December 11, 2025 • 54 mins
Ethereum co-founder Joe Lubin joins Friederike Ernst to discuss why we are at the "end of a supercycle," a chaotic transition period where legacy institutions are finally adopting blockchain rails not just for efficiency, but for survival. They explore the "inevitable convergence" where the US government may actively rely on stablecoins to absorb debt, effectively using crypto to extend the lifespan of the dollar. At the same time, banks scramble to compete with self-custodial wallets.
Joe also details the structural evolution of Consensys, from an "organic blob" incubating projects like Gnosis to a focused software powerhouse. He differentiates Linea from competitors by highlighting its commitment to permissionless innovation where anyone can deploy a rollup without a "sign-off". He shares his vision for MetaMask evolving into a user-owned "full-service bank.
Topics
- 00:00 Intro & Paradigm Shift
- 04:15 Crypto-Anarchy vs. Enterprise
- 10:30 Banks & Stablecoins
- 16:00 The Economic Supercycle
- 24:45 Consensys History & Spin-outs
- 33:20 Linea & Decentralization
- 42:15 L1 Scaling & ZK
- 48:00 Permissionless Rollups
- 55:30 Future Optimism
Links
- Joe Lubin on X: https://twitter.com/ethereumJoseph
- Consensys: https://consensys.io
- Linea: https://linea.build
- MetaMask: https://metamask.io
- Gnosis: https://gnosis.io/
Sponsors: Gnosis: Gnosis has been building core decentralized infrastructure for the Ethereum ecosystem since 2015. With the launch of Gnosis Pay last year, we introduced the world's first Decentralized Payment Network. Start leveraging its power today at http://gnosis.io
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to Epicenter, the show which talks about the
technologies, projects and people driving decentralization
and the blockchain revolution. I'm patrika ants and today I'm
speaking with Joe Lubin who is the Co founder of Ethereum and
CEO of Consensus. There's been a tremendous surge
in our ecosystem and a lot more respect for permissionless
innovation. Banks are panicking.
(00:22):
Organizations related to banks are trying to figure out what a
world looks like where you can essentially have a full service
bank owned by you in your pocketon your phone.
If I were a bank, I would adopt blockchain just for efficiency
gains, right? So any bank would and should.
(00:42):
So what we're going to be doing is furthering decentralization,
decentralized proving decentralized sequencing and
figuring out where it ways to toshare some value creation some
of the revenue with token holders.
And I think we can build a tokeneconomy or sub economy with a
lot of linear networks that are independent, quasi independent
(01:05):
or or closely related with one another that are collaborating
with one another, that are sharing infrastructure.
That's the the vision currently for LINEA.
Hey, Joe, thank you so much for coming back on again.
Doctor Ernst, thank you for having me.
(01:26):
One of my favorite podcasts and you are my my favorite podcast
interviewer. You're making me blush.
You're the best. Good.
Maybe let's start with kind of some bird's eye questions.
(01:46):
So if you, I mean, you've been in crypto in extraordinary long
time, Web three values have shifted, right?
Kind of you came into Web 3 after the 2008 financial crisis.
I, I remember you were telling me how you drove across, across
Argentina to see whether you could buy up land in
(02:08):
anticipation of kind of. Peru and Ecuador, but yeah.
Sorry, kind of in anticipate anticipation of kind of this
imminent collapse of the global financial system and now all the
banks are on chain, right? So kind of Web 3 was supposed to
be this ownership revolution andkind of what we're getting to
(02:29):
some extent is this back end upgrade for Wall Street.
And I mean, kind of like I can see it from this, from this from
the perspective of the legacy players, right?
Kind of if I were a bank, I would adopt blockchain just for
efficiency gains, right? So any bank would and should.
This episode has brought you my noses.
Building the open Internet one block at a time.
(02:50):
Nosis was founded in 2015 and it's grown from 1 of Ethereum's
earliest projects into a powerful ecosystem for open user
owned finance. Nosis is also the team behind
products that had become core tomy business and that are so many
others like Safe and Cow Swap. At the center is Nosis Chain.
It's a low fee layer one with 0 downtime in seven years and
(03:12):
secured by over 300,000 validators.
It's the foundation for real world financial applications
like Nosis Pay and Circles. All of this is governed by Nosis
Dow, a community run organization where anyone with a
GNO token can vote on updates, fund new projects, and even run
a validator from home. So if you're building in Web 3
or you're just curious about what financial freedom can look
(03:34):
like, start exploring at nosis dot IO.
The deeper question that kind ofplagues me is are we at risk of
losing the paradigm shift kind of that was meant to be inherent
to kind of web three if the userexperience, Rails and
distribution end up owned by thesame old incumbents?
(03:55):
Yeah, I, I think if, if there's any risk and there's a huge
amount of risk in the world right now, it's the risk of the
paradigm shift accelerating. I started in the blockchain
space when it was called Bitcoinin early 2011 and is crypto
anarchic? It was a bunch of people who
(04:19):
were technologists and they drewin people who were very paranoid
and very protective of their ownassets.
And I think that ethos has significantly prevailed in the
Bitcoin space. There are other projects and
starting in 2011, 2012, etcetera, colored coins, faster
coin, counterparty, a whole lot of them.
(04:45):
Next was an interesting one thatessentially added functions to
the protocol rather than pursuing Vitalik's idea, which
was to add a computationally complete computer to every node
of a, of a decentralized network.
And and so that was all about builders recognizing that this
(05:09):
profound invention of Satoshi decentralized trust was
something that should be everywhere and used in as many
cases as possible, not just in the the narrow use case of money
or store value, some some aspects of money.
And so there were certainly a bunch of crypto anarchist types
(05:31):
early in the Etherium ecosystem,but I think a lot of the, the
early builders were really pragmatic and many of us felt
that this is great. We can transform the world to
greater and greater, call it progressive decentralization
permissionlessly. Nobody can stop us.
(05:55):
You know, we're we're anti fragile. the US government to
even can try to kill us for for years in a row.
And, and ultimately we would just get stronger from those
attacks though move a little more slowly.
And so it was all about buildingenough functionality, usability,
(06:16):
scalability, etcetera, so that we could just change everything
ourselves if we needed to. And then maybe the older
generations, the older cohorts would die off and the younger
people would be crypto token native etcetera.
But we we really did many of us really did feel that unless the
(06:41):
whole world on boards to progressive decentralization,
the paradigm shift will will notbe nearly as effective.
And so early on consensus and a bunch of organizations in our
ecosystem did enterprise blockchain formed the Enterprise
(07:03):
Ethereum alliance and the the technology was used for
consortium chains and things like that.
And a bunch of years ago we declared that that Enterprise
Ethereum is dead, but Long live Enterprise Ethereum because the
(07:23):
layer 2 roll out, roll up road map was invented and has grown
remarkably successful in my opinion.
And so, you know, is is a whole bunch of banks and their
customers worse than some of theexploitative things that we've
(07:44):
seen going on in the meme coin space?
I would argue the ICO space was remarkably period era was
remarkably successful, but a lotof shenanigans in that era as
well. And so I really do look forward
to onboarding major financial institutions, major enterprises
(08:05):
around the world. And with things like prediction
markets, which you know a littlebit about and and other things
going mainstream, I think I think Tradfi is onboarding
itself to defy. It'll soon all be called finance
and and it's going to be runningon our rails.
Yeah, I, I think that's, that's innovatively happening.
(08:30):
But if you look at the promise of Web 3 and kind of if you, if
you look back over the last 15 years and you would have to
point that kind of a tangible metric that's gotten better for
real life people because kind oftheir banks now use blockchain
in the background. What would you say that it's
(08:52):
because kind of to me the the value proposition was to a large
extent that these intermediariesare no longer necessary and kind
of they, they are no longer in aposition where they can very
effectively extract from their users, right?
(09:15):
Yeah. So the intermediaries
essentially are disintermediatedand turned into protocols or
their functionality is replaced by protocols.
And so I think we've always beenabout growing agency, personal,
political, social, economic agency for people and for
(09:38):
communities. Companies are kind of
communities too. So they should have agency.
And, and if you look at what's been going on since the end of
the Biden auto pen Gensler administration, whatever that
was, there's been a tremendous surge in our ecosystem and a lot
(10:03):
more respect for permissionless innovation.
The Stable Coin Genius Act lit afire under our ecosystem, stable
coins growing and proliferating.Our total game changer for
banking. Banks are panicking.
(10:27):
Organizations related to banks are are trying to figure out
what a world looks like where you can essentially have a full
service bank owned by you in your pocket on your phone.
Gnosis is doing that, Man A Maskis doing that.
