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They were clear about the future of Alt L1 and Ethereum

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Paradigm co-researcher Hasu talks with Su Zhu, founder of Three Arrows Capital: Ethereum VS the new public chain, the dragon slaying is becoming a dragon.

Ethereum vs. Alt L1s - With Su Zhu and Hasu

Original author: Hasu & AMP; Su Zhu

0xz, Deep Tide TechFlow

Zhu Zhu (now known as Zhu Su on Twitter), founder of Three Arrows Capital, one of the most powerful men in the crypto world, has now gained an identity tag and is ranked number one in Cryptobriefing's top 10 crypto Villains for 2021. It all started when Su Zhu and Synthetix founder Kain Warwick started a debate on Twitter about ethereum \L2\ new public chain. Almost all the famous KOL participated in the debate, and gradually evolved from a personal quarrel to a public chain pattern dispute.

Su Zhu, who questioned Ethereum and L2, suddenly stood on the opposite side of the Ethereum community. Many people pointed out, what is Su Zhu's real opinion, why he changed from a staunch supporter of Ethereum to a skeptic, and what is the opportunity of the new public chain?

This dialogue is for you. This article is from Paradise m&NBsp; Co-researcher Hasu talks with Su Zhu on his podcast "Ethereum vs. Alt L1s", in which the two of them go head-to-head on a number of points.

Podcast Excerpts

Su Zhu:

1. One of the mistakes early bitcoin and Ethereum players like me can make is to become an extremist.

2. Much like bitcoin in '17, ethereum is now in a situation where new users don't necessarily have to choose them, even if they are indeed the best public chain. Acquisition of new users is critical to the public chain, and ethereum doesn't have that right now.

3. One fact is that a big reason people are getting into crypto right now is because they want to enjoy the benefits of the early bitcoin and Ethereum holders, so they will actively participate in those new public chains, but bitcoin and Ethereum are like philosophical coins to him right now.

4. When gas keeps going up in price, eventually no one has the ability to defI on the chain, then the price plummets and people stop using it. This negative effect can also be verified in NFT, when the price of NFT keeps rising, eventually no one buys NFT, so people stop using it.

5. I think Ethereum is less aware of its users and developers than ever before. And there's a kind of hubris in the Ethereum community that's similar to the Hubris in the Bitcoin community, but it's something that happens in every community that grows. Because when people become billionaires, the idea is usually how they stay, not how they change.

6. Ethereum and Bitcoin are two ancient currency technology representatives, everyone knows that holding these two tokens alone cannot make people truly rich, and only the old people hold these tokens. But there are a lot of new tokens that people can participate in and become very rich.

7. Currently, Ethereum has become a money-first public chain due to over-optimization, and it is the only possible target to compete with Bitcoin in store of value. But the biggest difference with Bitcoin is that it has a permanent inflation model with a security model.

8. New public chains are starting from scratch, they don't have technical debt, and they don't have to think about how to surpass bitcoin like Ethereum. The only thing they need to do is how to attract more new users, which makes them grow faster.

9. Once Ethereum loses innovation, all that's really left of Ethereum is EVM, and those L2 things, their approach is not worthy of the name.

10. When Web2 investors come to crypto, one of the metrics they look at most is network growth rate. If they've invested in Ethereum, they think, why is this happening? If it's Ethereum waiting for its own expansion, then Ethereum sounds more like Bitcoin, so they'll think about hedging and choosing to invest in the new public chain.

11. While many of the new public chains are not decentralized, it is important to understand that even now ethereum is considered by some big names to be non-decentralized.

12. My biggest worry is that in the crypto endgame, it's probably not people like you and me who decide where the game is going. There are a lot of Web2 people who get into crypto and they don't care about decentralization.

13. They are missing the point that new users don't have the need or patience to wait for Ethereum to be truly perfect. Besides, projects like Starkware, which doesn't belong to Ethereum, belong to themselves, I don't think they are going to pay rent to Ethereum, and the conclusion is that none of Layer2 is going to pay rent to Ethereum. They also want to gradually move to Layer1.

14. In a previous community discussion, someone asked why the Ethereum Foundation is not worried about the lack of network effects in Ethereum right now, and the Ethereum people said that they are waiting for ZK-rollup to become big enough and then they will have ZK-rollup to solve the problem. The problem is that ZK-rollup is not exclusive to Ethereum, it can exist on any public chain.

15. Everyone should keep an open mind, but at the moment ethereum extremists are dangerously overactive in the ethereum community.

The dragon slayer will always become the dragon. When the first one becomes the big one, the later one is required to follow their rules. But there will always be endless challengers, who are difficult to meet the challenges of the later one, because the later one always has all kinds of shortcuts.

17. When I talked to Arthur about LUNA, the attitude was that LUNA was not built on the Ethereum chain and should not be taken seriously. However, the fact is quite the opposite. At the beginning, I thought that only Ethereum was the real and only public chain of smart contracts, which is why I made such a wrong judgment. Therefore, I have to admit my cognitive blind spot and be brave to break it.

