining a little bit, and I had some like kind of formal dress shoes and the cobblestone. You know, did you have like a hat for a while? I did. Yeah. Yeah. So when Corey and I went to our first business trip, it was London Blockchain Week and like crypto was dead at the time, right, So the only people who showed up to the conference were suits, and I bought a top hat and a trench coat exactly. Yeah. I still have it. Oh yeah, I have a picture of Colin in that top hat in a Penguin outfit random side out. Yeah, he's dressed as a penguin with a top hot calling it. He was the original founder of this podcast, ash out All, one of the just like engineers, that all allabs. It's been a lot of years, but it doesn't feel like it's been that many years. But it went by fast. Um so coral tell us about it. Man, I got a lot of musician friends, and I'm not just it's not it's not one of those things like I got a musician friends. I actually do. My Rosie musician his friends and musicians. We hang out with him all time. Uh, you know, how does it's always been You were actually gonna you started a music club, but jazz club very no, not started. Like we're still doing that we had, we're still doing that. Yeah, I'm actually jazz club called Sharp nine Sharp nine Jazz literally looking for property as we speak. Um and uh. I always is tell my brother's...

...friends like, hey, you know, you should look at the blockchain technology. And I always like fuck, you try to sell me some doge bro and I'm like, no, it's not, it's not like that. It's not it's not like that. I feel like, um, you know, you get a little bit more of your money back for the time that you spend other than like you know ten, you know ten two tenths of a penny for every five streams on Spotify, you might get an actual pity for one stream you know, and so so what is what how can you know? Blockchain technology, web three, all the terms we could throw out help them. Yeah. So one of the first things that we UM did when we found Coral is, uh, we thought about, like, okay, first of all, what's wrong with the current music key here system right? And what went wrong in our opinion is that there was this promise that if you, as an emerging more independent artists, give away your music for free online, UM, you have greater access, people find it easier to listen to your work. UM, you'll be discovered, and then you'll make money through live shows. And that's where most artist revenue comes from. Still, like up until like a certain echelon of artists where you're like a top ten or top twenty streamer, it's not an important source of income for most musicians, and that collapsed in the pandemic, so there was no live music. The main source of income for UM. Emerging artists basically dried up. Most independent artists dried up, and basically people started reconsidering what their relationship is with their existing record deals with streaming services, with social platforms, especially and we spotted this opportunity about a year ago. Coral has been going on for a little over a year, and UM, the first thing that we noticed was the n f T trend. Like this time last year, n f t s were super hot. UM. This was still the top shots phase of n f t s in which it was relatively immature, and UM, we saw this opportunity that if we can build a decentralized alternative to top shots that still incorporates easy user onboarding and credit card integration, UM, then we can essentially grab market share and like develop something that's music focused. UM. So we worked on building that out and the problem is that the industry really picked up like incredibly fast, right, And by the time we launched at n f T n y c UM Music, n f t s were effectively like the largest category of parties, and we were just basically like drowning in a content see of sameness. Right, Like everyone's trying to launch n f t s music nfc s at the same time. And my background and like building accessible solutions that scale and something that's approachable and practical. UM, we sat back and we thought about it. It's like what we want to actually do is we want to build not just infrastructure, but we want to build something that's foundational. So we thought about it and we realized that, like we went to the core of it's like why were we interested in music n f t S. We want to build online communities UM that support and sustain musicians UM in a alternative to crowdsourcing, because it's more engaging than just a donation. And the goal that we have is I want fans to earn money promoting musicians that they're passionate about, right, and I want musicians to be able to pay fans for doing promotional work. And that combination, plus the fact...

...that we feel that UM Music Discovery is innately a peer to peer and happens through interpersonal and direct like human connections UM in combination basically built out our new strategy and what we're going to build out is essentially the incentive layer that will go on top of traditional or web three social media and that incentivizes the promotion of musicians UM. Yes, one of the flows of money that you didn't mention is how the artists paid. You said, I said, you want fans to get paid through proselytizing music. They care about You want artists to pay fans to proselytize their music. Correct, Artists get paid because they're the ones making it. Yeah. So in the current implementation of Coral, it's a marketplace and we wanted to include virtual and real life events. The first implementation that we've built uses n f t s as virtual concert tickets and real life concert tickets. So, um, we basically produced live streams and we're going to essentially produce exclusive content behind the scenes, backstage content. Um. And we worked with people like in our first couple of projects that were like ex boiler rooms, so that we're basically producing really high quality streams that we would then sell n f t s that would grant you access to this like backstage path. And this goes back to like the vision that we had uh coming out of the pandemic. We wanted to basically create the digital analog of the revenue stream that musicians have through live music. UM. So what we ended up doing is like n f t s that give you live streams, but we also want to do digital and physical merchandise. UM. So we want people to start collecting albums or album covers in limited edition and f t s. Also we sell merch for these artists as well. UM sometimes it's behind gated pages. And the idea is that we want to create a way for musicians to UM activate their hardcore fans and not only just like make money off of them UM having them by their merch, which they do anyways, it's a major source of income for them, but also create this incentive for people to really use existing social media UM to promote artists that they like. And we feel that if we just have a way for that incentive to work, UM, then it can kind of help new and emerging artists breakthrough. So yeah, within our next phase, we're actually expanding that idea even further and we're basically working with people who are influencers right. UM, it doesn't have to be an influencer. It can be like a small just a fan, anyone can go through the process. UM. But essentially we have an influencer marketing campaign that includes like Twitter, Instagram and TikTok advertisements for new and emerging musicians and we basically turn on monetization for those promotion contents, and like on TikTok, we create a contest and U creators essentially create new and unique videos that would then help spread awareness about the musician the artist, and those actually we track as n f t s and they can essentially get paid by...

