WEBVTT 1 00:00:00.160 --> 00:00:08.399 Starknet basically takes robust post-quantum secure, um, scaling ZK technology and uses it in order to scale blockchains. 2 00:00:08.700 --> 00:00:23.120 Bitcoin was built so that any two parties can interact, can transact with no third party intermediating that. That is not achieved today, and that is what Satoshi set out to do. Yeah. And we need to reach that. 3 00:00:23.400 --> 00:00:33.000 Jack Dorsey is saying it. Uh, a lot of people out there are saying it. You need to find a way to scale it. And unfortunately, I love Lightning. I love Lightning. Lightning ain't it. 4 00:00:33.100 --> 00:00:45.560 After five, seven years out there, my mom is not gonna use Lightning. Yeah. My mom can use, in fact, she does use Starknet wallets. Yeah. She's not gonna be able to use Lightning. It's not gonna happen, sorry. 5 00:00:45.620 --> 00:00:58.260 Did you forget about Opcat? We didn't. We've got StarkWare co-founder Eli Ben Sasson back on the show this time. My co-host, Will Foxley, is hosting this one, recorded live at Pub Key. 6 00:00:58.840 --> 00:01:08.390 Eli talks Opcat, ZK, Bitcoin history, Bitcoin development, and StarkWare's Starknet on Bitcoin. Enjoy the show. 7 00:01:08.390 --> 00:01:20.520 [upbeat music] Hey, welcome back to Bitcoin Season Two. It's a little takeover episode. I'm joining. 8 00:01:20.580 --> 00:01:30.980 Normally, I'm hosting the mining pod, but Charlie's out in New York, and we have an amazing guest today. Uh, Eli, welcome to Bitcoin Season Two. This is your second appearance on the show, first in person. 9 00:01:31.260 --> 00:01:33.860 Thank you, Will. Always a pleasure to be here. Yeah. 10 00:01:33.920 --> 00:01:46.200 We're, uh, super excited for today's conversation, which is all about a new announcement you guys have, and it's all about making Bitcoin actually usable, and not just Bitcoin on TradFi rails, but Bitcoin on cryptographic rails. 11 00:01:46.760 --> 00:01:59.800 Uh, so I'm gonna let you do the announcement, and then we're gonna dissect it the rest of the podcast. Right. So, uh, we've just announced or we're announcing, uh, BTC Fi, which is, um, has three major components. 12 00:01:59.820 --> 00:02:14.920 The first one is that Bitcoin staking is live now on Starknet. The second one is that the Starknet Foundation is allocating one hundred million STRK tokens to make borrowing against your Bitcoin cheap and competitive. 13 00:02:15.460 --> 00:02:20.520 And the third one is a whole bunch of contributors are joining this effort. 14 00:02:21.020 --> 00:02:38.120 I wanna, uh, mention one of them, the RE7 Crypto Fund is launching a suite of, uh, BTC yield strategies, some of which are gonna be deployed over Starknet, and we're very happy for their contribution and, uh, you know, joining the effort. 15 00:02:38.180 --> 00:02:48.260 Which one are you most excited about? I feel like as a technical founder, it's gotta be the first. Well, actually, you know, I have a lot of kids, and it's like asking which one you love, uh, most. 16 00:02:48.310 --> 00:02:56.480 [laughs] So, like, uh, you know, that's- Yeah. Uh, I, I-- I'm very excited about each one of them, and they complement and go together. Okay. So they're needed, each one of them. 17 00:02:56.760 --> 00:03:03.600 Well, we'll start with the technical portion 'cause that was the first in your list, and then we're gonna go through the other two parts, which are a little bit more commercial, 18 00:03:04.640 --> 00:03:06.960 uh, but still very important for how this is gonna unfold. 19 00:03:07.440 --> 00:03:17.380 For the first part, explain to me what native staking Bitcoin on Starknet looks like, and if you can start from the relationship with the L2, and then how that kind of fits into all this. 20 00:03:17.420 --> 00:03:30.280 And then I'm assuming this is separate from that, uh, 'cause you guys operate on both Eth and Bitcoin and, and so I'll let you kinda like rattle on through all that, but the point being, some of the audience members aren't gonna know all these points. 