18. However, the current attitude of Ethereum extremists towards other public chains is no different from the attitude of Bitcoin extremists towards Ethereum during the bear market, and I want people to think about this.

19. For me, any point is neither an argument to sell ether nor an argument to buy ether, I'm simply pointing out the huge gap between what Ethereum should be and what it currently is.

Hasu:

1. The ideas and practices of bitcoin extremists have not made Bitcoin a better network and a better investment.

2. These new public chains, at one point, can be understood as centralized databases, but it also means that they may have been from the beginning, so the worst case scenario is that the new public chains will have nothing at all; But if the best happens, given that they have a very similar roadmap to Ethereum, there could be a very good sharded database that goes ethereum's way.

3. The current development of new public chains is largely sustained by high incentives, which is not a sustainable development. In addition, even if they can develop, they will encounter similar problems as Ethereum, I don't think they can do better.

4. I am a person who firmly believes that the future will be a multi-chain world, and cross-chain will be important in the future; In addition, I agree that in the future, people will not interact with blockchain directly, but with applications. Applications will be the only interface for people to interact with blockchain in the future. Users do not have the right to decide which chain to use, only developers have the right to decide this matter. I also agree that the existing public chain will be split up and different steps such as computing databases will be split up, as this can build a highly optimized layer for faster execution.

The original podcasts

Hasu: Suzhu, congratulations on winning the title of Cryptocurrency villain of 2021. Your article recently ranked number one in terms of views, which is amazing. Do you have anything to say to your fans?

Suzhu: I was a very professional believer in Ethereum and Bitcoin around 2019. With the development of the market in the last two years, my followers have increased by 20 times, and I have gradually moved into other fields.

Now I like analysis, especially making predictions, which express bad views on BTC and ETH, and are often not liked by others, so NOW I am described as a villain.

For example, I think ethereum GAS is a big problem right now, but those early entrants to the Ethereum community, they think ethereum GAS should be high, is an eternal sacred truth.

Then, I posted some tweets criticizing Ethereum GAS, and they got 15,000 + likes, which shows that many users, especially new users, are very much in favor of this idea. It also shows that these new users believe that the crypto space should not belong only to the community elders, but to everyone.

We will discuss this in more detail later. So is Ethereum GAS divine truth? What exactly is the sacred truth in cryptography?

Ethereum and Bitcoin have many similarities. First, Layer 1 needs to be as decentralized as possible, and then Layer 2 needs to be extended, such as Bitcoin's lightning network and Ethereum's ZK-roll Up and Optimism Rollup. This is because users value the network quality and community quality of the public chain as well as the decentralized public chain infrastructure. So, I'm not saying that the ethereum patriarchs are wrong about the sacred truths they claim about GAS, I'm just saying that maybe they're right, but there are many other truths that are more true.

If you think back to the bear market, an organization like Multicoin had a different view of cryptocurrencies than most funds and investment houses at the time. At that time, most people thought bitcoin and Ethereum were enough, but Multicoin was determined to invest in new public chains, public chains that could be used by billions of people simultaneously. Solana, for example, invested in a lot of things that seemed unintelligible at the time, but in 2021 they made extraordinary returns. Looking back at the market last year, bitcoin and Ethereum are essentially flat compared to April, but the public chains, such as SOL and AVAX, are up tens of times.

So, I looked at some of the articles and I saw what the new institutional investors were thinking last year, and I ended up being struck by a kind of cognitive dissonance that I think is a very big split in the market right now between the old players and the new players thinking about encryption and the way they approach projects. An obvious statistic is that more than half of current Metamask users only use BSC, which largely shows that people are more willing to participate in the new network because they can reap the benefits of the early development of the network. One mistake a Bitcoin/Ethereum player like me can make is to become an extreme Bitcoin/Ethereum enthusiast.

As a member of the Ethereum community, I strongly believe that ETH is an asset that we should make bigger, and I also believe that Bitcoin and Ethereum are the most reliable cryptocurrencies with the best releases and the most decentralized power. But that hasn't done much to attract new users to the network, which is why Ethereum's market value has come close to bitcoin's in the past year. And that's why the market value of these new public chains is now coming closer to Ethereum.

In terms of the number of addresses, the number of active addresses in Ethereum today is not much higher than it was in 17, not even twice as high. As we have analyzed before, the reason given is that whales choose Ethereum because it is safe and stable, so whales hold a large number of Ethereum. But at the same time, this can cause new users to choose to remove Layer 2 or other new public chains.

Much like bitcoin in '17, ethereum is now in a situation where new users don't necessarily have to choose them, even if they are indeed the best public chain. If new users don't come, I'm not sure ethereum will be able to win out over other public chains. There is no doubt that users will pay rent for the public chain of their choice, but the business logic is that users are not willing to pay too much rent. I do think Ethereum can compete with Bitcoin because bitcoin has a very different trade-off pool. But I don't think ethereum as a network is available to most people because they don't need a highly decentralized network like Ethereum.