...getting someone to turn on to a new musician. Right. So we're approaching influencers and we're telling them it's like, hey, like this unique link. It's similar to what affiliate links do, but we have them in the form of an n f T. If you use this as inside of your content, right, and you activate users to like go to a show and buy a ticket, um, you're actually going to get directly credited for turning that person onto this artist. So if you ever buys merch from that artist, right, you actually make portions of it. And our long term goal is to demonstrate that we can create organic, community driven marketing machines that replace traditional Facebook, Instagram, Twitter ads. And that's the idea, Like, we want people to create organic content, we want to incentivize it peer to peer, and then we want to essentially move like advertising budgets um from big tech platforms to like influencers, and we want to activate people to become influencers, right because I actually hate influencer marketing. It feels very parasitic um. But the trend that we've noticed is that it goes from like the Kim Kardashian influencers two micro influencers to nano influencers, and now we're doing a peer to peer using payments influencers. Yeah, exactly. It's just like just fans, right, It's like I'm not even an influencer. I'm just a fan and I want to represent. I should probably mention do your muted. Uh so you're just your wealth movement. I am an advisor, so it's probably so describer we should probably have. I said, be good to influence. So what is what I said? First of all? And um, that's a lot to take in. I have some questions, Jesse, order just a move before we go, Before I'm moving show himself. Um, I guess. So when I think of Coral, I think of in TV's Real World Back to New York season ten. She was an amazing cast member. But you thought of Coral and said this is what I'm going to name my company. Yeah, because it grows growing organic communities. We thought of it as like a living organism that self replicates. UM and I kind of just like the fractal patterns of how that growth is represented UM, and we went through a lot of names, but we went through a lot of names UM and coral is UM. Basically it's just kind of like an umbrella brand. It didn't necessarily target specific music audience where UM not picking gen rias in music at all. We essentially just want to be kind of the infrastructure that helps automate the promotion of music. And we thought that actually, this is something that Johnny always said is like that sounds too tech e, right, And there's a specific aesthetic and there's a specific UM attitude that Crypto exudes that turns off people that are like audiophiles or just like normal fans of music. It's UM there. It's a self selecting UH subculture, and sometimes you gotta just like take some influence from outside in a different UM context in order to onboard more people. And that's what we want to do, Like we want to onboard music lovers. I want them to use Crypto. I don't want them to use a crypto product because it's a crypto product. I want them to feel the benefit of it and just essentially think of it as their own. And as...

...a result, like we're gonna end up scrubbing the n f T terminology from most of our state. It's um it's already played out in the music space. UM. So it's no longer an n f T. It's all access pass right because we're using them as access tokens for gaid pages um or a digital concert ticket um and the this type of stuff we only really get from like feedback from artists and working with them and launching campaigns. It's just something that we have to kind of like progress through and evolve. That makes sense though, right, Like you get in a like say, you know, when we worked to Booze, right, we got our our badges. They were so like, here's your here's your you know, access enabled Java card. They said, here's your badge toint doors. You have to have this badge. Like they don't expect whenever you get something that allows you do something you'll explain all the tech stact behind it. They just just understand how it works. And I think that's I think that's a theme that will start seeing more of as we span the audience we're trying to get to. Whereas like it's instead of like let's try hards proselytizing the tech because we love it and we know what it's capable of, and so we try and explain that in the process of every application. It was like, oh, here, do this. It's a cool thing you can do. Now how it works? Yeah, and I remember, like the general purpose person right, Um, it's becoming grains in the back of my mind. Like when I'm building products, I'm like, I'm no longer a g ppee, but I have to unlearn a lot in order to be able to like think, and in the end, I actually can't, like I have to do user testing. There is no there's like I can't just pretend like I'm a g PP anymore. I'm just like, oh, just download meta masks right down your seed phrasese like all right, turn lost right if you need a lord of the GPPs. That's what I coined myself last year. It's just everything was moving so fast on Crypto. I was like, you know what, I'm just general purpose now, that's that's what's going on. What's going on. But anyways, you're still super early adopter. It's seven years of experience and like, having used all of these products, it's uh, GPP like, is the type of person where on open sea. They can't tell the difference between the polygon purple and the ethereum blue, right, Like, that's that's kind of and I think that's an intentional design choice, right, Like, don't worry about it. Your money is somewhere like right, it's like it's floating somewhere. Okay, yeah, exactly. Well. The reason why I think embracing GPP is um is important for founders and you know, developers, is because like I did not for a long time for many years, and I've ended up because I mean tech support for all of crypto for everyone, and from my family to my friends to my work associates, they're like, hey, so this I want his website last night, so they asked me for my private key, and I'm like, oh, i'll see you tomorrow. Man, you are fucked like like like your tech support. And I was like, I'm tired of being tech support. I'm just gonna be a GPP two and I'm just gonna not act like a GPP and live that life because I'm tired these questions. There's a lot of questions. So it was there's a bit of magic with doing something that's difficult in a very easy way. And crypto loves to make difficult things even more difficult, and they're like, it's for your own good, it's for decentralization, And I'm like, okay, but are people are gonna use it as intended or they going to suck it up even worse? Right? And the best analogy for this is like, use their name and passwords incredibly secure if you use them correctly, if you...