21 00:03:30.380 --> 00:03:45.520 So if we could start from more like first principles on that. Yeah. So for those who don't know, um, Starknet is, um, a scaling solution that is decentralized and self-custodial, and it relies on the integrity of math. 22 00:03:46.020 --> 00:03:56.640 So I'm assuming, uh, many of the listeners don't know, but, um, [lips smack] in my previous life form, I was a mathematician, cryptographer, a professor of theoretical computer science. 23 00:03:57.480 --> 00:04:10.540 I invented a lot of the ZK technology that is now used around there. So Zcash, which I co-founded, i-is based on academic work that we wrote, uh, seven co-authors back in twenty fourteen. 24 00:04:11.230 --> 00:04:27.340 [lips smack] And, um, ZK STARKs, which are the post-quantum secure, uh, best, uh, used, uh, most scalable ZK proof, um, family out there that has now become the gold standard for scaling, is based on, um, 25 00:04:28.240 --> 00:04:36.080 you know, my co-inventions, uh, the ZK STARK, uh, paper and the, the FRI protocol and other things. Okay, so going back to Starknet. 26 00:04:36.240 --> 00:04:46.240 Starknet basically takes all of that robust post-quantum secure, um, scaling ZK technology and uses it in order to scale blockchains. 27 00:04:46.620 --> 00:04:55.000 So it was easiest, uh, because of the smart contract language available to do this on Ethereum, and that's where we started with a bunch of solutions. 28 00:04:55.540 --> 00:05:06.760 And we've, uh, you know, serviced some of the most, uh, uh, formidable and best, uh, perps exchanges and other solutions out there in history, and we still continue doing that. 29 00:05:07.380 --> 00:05:21.440 But now we see an opportunity, and certainly there's a huge demand coming from the financialization demand for Bitcoin, um, and we wanna deploy the very same technology to scale Bitcoin in a self-custodial, decentralized way. 30 00:05:21.900 --> 00:05:33.580 So that's a long answer to a short question. I think for people who are maybe like glossing over a little bit when you start hearing about the, the math parts, and this is foundational to Bitcoin, right? 31 00:05:33.620 --> 00:05:37.400 So zero knowledge proofs were commented on early Bitcoin talk forums. 32 00:05:37.980 --> 00:05:49.060 Uh, Satoshi talked about using them, just like he didn't have the background and, you know, he said that on the forums that he was not gonna be able to do it. And then yourself spoke at Bitcoin twenty thirteen or- Yes... 33 00:05:49.090 --> 00:05:54.100 Bitcoin twenty fourteen- Yep... talking about needing Bitcoin to implement this in the future. 34 00:05:54.700 --> 00:06:07.046 And then as a-- I'll let you tell the story, but like a lot of this took years to come back to Bitcoin becauseUh, Vitalik came up with Ethereum, and it was obviously a little bit easier to build over there, and a lot of the money moved that way. 35 00:06:07.156 --> 00:06:13.556 So can you tell me a little bit about the history of zero-knowledge proofs in Bitcoin and where we're at in twenty twenty-five? I was a professor of math. 36 00:06:13.796 --> 00:06:25.406 I was peddling my practical implementation of ZK mostly in academic, uh, places like, you know, uh, uh, whatever, Harvard, Princeton, uh, S-Stanford. 37 00:06:25.896 --> 00:06:42.476 And it was in 2013 that I knew I'm gonna give a talk both at Stanford and Berkeley, and I reached out to, um, Gavin Andresen and Greg Maxwell and Mike Hearn, and a bunch of other, uh, core devs at the time and said, "You know, there's this math I wanna present there," and they said, "Sure, come present it." 38 00:06:43.156 --> 00:06:53.986 I entered the-- that conference, I just fell in love. I got red-pilled there. Uh, have been with, uh, you know, Bitcoin and blockchain ever since. So I was the first to go 39 00:06:55.376 --> 00:07:03.296 and say that ZK is the way to solve not just the privacy problems of blockchain, but more importantly, scalability. 40 00:07:03.316 --> 00:07:13.296 And back then, I said I have a vision that one day when you download, you know, and you wanna sync a new node, you won't need to go through all of the transaction history. 41 00:07:13.356 --> 00:07:19.936 You can download a single short proof and know that everything happened with integrity, and we're almost there. 42 00:07:19.976 --> 00:07:35.176 We already have, uh, a proof of all of the block headers, uh, done by, uh, our team member, the amazing Abdel and Michael on his team, and we're nearing, like, with every day, we're getting closer to proving the whole Bitcoin blockchain. 