(10:48):
And how do regional banks survive and thrive in that sort
of context? How does SWIFT, for instance,
provide services to 11,500 financial institutions using
enhanced technology? And so we're talking to lots of
(11:11):
banks and we're working with SWIFT and, and there's some
really good answers to that. So it is not the case that
you're going to need to be custodying the assets of your of
your customers in order to provide services to them and and
make a living. If your financial institution,
(11:32):
other financial institutions could potentially achieve
charters and we're going to needsome government cooperation on
this around being data custodians, identity reputation
custodians, attestation custodians.
A project portfolio company called Spruce ID is working
(11:56):
doing some great work on this stuff.
And so it's going to take time for the general population to
get more comfortable with Defy. So Defy is probably one of the
first killer OPS of of the worldLedger as Ethereum has a sort of
(12:18):
re articulated as Vitalik's we are articulated Ethereum pulling
it back a little bit temporarilyfrom calling it the world
computer. Vitalik is also articulated that
he believes that that low risk defy is now something that they
could be considered by even naive people because the the
(12:44):
financial system, the global economy is in danger right now.
We're at the end of a super cycle and there is great risk in
holding nation state currencies in certain bank accounts.
And the risk might be more severe in terms of financial
repression, where where inflation just erodes the
(13:04):
purchasing power of the savings of people and companies.
And, and so holding your own assets under your own control in
your own personal bank and, and exposing them to yield and
investment opportunities in an ecosystem that has been growing
exponentially for the last 10 or15 years may be a good idea
(13:29):
compared to being exposed financially to a global economy
that is, is careening towards a brick wall in the form of the
end of a super cycle. So I'm, I'm very optimistic that
we're going to move into the next super cycle that will be
heavily supercharged by AI and will be operating on
(13:51):
decentralized rails. But there's a there are ways to
to bring the legacy infrastructure along for the
ride. A lot of the stables that we see
today in web three are just wrappers for legacy currencies,
right? So kind of USDC and USCT are
(14:13):
backed and supposedly supposedlyprobably backed one to one by
U.S. dollars in some sort of escrow custodian account.
So kind of like if, if the if the US dollar kind of careens to
watch towards the edge, what does that mean for a defy
(14:33):
landscape that is very heavily built on these these
transpositions? Yeah, if it careens towards the
left edge, it it could be concerning.
So I I think of backed stable coins to be a tremendous
validation of our technology, also an existential threat
potentially to our technology asyou've suggested.
(14:58):
I think of it of it as a transitionary step.
I would love to see I would loveto see and die continue on its
pure path liquidy. It is a very cool protocol that
makes use of decentralized economic bandwidth basically in
the form of of ether or other decentralized instruments
(15:23):
serving as, as collateral so that you can, it's a complicated
ecosystem, but you can basicallylend yourself some stable coin
against your own collateral. And that's an incredibly
important construct. But we need ether to go through
(15:44):
the roof and price. We need Bitcoin to go through
the roof and price in order to be able to mint enough stable
coins based on that mechanism. In the meantime, there's a
really interesting political economic transformations
underway where China, some othercountries are are going to have
(16:05):
to pull back on lending money tothe United States.
Japan's raising rates and is probably going to pull back a
bunch of its money and and throwthe world into a much less carry
trade driven world. That should be very interesting.
And Scott Besson, Treasury Secretary, has crafted a
(16:30):
strategy where the US can borrowmoney from many organizations
around the world that are effectively involved in, in
doing genius compliance stable coins and, and they're either
putting dollars in the in the bank or, or holding U.S.
Treasuries in custody. 1 backingstable coins, one for one.
(16:54):
And I think the United States government is going to be very
aggressive about that strategy. Scott Bestent indicated he
thought probably hit 3 trillion in stables.
And so that is a transitionary political economic phenomenon or
moment that embraces our technology, drives our
(17:15):
technology forward, drives the price of Ether and Bitcoin
higher, much higher, hopefully enabling.
We don't need a full replacementof of backed stable coins in our
ecosystem. We just need to bootstrap
properly decentralized stable coins in our ecosystem.
(17:36):
Really nice side effect for people around the world in
countries that are say more problematic than Germany or or
the United States is that if youhave a despot who is financially
exploiting the population via monetary mechanisms or getting
(17:56):
into deep debt and financially repressing the population,
printing much too much money. It's great to have either tokens
like ether or Bitcoin or stable coins that are tracking the US
dollar or or other denominationsto put your money in.
In some cases, you need to hide your money from family members
(18:17):
that that might take it from you.
In other cases, you just need toprotect yourself from the
governments. And if governments lose their
ability to financially exploit their populations, we could see
some positive political ramifications.
I know I'm saying this at a moment of extreme chaos in the
(18:40):
world. We are at the end of the an 80
something year super cycle and alot of stuff is breaking and
kind of has to break. That's what happens at the end
of super cycles, so that the newsystem of the next super cycle
can establish itself. So what do, what do you
recommend for the ecosystem to kind of build in anticipation of
(19:05):
this collapse? Because kind of like currently
we're kind of transposing a lot of the old mechanisms on chain
and they will just collapse withthe old mechanisms, right.
So what what do you, what do youthink is the infrastructure and
the projects we need to kind of see us through this?
So I I think keeping a bunch of the old mechanisms as healthy as
(19:27):
possible to facilitate as smootha transition for humans as
possible is a good thing. Like smashing into a brick wall
would be bad and doing that sortof thing might make it easier
for nefarious actors who have guns and things to take control
(19:49):
of a very of a very broken situation.
So I I think we need to remain as functional as possible while
organizations like ours continueto build infrastructure
scalability applications that they can enable people to to
transition to the next economy. And So what are we building?
(20:14):
We're building wallets that thatpeople fully own and control.
We're building decentralized finance so that people can
participate in, in funding the development of the next economy
and and can earn yield as the next economy accelerates.
(20:37):
Because money in the next economy, even though it it's
nearly free to print magic Internet money.
It's, you know, they're really good ones are valuable, are
scarce and, and they earn prettygood yield.
If you're trying to acquire them, borrow them for, for
(20:57):
different things. So our our ecosystem is likely
to see pretty good yields compared to the legacy economy.
We'll see how that goes. But looks like we're going to
move into another accelerated money printing phase and
(21:20):
building things that enable people to express themselves
better. Prediction markets are a great
one that we've talked about for many years that enable the world
of people who think they know the truth about different issues
to incentivize the people who actually know the truth to share
the truth, sort of like a, a consulting fee.
(21:43):
I think that's going to be great.
I think we're going to have a lot of revolution revelations
over the next few years about all the, the shenanigans and,
and just utter rot that sits at the, at the core of of our
political cultures. So looking forward to that.
(22:04):
And I think it's going to be about empowerment to, to do
things. I think the social media social
networking industrial complex isunbelievably toxic.
And you know, it's, it drives polarization.
I think if you look at the people in small town Germany and
(22:24):
the small town America, they're probably isolated from a bunch
of the madness that that we think is the state of the world.
If we're paying attention to to Twitter and certain elements of
of mainstream or social media. I actually think that a lot of
(22:48):
the, the polarization and the narrative around collapse of, of
the system of the world, I thinka lot of that is a manufactured
narrative. Yes, there are big changes going
on, but but I think I think there are owners of all the all
(23:08):
the different industrial complexes, whether it's a social
media or educational or scientific publishing or pharma
or food or military. And so we do live in a a
manufactured reality and the opportunity is for reality to
become a little more decentralized.
(23:29):
If we if we start building applications on decentralized
rails like block chains, if we start building applications on
the centralized networks of decentralized social graphs,
where are decentralized identities are wired together
via attestations and reputation systems.
And and when their platforms where we can add contents to our
(23:54):
social graphs, tokenize our social graphs, earn money, can
add functionality to our social graphs, We can the owner of a
social graph can earn tokens. Potentially the owner can share
those tokens with people contributing value to the social
graph. And so it shouldn't be the the
(24:16):
big corporate owners and making use of AI to exploit us who are,
who are making money from user generated content.
It should be the people who are in control of all that and and
benefiting from that. And we need a lot of
infrastructure building in orderto make that happen.
(24:37):
But as soon as they're good platforms and people can start
making a living and feeling likethey're not being manipulated
and and driven a bit crazy from plugging into social networks, I
think they'll, they'll probably be a, a flipping of the of how
people engage in in social networking going forward.
(24:58):
So I look forward to the the bigsocial network companies
shrinking quite dramatically. That sounds like wonderful
vision for the future and it sounds a lot like kind of like
this ownership narrative, right?Kind of like this.
It's it's a platform. It belongs to no one.
That's it's, that's it belongs to everyone narrative, right?
(25:19):
Where there's not one central counterparty or one bottleneck
that kind of sits in a position where kind of they can.