...use them correctly, right, Like that's why your root password on your computer, use your name password. Right in that context, it's very secure. Once you start using them in like logins for websites and people start interacting with them, it's not secure at all. And it shouldn't be used in any production blockchain system and anywhere in the stack, right, Like it's a complete liability when it's implemented in production in blockchain. Um so, just working around that one problem, there's like a bunch of solutions. There's been hundreds of millions of dollars invested in companies trying to solve it, and um yeah, I still see people spinning their wheels on the same thing that like we tried to solve. And when I first started in crypto, I'm like everyone has to have a hardware wallet. Um, there's like you basically need a hardware wallet and password encryption of the hardware wallet in case someone physically steals your hardware wallet. Um. And then was trying to build consumer applications using that, and everyone's like no, there's there's no way like this, this is too difficult, like no one can get it, No one's gonna be able to use your app. So then you like go back and you're like, okay, I'll make a slight compromise, right, and then you end up building something and it uses like before account abstraction became popular, there was a design pattern which you use like passwordless authentication to unlock a crypto key that still is being saved on a server, right and it's still being used. Um, but yeah, it's like you it's a back and forth. Like the cipher punks who started cryptocurrency movement really early on, like they had the skills and the abilities to like have their private keys written in metal plates and like buried under somewhere, and there was was it loop that like tested what what level of house fire your steel seed phrases can survive? Right, And then you have the normal person and like you test an app and you see a nine turn whenever you ask them to write down a seed phrase geez right, you can relate to those members easily. Yeah, like, and then you give them an option. And I think that, UM, the coolest thing that came out of this last Bowl market was being able to see which mass market projects were successful in simplifying it for users without giving up decentralization. And it gave us a really big spectrum of how to do it UM and with Coral we picked I think kind of like the best path through all of that using a web three off or trusts to allow for social log in. However, it distributes the key management to UM multiple nodes so that there isn't a centralized password database with private keys. UM. So I think that's kind of like the current best option. UM. There's other options now, like coin bases. Yeah, coin base, I don't have a Jamaican accent. Yeah, I miss that was pretty bad, man. I mean I was about to say something to attest to my Jamaican heritage, but no one's gonna believe it. Uh And UM, yeah, they have the UM multi party computation systems in which the like private key is broken up into three key shares. They also bought on bound technologies if you remember them. UM, and they hold...