43 00:07:35.396 --> 00:07:42.326 And honestly, like, we could spend an entire podcast talking about why that's important, um, but we won't. We'll [chuckles] keep- Right... going with the announcement. 44 00:07:42.366 --> 00:07:47.506 [chuckles] Yeah, we have to get back to, uh, right, BTC Fly. Yeah. Uh, IBD and all that stuff is really important. Yes. 45 00:07:47.556 --> 00:07:59.926 And I think like what Robin Linus has done with ZeroSync, and then what you guys are doing, uh, def-definitely saw your announcement when you guys were talking about, um, using zero-knowledge proofs to, uh, just, you know, do a lot of stuff with the, the headers there. 46 00:08:00.736 --> 00:08:04.816 Going back to zero-knowledge proofs and the scalability comment, that's really important, right? 47 00:08:04.876 --> 00:08:21.015 Because, like, a lot of times when we have conversations around zero-knowledge proofs in crypto or Bitcoin, people are thinking immediately it's about, like, privacy or it's about, uh, you know, hiding stuff from the feds, and there's, like, some elements for that, and like, you know, most people in Bitcoin are privacy-focused. 48 00:08:21.236 --> 00:08:27.836 Uh, I'm a solve ham. I'm, I'm sure you are as well as a co-founder of Zcash. But, uh, the scalability part is really important. 49 00:08:27.876 --> 00:08:34.236 Like, that's, that's what changes people's, uh, thoughts around this, and it's even in the conversation today. I don't know if you saw the Luke Dash Jr. 50 00:08:34.256 --> 00:08:43.936 post last night on Twitter about how they're interested in using zero-knowledge proofs for, for Bitcoin right now, which- Yep. Uh- I'm a big supporter of, uh, using zero-knowledge proofs- Yeah... 51 00:08:43.956 --> 00:08:49.356 and having soft forks that would support that. Yeah. And I know that a lot of core devs from Luke Dash Jr. 52 00:08:49.736 --> 00:09:01.776 through, you know, Adam Back, Andrew Poelstra, Ethan Heilman, uh, and a whole bunch of others are supportive of that. Yeah. No, there's definitely, like, a lot of interest around it. Tell me about the scalability part. 53 00:09:01.816 --> 00:09:04.836 So it's, let's land the plane on that, and then I wanna go over to the staking part. 54 00:09:04.876 --> 00:09:18.396 But on a practical implementation level, and then for an audience that's, like, a little more agnostic to these topics, how would, uh, ZKPs allow you to have more, uh, scalable Bitcoin? What would that look like? Yeah. 55 00:09:18.456 --> 00:09:27.856 So the way ZKPs work, it's a little bit like polling an election, right? You wanna know, wanna get some good accuracy estimate for who's gonna win the election. 56 00:09:27.976 --> 00:09:46.776 So instead of going and asking every single citizen, which is what happens on election day, what the polling, um, you know, systems do before that is they sample randomly a bunch of people, and based on that and the laws of statistics, you can, uh, get a pretty good estimate for who, you know, how it-- will it, will it shape out. 57 00:09:47.236 --> 00:10:00.216 Now, the amazing mathematical discovery is that you can poll the integrity and validity and correctness of a huge amount of computation without needing to check and inspect each and every transaction. 58 00:10:00.336 --> 00:10:12.216 So today, a Bitcoin node has to basically inspect every part of every single transaction in order for everyone to know, and for that node to know, that the right thing was being done. 59 00:10:12.716 --> 00:10:25.426 But the amazing mathematical discovery, um, and that's the discovery or the set of discoveries behind, uh, zk-STARKs, is that you can-- and the things that predated that, that, um, it's like four decades of research. 60 00:10:25.716 --> 00:10:45.936 But the amazing part of zk-STARKs is that you can poll the integrity of a huge amount of transactions, and for the cost of verifying one single transaction, you can have cryptographic certainty that a million transactions happened correctly. 