You need blockchain characteristics, you need
guaranteed execution, permissionless innovation,
censorship resistance. So and and we need scalability
where we've gotten to the point where we're we're really close
to having good scalability. I yeah, I want to talk about
(25:40):
scalability in just a bit, but maybe kind of like if you look
at applications we see so far, mostly we see yield applications
where somehow Web 2 yield or webtwo financial stack yield is
redistributed to kind of Web 3 protocols, right?
So kind of the, the, the yield on stables comes from the fact
(26:02):
that kind of they are they they buy T-bills and kind of then
rather than I'm kind of eating this up themselves, they kind of
somehow redistributed to, to, tothe defy users or the low risk
defy users. Where do you see the Where do
you see the applications that actually give back ownership to
(26:22):
users of their data, their identity, their audience, their
content? Because I, I, I mean, I know all
the experiments, but none of them have really caught on,
right? It is transitional.
We're in a transitional phase. When cars were invented, there
were laws where people had to walk in front of the cars like
(26:45):
they walked in front of horses and and carriages.
And that's because the roads maybe couldn't handle fast cars
moving down them. When TV was invented, nobody
knew what to do with it. So people stood up with their
scripts and they they read radioplays in front of the cameras.
Do you think we'll get there? Yeah, of course.
(27:07):
I think we'll get there. Maybe I'm maybe I'm just
impatient. So I mean, the patience has
never been my prime virtue. Most people don't see the world
in terms of flows. If you look at crypto Twitter,
everybody's looking at a slice of time and whether their tokens
are up today or down today and, and either the sky is falling
(27:30):
or, or everything is great. And so if you start paying
attention to the flows and, and we've made unbelievable progress
since 2009 or, or 2014 for Ethereum, a civilization has now
effectively started embracing inearnest decentralized protocols.
(27:54):
So we're seeing it at consensus because we're talking to
governments and and big companies, especially in the
financial industry and they are all asking for help in
understanding the stuff or in building on this stuff.
Maybe let's talk about consensusfor a bit.
So kind of consensus is an unusual company to say the
(28:17):
least, right. So if if, if you were starting,
if you were to start consensus again today with kind of
everything you've learned over the past decade, more than a
decade, would you replicate kindof this haben spoke structure
that you pioneered back then? I spent a year roughly on the
(28:39):
Etherium project helping with a whole lot of people to to stand
up well, the theorem project, the theorem foundation,
etcetera. And I think it's important to
note that as we did, we did talkto some VCs back then and we, we
did make the explicit decision not to take VC money directly,
(29:00):
VCs for free, invest in the token launch.
But we felt like we had to be a very different kind of project,
a different kind of organization.
It had to be as decentralized aswe could make it and
progressively decentralize it. And the token sale had to be
(29:23):
open, free and fair. And we did a lot of legal work
to make sure that that we wouldn't get into trouble in the
United States if we allowed to Americans to, to participate and
got a, a piece of paper from thelaw firm that they gave us
confidence that we could go ahead and do that.
(29:45):
And that has stood up despite the attempts to to tear it down.
And, and we didn't hire in the sense that we didn't put up job
wrecks, job descriptions and things like that.
Basically anybody who wanted to self select to become part of
(30:09):
the Etherium project, they were virtually instantly on the
Etherium project. And and so it was a, a band of
pirates, band of characters. Sometimes there were issues,
interpersonal issues, but I don't think that Ethereum would
have been seen to be open, permissionless and something
(30:34):
that moves towards civilization,scale, technology if we were a
company, like a traditional company to start.
And so a year into it, I wanted to do something essentially
based in the United States because Ethereum people were
(30:55):
afraid of the United States backthen, but I was a little less
afraid. And and it was, it was about
continuing the vision in the mission of the Etherium project.
And we knew that we couldn't design an ecosystem, whether
from the Etherium Foundation or from consensus.
(31:15):
We couldn't design the decentralized protocol world top
down. We had to just do a, a ton of
experimenting. So it was, it was pretty
decentralized and people made fun of it because we were trying
to figure out how to govern ourselves and, and what to build
with the type, the technology. You know, we tried to build an
(31:37):
accounting system, we tried to build a DAP store and we
realized, hey, we have no developer tools, we have no
ecosystem really. And so why don't we build a
little infrastructure to enable us to interact with this raw
technology. So at a mask emerge from that
and Inferra emerge from that andTruffle emerged.
(32:03):
Custom culture was trying to build a DAP store and, and just
the scripts that he built in order to, to build an
application ended up evolving into a pretty useful developer
tool that was used by many for many years.
So Consensus has been different organizations over the years.
(32:26):
So there's a, an initial mothership company called
Consensus Mash and it went through a bunch of pretty
powerful or radical evolutions in in its nature.
It does pay a lot of attention to enterprise Ethereum for a
while, some projects spun out because of the, the COVID
challenges of consensus mesh to form consensus software and, and
(32:50):
it's been very tight integrated software product company
extremely different from the, the organic BLOB that consensus
mesh was and and had to be. Because early on Mesh was all
about fostering adoption, educating, talking to anybody
who would listen to us and incubating a huge number of
(33:14):
projects, many of which including Gnosis spun out a
consensus, some with great success, some with not so great
success. But we did, we did seed a lot of
activity in the Etherium ecosystem and and so we have a a
lot of friends out there in the extended consensus network.
(33:37):
I, I think it's completely uncontentious that so much value
has come out of consensus over the years for Ethereum.
And I, I think you're 100% spot on that Ethereum needed a
business to kind of, to kind of Dr. adoption.
(33:57):
If you look at the individual parts that kind of make up
consensus and I think I, I, I kind of maybe I look at this
because I feel sometimes we're kind of like in, in a similar,
I'll be a much smaller boat. So kind of what do you think
some of the projects would have been better off kind of on their
(34:21):
own rather than as part of this of this often unwieldy
mothership structure? The social contract back then
was that you could spin out, youknow, it, it had to make sense
and, and it had to be pretty broad agreement.
But a lot of projects got financial and other support to
(34:44):
spin out of consensus. And I think we we spun out over
40 projects that that were incubated inside a consensus and
and invested in, in many others that weren't incubated inside a
consensus. Projects like Metamask spent a
lot of time figuring out not just what their business model
(35:05):
should be, but if they should have a business model.
So there was, there's a lot of interest early on in just
setting up a foundation and treating Metamask as a public
good. And don't worry about making
turning it into a for profit endeavor.
And the reason that the Metamaskhad pretty good distribution
(35:27):
starting in 20 like 2021 as D51 point O happened and then the
NFT phenomenon happened. And and the only reason Metamask
ended up being in a position to make money was because we
absorbed A-Team called Air Swap.And they were, they were the
(35:48):
people that that build of the infrastructure that enabled us
to charge for swapping and, and have added a lot of features
since then. So would Metamask have been
better? Maybe the world would have been
better off if Metamask remained a public good infrastructure.
And maybe it's moving in that direction already actually,
(36:13):
because we're we're trying to progressively decentralize a
bunch of the elements of consensus.
I think you were better off spinning out because.
Yeah, 100%. Back then, I, I thought that you
(36:35):
all could become a hub in the same way that consensus was a
sort of hub and spoke like model.
And you've done an amazing job of that building a bunch of
integrated, very valuable components and so already
massively successful. And I think your future is going
(36:56):
to be very, very bright as as weall move into the mainstream.
So we can go through a lot of examples, but I think, you know,
roughly we made pretty good decisions along the way.
Yeah. So I mean we we were the first
spin out, I think and many. Too.
(37:17):
Yeah. And yeah and yeah, no regrets.
So I think it worked out well for us and you guys.
So it's yeah. So the the two big pillars
inside content is right now linear and Metamask, right.
I mean, so there are, there are still big pillars that are less,
less visible like in Furor for instance, and and diligence and
(37:41):
so on. But but talk me through linear
and Metamask first. So kind of how do you see them
fit together, really enforce each other or kind of do you do
you see them as somewhat orthogonal?
Men mask as I already articulated, we're seeing as
your cell phoned personal walletin your pocket or or on your
(38:01):
laptop. And we think that Metamask can
become a a full service bank. We think we can start speaking
ISO 20 O 22 like other banks andbecome infrastructure not just
for people and communities and companies.
I think some of it could become decentralized and become sort of
(38:23):
back end infrastructure as well.Linea is a technology, It is
leading ZKEVM technology. We're hoping to see it natively
enshrined in the Ethereum protocol at some point in the
not too distant future. And with the the pace of
(38:43):
innovation of real time ZK proving, things are looking like
Ethereum's going to get remarkably scalable.
So it was going you out and we're hoping Linea is a big part
of that. The scaling issue so kind of
Ethereum has kind of in the pastcouple of years kind of had this
paradigm around L2 scaling, right.
(39:06):
But now kind of it looks like L1scaling may actually come much
faster than we had we had originally anticipated with real
time proofing. And it, it looks like possibly
the the true bottleneck is, is networking, which would be
wonderful. How, how do you see that?