Given that most users don't value decentralization and are unwilling to pay for it, more than half of Metamask users are using BSC, which is a really impressive number for me. But that doesn't mean they love the network, it means that new users now want to get in early and reap the early dividends.

It's in the utopian crypto spirit, where you're an early ethereum or Bitcoin founder, and you have a bunch of Ethereum or Bitcoin, and you want other people to come in and buy your coins. But if you're a new user, there's a good chance you'll choose a currency that doesn't have that many veterans, and crypto needs a steady stream of new users to grow.

This bull market has performed very differently from what many of the founding fathers of mainstream currencies predicted, such as bitcoin exceeding $100,000 and Ethereum exceeding $6,000. But that's not the case. Since April SOL has risen eightfold and AVAX sixfold.

It's a fact that a lot of the reason people are getting into crypto right now is because they want to enjoy the benefits of early bitcoin and Ethereum holders, so they're actively participating in those new public chains. Now bitcoin and Ethereum are very much like philosophical coins. If you're an average person with $1,000 or $10,000, you haven't touched the basics of the public chain, heard about bitcoin from someone else, and just bought it on Coinbase's trading account, but never traded it on the chain, it's like a philosophy, just by hearing about it, But not actually involved.

However, the holders of BSC, SOL and AVAX tokens are different. These tokens have absorbed many new users, and most of the Token holders have also made corresponding on-chain transactions. Therefore, the number of active addresses of new users of these public chains has increased very fast, increasing by an incredible multiple every month.

Some people think that the growth in users on the new public chain is due to those DefI Ponzi schemes, but in fact there are also defI Ponzi schemes on Ethereum in 2019-2020, right?

I think ethereum is in a kind of founder's dilemma, where the old guys have a lot of market share, and they've proven the market, but ultimately they're not winning the market. I still think ethereum has a good chance of winning the market and sharing it with Bitcoin, but not right now. Because acquisition of new users is critical to the public chain, ethereum doesn't have that right now.

Multicoin pointed out the negative effects of the network last cycle, which is actually happening now: when gas keeps going up in price, eventually no one has the ability to defI on the chain, then the price plummets and people stop using. This negative effect can also be verified in NFT, when the price of NFT keeps rising, eventually no one buys NFT, so people stop using it.

I think in the future, it's possible that there will be a lot of public chains, because Ethereum has had its ups and downs, and they're not expanding to the extent that people need them right now. And I think currently Ethereum is over-optimized to become a money-first public chain, and it's the only one that could possibly compete with Bitcoin as a store of value. It is very different from bitcoin in that it has a permanent inflation model with a security model.

There are a lot of developers on the new public chain like BSC now, because there are a lot of users there, and a lot of innovative projects this year are coming out of the new public chain.

A lot of Ethereum owners have a bad mindset right now that I'm already so rich that new users have to understand why I got rich and have to walk the same path again. And in fact, Matic wasn't the best answer, because when new users asked why they chose Matic over the new public chain, we didn't have an answer.

Ethereum does make an effort. EVM allows developers to quickly deploy applications to where users want them. Back in April of last year, I would have said that Ethereum would benefit a lot from this multi-EVM by taking the Ether to different Bridges and using it as collateral. However, the performance of doing this is much lower than directly using other public chains. I think performance is very important, because high performance can attract more people to participate. So you can see that the Ethereum DEFI project, over time, has depreciated in dollar terms.

The early participants in the Ethereum community, it's true, were committed to using Ethereum as a network, but as the network grew, the early participants had a lot of tokens and became very rich, so the incentive to build decreased a lot. Most people also choose to cross chains rather than acquire new users.

A lot of ethereum developers I know, they are very good at cross-linking, and I asked them why they chose cross-linking, and they said I am too rich, so I think cross-linking is the right thing, the cost of cross-linking is very low for me.

In fact, ethereum isn't the most innovative project out there right now, with a lot of ethereum projects copying what LUNA did, such as ecosystem airdrops.

I think there's a kind of arrogance in the Ethereum community that's similar to the Bitcoin community, because of the founder's dilemma, and in fact there's arrogance in every community that grows.

The reason is that when people become billionaires, ideas are usually about how they stay, not how they change. Today's new public chain projects tend to do better, because developers there aren't rich, they need to keep their passion for innovation and try to create apps that millions of people can use at the same time.

Hasu: To some extent, I think you're making the same mistake that you warned me about a few months ago, which is that the ideas and practices of bitcoin extremists are not making Bitcoin a better network and a better investment.

Suzhu:I do think the last warning is important, and the main issue right now is where to invest, and if you look at what ethereum is hyping right now, and you can see that they're doing badly, we could make a whole list of those things.