61 00:10:46.016 --> 00:10:57.736 So for the price of one, you can check a million transactions. Now, what does this mean for Bitcoin? You know, I remember several times in the past where adoption of Bitcoin seemed to be taking a step function- Yeah... 62 00:10:57.756 --> 00:11:07.625 and it immediately stopped. Now, why was that? Because you know what happens. Everyone wants to use Bitcoin, which is great. Yeah. Uh, what's, what's gonna happen to fees? They're gonna rise to, you know- Yeah... 63 00:11:07.656 --> 00:11:16.936 ten dollars, fifty dollars. Yeah. Then everyone from the outside looking at this, they're saying, "Okay, this isn't ready yet," and they go back. So you see these peaks. Yeah. Same thing happened on Ethereum, and so on. 64 00:11:17.336 --> 00:11:27.066 Now, what scaling would do, it would mean, uh, something like zk-STARKs, it would mean that the whole world wants to come and use this, and you know what? They can. Mm. 65 00:11:27.076 --> 00:11:36.956 There's no increase in price, there's no increase in delay or latency. Everything just works smoothly without actually that much of a change to Bitcoin itself. Yeah. 66 00:11:37.016 --> 00:11:46.256 What you would want is just something like Opcat or could possibly also be a BitVM bridge, which doesn't need any change and is coming- Yeah... anyways. So that is the vision. 67 00:11:46.296 --> 00:11:56.616 The vision is that a whole bunch of economic activity is gonna happen on Bitcoin, on decentralized platforms, in the way that Satoshi would have approved of. Okay. Okay. 68 00:11:56.736 --> 00:12:08.936 So that helps us kinda, like, see, like, the, the general point for Starknet and Starkware. In terms of the... Help me bridge here between Bitcoin stakingAnd then what you guys are doing with scaling Bitcoin. 69 00:12:08.996 --> 00:12:22.596 Like, how do those two things fit together? Okay, excellent question. So I wanna introduce StarkNet and the STRK token- Yeah... which is used for the staking. So Bitcoin, never gonna have more than twenty-one million 70 00:12:23.636 --> 00:12:30.956 Bitcoin. That's great, and they're mined using proof of work, which is great. Okay? You don't wanna touch that. Yeah. 71 00:12:31.056 --> 00:12:45.726 Now, you want a decentralized layer that will allow, in a decentralized way, self-custodial way, you want something that will allow you to financialize Bitcoins, which means borrow, you know, stables, other tokens, whatever, stock, whatever you believe in- Yeah... 72 00:12:45.776 --> 00:12:53.436 against it, consume, you know, do your daily consumption, buy your, uh, cups of coffee, which are usually done-- I mean, we're here in Pubkey. 73 00:12:53.776 --> 00:13:02.596 Yeah, about to get beer [laughs] But outside of Pubkey, you know, you pay with that, with dollars or something like that. Yeah. So you want all of that to happen on something that is very closely tied to Bitcoin. 74 00:13:02.656 --> 00:13:13.986 It is decentralized, censorship resistant. Now, you're not gonna use Bitcoin and Bitcoin mining for that. You want another layer, and that is what is known as a layer two for Bitcoin. Yeah. 75 00:13:14.036 --> 00:13:29.896 A financialization layer, a execu- an execution layer. StarkNet is that layer, and it is controlled by a proof of stake kind of, uh- Mm-hmm... mechanism where, um, stakers of the STRK token, um, you know, operate it. 76 00:13:30.136 --> 00:13:38.646 They validate blocks, they propose blocks. They will propose blocks, they will generate proofs for this and, um, the token is used for paying fees- Yeah... 77 00:13:38.646 --> 00:13:44.116 for governance on the StarkNet token and for operating and choosing the next operators. 78 00:13:44.556 --> 00:13:57.326 So what we've done now with Bitcoin staking is said, we would like not just the decentralized, you know, ecosystem of STRK holders to be part of the operating set. Mm-hmm. 79 00:13:57.856 --> 00:14:12.376 We want Bitcoin holders to be part of that set and then to be remunerated to be, um, um, you know, given STRK for their services. Yeah. And that is the Bitcoin, uh, staking on top of StarkNet. 80 00:14:12.996 --> 00:14:25.846 And part of this is, like, using that, that proof of stake mindset, which I think, like, a lot of Bitcoiners when they first hear about, "Oh, we're gonna use a proof of stake network attached to Bitcoin," they kind of, like, cringe at it a little bit, but it's really important, right? 