(39:28):
And how do you see, see that in context of the L2 landscape?
How do you foresee the the future evolving here?
So we'll have to get back to to that initial thread, but let me
run with this one. I think scaling has all been
enabled by the roll up centric road map.
We were trying to scale the theorem in different ways,
(39:51):
plasma sharding, etcetera. And we simply didn't have the
technology to get that done in the pure layer 1 context.
And so the roll up centric road map gave a lot of really smart
people and entrepreneurs permission and incentives to
take approaches, whether they'reoptimistic approaches or or zero
(40:15):
knowledge approaches. To building out scalability,
Ethereum layer one seeded its pricing power for a while and
made explicit choices in in the protocol to enable roll ups to
establish themselves and flourish and really build out
the technology back when we. So we have a protocols group
(40:39):
that produces an execution client called Basu and Techu
consensus client. And we've been building clients
for a long time as have you for the Etherium protocol.
And we've always had an R&D group in our protocols group.
And the R&D group was doing a bunch of work 6:00 or so years
(41:00):
ago, maybe longer in zero knowledge proof technology.
A couple three years into that, it started to become clear that
hey, we think we could build A roll up because the technology
is moving much faster than we thought it would.
And so that's been accelerating exponentially since then we
(41:24):
built Linea. Linea has been accelerating
exponentially. Linea today is Wednesday,
December 3rd, 2025, otherwise known as Fisaka Day.
And traditionally Linea has beenout of sync with the with the
hard forks and but Linea has been improving its process all
(41:48):
along. And over the last few months
we've implemented four or five different hard forks and for the
first time we're actually launching Fusaka for Linea on
the same day as as the rest of the world, which is a really
(42:08):
remarkable feat in my opinion. And so we're seeing Justin Drake
demonstrated that the two GPU's are able to real time prove some
blocks, I'm not sure which blocks they they were proving.
And, and so we're getting to thepoint and this is something that
we anticipated in our R&D group years ago that not only is ZK
(42:31):
going to be the direction of travel for layer twos, but ZK is
going to be used horizontally inmessaging and ZK is is going to
make its way into the core protocol.
And if consensus wanted to be a core protocol company and we
would have to be expert, but with ZK.
And so it's all working out in that direction it looks like.
(42:56):
And I think we're going to see avery fast, very performative
layer one for a theorem that hasvery useful things for layer
twos to do. And it's all saturated by super
fast CK real time proving accelerated by hardware.
At some point soon, I think layer twos, layer threes, layer
(43:21):
fours and higher are going to have a real utility.
They're going to represent gaming domains or topical
domains or regional domains. It's possible that the the
country of France may may not want to share a layer 2 with the
country of the United States because it would want to divide
(43:43):
some have some political divisions for for its provinces
and and the United States might have political divisions and
Switzerland isn't going to want to have a bunch of data leaked
outside of its national layer 2 borders.
So that a lot of good reasons for the prolap centric road map
(44:07):
architecture to be incredibly useful and valuable for the next
economy and the next geopolitical map.
The Anti Network states. Exactly, love it.
So do you want me to go back to talking about what linea is I I
(44:28):
sort of described? Yes, yeah.
Go, go back to Linea. I think that's a good idea.
Yeah. So Lenny is a technology, Lenny
is a network linear mainnet and we're putting lots of effort
into that. We've tokenized, we've
decentralized it into a linear consortium.
We've got stewards from across the ecosystem, we're adding one
(44:54):
steward that we're about to announce in a in a few days.
So don't want to front run that.And these stewards are very
aligned with the health of the Etherium ecosystem and obviously
the the linear ecosystem as wellof a giant ecosystem Development
Fund in the form of the the linear tokens and the linear
(45:16):
consortium and technology is available for others to build
on. So SWIFT consensus is building
on the linear technology for SWIFT.
We're working out our privacy technology and we think we're
going to be able to do somethingpretty profound between Metamask
(45:38):
and Linea connecting to one another.
BAZK, maybe not best in class, but one of the best in class
privacy solutions. So we think that Linea itself
has a business model. It is credibly neutral
permissionless innovation. We don't control it, but we're
(45:59):
leaning heavily into into makingit successful.
So between Infura, which is decentralizing itself into dim
decentralized infrastructure network, So what it calls
enabling the range of Metamask to to grow as fast as the
ecosystem grows, as fast as protocols can onboard themselves
(46:21):
to decentralized infrastructure network, inferior is helping DIN
out quite significantly. And DIN is, is run design
founded by EG Galano, who was a founder of Infura.
And so between those different elements, what we're looking to
(46:42):
do is what traditional companieshave done verticalized.
And so how do we verticalize in a way that is different and much
better for everybody than the way the, the Web 2 walled garden
companies verticalized. We, we do it while maintaining
as much credible neutrality at each layer as we can.
(47:04):
So, so there are things that we can do that unlock synergies
between men, mask and lineal andsome will be forthcoming don't
want to front run those things. But you know, things like our
new rewards platform makes use of both and they'll be more on
that front. But we have to figure out how to
(47:26):
maintain the balance between some useful verticalization to
make products better for people and companies and making sure
there's credible neutrality so that nobody feels like they can
be de platformed by us. And everybody feels like there's
a long tail of innovation where they can build in the Metamask
(47:50):
context, building the linear context, building the dim
context and, and just add value to the ecosystem and, and
nothing we can do to stop that. And that's we can do to foster.
That I think this is something that the ecosystem often doesn't
give you enough credit for. And you probably get APR
briefing document before every interview you do that says
(48:11):
don't, don't compare yourselves to competitors because I know
this is what what I get, but maybe I can do this.
So kind of on on linear, you candeploy your own roll up without
permission from you guys where, where it's kind of like if you
look at the other major stacks, it's actually very much not
permission. You actually need sign off from
(48:34):
optimism to kind of to launch anOP stack roll up.
And I think most people aren't actually aware of this.
And it's crazy, right? Kind of like this?
Shouldn't be this this? Business model, you know, and if
it works for them, it's fine andnot crazy.
So what we're going to be doing is furthering decentralization,
(48:56):
decentralized, proving, decentralized sequencing,
etcetera, figuring out where ways to, to share some value
creation, some of the revenue generation with the with token
holders, linear token holders. And, and maybe it's just through
burning more linear tokens. And, and I think we can build a
(49:18):
token economy or sub economy with a lot of linear networks
that are independent, quasi independent or, or closely
related to one another, that arecollaborating with one another,
that are sharing infrastructure.And I, I think that's, that's
how the the next geopolitical landscape gets built out
(49:43):
somewhat bottom up with a lot of, a lot of projects showing up
and, and finding synergies and Co locating on different
networks. And lots of those projects will
be on multiple networks and willbe citizens of many different
network states the the vision currently for Linea.
(50:03):
Yeah. I mean permission is innovation,
true composability. I think that that'll be a huge
unlock. We kind of.
One last thing, we would like our relationship to Linea to be
very similar as our relationshipto a theorem.
That Linea should be as a theorem aligned as possible,
(50:24):
100% a theorem compatible. And maybe there's a time when
when the architectures can evolve so that maybe overflow
activity at layer one gets handled by different layer 2
networks. So I, I think, and we'll see,
we'll see quite a bit of architectural evolution over the
(50:47):
next decade or two. Absolutely.
So we probably have time for onemore question and I want to make
it a good one. So if, if you kind of, I mean
you are a remarkable optimist and a pessimist at the same
time. So maybe maybe do do the doom
thing. So kind of what what do we, what
keeps you up at night about the ecosystem?
(51:10):
So kind of what, what do you think is the one thing kind of
we need to get right in the nextone or two years.
So kind of are you worried aboutvalidator centralization or
custodians or L2 interop? What are you worried?
About I'm not worried about anything specifically related to
the evolution of our ecosystem because the ecosystem is so big
(51:36):
and anti fragile and self-sustaining.
We've gotten over a lot of very difficult humps and it's hard
building civilizational infrastructure in the middle of
a civilization that doesn't careor wants to kill you.
But we've made remarkable progress.
(51:57):
There are so many technical issues in our ecosystem, the
Etherium ecosystem, but we're aware of most of it or all of
it. And there are so many parallel
efforts to to solve all these different issues, whether it's
throughput or latency or composability.
I mean, these are just obvious things that that really just
(52:21):
require engineering solutions. There's nothing existentially
difficult about these things. We just have to keep working on
them and we're, we've got the wind at our backs now, U.S.
government wind at our backs. The much of the globe is
following the US in terms of getting more comfortable legally
(52:42):
with the technology and, and themainstream.
So we don't have any users yet. We don't have any applications
yet. And, and that's, I think largely
because of scalability and usability issues and, and
because it was effectively illegal to do things in our
ecosystem in the United States, illegal for companies to hold
(53:03):
tokens or issue tokens, illegal for builders to, to build
something innovative. Because the SEC would would slap
a lawsuit on you if you, if you started to, to look successful.