So there's a lot of common ground, and the biggest common ground is that these things are supposed to be done on Ethereum.

For example, we invested in a project called Monaco, whose founder is like an Ethereum believer. In order to help the project grow, we even provided full GAS subsidies for everyone who built the NFT, which cost a lot of money. So much so that we finally decided to release tokens on BSC and AVAX.

People like AC have long understood this, so users can interact with Phatom and Solana for a fraction of their Gas bills and get a good experience. AVAX is trying to do the same. It is not hard to see that the pressure of Ethereum on other new public chains is gradually fading.

The fact is that culture does matter, and it's an idea that every smart contract community needs to convey to new users as well as new developers.

Starkware is an interesting example. As the dark Web gets bigger and bigger, the question arises, does it have to pay rent to Ethereum, does it owe anything to the other public chains?

Of course, the answer is no, but it also introduced another point of view, is that people will be useful to their technology route to continue to develop, spread this idea, like encryption currency now to enter the stadium, new players need to pay the rent at the oldest player to continue to use their technology, this idea is very popular in the etheric lane community now, Part of the reason is that EIP1559 proved it right, it benefited ethereum holders a lot, and EIP1559 was copied on other chains like BSC.

But I think ethereum is facing more and more challenges now, just because the idea of the ethereum community has been validated by EIP1559. The main reason is that ethereum, in its current state, has lost enough network effects to attract new users and is not scalable enough.

Earlier this year, I talked to a lot of people in the Ethereum community who told me that Optimistic roll-up could become huge and could be a one-size-fits-all thing that would win the market.

But what I see now is that it's a bridge that takes seven or eight days to build, and it's very limited in what market makers can do. What I can see now is that there is a huge gap between ethereum's ambitions, its goals and its implementation in reality.

Ethereum is doing better than Bitcoin, though. But that has led to a lot of dangerous ideas in the community, the biggest of which is flipping Bitcoin. I think if Ethereum is going to beat Bitcoin, ethereum has to become more valuable than Bitcoin, and that's still some way off.

And it's quite possible that while both coins are going backwards, the other tokens are moving forward.

This situation is like the Max Payne scenario of cryptocurrency. Ethereum and Bitcoin are two ancient currency technologies. Everyone knows that just holding these two tokens can't make people really rich, and only old people hold these tokens. Can become very rich.

Hasu:I understand why you said this is a cultural problem, it makes sense, but I want to say is, as the basic argument of technical arguments, culture is meaningless, because in the worst case, other male chain are doing is just part of calculation when trading integrity, or put forward some blocks chain form of accountability, Thus better performance and better throughput of the public chain can be obtained. In fact, this is not the real extensibility, this can make them temporarily development is very good, but after a period of time, they will meet the same problem, is their capacity will reach the ceiling, means that is similar to the AVAX, BSC, SOL such public chain need to selectively abandon part of their users. These new public chains can be understood at one point as centralized databases, but it also means that they may have been from the beginning.

In the worst case, these new public chains will lose everything. Instead they could have a very similar roadmap to Ethereum, become a very good sharded database, become like Ethereum, but that would also mean high Gas.

Suzhu:This is an approach that we agree on. The ultimate road map of all public chains may be very similar, but the question is which public chain is willing to faithfully follow this road map.

If Ethereum merely tries to surpass Bitcoin, I think it will fail at implementing the roadmap.

While other public chains are starting from scratch, the only thing they need to do is how to attract more new users, they don't need to think about how to surpass Bitcoin, which makes them grow faster.

As you know, AVAX's Gas bill has dropped dramatically since the recent upgrade. Assuming ethereum and AVAX follow the same roadmap, who will follow it more thoroughly, and who will be more likely to deliver better, faster and cheaper services to new users and developers? I think that's the point.

If it is a competitor in the same field, there is no such thing as a better chance of winning by starting first. In fact, it's probably the late starters who have the better odds.

As an operating system, for example, blackberry was born before IOS and Android, and it dominated the mobile operating system market for a while, but IOS and Android won the market.

The first mover has a lot of constraints. For example, the previous technology limits the direction of future development. This is what we call technical debt. But the latecomers don't have any technical debt, they have a completely different mindset, they don't need to serve their existing users, they try to acquire as many new users as possible.

I firmly believe in the store of value in cryptography, which is why I think bitcoin and Ethereum are better than other tokens in terms of value. But I don't think bitcoin and Ethereum can really do that if you look at the implementation of the roadmap and see which network follows the roadmap to attract new users into the crypto space.

I firmly believe that the price of Bitcoin will continue to rise because bitcoin is worth investing in as the leading store of value in the crypto space.

But I also see more and more people like Zamani's idea that at some point in the future BNB will have a billion users, even though it is a centralized database.

And bitcoin holders need to convince new users to buy Bitcoin as a store of value, rather than buying a new public chain with benefits that are too good to refuse. Once bitcoin investors say so, it looks like a cult to new users.

