Some of you know that I also host the Lightspeed Podcast and write this newsletter. Some of what we discuss here is inspired by the conversations that take place on Lightspeed.
To end this week of holidays, I thought about a couple recent episodes from the show while I was writing these emails:
- “Execution is the only moat, always.” — Anatoly Yakovenko, co-founder of Solana
Mert mumtaz, a co-host of mine on “The Mert Show”, recently interrogated Solana’s Chief Architect about looming issues and potential problems that the network might face. This is worth listening to.
Mert once asked Yakovenko, “What could Solana have as a moat in this world of new layer-1s or layer-2s that are bringing blockchains to the market faster and cheaper, thus reducing Solana’s current advantage?”
Yakovenko’s reply is: “Keep executing.” He talks also about Solana hiring techies rather than academics because they are more able to deliver features quickly and work under pressure.
- “We want to understand the causal connection to things, it’s in our nature to do that. But in a market there is no causal connection it’s literally like, ‘Are there more buyers than sellers?'” — Joe McCann, CEO and CIO at Asymmetric Capital
McCann made this statement while disagreeing about my opinion on how memecoins would affect the price of SOL. However, since I consider myself to be a humble person, I decided to include it.
McCann’s statement is a good one because, despite the endless media analysis and reading tea leaves you will see online and in print, it can be difficult to understand why the markets behave the way they do.
If the price increases, this is because there are more buyers than sellers on the market. It is difficult to identify the motivations of buyers and sellers.
- “Issuance is a cost to non-stakers. They do not receive that [issuance]. Stakers do … there is a value transfer from non-stakers to stakers.” — Dan Smith, data lead at Blockworks Research
As I become more interested in the Solana eco-system, my curiosity grows. Different stakeholders receive different rewards as the SOL price increases.
Many Solana observers, including the newsletter, debated whether SOL’s inflation rate should be lowered. Inflation is dilutive, and disinflation can be bullish for an asset’s price, the thinking goes — likely influenced by the Bitcoin halving.
In Solana however, the issuance of SOL only diluted non-stakers, as newly issued SOL went to validators and they then passed it onto stakers.
- “I always like that framing which is just create a new category and go after a small market that you think will grow” — Mert Mumtaz, CEO of Helius
After a time, the layer-1 battles and debates over which blockchain to use become tiresome. Mert’s point on the recent episode was one I found very interesting: to compete in cryptocurrency, you have to target a new or innovative market.
SOL should not be portrayed as a ETH killer. This is a blockchain with different trading. Monad, Berachain MegaETH and all the others shouldn’t be trying to become SOL-killers. The rest of them should not try to be SOL killers.
- “I don’t think it’s really workable, sadly.” — Rune Christensen, co-founder of Sky
Christensen (the co-founder Sky, previously Maker) is making reference to futarchy. This is a hot new concept of governance in the Solana community.
Futarchy allows markets to decide what DAOs do, instead of voters. Christensen’s view on DAO governance was intriguing to me because it has always been an issue, with MakerDAO being one of the earliest examples.
Christensen has a negative view on futarchy. He believes collective wisdom to be wrong. And DAOs require someone who is smart and can distinguish between a good advertising initiative and a ponzi-scheme, for example.
It sounded to me like an advertisement for corporate governance as we know it, but then again what do I actually know?
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