...two of the keys, so it's enough for them to be able to recover keys for you. UM. But you only hold one of the keys, so it's basically like training wheels for self custody. UM. But if you like go through some kind of support process, they could recover your keys for you. Yeah. I mean it's pretty good. UM. It's interesting and I'm glad they built something like that. UM. But at the same time, like a single organization still has the ability to recover your private keys, which it works for coin Base, but almost no other organization would I actually trust customing assets. I don't even trust coin Base that much. It's just as much as I need to. UM. But yeah, in terms of like mass user adoption, we haven't figured out the log in. UM. We have the we have the best like shot at it and it works. UM. And it works as it is, but it's definitely not a solved problem. UM. But there's people who have onboarded like literally millions of users into crypto and and that's why we've seen the rise of like mass market consumer applications. UM. Some people that were sufficiently incentivized to do so learned how to use meta mask. I think the current usage stat is like twenty million UM. And then like there's some depths that reached about a million users um most like cap it around a couple hundred thousand, even the most successful ones. And I'm thinking of like so rare, right, Uh, their account creation process super simple. And then there's other apps that essentially like NBA top Shots I think reached two to four unred thousand when I was still paying attention to them, like February of last year or something. Sometimes. Um, yeah, they essentially just had Google authentication. There's no there's no like cryptocurrency hardware. While it's just like sign in with your Google account and we'll keep your private keys for you and pay with credit card and ky in order to withdraw your money. Right, And then you have so Rare and they did like, oh, we'll generate a private key for you if you only want to sign in with your email, will email you your private key so you can do account recovery. But you can connect a meta mask wallet. You could even export your private keys and take self custody at any time. Right, So like even within the span of n f T gaming projects within the last cycle, we saw an improvement of people saying like, you can have the same ux, but it's still decentralized enough to be self customer the main thing. Yeah. Yeah, and we focused a lot a lot on that on in Coral UM. And then it's just a question of like, okay, then we have to like we have a way to onboard users social log in, it has its non custodial We built in credit card payments, UM. And again it does so really similarly to a project that you had on the podcast before, Corey for um subscriptions. I forgot the name of them, Yeah, unlocked porkal Yeah, Julian I just I just didn't really like their smart contracts, so we just built our own system. UM. But yeah, I mean like a lot of these ideas, like you see in production, you're like, oh wow, that's really cool idea, UM, and then you try it out and you see people are like really able to pick it up quickly, and then you're often running it's. Um, that's the biggest thing since our last cycle, Like it is, you have so many good examples, UM, but now we just need to figure out the business models that generate revenue and actually work and are financially sustainable and don't need...

...like multibillion dollar buyings from retail investors in order to like justify the next VC investment rotation or something. It's yeah, we we need actual products that generate revenue and have users, and people don't even need to be sold or prosletized crypto. I think we're at the point in which people can just benefit from using a decentralized system. Um. You guys keep saying prostitutizing, prostized, very different, very different things. That's it's kind of one you're selling the token, the other you're selling your body. Um, some one's going on. Prostletized definition needs to present a present participle of problem. Come on, I keep your breaking to introduce one. Do someone presents someone to convert, to recruit someone's institution or cause? Okay, it's it's a it's come on into my propa. I have a question, Lucian. I have been spending the past few minutes while we were talking trying to google Coral and get to the website. How do I get Yeah, it's Coral dot fan Okay, got it. Yeah, that's the domain name. We probably haven't um gotten the traction required to outcompete the aquatic animal coral yet the last result as well, yeah, you've got a lot of competition for coral. Yeah. I think, um, I think that the way that we're going to be promoting the UM the campaigns, we always wanted coral to kind of be in the background, and we wanted to push musicians forward. We wanted it to be like the band ca a landing page where people see it as central for their like um monetization of their career basically right, Um. We wanted to add n f T s to like selling digital copies of your song because there's not a lot of people who still do that um and like final and merch and we wanted it to be like someone's landing page UM for the monetization aspect of their music. UM. But I think we wanted to go a little further because when we realize like what n f T campaigns actually are, you're spending so much money on social media, right and I can't help but like notice that a lot of n f T s were basically big tech lifting the embargo on promoting tokens right for example, That so big tech. UM just decided a blacklist a lot of crypto advertising all at once. UM. Yeah. And because n f t S first broke out NBA top shots, then broke out with analogies to the art market UM, the fact that they were digitally unique was a kind of regulatory arbitrage in which they said, oh, this can't be a security because securities are not like one of ten thousand. It's a security share, right, it's fungible exactly. And I think the analogy allowed for further advertising UM and and i f t's like when people were investing in n f t S, what would they do. They would see Twitter followers, they would go and see how much chatter was on discord, and then they would see essentially like social proof that there is a community backing this UM. So a lot of attention was put on hype generation. And when...