81 00:14:26.056 --> 00:14:39.826 Proof of stake is a actual useful innovation that does power the ability to do some of these networks and, uh, also allows you to have the sort of mechanism where you do earn an interest or a yield back on, like, whatever work you're doing. 82 00:14:40.316 --> 00:14:41.486 It's just, uh, different than the proof of work. 83 00:14:41.556 --> 00:14:49.996 So maybe you could, like, speak to that a little bit for some people who are, like, perhaps, you know, get a little confused that Bitcoin's proof of work and then this network is, is not. Yeah. So, so 84 00:14:51.216 --> 00:14:59.996 both proof of work and proof of, uh, stake, and to the extent there are other things, you know, proof of storage- Yeah... proof of useful work, there's a whole bunch of things. 85 00:15:00.276 --> 00:15:08.486 So, um, they are means to an end, and the end is your freedom and you not being censored- Yeah... 86 00:15:08.486 --> 00:15:17.716 and you truly knowing that no nation state, no corporation nor, you know, can, can, you know, stop you or seize your funds or control what you wanna do. Okay? 87 00:15:18.116 --> 00:15:29.916 So yes, you get that on Bitcoin in a spectacular way using proof of work, which is great. Yeah. Um, on a Bitcoin layer two, um, I could see that some of them would wanna use a proof of work. 88 00:15:29.926 --> 00:15:34.596 That's fine, I think that's definitely, um, that's definitely doable. 89 00:15:34.696 --> 00:15:44.165 Um, you could also use a proof of stake, and on StarkNet, what we have is a proof of stake, which has a lot of benefits, um, uh, especially for this particular purpose. Yeah. 90 00:15:44.165 --> 00:15:57.436 And I wanna remind you that the whole point of a layer two, a financialization layer for Bitcoin means that you're not really relying on the consensus of the layer two- Yeah... to secure your Bitcoin. 91 00:15:57.516 --> 00:16:09.856 You're relying on mathematical proofs of integrity for that- Yeah... and you go back to the mother chain, uh, you know, Bitcoin or Ethereum, in order to make sure that the right thing was being done. Okay. 92 00:16:09.916 --> 00:16:16.996 Okay, so we got all those little points together, which is great. Now we kinda have the scaffolding to talk about what this means for someone who has Bitcoin. 93 00:16:17.036 --> 00:16:29.276 So if I'm, you know, Joe Nakamoto with, uh, twenty-one Bitcoin and I go to, to, to your chain and, like, deposit my Bitcoin, what are some of the practical benefits that you guys now have after this announcement? 94 00:16:29.736 --> 00:16:39.356 So by staking your Bitcoin onto StarkNet, which, um, you can do today, and we're actually-- You can do today. Yeah. 95 00:16:39.436 --> 00:16:46.346 And, uh, I think like in a week or two, I don't know when this is airing, there will be, uh, a retail-facing portal- Okay... 96 00:16:46.346 --> 00:16:56.756 that will allow either one or two click from Bitcoin and one-click deposits from, you know, Solana, Ethereum, Arbitrum, Base, a whole bunch of very popular, uh, chains. Yeah. 97 00:16:56.816 --> 00:17:08.835 So what you can do and what you will get is, um, it will still be self-custodially, you know, your Bitcoin. Okay? Um, it will be entering the staking protocol. 98 00:17:09.316 --> 00:17:25.146 You will receive, um, STRK tok- uh, tokens as staking reward over time. Yeah. And with time, uh, y- you will sort of d- either operate a validator or delegate it to one of a very large set of, uh- Yeah... 99 00:17:25.196 --> 00:17:39.816 of validators, including by, you know, teams like Anchorage and others, and, um, then you will-- your Bitcoin will support the decentralized, uh, proposal, proving and, um, uh, validation of- Mm-hmm... uh, 100 00:17:40.936 --> 00:17:49.616 blocks of this, uh, financialization layer for Bitcoin. Okay. And so from a individual standpoint, a few clicks, which is always great, just to have, like, that simple interface. 101 00:17:50.196 --> 00:17:53.016 On the back end, tell me about the security that goes in there. 