But now it's legal and everybody's all the
organizations are trying to figure out how to rush in and
(53:24):
the builders are coming. So we're going to see so much
innovation in in terms of building novel things largely in
define hopefully in social and gaming and other things in our
ecosystem. So hopefully the global economy
will hold itself together in 2026.
(53:47):
If it does, it'll be an epic here for the Etherium ecosystem.
Cool. Joe, thank you so much for
coming on. Where do we send people to find
out more about you, Our consensus, Metamask, Linear, all
the wonderful things you're doing?
Ethereum Joseph on Twitter consensus dot IO on the
interweb. Perfect.
(54:08):
Thank you so much. Thanks, Frederick.
Welcome to Epicenter, the show which talks about the
technologies, projects and people driving decentralization
and the blockchain revolution. I'm patrika ants and today I'm
speaking with Joe Lubin who is the Co founder of Ethereum and
CEO of Consensus. There's been a tremendous surge
in our ecosystem and a lot more respect for permissionless
innovation. Banks are panicking.
(00:22):
Organizations related to banks are trying to figure out what a
world looks like where you can essentially have a full service
bank owned by you in your pocketon your phone.
If I were a bank, I would adopt blockchain just for efficiency
gains, right? So any bank would and should.
(00:42):
So what we're going to be doing is furthering decentralization,
decentralized proving decentralized sequencing and
figuring out where it ways to toshare some value creation some
of the revenue with token holders.
And I think we can build a tokeneconomy or sub economy with a
lot of linear networks that are independent, quasi independent
(01:05):
or or closely related with one another that are collaborating
with one another, that are sharing infrastructure.
That's the the vision currently for LINEA.
Hey, Joe, thank you so much for coming back on again.
Doctor Ernst, thank you for having me.
(01:26):
One of my favorite podcasts and you are my my favorite podcast
interviewer. You're making me blush.
You're the best. Good.
Maybe let's start with kind of some bird's eye questions.
(01:46):
So if you, I mean, you've been in crypto in extraordinary long
time, Web three values have shifted, right?
Kind of you came into Web 3 after the 2008 financial crisis.
I, I remember you were telling me how you drove across, across
Argentina to see whether you could buy up land in
(02:08):
anticipation of kind of. Peru and Ecuador, but yeah.
Sorry, kind of in anticipate anticipation of kind of this
imminent collapse of the global financial system and now all the
banks are on chain, right? So kind of Web 3 was supposed to
be this ownership revolution andkind of what we're getting to
(02:29):
some extent is this back end upgrade for Wall Street.
And I mean, kind of like I can see it from this, from this from
the perspective of the legacy players, right?
Kind of if I were a bank, I would adopt blockchain just for
efficiency gains, right? So any bank would and should.
This episode has brought you my noses.
Building the open Internet one block at a time.
(02:50):
Nosis was founded in 2015 and it's grown from 1 of Ethereum's
earliest projects into a powerful ecosystem for open user
owned finance. Nosis is also the team behind
products that had become core tomy business and that are so many
others like Safe and Cow Swap. At the center is Nosis Chain.
It's a low fee layer one with 0 downtime in seven years and
(03:12):
secured by over 300,000 validators.
It's the foundation for real world financial applications
like Nosis Pay and Circles. All of this is governed by Nosis
Dow, a community run organization where anyone with a
GNO token can vote on updates, fund new projects, and even run
a validator from home. So if you're building in Web 3
or you're just curious about what financial freedom can look
(03:34):
like, start exploring at nosis dot IO.
The deeper question that kind ofplagues me is are we at risk of
losing the paradigm shift kind of that was meant to be inherent
to kind of web three if the userexperience, Rails and
distribution end up owned by thesame old incumbents?
(03:55):
Yeah, I, I think if, if there's any risk and there's a huge
amount of risk in the world right now, it's the risk of the
paradigm shift accelerating. I started in the blockchain
space when it was called Bitcoinin early 2011 and is crypto
anarchic? It was a bunch of people who
(04:19):
were technologists and they drewin people who were very paranoid
and very protective of their ownassets.
And I think that ethos has significantly prevailed in the
Bitcoin space. There are other projects and
starting in 2011, 2012, etcetera, colored coins, faster
coin, counterparty, a whole lot of them.
(04:45):
Next was an interesting one thatessentially added functions to
the protocol rather than pursuing Vitalik's idea, which
was to add a computationally complete computer to every node
of a, of a decentralized network.
And and so that was all about builders recognizing that this
(05:09):
profound invention of Satoshi decentralized trust was
something that should be everywhere and used in as many
cases as possible, not just in the the narrow use case of money
or store value, some some aspects of money.
And so there were certainly a bunch of crypto anarchist types
(05:31):
early in the Etherium ecosystem,but I think a lot of the, the
early builders were really pragmatic and many of us felt
that this is great. We can transform the world to
greater and greater, call it progressive decentralization
permissionlessly. Nobody can stop us.
(05:55):
You know, we're we're anti fragile. the US government to
even can try to kill us for for years in a row.
And, and ultimately we would just get stronger from those
attacks though move a little more slowly.
And so it was all about buildingenough functionality, usability,
(06:16):
scalability, etcetera, so that we could just change everything
ourselves if we needed to. And then maybe the older
generations, the older cohorts would die off and the younger
people would be crypto token native etcetera.
But we we really did many of us really did feel that unless the
(06:41):
whole world on boards to progressive decentralization,
the paradigm shift will will notbe nearly as effective.
And so early on consensus and a bunch of organizations in our
ecosystem did enterprise blockchain formed the Enterprise
(07:03):
Ethereum alliance and the the technology was used for
consortium chains and things like that.
And a bunch of years ago we declared that that Enterprise
Ethereum is dead, but Long live Enterprise Ethereum because the
(07:23):
layer 2 roll out, roll up road map was invented and has grown
remarkably successful in my opinion.
And so, you know, is is a whole bunch of banks and their
customers worse than some of theexploitative things that we've
(07:44):
seen going on in the meme coin space?
I would argue the ICO space was remarkably period era was
remarkably successful, but a lotof shenanigans in that era as
well. And so I really do look forward
to onboarding major financial institutions, major enterprises
(08:05):
around the world. And with things like prediction
markets, which you know a littlebit about and and other things
going mainstream, I think I think Tradfi is onboarding
itself to defy. It'll soon all be called finance
and and it's going to be runningon our rails.
Yeah, I, I think that's, that's innovatively happening.
(08:30):
But if you look at the promise of Web 3 and kind of if you, if
you look back over the last 15 years and you would have to
point that kind of a tangible metric that's gotten better for
real life people because kind oftheir banks now use blockchain
in the background. What would you say that it's
(08:52):
because kind of to me the the value proposition was to a large
extent that these intermediariesare no longer necessary and kind
of they, they are no longer in aposition where they can very
effectively extract from their users, right?
(09:15):
Yeah. So the intermediaries
essentially are disintermediatedand turned into protocols or
their functionality is replaced by protocols.
And so I think we've always beenabout growing agency, personal,
political, social, economic agency for people and for
(09:38):
communities. Companies are kind of
communities too. So they should have agency.
And, and if you look at what's been going on since the end of
the Biden auto pen Gensler administration, whatever that
was, there's been a tremendous surge in our ecosystem and a lot
(10:03):
more respect for permissionless innovation.
The Stable Coin Genius Act lit afire under our ecosystem, stable
coins growing and proliferating.Our total game changer for
banking. Banks are panicking.
(10:27):
Organizations related to banks are are trying to figure out
what a world looks like where you can essentially have a full
service bank owned by you in your pocket on your phone.
Gnosis is doing that, Man A Maskis doing that.
(10:48):
And how do regional banks survive and thrive in that sort
of context? How does SWIFT, for instance,
provide services to 11,500 financial institutions using
enhanced technology? And so we're talking to lots of
(11:11):
banks and we're working with SWIFT and, and there's some
really good answers to that. So it is not the case that
you're going to need to be custodying the assets of your of
your customers in order to provide services to them and and
make a living. If your financial institution,
(11:32):
other financial institutions could potentially achieve
charters and we're going to needsome government cooperation on
this around being data custodians, identity reputation
custodians, attestation custodians.
A project portfolio company called Spruce ID is working
(11:56):
doing some great work on this stuff.
And so it's going to take time for the general population to
get more comfortable with Defy. So Defy is probably one of the
first killer OPS of of the worldLedger as Ethereum has a sort of
(12:18):
re articulated as Vitalik's we are articulated Ethereum pulling
it back a little bit temporarilyfrom calling it the world
computer. Vitalik is also articulated that
he believes that that low risk defy is now something that they
could be considered by even naive people because the the
(12:44):
financial system, the global economy is in danger right now.