...you're trying to bootstrap like a community from zero to one, like you pay off influencers and then you buy advertising and then you basically do all of this upfront expenditure and then you recover it when you actually do the token launch UM and it became kind of predictable. So people started just like churning these out until market saturation set in. And yeah, um, and that's how I kind of pessimistically see n f t s in general. But um, I think that there's a way to do it that and I'm this, I'm borrowing Corey's words directly for this. Right incentivized communities um can be represented as n f t s. They don't have to be in their current form. They are and it's powerful. It's like a cryptoeconomic primitive of inclusion. And you get to buy your way into a set. You get to be part of the Chicken fam you know, um and book it's limited, it's digitally scarce, and it's fun and you're getting access control. Chicken is sticky. Chicken is sticky. Yeah, I keep it pinned them my Google browser, so that'll do. Oh ship, I've given up too much information group. I don't use Google. I used different brows in that you don't know me. Yeah, brave. I think that that's that's were a little bit past halfway point here. That that transitions nicely into like where are you doing this? I know you work you work for Alva Labs, and why choose them as a substrate for for coral yeah, so it's worth going back and talking about, UM, the work that I did at Deloitte. What was the biology joke? I missed it? Substrates for coral, substrate for coral. Yeah, actually did out of celcium in there somewhere. Never mind, keep going, that's too scientific for me and Dr Corey Petty. I'm reaching. I'm reaching pretty hard. I'll because the better later. Keep going. UM. Yeah, So between working with you at Booze and going to aval Abs and Coral, I worked at Deloitte for about three years and the project that we built there is now approaching production and it's built using avalanche and UM. The part it's going to make even further use of avalanche in the immediate future, but that part is not yet public, so I won't kind of spoil it, but you'll kind of get the hint. UM. The idea is that it's a non financial application that does UM auditing of federal expenditure that is done at the local and state level. So we basically tracked disaster recover repayments made by localities like Florida that got hit by a hurricane or Texas anywhere, and FEMA essentially comes in and they're obligated by law to help communities get back on their feet. Um, so you're spending federal money locally, but there's a catch. You have to prove that the expenditure and the process that you went through in approving those expenses we're done legally. So we encoded the business processes into smart contracts, and then we followed the entire document chain from like preparation and like buying sandbags and like paying people to fill them up to put them in front of like the Capitol hall steps, um, all the way to like calling in contractors to rebuild a school and like basically all of these had to follow pretty standard rules that were set at the federal level, but it has to be executed at the local level. And we basically built out a...

...system that can do this effectively and um securely on a public blockchain. But the problem is is that it didn't need a cryptocurrency. In fact, it couldn't use a cryptocurrency as its native gas token because the federal government can never hold appreciating assets on its balance sheet ever, right like it can't own stock, it can't make profit, right um, and if it holds a bunch of ether in order to pay gas costs. It can't do that, um So either you essentially like pay a contractor that might handle it for you, and you have to take on the risk of like the gas prices on ether fluctuating wildly, or you have a system that lets you basically build your own blockchain and keep certain components of it public and other components of it private. And that's how avalanche subnets kind of like really emerged as such a powerful crypto economic primitive right, you have so much flexibility and again coreries like explanation for what a subnet is is like still my favorite. It's a bunch of avalanche validators that agree on anything right, and as a result, you can most often they decide to build their own blockchain, and very often it's an e v M compatible blockchain. But you can decide for the gas token to be effectively valueless or non transferable or like all of these other slight little criteria that could have made or break a broken a use case like the one we built at Deloitte. But you have the flexibility to do all of that because you don't need consensus of a full public network. You can instead just get a subset of the validators that agree to UM play by certain rules, and the end results is like it's probably going to be the first government blockchain application, like the first US federal government public blockchain application. And Yeah, how do you get around the government running validators and actually owning the avalanche like the two thousand avalanche to run those validators to validate that subnet? They don't. They don't. Yeah, they don't have to. They can contract White Deloitte, did it. UM is a completely separate network. They're not. They are basically, as far as I understand, licensing the technology to build a secondary network that doesn't have that two thousand Avalanche requirement. So it's more of like a ostensibly proof of authority network because the federal government is running these validators, they don't need to trust anyone else. But they can publicly broadcast and have that kind of access chain, and there might be ways in which they can incorporate into the avolation network later on down the line, if those types of things relaxed in terms of what it means to be a subord Yeah. The thing that I was hesitant to say early on because it isn't fully public, UM it's going to be public because it will be on the explorer imminently, but UM, hopefully it's public by the time this goes out. It shouldn't be good Sunday. Yeah, it's actually not going to be up by Sunday. Okay, you'll see they'll be well, let's put it this way. There will be an explorer. UM, it's going to move to a permission subnet. So it's going to like move the entire chain to a permission subnet. UM. They're going to have a public explorer. UM. It's not going to be like there's no data that's being leaked through UM following transactions on chain. UM. But essentially there's going to be a public attest station to...