So, we really, really need to think about how to attract more new users to the crypto space, and how new users are thinking when they interact with cryptocurrencies, rather than thinking it's wrong for them to think that way. This is one of the biggest issues that has led to brutal price swings in cryptocurrencies.

Hasu:Yes, I do think that for any new user, if you're just a user and only have $1W, you shouldn't use Ethereum, you should use BSC, SOL, AVAX. Because a layer of Ethereum doesn't extend for any normal user, because that's not necessary.

So, if we fast-forward two years, we can see that ethereum will not have any regular users, and ethereum will only have whales on top of it. Normal user interaction may be roll-ups. Roll-ups sends their credentials to a layer, and then they update their database as DyDX does, allowing for decentralized applications and decentralized trust.

I see the above model as a roadmap for all layers of the public chain. You could say that a bigger size higher throughput to attract new users, but I think you also say, such a network effect, in the long run, will not bring any good thing, because there are always a variety of new chain, the chain of new public don't even need to do anything new and different in technology, All they need to do is offer rewards to attract new users, so other new public chains will follow suit.

That's why I'm not interested in participating in the new public chain, because the current development model of the new public chain is not a reliable way to extend the chain.

But Ethereum is a global, reliable, highly decentralized public chain with sharding mechanisms. If you look at a layer of computing reliability, I think Ethereum is the only one that can be trusted. And I'm interested in any public chain that follows a similar growth model to Ethereum, but for others, I think they're shortsighted.

Suzhu:But WHAT I think is that you lack an objective attitude. What you have said above is too certain, XXX must be XXX, so you are only interested in XXX. You know, what you said above is some of the early bad things about SOL. But the truth is that SOL has attracted a lot of grassroots developers and a lot of application interest.

Also, I would say that out of the last 20 apps we invested in, more than 15 were non-Ethereum apps, mainly because we prefer to invest in apps that can do better where there is a large enough number of users.

Many funds, even those fiercely opposed to SOL, are trying to tap into the new public chain. So I want you to move away from a purely technical point of view and take a more objective view.

Now I see a more pragmatic development model in the crypto industry, which means I want to join users and think from the perspective of ordinary users. So I think the ethereum community really needs to treat the average user with more respect right now, but that doesn't seem to be the case.

You could argue that this isn't necessary, since Ethereum is currently expanding in another powerful way. But take the Bitcoin Lightning network for example. While you can do whatever you want there, the Bitcoin network does lose its powerful network effects.

Although people can make money by buying Bitcoin Ethereum as a store of value, as far as the Ethereum network is concerned, since Optimistic roll-up is not as competitive, the Ethereum network is being challenged by new public chains. It is important to note that there will not be new network extensions in the near future.

Other public link builders are starting to do better, because they want to reach more users by choosing the new public link, so Luna is doing very well.

This fact is very much against the culture of Ethereum, as ethereum currently does not provide space for such builders.

I remember in AC's conversation, probably last March, he said that if you are an EVM builder today, you should go to BSC immediately, and sure enough, a lot of people went to BSC.

I think from a user and developer perspective, going to the new public chain is really the future. I do miss last year's DEFI era, miss it and hope it gets better.

But I also think that in the future, what happened to the bitcoin extremists will happen to the Ethereum extremists. But the problems with Ethereum are not that important for Bitcoin, because we don't do anything with Bitcoin, but we need to do things on Ethereum.

This is a red flag when developers move on to anything better, because ethereum can't be said to have more and better innovation for some time to come.

Once ethereum loses innovation, all that's really left of Ethereum is EVM, and those two-tier things, I don't think their solution lives up to its name.

Hasu:I think Vitalik's statement that he has 5 cents in Bitcoin shows that he still wants to develop Ethereum better.

Suzhu:I also think I own more Ethereum than even anyone I know, but what I've said above is a very dangerous sign for Ethereum.

Hasu:But I think Vitalik is a very smart person.

Vitalik made the same claim when BCH claimed to sacrifice some decentralization to achieve an efficient network and failed, but he also failed. But I now understand that such statements are very short-sighted and will ultimately fail. I now see these new public chains doing the same thing over and over again, so I don't think these new public chains will succeed either, just like BCH and Vitalik, they will fail.

That's why I look at it from a technical standpoint.

From a technical point of view, though, the purely technical common chain is limited in scale, and without a credible roadmap when Gas rates rise, the story around the common chain will not work, and it will spiral into death.

But for me, what the new Public chain is doing, I've seen it do many times, it hasn't worked before, and it won't work now.

Suzhu:I'll give you the briefest and strongest rebuttal.

You just look at the network growth rates of other networks and assume that they hit a scaling bottleneck and assume that they solve the growth problem in some way that the Ethereum community doesn't accept.

The way ethereum has expanded, though, is also completely unacceptable to the bitcoin community. However, I think the current public chain competitors are more suitable for the market. The core is that I see these teams are more motivated to integrate into users, so I predict that all the public chains will develop better and better.