We're at the end of a super cycle and there is great risk in
holding nation state currencies in certain bank accounts.
And the risk might be more severe in terms of financial
repression, where where inflation just erodes the
(13:04):
purchasing power of the savings of people and companies.
And, and so holding your own assets under your own control in
your own personal bank and, and exposing them to yield and
investment opportunities in an ecosystem that has been growing
exponentially for the last 10 or15 years may be a good idea
(13:29):
compared to being exposed financially to a global economy
that is, is careening towards a brick wall in the form of the
end of a super cycle. So I'm, I'm very optimistic that
we're going to move into the next super cycle that will be
heavily supercharged by AI and will be operating on
(13:51):
decentralized rails. But there's a there are ways to
to bring the legacy infrastructure along for the
ride. A lot of the stables that we see
today in web three are just wrappers for legacy currencies,
right? So kind of USDC and USCT are
(14:13):
backed and supposedly supposedlyprobably backed one to one by
U.S. dollars in some sort of escrow custodian account.
So kind of like if, if the if the US dollar kind of careens to
watch towards the edge, what does that mean for a defy
(14:33):
landscape that is very heavily built on these these
transpositions? Yeah, if it careens towards the
left edge, it it could be concerning.
So I I think of backed stable coins to be a tremendous
validation of our technology, also an existential threat
potentially to our technology asyou've suggested.
(14:58):
I think of it of it as a transitionary step.
I would love to see I would loveto see and die continue on its
pure path liquidy. It is a very cool protocol that
makes use of decentralized economic bandwidth basically in
the form of of ether or other decentralized instruments
(15:23):
serving as, as collateral so that you can, it's a complicated
ecosystem, but you can basicallylend yourself some stable coin
against your own collateral. And that's an incredibly
important construct. But we need ether to go through
(15:44):
the roof and price. We need Bitcoin to go through
the roof and price in order to be able to mint enough stable
coins based on that mechanism. In the meantime, there's a
really interesting political economic transformations
underway where China, some othercountries are are going to have
(16:05):
to pull back on lending money tothe United States.
Japan's raising rates and is probably going to pull back a
bunch of its money and and throwthe world into a much less carry
trade driven world. That should be very interesting.
And Scott Besson, Treasury Secretary, has crafted a
(16:30):
strategy where the US can borrowmoney from many organizations
around the world that are effectively involved in, in
doing genius compliance stable coins and, and they're either
putting dollars in the in the bank or, or holding U.S.
Treasuries in custody. 1 backingstable coins, one for one.
(16:54):
And I think the United States government is going to be very
aggressive about that strategy. Scott Bestent indicated he
thought probably hit 3 trillion in stables.
And so that is a transitionary political economic phenomenon or
moment that embraces our technology, drives our
(17:15):
technology forward, drives the price of Ether and Bitcoin
higher, much higher, hopefully enabling.
We don't need a full replacementof of backed stable coins in our
ecosystem. We just need to bootstrap
properly decentralized stable coins in our ecosystem.
(17:36):
Really nice side effect for people around the world in
countries that are say more problematic than Germany or or
the United States is that if youhave a despot who is financially
exploiting the population via monetary mechanisms or getting
(17:56):
into deep debt and financially repressing the population,
printing much too much money. It's great to have either tokens
like ether or Bitcoin or stable coins that are tracking the US
dollar or or other denominationsto put your money in.
In some cases, you need to hide your money from family members
(18:17):
that that might take it from you.
In other cases, you just need toprotect yourself from the
governments. And if governments lose their
ability to financially exploit their populations, we could see
some positive political ramifications.
I know I'm saying this at a moment of extreme chaos in the
(18:40):
world. We are at the end of the an 80
something year super cycle and alot of stuff is breaking and
kind of has to break. That's what happens at the end
of super cycles, so that the newsystem of the next super cycle
can establish itself. So what do, what do you
recommend for the ecosystem to kind of build in anticipation of
(19:05):
this collapse? Because kind of like currently
we're kind of transposing a lot of the old mechanisms on chain
and they will just collapse withthe old mechanisms, right.
So what what do you, what do youthink is the infrastructure and
the projects we need to kind of see us through this?
So I I think keeping a bunch of the old mechanisms as healthy as
(19:27):
possible to facilitate as smootha transition for humans as
possible is a good thing. Like smashing into a brick wall
would be bad and doing that sortof thing might make it easier
for nefarious actors who have guns and things to take control
(19:49):
of a very of a very broken situation.
So I I think we need to remain as functional as possible while
organizations like ours continueto build infrastructure
scalability applications that they can enable people to to
transition to the next economy. And So what are we building?
(20:14):
We're building wallets that thatpeople fully own and control.
We're building decentralized finance so that people can
participate in, in funding the development of the next economy
and and can earn yield as the next economy accelerates.
(20:37):
Because money in the next economy, even though it it's
nearly free to print magic Internet money.
It's, you know, they're really good ones are valuable, are
scarce and, and they earn prettygood yield.
If you're trying to acquire them, borrow them for, for
(20:57):
different things. So our our ecosystem is likely
to see pretty good yields compared to the legacy economy.
We'll see how that goes. But looks like we're going to
move into another accelerated money printing phase and
(21:20):
building things that enable people to express themselves
better. Prediction markets are a great
one that we've talked about for many years that enable the world
of people who think they know the truth about different issues
to incentivize the people who actually know the truth to share
the truth, sort of like a, a consulting fee.
(21:43):
I think that's going to be great.
I think we're going to have a lot of revolution revelations
over the next few years about all the, the shenanigans and,
and just utter rot that sits at the, at the core of of our
political cultures. So looking forward to that.
(22:04):
And I think it's going to be about empowerment to, to do
things. I think the social media social
networking industrial complex isunbelievably toxic.
And you know, it's, it drives polarization.
I think if you look at the people in small town Germany and
(22:24):
the small town America, they're probably isolated from a bunch
of the madness that that we think is the state of the world.
If we're paying attention to to Twitter and certain elements of
of mainstream or social media. I actually think that a lot of
(22:48):
the, the polarization and the narrative around collapse of, of
the system of the world, I thinka lot of that is a manufactured
narrative. Yes, there are big changes going
on, but but I think I think there are owners of all the all
(23:08):
the different industrial complexes, whether it's a social
media or educational or scientific publishing or pharma
or food or military. And so we do live in a a
manufactured reality and the opportunity is for reality to
become a little more decentralized.
(23:29):
If we if we start building applications on decentralized
rails like block chains, if we start building applications on
the centralized networks of decentralized social graphs,
where are decentralized identities are wired together
via attestations and reputation systems.
And and when their platforms where we can add contents to our
(23:54):
social graphs, tokenize our social graphs, earn money, can
add functionality to our social graphs, We can the owner of a
social graph can earn tokens. Potentially the owner can share
those tokens with people contributing value to the social
graph. And so it shouldn't be the the
(24:16):
big corporate owners and making use of AI to exploit us who are,
who are making money from user generated content.
It should be the people who are in control of all that and and
benefiting from that. And we need a lot of
infrastructure building in orderto make that happen.
(24:37):
But as soon as they're good platforms and people can start
making a living and feeling likethey're not being manipulated
and and driven a bit crazy from plugging into social networks, I
think they'll, they'll probably be a, a flipping of the of how
people engage in in social networking going forward.
(24:58):
So I look forward to the the bigsocial network companies
shrinking quite dramatically. That sounds like wonderful
vision for the future and it sounds a lot like kind of like
this ownership narrative, right?Kind of like this.
It's it's a platform. It belongs to no one.
That's it's, that's it belongs to everyone narrative, right?
(25:19):
Where there's not one central counterparty or one bottleneck
that kind of sits in a position where kind of they can.
You need blockchain characteristics, you need
guaranteed execution, permissionless innovation,
censorship resistance. So and and we need scalability
where we've gotten to the point where we're we're really close
to having good scalability. I yeah, I want to talk about
(25:40):
scalability in just a bit, but maybe kind of like if you look
at applications we see so far, mostly we see yield applications
where somehow Web 2 yield or webtwo financial stack yield is
redistributed to kind of Web 3 protocols, right?
So kind of the, the, the yield on stables comes from the fact
(26:02):
that kind of they are they they buy T-bills and kind of then
rather than I'm kind of eating this up themselves, they kind of
somehow redistributed to, to, tothe defy users or the low risk
defy users. Where do you see the Where do
you see the applications that actually give back ownership to
(26:22):
users of their data, their identity, their audience, their
content? Because I, I, I mean, I know all
the experiments, but none of them have really caught on,
right? It is transitional.
We're in a transitional phase. When cars were invented, there
were laws where people had to walk in front of the cars like
(26:45):
they walked in front of horses and and carriages.