102 00:17:53.076 --> 00:18:01.816 You said it's, like, still self-custody, which I'm curious about, if there's any slashing conditions or if there's anything else that's involved with these networks, which sometimes there are. 103 00:18:02.596 --> 00:18:15.537 Um, and then I'm also curious about, like, if you are doing, like, delegated proof of stake, like, uh, to some of these larger ecosystems, which can make sense-What's their relationship to the Bitcoin, um, if, if there is like a slashing event or something like that? 104 00:18:15.968 --> 00:18:24.208 Right now there's no slashing on the staking. That will come later on, uh, but we're still, you know, we're still a while away from that. Okay. 105 00:18:24.248 --> 00:18:34.518 For now, um, the main thing you should know is that there is a redeem period of twenty-one days. I think we're considering, or the ecosystem is considering shortening it a little bit- Yeah... 106 00:18:34.528 --> 00:18:40.948 but still it will be-- There is- For the meme, right? Twenty-one. [laughs] Gotta do it. [laughs] I didn't think of that, yeah. Um, I thought of it as three weeks. 107 00:18:41.028 --> 00:18:51.848 But, um, yeah, so there is a, uh, unstaking period in order to make the, you know, the, the change in the amount of stake more amenable to the algorithms that operate the proof of stake. 108 00:18:52.228 --> 00:19:03.248 Right now there's no slashing, and in terms of risks, uh, well, you know, uh, do your own research and always study. I will say this. So, so there's always, let's say, the smart contract risk. Yeah. 109 00:19:03.278 --> 00:19:07.588 It is a very simple, battle-tested, um, smart contract. 110 00:19:07.888 --> 00:19:22.468 For instance, it has been, uh, supporting the staking of STRK for, I think over a year, I don't know the exact amount of time, and by now there's over five hundred million STRKs staked with it, so it is pretty battle-tested. 111 00:19:22.588 --> 00:19:37.168 Yeah. Um, and beyond that, uh, you know, the usual blockchain risks that go everywhere. Um, we do, uh, pride ourselves with being a very, very, uh, technically powerful and production-ready- Yeah... 112 00:19:37.268 --> 00:19:47.748 team that has serviced, uh, you know, over many years, many leading protocols, so I think, uh, you know, that will... Yeah, yeah. There's pretty good security, um- Mm-hmm... background. 113 00:19:47.788 --> 00:19:58.388 Everything's, of course, audited, and so on and so forth. [upbeat music] Hey, Will here with Blockspace Media. Did you know that we have individual feeds for all our shows? 114 00:19:58.688 --> 00:20:10.128 If you're watching the Mining Pod, Bitcoin Season 2, or the Court Show, be sure to check out the individual feeds. You can find them on your podcast player of choice, whether that be Spotify, Apple, YouTube, et cetera. 115 00:20:10.188 --> 00:20:16.788 Just type in Blockspace Media and you'll find all our shows pop up. Or just type in the individual show name, like the Mining Pod or Bitcoin Season 2. 116 00:20:16.828 --> 00:20:23.568 Be sure to hit that subscribe and give us a five-star rating so we can continue to bring you the best content in Bitcoin. 117 00:20:24.517 --> 00:20:36.118 [upbeat music] So for the staking rewards, you're giving a hundred million, uh, which my math is, like, around eleven to twelve million- No, no, no... USD. The staking rewards are different. The staking rewards- Okay. 118 00:20:36.118 --> 00:20:45.668 Yeah... are ongoing. There's no cap amount to them. Okay, great. That's a great point to make. There is, um, there is a, a minting curve for, for it, which basically- Okay... 119 00:20:45.688 --> 00:20:56.268 the larger the amount of stake, then the, um, larger overall the, the, the number of STRKs that goes per Bitcoin. But yeah, uh, so there is a formula that, that controls that. 120 00:20:56.758 --> 00:21:03.408 The one hundred million STRK are going towards something different, which is not directly related to staking. Okay. 121 00:21:03.428 --> 00:21:16.068 This is for the financialization, for making StarkNet the best decentralized place for folks with Bitcoin to financialize it, to put it as collateral, borrow against it at the best rates possible. Okay. 122 00:21:16.108 --> 00:21:26.208 And so for the, I'll just say, like, the yield from the depositing your Bitcoin side of things, is that coming from new StarkNet tokens that are issued for this? Yes. Or is this from- This is minting. 