When I talked to Web2 investors, THIS prediction was confirmed.

When Web2 investors come to crypto, one of the metrics they look at most is network growth rate, and if they've invested in Ethereum, they think, why is that? If ethereum is waiting for its own expansion, then ethereum sounds more like Bitcoin, so they think they need some hedging, and they choose to invest in the new public chain.

Although many new public chains cannot achieve decentralization at present. But we need to understand that even now ethereum is considered by some big names to be un-decentralized.

That's my prediction. Fortunately, I formed this view during the bear market and found that many of the one-tier public chains, such as DOT, KSM, AVAX, and NEAR, were greatly undervalued. Like Ethereum's rapid growth, they have also grown rapidly this year.

And right now, the interaction between real-world applications and the blockchain is at a zero level. For example, XTZ recently partnered with Ubisoft to provide ubisoft users with 1,000W wallets and some tokens in them. This is blockchain interacting with real world entities, which means the future can be even better.

While the new public chain may sacrifice some decentralization, it is healthy for broader interaction with the larger world. From this point of view, ethereum's dominance of the public chain has been challenged. If Ethereum achieves its 2025 roadmap ahead of schedule, it will strengthen its position and be able to challenge bitcoin's market cap.

In today's world, I see more and more fake Bitcoin or Ethereum, which have gone up very high, not to endorse it, but to point it out.

Hasu:Right, the etheric fang also experienced extreme growth in prophase, the past for some time, we think the etheric fang more appropriate than the currency value is stored, and in the development of these years, we do see any development indicators show the etheric fang is better than the currency, but the time to prove, is still the currency value is more suitable for storage. Isn't the challenge of the new public chain just like when Ethereum challenged Bitcoin? I don't think they will succeed.

Suzhu:These new public chains are already growing much faster than Bitcoin and Ethereum, and they could grow even faster because they don't have any technical debt, which bitcoin and Ethereum both have.

In addition, these new public chains have almost completed POS, but Ethereum has not completed POS so far, and it is estimated that it will take several months. Even if Ethereum does complete POS, there will be a lot of problems, so it's important to have no technical debt.

The other thing that is very important is the community atmosphere. The early community atmosphere is very easy to get people interested in participating. But for now, Ethereum has a huge amount of community debt and no sense of community in its early days.

Ethereum had a very good community atmosphere in 2019. For example, I was very active with ENS in 2019, signed up to use it, had a very good experience, just like some products at the end of 2020. In the end, about 2,000 to 5,000 people benefited from this project.

But now, ethereum's user growth on a tier is essentially zero because of high Gas.

Although, you could say, Ethereum is going to do roll-ups and it's going to get better, my argument is that if you think roll-ups are really going to be successful, it's going to grow faster on the other chains, because people don't have time to wait for roll-ups to be ultimately successful, they need to be engaged in crypto all the time.

For me, the number of users and transaction activity on other public chains is bound to grow faster than Ethereum.

SOL is up 1,000 times in dollar terms, and we're trying to figure out what's a fair proportion of Ethereum's market cap?

But when it comes to the number of user accounts, when it comes to how active developers are in their new projects, especially when it comes to the number of developers who want to create a multi-billion dollar project, I think it makes sense for SOL to continue to expand as a percentage of market cap as it does for other public chains like AVAX. Developers are also more likely to deploy on layer 2 than layer 1 ethereum.

The upshot is that Ethereum does lose network effects and it's hard to attract new developers to the Ethereum tier, and I admit THAT I realized this a little late. If I had realized this earlier, I would have sold all my ETH to buy SOL, AVAX.

I know a lot of young people who play crypto for a small amount of money, and a lot of them have 50 SOL or AVAX, but they rarely own Ethereum, and they never think about why it's better to own Ethereum and Bitcoin, what's the better point of owning Bitcoin and Ethereum, they just think it's better to buy these new public chains.

That's what I need to remind myself all the time: young people are really important, and every cryptographic cycle brings in new people, and I respect those young people. But your point of view is very different from mine, and you think they should follow the path we've taken.

Hasu:I don't think so, and I look at the fact that new people are not buying Bitcoin and Ethereum. But in the long run, it's not the right thing for newcomers to do.

There is an obvious cognitive ordering problem for people who have not been here for half a cycle. They overestimate what is new and underestimate what has been there for a long time, which is too idealistic.

I consider myself a pragmatist, far from an idealist. With ethereum's current roadmap, roll-ups will greatly improve the user and developer experience as Ethereum continues to overwhelm other public chains. This is a pragmatic conclusion, not a subjective one.

Suzhu:For someone like me who has invested heavily in applications, what I've seen so far is that the most powerful applications are not built on Ethereum.

If you had shared your conclusions with me a year ago, I would have totally agreed. But things are different now. Now I feel bad for Ethereum, which is not where I thought it would be.