And that's because the roads maybe couldn't handle fast cars
moving down them. When TV was invented, nobody
knew what to do with it. So people stood up with their
scripts and they they read radioplays in front of the cameras.
Do you think we'll get there? Yeah, of course.
(27:07):
I think we'll get there. Maybe I'm maybe I'm just
impatient. So I mean, the patience has
never been my prime virtue. Most people don't see the world
in terms of flows. If you look at crypto Twitter,
everybody's looking at a slice of time and whether their tokens
are up today or down today and, and either the sky is falling
(27:30):
or, or everything is great. And so if you start paying
attention to the flows and, and we've made unbelievable progress
since 2009 or, or 2014 for Ethereum, a civilization has now
effectively started embracing inearnest decentralized protocols.
(27:54):
So we're seeing it at consensus because we're talking to
governments and and big companies, especially in the
financial industry and they are all asking for help in
understanding the stuff or in building on this stuff.
Maybe let's talk about consensusfor a bit.
So kind of consensus is an unusual company to say the
(28:17):
least, right. So if if, if you were starting,
if you were to start consensus again today with kind of
everything you've learned over the past decade, more than a
decade, would you replicate kindof this haben spoke structure
that you pioneered back then? I spent a year roughly on the
(28:39):
Etherium project helping with a whole lot of people to to stand
up well, the theorem project, the theorem foundation,
etcetera. And I think it's important to
note that as we did, we did talkto some VCs back then and we, we
did make the explicit decision not to take VC money directly,
(29:00):
VCs for free, invest in the token launch.
But we felt like we had to be a very different kind of project,
a different kind of organization.
It had to be as decentralized aswe could make it and
progressively decentralize it. And the token sale had to be
(29:23):
open, free and fair. And we did a lot of legal work
to make sure that that we wouldn't get into trouble in the
United States if we allowed to Americans to, to participate and
got a, a piece of paper from thelaw firm that they gave us
confidence that we could go ahead and do that.
(29:45):
And that has stood up despite the attempts to to tear it down.
And, and we didn't hire in the sense that we didn't put up job
wrecks, job descriptions and things like that.
Basically anybody who wanted to self select to become part of
(30:09):
the Etherium project, they were virtually instantly on the
Etherium project. And and so it was a, a band of
pirates, band of characters. Sometimes there were issues,
interpersonal issues, but I don't think that Ethereum would
have been seen to be open, permissionless and something
(30:34):
that moves towards civilization,scale, technology if we were a
company, like a traditional company to start.
And so a year into it, I wanted to do something essentially
based in the United States because Ethereum people were
(30:55):
afraid of the United States backthen, but I was a little less
afraid. And and it was, it was about
continuing the vision in the mission of the Etherium project.
And we knew that we couldn't design an ecosystem, whether
from the Etherium Foundation or from consensus.
(31:15):
We couldn't design the decentralized protocol world top
down. We had to just do a, a ton of
experimenting. So it was, it was pretty
decentralized and people made fun of it because we were trying
to figure out how to govern ourselves and, and what to build
with the type, the technology. You know, we tried to build an
(31:37):
accounting system, we tried to build a DAP store and we
realized, hey, we have no developer tools, we have no
ecosystem really. And so why don't we build a
little infrastructure to enable us to interact with this raw
technology. So at a mask emerge from that
and Inferra emerge from that andTruffle emerged.
(32:03):
Custom culture was trying to build a DAP store and, and just
the scripts that he built in order to, to build an
application ended up evolving into a pretty useful developer
tool that was used by many for many years.
So Consensus has been different organizations over the years.
(32:26):
So there's a, an initial mothership company called
Consensus Mash and it went through a bunch of pretty
powerful or radical evolutions in in its nature.
It does pay a lot of attention to enterprise Ethereum for a
while, some projects spun out because of the, the COVID
challenges of consensus mesh to form consensus software and, and
(32:50):
it's been very tight integrated software product company
extremely different from the, the organic BLOB that consensus
mesh was and and had to be. Because early on Mesh was all
about fostering adoption, educating, talking to anybody
who would listen to us and incubating a huge number of
(33:14):
projects, many of which including Gnosis spun out a
consensus, some with great success, some with not so great
success. But we did, we did seed a lot of
activity in the Etherium ecosystem and and so we have a a
lot of friends out there in the extended consensus network.
(33:37):
I, I think it's completely uncontentious that so much value
has come out of consensus over the years for Ethereum.
And I, I think you're 100% spot on that Ethereum needed a
business to kind of, to kind of Dr. adoption.
(33:57):
If you look at the individual parts that kind of make up
consensus and I think I, I, I kind of maybe I look at this
because I feel sometimes we're kind of like in, in a similar,
I'll be a much smaller boat. So kind of what do you think
some of the projects would have been better off kind of on their
(34:21):
own rather than as part of this of this often unwieldy
mothership structure? The social contract back then
was that you could spin out, youknow, it, it had to make sense
and, and it had to be pretty broad agreement.
But a lot of projects got financial and other support to
(34:44):
spin out of consensus. And I think we we spun out over
40 projects that that were incubated inside a consensus and
and invested in, in many others that weren't incubated inside a
consensus. Projects like Metamask spent a
lot of time figuring out not just what their business model
(35:05):
should be, but if they should have a business model.
So there was, there's a lot of interest early on in just
setting up a foundation and treating Metamask as a public
good. And don't worry about making
turning it into a for profit endeavor.
And the reason that the Metamaskhad pretty good distribution
(35:27):
starting in 20 like 2021 as D51 point O happened and then the
NFT phenomenon happened. And and the only reason Metamask
ended up being in a position to make money was because we
absorbed A-Team called Air Swap.And they were, they were the
(35:48):
people that that build of the infrastructure that enabled us
to charge for swapping and, and have added a lot of features
since then. So would Metamask have been
better? Maybe the world would have been
better off if Metamask remained a public good infrastructure.
And maybe it's moving in that direction already actually,
(36:13):
because we're we're trying to progressively decentralize a
bunch of the elements of consensus.
I think you were better off spinning out because.
Yeah, 100%. Back then, I, I thought that you
(36:35):
all could become a hub in the same way that consensus was a
sort of hub and spoke like model.
And you've done an amazing job of that building a bunch of
integrated, very valuable components and so already
massively successful. And I think your future is going
(36:56):
to be very, very bright as as weall move into the mainstream.
So we can go through a lot of examples, but I think, you know,
roughly we made pretty good decisions along the way.
Yeah. So I mean we we were the first
spin out, I think and many. Too.
(37:17):
Yeah. And yeah and yeah, no regrets.
So I think it worked out well for us and you guys.
So it's yeah. So the the two big pillars
inside content is right now linear and Metamask, right.
I mean, so there are, there are still big pillars that are less,
less visible like in Furor for instance, and and diligence and
(37:41):
so on. But but talk me through linear
and Metamask first. So kind of how do you see them
fit together, really enforce each other or kind of do you do
you see them as somewhat orthogonal?
Men mask as I already articulated, we're seeing as
your cell phoned personal walletin your pocket or or on your
(38:01):
laptop. And we think that Metamask can
become a a full service bank. We think we can start speaking
ISO 20 O 22 like other banks andbecome infrastructure not just
for people and communities and companies.
I think some of it could become decentralized and become sort of
(38:23):
back end infrastructure as well.Linea is a technology, It is
leading ZKEVM technology. We're hoping to see it natively
enshrined in the Ethereum protocol at some point in the
not too distant future. And with the the pace of
(38:43):
innovation of real time ZK proving, things are looking like
Ethereum's going to get remarkably scalable.
So it was going you out and we're hoping Linea is a big part
of that. The scaling issue so kind of
Ethereum has kind of in the pastcouple of years kind of had this
paradigm around L2 scaling, right.
(39:06):
But now kind of it looks like L1scaling may actually come much
faster than we had we had originally anticipated with real
time proofing. And it, it looks like possibly
the the true bottleneck is, is networking, which would be
wonderful. How, how do you see that?
(39:28):
And how do you see, see that in context of the L2 landscape?
How do you foresee the the future evolving here?
So we'll have to get back to to that initial thread, but let me
run with this one. I think scaling has all been
enabled by the roll up centric road map.
We were trying to scale the theorem in different ways,
(39:51):
plasma sharding, etcetera. And we simply didn't have the
technology to get that done in the pure layer 1 context.
And so the roll up centric road map gave a lot of really smart
people and entrepreneurs permission and incentives to
take approaches, whether they'reoptimistic approaches or or zero
(40:15):
knowledge approaches. To building out scalability,
Ethereum layer one seeded its pricing power for a while and
made explicit choices in in the protocol to enable roll ups to
establish themselves and flourish and really build out
the technology back when we. So we have a protocols group
(40:39):
that produces an execution client called Basu and Techu
consensus client. And we've been building clients
for a long time as have you for the Etherium protocol.