...all the transactions that happened, and there's going to be effectively at checkpointing for specific points in time so that you have um irreversible or tamper proof transactions up until like a certain point in time, and then you have full trace ability and independent auditability of every transaction that was made and approved like automation about audibility auditability exactly. And it's like pre we wanted to say it's pre auditing, but like that term is a little too loaded. UM. The idea is that we can follow every actor's actions on an individual basis what they approved when they approved it, and eventually like speed up the process of repayment um drastically, like to the matter of weeks for something that takes five plus years in a usual case. Yeah, that's all you're saving live for real, I hope so hey, yeah, I mean, like even to be more extreme with what I hope comes out of that work is I hope it's an example of transparently spending federal money at the local level. Um. That's effectively what's happening because the money is guaranteed by federal law, but it has to be spent locally. I think a lot of use cases can benefit from this, right, Like Department of Education. You have underfunded local schools because it's all based on local property tax and the federal spending in the Department of Education is poorly managed. That Like a patent, did you patent that, I'll give you one million dollars or seven percent? It's not structing, Yeah, it's um, I mean, it's something that I hope happens in the world. Like it's one of those things if I did have a patent on it, I would give it away for free. If it meant like that's how the world works. I would love a world where all federal money is spent at the local level. UM. But yeah, it's just not how power works. Back to the original question. Yes, yeah, And so after I started coral um, basically I wanted to build something off of avalanche UM and I was really really excited about the prospects of subnets. And it's because of the flexibility of having your own native token, having your own network, being able to roll your own virtual machine if you need it. But most importantly, I think UM building applications that break the link between finance and what you track on chain. So I mentioned that we want to build a UM a platform that m d incentivizes ad spend on traditional social media. Right, how much do you think, like a music industry cost per click is like an Instagram ad on a like for a musician or a concert, how much do you think the artist it's probably, I don't know, Probably it's a real littilely exorbitant cost. Cents for two cents per pretty high. Yeah, and that's per click, and that's considered a positive one. But imagine if you wanted to, like measure impressions. UM, you're essentially pushing like the subcent cost, and we wanted to build something that would be cost competitive with traditional advertising. We wanted something that could effectively scale the marginal cost per transaction does...

...row And this is something that I'm fairly like, I'm one of the only people that thinks about it this way. UM. I think that when you build a subnet, you have higher fixed costs because you have to pay validators, but you have lower marginal costs because you have the full network bandwidth to yourself. So you're making a trade off. You're essentially saying, like, I'll give out more of my tokens than I would if I launched entirely on an l one UM. But the consequence of it is that you have full control over every transaction that goes on the network, and you can price those down to effectively zero. And that's what we hope to do. We effectively hope to make the transaction costs in a non monetary token UM so that you can essentially like run advertising campaigns and not worry about gas costs. UM. There's been previous work in this direction, and the most common like things to come out of this are relayer networks and gas station networks and UM basically there's a central server or several individuals acting as servers that are decentralized and they pay for other people's gas costs UM. But if you actually get to dictate the network token yourself, why not make the network token valueless and let people as long as they interact properly with your app, why don't you just air drop them small amounts so that they can continue minting n f t s and using the application as intended UM. So this is kind of like our long term scaling vision. We don't see that transaction costs UM being pushed onto users ever. Again, I think it's probably the main impediment because there's if you went to a normal web two website and you couldn't do anything until you've spent money, I think the turn rate would be even higher than right UM. And I feel like that is one of the basic things that people are addressing, And there are examples of people addressing this, like the Lens protocol. They implemented ah gas station network style relayers to pay for other people's transaction costs just so that people would use this social network and not have to worry about um always like paying for like micro transactions worth of gas. Right, and you guys remember Pepe right yep, Like why would you pay thirty cents to tweet? Right? Characters are rare important. Yes, they need to be written into an immutable blockchain, but like you are paying for the immutability in the decentralization. But the flip side is that you are reducing the total number of people who are willing to participate because there's a free alternative and you're pricing yourself out, so you only get like maximalists or like, yeah, the fixed gus that you talked about, are those variable or in like they are dependent upon how many valid as you need? Is that? Yeah? So let's talk about subnets because this is um my day job, and this is what I focus a lot of, and I've helped most of the projects that I've launched subnets. It's a personal episode where fifty minutes in and we've just kind of talking about what you do for a living. You do. It's I mean, that's the kicker, right, Like, I basically get to help projects and I tell them I'm like, hey, I'm gonna help you get to production with subnets, let's figure out everything. And most of the time it's not a technical hurdle because we've automated most of the the deployment and most...