My biggest concern is that the encryption money the end of the game, eventually is probably not the people like you and me to determine the direction of game, there are a lot of Web2 people into the area of encryption, they don't care about decentralized, they choose a lot of concentration of chain, some people even said to me, they do not need encryption, they need only Token.

They think tokens are important because they can motivate anyone and get rid of the constraints of blockchain. If the existing Ethereum can't make some viable extensions to absorb enough new users, it will be difficult to issue new tokens, and without enough Token incentives, those new players may abandon Ethereum.

The crypto space itself is a balancing game. Markets have a role, new users have a role, and new builders have a role, that's for sure.

So I think what the new public chain is doing is a good prediction of the future of cryptography, and the market will go their way.

Hasu:I couldn't agree more.

What do you think can be simplified as: if the fast forward to the next five years later, people will use and chain interact, they will be sent to you by now Web2 such applications to interact with the chain, and although they also know that the future of the application is decentralized, but they don't know where the application is a chain running, they also do not need to know.

Users have no preference for the public chain, and it's up to the developer to decide which chain wins. If there was a public chain that would attract better developers and keep them for the long term, I would definitely go with that chain.

Unfortunately, I don't see such a common chain right now. And I don't think the current development of the new public chain will last. The point is that their rapid growth comes from huge incentives, not that the chain itself is so good.

Suzhu:My biggest retort to your point is that what you call short-sighted incentives have been going on for months now. This has partly proved us wrong a year ago. And your question should be, what we thought a year ago is going to be true in the future.

I know that most people in the Ethereum community think that ethereum will be right when it has Layer2 extensions that will greatly improve the user experience.

But they miss the point that new users don't have the need or patience to wait for Ethereum to be perfected.

The other problem is that a project like Starkware, it's not owned by Ethereum, it's owned by itself, and they're not going to pay rent to Ethereum. And I don't think any of the Layer2s are going to pay rent to Ethereum, and they're going to want to evolve to Layer1.

Motivated or not, the execution layer is the environment that provides the best experience for the application. Once you have a good implementation layer, plus a flywheel of increased users, the public chain can become very powerful.

One fact is that BSC, you can see how well BSC has developed this year. Even if BSC's technology roadmap is not that great, it attracts the largest number of users.

That's why all new GameFi projects are released on the BSC, because that's where the users are.

I think ethereum is more out of touch with its users and developers than ever before. Of course I admit that if ethereum's two-tier roll-ups of those could really be perfected, users might come back, but I really don't believe it's easy to do.

Hasu:I do think it's best for developers to build on Ethereum Layer2, like DyDX, if we think developers are just going to build on what they think is the lowest cost chain and make the user experience as reliable as possible. In dyDX, the cost is really low. On average, it's even cheaper than SOL. We'll see more of these apps in the future.

Suzhu:DYdX is a great application in its own right, but the example you gave is not a good fit.

As Antonio said, they initially built the application on Top of Starkware before eventually settling on Ethereum, which they would have done if they had had the opportunity to choose another chain.

And I don't think the OG's in Ethereum right now want to have roll-up, zK-roll-up. Ethereum funds did fund these projects when they started, but they didn't own their ideas at all.

In a previous community discussion, someone asked why the Ethereum Foundation is not worried about the lack of network effects in Ethereum right now, and the ethereum people said that they are waiting for ZK-rollup to become big enough, and then they will own ZK-rollup to solve the problem. The problem is that ZK-rollup is not exclusive to Ethereum, it can exist on any public chain.

Hasu:What I think is interesting is that there are facts that support both your point of view and mine.

Suzhu:Because your argument, your assumption, is backed up: that those who leave Ethereum will eventually come back to ethereum, just as you're betting on Bitcoin.

But my point is, I'm not sure what the future holds. I'm not sure users will come back to Ethereum, because other new public chains are producing a lot of users and a lot of innovative applications.

After all, it seems to me more dangerous to own something with a certain future than to own something with infinite possibilities.

Hasu:To be clear, I absolutely agree with you that I don't think everything will necessarily return to Ethereum.

I am a very firm believer that the future is a multi-chain world, and cross-chains are important in the future; In addition, I agree that in the future, people will not interact with blockchain directly, but with applications. Applications will be the only interface for people to interact with blockchain in the future. Users do not have the right to decide which chain to use, only developers have the right to decide this matter. Finally, I agree that the existing public chain will be split. It makes a lot of sense to split different steps such as computing databases, because the split can build highly optimized layers and thus faster execution.

I also think it's true that Ethereum hasn't realized the importance of the split. They think ethereum can be stored as a high confidence data layer, but I don't think so. So I agree that ethereum activity will gradually decline and other optimized Layer1 or Layer2 will become more and more active. But it seems that other public chains are worse off in this regard right now, so I would be cautiously optimistic about Ethereum.

Suzhu:That's right. I do agree with all of your previous points, but your last criticism is a bit like the bitcoin extremists used to be.