123 00:21:26.248 --> 00:21:34.688 It's like the, uh, minting, it's like the, you know, uh, uh, mining rewards, right? Yeah. So in a proof of stake, you have minting rewards for- Okay... those who stake and operate the network. Okay. 124 00:21:34.968 --> 00:21:45.098 So it's new, separate from the old contract, 'cause you guys have the two chains, right? So it's, like, on Eth and then on Bitcoin, and then so how do those- Oh, no, no. There's one chain, which is StarkNet. Okay. 125 00:21:45.118 --> 00:21:49.778 StarkNet is connected both to Ethereum and to Bitcoin. Okay. And then you have the same reward. 126 00:21:49.778 --> 00:22:01.718 And it's one global minting function, but part of the minting goes towards BTC being staked, part of it goes to STRK being staked. Great, okay. Glad we cleared that part up. So let's go to the hundred million, which, 127 00:22:02.648 --> 00:22:08.708 uh, tell me about the incentives for that and, like, where, what are you guys trying to incentivize people to build on top of this and do on top of this? Yeah. 128 00:22:08.748 --> 00:22:19.448 So first of all, we wanna incentivize, um, folks with Bitcoin who want to borrow against their Bitcoin for a variety of purposes. Maybe they wanna leverage and, you know- Yeah... go long on Bitcoin. 129 00:22:19.528 --> 00:22:29.728 Maybe they want to consume in a way that is more tax-friendly. I wanna mention, I am not a tax expert. This is not tax advice, and it- Yeah... varies by jurisdiction. Do your own research. 130 00:22:30.048 --> 00:22:38.338 But that could be another potential use case. Um, another one is that some people, you know, I know that I'm here in Pubkey, and you're not supposed to say this- [laughs]... 131 00:22:38.358 --> 00:22:47.918 but I've heard that there are some, a few, who might wanna go long on some other tokens out there. Yeah. You know, just saying this, don't, you know, don't, don't kill me for it, but- [laughs]... 132 00:22:47.928 --> 00:22:57.728 for those who want that, right, you wanna put your Bitcoin as collateral in the safest possible way, and then, you know, ape into whatever it is that you, uh- Yeah... want to ape in. So 133 00:22:58.708 --> 00:23:14.388 right now, most of that is happening on, uh, centralized platforms and corporate chains, and we think there's demand, we know there's demand for something that is more decentralized, more tightly connected to Bitcoin, and we want that to be, uh, StarkNet. 134 00:23:14.808 --> 00:23:26.548 For that to happen, we want initially to incentivize and have, like, a very, you know, big market, deep liquidity. Yeah. Um, so. Is there something particular that you were drawn to with the lending market? 135 00:23:26.608 --> 00:23:34.428 From a background perspective, DeFi summer was, you know, really kicked off by the lending protocols like Compound, Aave, uh, Maker, 136 00:23:35.388 --> 00:23:43.048 enabling people to, you know, whales mostly at the time, to actually use their Bitcoin or Ether or whatnot for productive means. 137 00:23:43.088 --> 00:23:51.608 And so I've always had, like, uh, a big, like, sweet spot for those protocols because they, they really did change something fundamental in crypto. 138 00:23:51.688 --> 00:24:04.588 Uh, it seems like we're getting a another take at that this cycle, where we've had a few Bitcoin-based lending protocols using discrete log contracts, which is pretty cool. So Lava's one, Ligos is one. 139 00:24:04.848 --> 00:24:14.520 Um, I've heard of w- at least one more. But they're not really necessarily related to a chain. Uh, there's certainly more, uh-More of a TradFi experience with it. 140 00:24:15.340 --> 00:24:23.440 Uh, but yeah, I'd be curious if you-- there's, like, anything from your perspective on, like, the lending market that is a reason you guys wanna start there. So first of all, I, I, you know, I 141 00:24:24.980 --> 00:24:32.020 suggest this to anyone who wants to learn more. Take a very small whatever. Take whatever you feel comfortable with, check it out. 142 00:24:32.100 --> 00:24:43.220 You'll be amazed, especially if you've tried some of the other things, you'll be amazed by- Yeah... the, uh, smoothness of the UX, by, uh, the speed, by the low cost, by the good rates you'll get. 143 00:24:43.280 --> 00:24:44.819 So, you know, first of all, check it out. 144 00:24:46.040 --> 00:24:58.640 If you're interested, you