...of the stuff isn't hard. It's not hard anymore Like you want the canned vms that are currently available, it's not hard. Yeah, it's like, uh, very quick. And the hard part is like how do I create the token economic incentives to get validators onto my chain? And then how can I be sure that they're there? And then like how do I set gas prices? And then how do so A lot of the questions that I have to deal with are economic and the fact that you don't have any infrastructure. You are going to a chain that is bald, like there's no Unite swap, right, there's like it's bare you and you you realize just how much you rely on um the compos herble ecosystem around you. But when you want like bare metal, like fastest throughput, like I want to out compete social media on price, right, like once you hit that level and most games are already there. So web three gaming and subnets is like the perfect use case because they're like pushing the limits. They want a million consecutive users. They want free n F team mints for everyone, they want user generated content everything, right, And you hear all of that and you're like, this has to be on a subnet. Yeah. And I help them kind of like work through all of those problems, um, and then I take the lessons learned and find the pain points and then work with engineers to basically automate and build out all of those roadblocks that they encountered so that every progressive subnets becomes easier and easier. Um. So there's a bunch of subnets just like ready production ready, Like their test nets are like they have all of the infrastructure, they know everything how to do it themselves, and they're just like waiting to do a token over are subjects just ready to go? Yeah? Yeah, And and I worked with like five of the first and biggest ones, and the subnets that are currently on test net. I don't think all of them are going to launch at once, um just yet. I think it's going to everyone's a little bit timid because when you launch a subnet and everyone's doing this, you also launch your own native token, and that's also your gas token, but it's also your staking token and most people are kind of caught up there, which is why for Coral, I want to have a different native token that isn't tied up in the proof of steake system, so that I could start the network, get the traction necessary, and then launch the actual proof of stake token UM. Basically the only project trying to do this though, UM. But the the idea is that you have immediate utility and UM you're going to have a like a lot of your token locked up and staking right away, which is two very attractive things both from regulatory and from token economics standpoint. UM, but you need the market conditions to be able to launch successfully UM. And that kind of last part. It's been of a bit of a waiting game. But that's the point where we are right now with subnets, like we have proof of stakes subnets ready to go. The upgrades to building full permission list proof of stakes subnets is out. It's not in its final version because you can't use e r C twenty tokens on the C chain just yet. It's UM. We have an intermediary step, but that's gonna be taken care of as well, So we're gonna argue with the permission list part. But yeah, so the idea is like this asterisk is my addition to that. Yeah, I mean I can actually...

...let's talk about how a subnet would launch and the tokens involved, and like how you would go about it and why, Like so many people are attracted to this, including Coral, Like I think this is the key to Coral being like a breakout success. Like, we need our own token to incentivize musicians UM to onboard onto our platform. We're going to give away most of our tokens to musicians so that they could then pay to their fans. That's our entire like token distribution strategy in a nutshell. So UM, like how would you go about doing it? And you would launch e r C twenty token on the Avalanche C chain and you would get it circulating UM and then you would build a proof of authority based chain on Avalanche main net so that there is a working, functioning consensus being managed already. And the difference between proof of authority and proof of steake is that the tokens allocated to validators in the proof of authority system is manually set, so when you move to proof of steak, you no longer have a key that can dictate what the weight is. Right, Instead, you have to put up or shut up, Like either you put up those tokens and then you have that weight within the proof of steake network UM or like there's no alternative, right, Like, once you flip the key from proof authority to proof of steak, then you have to put up the tokens UM. And that's essentially how you do it. You launch a token, build a proof of authority network, you turn off the proof of authority network, and you can manually delist the authority validators and their weight and then let the proof of stake economic system essentially the say who's the validator, how much weight they have, how many tokens have they staked um, and we're going to see it like imminently the subject to the pool of validators to the primary network. That's where my qualm comes in is that you're selecting from the primary network of who can participate in proof of steak. So like so the pool of people could like any validator in that pool, the primary network just says, I'm an evaluate on the subnet to with this much steak, and that then gives you the weighting of what their vote means within that sub network. My definition of a permissionless network is people outside of the primary network can also do that. That's gonna be something that's maybe never on the road map for Avalanche, but it's still yeah, it's it's it is like even just that is a significant improvement on what it means to be a subnet and how validators can further like how validation in the prematory can further choose to like add resources to earn money based on what's going on. Mm hmm, like yeah, I guess riddle me. This is like, um, you know as you know, lord of GPPs that happens to have the skill sets, I mean not the skill sets, but like, um, you run validator you Well, I personally core is more like doing I do it. He's turning the wrenches. I'm just the guy that's like, hey, validate to our node and they're like how do I do that? And like sit down, young grasshopper, let me show you how to push some buttons. And I did do that part, but um, the thing is with me is like Okay, we're gonna validate your subnet. But then they're always like yeah, but you gotta have an ask ton of ore token to validate our subnet. And I'm like, okay, so who's gonna give me that ass ton are you gonna get Are you gonna get that to me?...