And we've always had an R&D group in our protocols group.
And the R&D group was doing a bunch of work 6:00 or so years
(41:00):
ago, maybe longer in zero knowledge proof technology.
A couple three years into that, it started to become clear that
hey, we think we could build A roll up because the technology
is moving much faster than we thought it would.
And so that's been accelerating exponentially since then we
(41:24):
built Linea. Linea has been accelerating
exponentially. Linea today is Wednesday,
December 3rd, 2025, otherwise known as Fisaka Day.
And traditionally Linea has beenout of sync with the with the
hard forks and but Linea has been improving its process all
(41:48):
along. And over the last few months
we've implemented four or five different hard forks and for the
first time we're actually launching Fusaka for Linea on
the same day as as the rest of the world, which is a really
(42:08):
remarkable feat in my opinion. And so we're seeing Justin Drake
demonstrated that the two GPU's are able to real time prove some
blocks, I'm not sure which blocks they they were proving.
And, and so we're getting to thepoint and this is something that
we anticipated in our R&D group years ago that not only is ZK
(42:31):
going to be the direction of travel for layer twos, but ZK is
going to be used horizontally inmessaging and ZK is is going to
make its way into the core protocol.
And if consensus wanted to be a core protocol company and we
would have to be expert, but with ZK.
And so it's all working out in that direction it looks like.
(42:56):
And I think we're going to see avery fast, very performative
layer one for a theorem that hasvery useful things for layer
twos to do. And it's all saturated by super
fast CK real time proving accelerated by hardware.
At some point soon, I think layer twos, layer threes, layer
(43:21):
fours and higher are going to have a real utility.
They're going to represent gaming domains or topical
domains or regional domains. It's possible that the the
country of France may may not want to share a layer 2 with the
country of the United States because it would want to divide
(43:43):
some have some political divisions for for its provinces
and and the United States might have political divisions and
Switzerland isn't going to want to have a bunch of data leaked
outside of its national layer 2 borders.
So that a lot of good reasons for the prolap centric road map
(44:07):
architecture to be incredibly useful and valuable for the next
economy and the next geopolitical map.
The Anti Network states. Exactly, love it.
So do you want me to go back to talking about what linea is I I
(44:28):
sort of described? Yes, yeah.
Go, go back to Linea. I think that's a good idea.
Yeah. So Lenny is a technology, Lenny
is a network linear mainnet and we're putting lots of effort
into that. We've tokenized, we've
decentralized it into a linear consortium.
We've got stewards from across the ecosystem, we're adding one
(44:54):
steward that we're about to announce in a in a few days.
So don't want to front run that.And these stewards are very
aligned with the health of the Etherium ecosystem and obviously
the the linear ecosystem as wellof a giant ecosystem Development
Fund in the form of the the linear tokens and the linear
(45:16):
consortium and technology is available for others to build
on. So SWIFT consensus is building
on the linear technology for SWIFT.
We're working out our privacy technology and we think we're
going to be able to do somethingpretty profound between Metamask
(45:38):
and Linea connecting to one another.
BAZK, maybe not best in class, but one of the best in class
privacy solutions. So we think that Linea itself
has a business model. It is credibly neutral
permissionless innovation. We don't control it, but we're
(45:59):
leaning heavily into into makingit successful.
So between Infura, which is decentralizing itself into dim
decentralized infrastructure network, So what it calls
enabling the range of Metamask to to grow as fast as the
ecosystem grows, as fast as protocols can onboard themselves
(46:21):
to decentralized infrastructure network, inferior is helping DIN
out quite significantly. And DIN is, is run design
founded by EG Galano, who was a founder of Infura.
And so between those different elements, what we're looking to
(46:42):
do is what traditional companieshave done verticalized.
And so how do we verticalize in a way that is different and much
better for everybody than the way the, the Web 2 walled garden
companies verticalized. We, we do it while maintaining
as much credible neutrality at each layer as we can.
(47:04):
So, so there are things that we can do that unlock synergies
between men, mask and lineal andsome will be forthcoming don't
want to front run those things. But you know, things like our
new rewards platform makes use of both and they'll be more on
that front. But we have to figure out how to
(47:26):
maintain the balance between some useful verticalization to
make products better for people and companies and making sure
there's credible neutrality so that nobody feels like they can
be de platformed by us. And everybody feels like there's
a long tail of innovation where they can build in the Metamask
(47:50):
context, building the linear context, building the dim
context and, and just add value to the ecosystem and, and
nothing we can do to stop that. And that's we can do to foster.
That I think this is something that the ecosystem often doesn't
give you enough credit for. And you probably get APR
briefing document before every interview you do that says
(48:11):
don't, don't compare yourselves to competitors because I know
this is what what I get, but maybe I can do this.
So kind of on on linear, you candeploy your own roll up without
permission from you guys where, where it's kind of like if you
look at the other major stacks, it's actually very much not
permission. You actually need sign off from
(48:34):
optimism to kind of to launch anOP stack roll up.
And I think most people aren't actually aware of this.
And it's crazy, right? Kind of like this?
Shouldn't be this this? Business model, you know, and if
it works for them, it's fine andnot crazy.
So what we're going to be doing is furthering decentralization,
(48:56):
decentralized, proving, decentralized sequencing,
etcetera, figuring out where ways to, to share some value
creation, some of the revenue generation with the with token
holders, linear token holders. And, and maybe it's just through
burning more linear tokens. And, and I think we can build a
(49:18):
token economy or sub economy with a lot of linear networks
that are independent, quasi independent or, or closely
related to one another, that arecollaborating with one another,
that are sharing infrastructure.And I, I think that's, that's
how the the next geopolitical landscape gets built out
(49:43):
somewhat bottom up with a lot of, a lot of projects showing up
and, and finding synergies and Co locating on different
networks. And lots of those projects will
be on multiple networks and willbe citizens of many different
network states the the vision currently for Linea.
(50:03):
Yeah. I mean permission is innovation,
true composability. I think that that'll be a huge
unlock. We kind of.
One last thing, we would like our relationship to Linea to be
very similar as our relationshipto a theorem.
That Linea should be as a theorem aligned as possible,
(50:24):
100% a theorem compatible. And maybe there's a time when
when the architectures can evolve so that maybe overflow
activity at layer one gets handled by different layer 2
networks. So I, I think, and we'll see,
we'll see quite a bit of architectural evolution over the
(50:47):
next decade or two. Absolutely.
So we probably have time for onemore question and I want to make
it a good one. So if, if you kind of, I mean
you are a remarkable optimist and a pessimist at the same
time. So maybe maybe do do the doom
thing. So kind of what what do we, what
keeps you up at night about the ecosystem?
(51:10):
So kind of what, what do you think is the one thing kind of
we need to get right in the nextone or two years.
So kind of are you worried aboutvalidator centralization or
custodians or L2 interop? What are you worried?
About I'm not worried about anything specifically related to
the evolution of our ecosystem because the ecosystem is so big
(51:36):
and anti fragile and self-sustaining.
We've gotten over a lot of very difficult humps and it's hard
building civilizational infrastructure in the middle of
a civilization that doesn't careor wants to kill you.
But we've made remarkable progress.
(51:57):
There are so many technical issues in our ecosystem, the
Etherium ecosystem, but we're aware of most of it or all of
it. And there are so many parallel
efforts to to solve all these different issues, whether it's
throughput or latency or composability.
I mean, these are just obvious things that that really just
(52:21):
require engineering solutions. There's nothing existentially
difficult about these things. We just have to keep working on
them and we're, we've got the wind at our backs now, U.S.
government wind at our backs. The much of the globe is
following the US in terms of getting more comfortable legally
(52:42):
with the technology and, and themainstream.
So we don't have any users yet. We don't have any applications
yet. And, and that's, I think largely
because of scalability and usability issues and, and
because it was effectively illegal to do things in our
ecosystem in the United States, illegal for companies to hold
(53:03):
tokens or issue tokens, illegal for builders to, to build
something innovative. Because the SEC would would slap
a lawsuit on you if you, if you started to, to look successful.
But now it's legal and everybody's all the
organizations are trying to figure out how to rush in and
(53:24):
the builders are coming. So we're going to see so much
innovation in in terms of building novel things largely in
define hopefully in social and gaming and other things in our
ecosystem. So hopefully the global economy
will hold itself together in 2026.
(53:47):
If it does, it'll be an epic here for the Etherium ecosystem.
Cool. Joe, thank you so much for
coming on. Where do we send people to find
out more about you, Our consensus, Metamask, Linear, all
the wonderful things you're doing?
Ethereum Joseph on Twitter consensus dot IO on the
interweb. Perfect.
(54:08):
Thank you so much. Thanks, Frederick.
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