Almost half of their tweets at the time were about how centralized Ethereum was. During the last bear market, Ethereum was almost dead, and people agreed at the time that Ethereum was in a death spiral.

But there were a lot of strong Ethereum holders, and they had a good community culture within them, and they felt that they wanted to defend what they thought was valuable, and that was one of the reasons I was interested in investing in Ethereum at the time.

At the time, Ethereum was just over a hundred dollars, and as a public chain, it was really undervalued.

Hasu:But then people lost most of their money.

Suzhu:Even so, people in the community were still trying to build it, and I was at every Ethereum gathering available in Southeast Asia, and I really realized that I was at a turning point in Ethereum history.

But now, I see the same energy in the new Public chain, and it scares me.

There is a phenomenon in the world: once you are rich, anything you say is right.

As bitcoin holders get rich, they expect others to follow their lead, and some even become bitcoin extremists. I think there is a segment of the Ethereum community right now that are also very extreme Ethereum extremists.

We need to realize that not everyone in the Ethereum community is right, and we need to realize that if the current cultural climate continues to deepen, ethereum is likely to end up on the same path as Bitcoin.

I think everyone needs to keep an open mind. There's a dangerous overactivity of Ethereum extremists in the ethereum community right now.

Hasu:I couldn't agree more, and I've seen the trends you're talking about, although I'm not part of them, especially the expansion of ethereum extremists, and I generally mute them. But I think the good thing is that the community culture of Ethereum is still more open than bitcoin.

Suzhu:In fact, the culture of the bitcoin community is becoming more and more open, and I was talking to our mutual friend LEO recently, and he said that there is a huge drive in the Bitcoin community right now to add scripts and make Defi possible there.

Then I was talking to another bitcoin community guy, and he said that he had proposed funding for bitcoin developers through NFTS, and it didn't pass, but he thought NFTS was interesting, and he's an anonymous Bitcoin billionaire.

I think there's a cultural resurgence in the bitcoin community right now, and that's a good thing. They say they don't agree with NFT, they don't agree with DEFI, but they really want to try the right thing to promote development. The current trend of increasing extremism in the Ethereum community is indeed driving new users into other public chains.

This may indeed be a simple repetition of human civilization, the dragon slayer will always become the dragon, and when the pioneers become huge, they will demand that the successors follow their rules, but there will always be endless challengers, they are difficult to meet the challenges of the latter, because the latter always have all kinds of shortcuts.

In general, when a community moves too fast, it does run the risk of losing touch with what the market really wants. One example of a disconnect is Optimistic roll up, they want to become market makers to bridge the gap, which is fine.

So, I think there's still a big opportunity for Ethereum not to disconnect, and fundamentally the Ethereum community is a very eclectic group of people, with a lot of different people working on different solutions. But I do think the community is missing out on new user growth right now, and I don't mean that in a bad way.

Hasu:I can tell you felt at least a little guilty when you criticized Ethereum earlier, hahaha.

Suzhu:I explicitly talked about SNX before, that was the first DEFI project I talked about publicly, and I introduced SNX to people. But as it stands, SNX really isn't as good as I said it would be, much less LUNA. It's basically the same thing as LUNA, only LUNA performs it better.

I thought, why does this happen?

In the past, I also had a lot of LUNA, but I sold it and replaced it with a lot of other defi stuff, and I don't have a clear answer. But at least it proves that I didn't always make the right choices, that I also made the wrong choices and misled people into DEFI.

I remember talking to Arthur, and we were talking about LUNA, and the attitude was: LUNA wasn't built on the Ethereum chain, it wasn't worth taking seriously. Instead, LUNA is worth more than all defi's stuff put together.

So, I admit I do have a blind spot when I look at things. The main reason for this blind spot is that I made such a wrong judgment when I thought that ethereum was the only real smart contract public chain. Looking back, it is also because of this factor that I made a wrong judgment on SNX.

That's why optimistic roll-up is so popular right now with everyone but ethereum extremists.

What is the difference between the current attitude of Ethereum extremists towards other public chains and the attitude of Bitcoin extremists towards Ethereum during the bear market? There is no difference. I want people to think about it.

There's a big difference between whether ethereum is going to be a good investment asset and whether it's going to be a good network.

I have my doubts about ethereum's future dominance of smart contracts. On the asset side, I'm not sure it's going to do better than Bitcoin in the future, but it's certainly going to do as well as most currencies in general, because there's a lot of consensus, there's a lot of liquidity.

My whole point is not to persuade people to sell ether, nor to persuade people to buy ether. Just pointing out what Ethereum should be? And what is Ethereum currently? There is a huge gap between.

Hasu:We all love encryption, and even though we've been immersed in it for a long time, we still have big differences on how to go forward. But I think that's the most interesting thing about crypto. It's like the most intelligent space in the world. It's the most interactive marketplace in the world. I really appreciate our honest conversation today. Thank you.