Or you want me to go by that out of my money? And you want me to validate, so you want me to spend money and spend more money. You only spend recursive money. And that's you see what I'm saying. As a g p P, I'm like, yeah, I'm not gonna. I'm not. You gotta spend money to make money, right, and I mean the question that the question then becomes like um, in the Cosmos ecosystem, most validators get air dropped their token, right. Um. In the Polka dot ecosystem, you have to stake your dot to a specific project so that you could then earn for validating like a project. I might be butchering that, but like you have to lock up dot token in order to get a parachain slot and then you can get paid in the Paara chains token with emissions over time, so like you still need dot tokens. UM in the Avalanche, it's worth like talking about the Avalanche economic model, like from a really high level, because most people don't um avalanche has the same it will it mapped the same kind of reducing emissions curve as Bitcoin, so there's havings every single second. Like it slowly reduces the emissions of AVEX tokens over time. Currently, I think it's about eight point seven, maybe like nine to nine, depending on the duration of how long you're staking. That's how much AVX you make for locking up your tokens for a year. Let's say next year, it's going to be like eight, and then and then the year after seven. Eventually in about twenty years time, it's going to be really close to zero. Um My times are off by the way, like you have to look at the charts um in their economics paper. But the idea is that there is an exponentially decreasing emissions in AVEX tokens long term. And the idea then becomes like what are you do? You have the same problem as bitcoin, like are you're going to run out of security budget? How are you going to manage a proof mistake system without a security budget? The kicker is subnets over twenty years will create the emissions that will replace AVEX emissions, so you would buy and lock up vex and then you would only expect rewards in the subnet token long term. And that's essentially how the vision is. And that's also how it's a fixed supply token. And I want to draw like a direct parallel to EAT two and the difference between gas burn right, EAT two burns gas UM not all of it if I'm not mistaken, right, UM, it burns only like a portion of it. Um in Avalanche, we burned all the gas. Because it actually doesn't matter who proposes the blow box block. Production is anonymous actually, so you have there's actually no way to censor transactions from the mean pool because you don't know which node actually, uh like submitted it. Right, So if one I was, I was just gonna say, any one of the one thousand, four hundred nodes could be the proposer um and there's no consequences because even your own node doesn't know it's the proposer um. Maybe you do. If it's out of the mean pool and you're the first one submitting it, maybe you do UM. And there are consequences with like following who voted for what UM. But the way the protocol is designed, it's meta stable. It has to fall to like either four or against vote in the end um, there is no like individual. Let's say coin bases node when it submits transactions, it has a specific place in the slot. It is their validator that receives...

...a reward for including a very specific transaction. That analogy does not exist in avalanche. Right, it's moving in that direction. You're getting more and more leader as you get more and more throughput with things like still that plus plus and frosty. But we're already running out of time and we may want to saved that to like a more technical debate. Yeah yeah, um. So the end results is that subnets are essentially the way um that the long term modernization continues. And you don't need gas burn in order to create a fixed supply um the way you do in ethereum, because the emissions and ethereum are essentially designed to be perpetual, So you need to have a gas burn above a certain level in order to like prevent the constant inflation of the total supply ethereum. Simple expam for avalanche, whereas incentives are going to come from whatever the hell is happening on subnets, Like eventually, what I see with with avalanche is the sea chain is useful and burdensome to the being a primary validator and all the things you really care about is most of the P chain, which is who's validating what on what stuff? That's MHM once UM and we're building like a network UM, a network specific bridge, so that bridging between subnets has a higher safety threshold than like bridging to an external gives you a reason subject because it gives you like a way to communicate with other subjects. It also creates this incentive for added use for the sea chain because it's going to be the defied chain, so when you're moving like size, you want the full validator set and UM as a result, I actually see that there's weird and it's an open design space. But UM and we disagree even internally. Some people think that all DeFi is going to happen on the sea chain. UM. Some people think that it's going to go to application specific chains that do nothing except complex calculations for finding market inefficient prices. Maybe there's going to be something like the Osmosis chain in which there's a specific subnet that there is nothing except arbitrage like opportunities on other chains. UM. I mean it's it's very much open and up in the air. But um, I actually think that there's going to be more demand on the sea chain the more subnets there are, because new projects like Coral Coral is currently on the sea chain, and we have to hit that fixed like we have to make it worth having such a high fixed cost to launch a subnet. So we're like building size and we have time, right, Like, we have time to get a ton of transaction throughput until we hit that point in which it makes more sense to have a high fixed cost and a zero variable cost, right, Um, So we have room to grow on the sea chain until that happens. But that's kind of how I see it happening for especially games and other projects, like they're going to sell their base n f t s on the sea chain. They're going to try to make as much money as possible. It's where all the liquidity is in the network. And then once the game has traction and you want to lock up your game for in game activities or trading or like essentially the really expensive gas calculations, then you'll do that on the subnet. Um, so you're essentially like able to get some of the compos ability of like a massive monolithic blockchain on the sea chain, but you have the application specific um subnets that essentially let you just really scale once you hit the like Crypto Katies moment, right, there's a moment in which you just outgrow the chain because your transactions alone basically drive up the entire price for everyone else on the chain. UM and it happened to Crobata on Avalanche UM,...

...and it's gonna happen to a lot of projects really, Like if if you share resources, eventually you are either going to experience a price increase from someone else's like success, or your yourself going to be so successful that you're gonna end up like supporting the entire economics of the rest of the chain with your project alone. M hm, Well, I'm getting messages in the background from our producer to shut the hell up, So I'm gonna go start it up. You gotta you gotta have a smoother segue than that. We're supposed we're supposed to stop now by Lucien. Hey, it was It's always awesome hanging out with you. Yeah, thanks for letting me ramble again. I'm just just like real coral. Your project is being a home to many many beautiful, beautiful creatures out there, and musicians there you go, well done,.

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