might look into the other kinds of DeFi protocols that are already today on StarkNet, including the very best automatic market maker out there, Kubo, the very-- or among the very best. 145 00:24:58.680 --> 00:25:11.770 Again, do your own research. Uh- Yeah... among the very best, uh, lending protocols like, uh, VeZu, uh, a very good, uh, DEX aggregators like Avenue, and, like, a whole bunch of things that probably the, um, 146 00:25:12.760 --> 00:25:27.100 the average Bitcoin, um, DeFi person or- Yeah... DeFi-curious person has not heard about. And I advise, you know, listeners to just try it out and write me- Yeah... on Twitter, ever- wherever you are, if you like it. 147 00:25:27.160 --> 00:25:32.120 If you don't like it, speak candidly about it. I, I also echo that. Uh, it's a lot of fun. 148 00:25:32.360 --> 00:25:49.100 Just-- And it's a different experience the first time you like-- I remember the first time trading on Uniswap, and just kind of like magical feeling, and the first time taking a loan out, and then swapping that like USDC or Tether or whatnot, and then dropping it in a bank account, and it's like, "Oh, this is like-- This is not just fake money. 149 00:25:49.180 --> 00:26:02.420 This is very much real. I can deposit it in through ACH." Um, obviously you gotta swap first, but okay. So we have the hundred million staker token part, and now let's go to the RE7, correct? Yes. 150 00:26:02.600 --> 00:26:19.500 And so in some of the documents you guys sent over to me, you alluded to the similarity with what Multicoin and a few others have done with the Solana ecosystem, and how you guys see, like, this need for an outside capital group to really help bootstrap a system, uh, by... 151 00:26:20.120 --> 00:26:25.880 I think in a lot of ways what Multicoin has done and, and Kyle and that team have done is, like, push a narrative repeatedly. 152 00:26:26.220 --> 00:26:30.080 You know, they're-- they have access to capital, which is great, but there's a lot of money in the world. 153 00:26:30.800 --> 00:26:36.720 Uh, what they really do have is a platform, ability to get on, you know, CNBC or get in front of a crowd of people and talk about it. 154 00:26:37.300 --> 00:26:43.900 So is that-- I'm curious what you're seeing from RE7 and what they're kinda bringing to the table. That was my first thought when I saw the announcement. 155 00:26:44.300 --> 00:26:55.620 So first of all, I highly, uh, recommend having, uh, Evgeny, uh, you know, the founder of RE7, on one of the shows. He, he speaks- Yeah... uh, you know, he speaks very, uh, well for himself in explaining what they do. 156 00:26:56.080 --> 00:27:11.540 Um, I'll say from our point of view, first of all, yes, I agree that, um, you know, there's a lot of inspiration to be taken from, um, other chains that have successfully found, uh, a team that was willing to- Yeah... 157 00:27:11.580 --> 00:27:26.080 champion and, uh, say, "You know what? We like the technology. We believe in it. We will publicly or, you know, in a variety of ways support it- Yeah... because we believe it can benefit us and serve our interests." 158 00:27:26.680 --> 00:27:41.540 And I am very, very grateful to RE7 for being contributors to the StarkNet ecosystem and putting their faith- Mm-hmm... in StarkNet and, you know, stepping up. I think, uh, and hope that many others will follow suit. 159 00:27:41.620 --> 00:27:54.140 There's room, you know. Uh, true decentralized network, you want not just, you know, one Khals Samani and Multicoin. You would actually want- Yeah... you know, five and ten different, uh, VCs, uh, crypto funds and so on. 160 00:27:54.620 --> 00:28:04.410 And, um, StarkNet with its true and deep decentralization would love to have that. So there's certainly room for more. There are a bunch of other, um- Mm-hmm... 161 00:28:04.410 --> 00:28:15.160 crypto funds that are, you know, deeply, uh, deep believers, uh, in StarkNet. Um, and, uh, yeah, definitely RE7 seem to be leading the way on this. 162 00:28:15.740 --> 00:28:22.500 Um, and I also think it will highly benefit their business, which is, uh, the best way, right? We want alignment- Yeah... 163 00:28:22.540 --> 00:28:33.880 not just based on values which we share, but also based on, you know, business interests or belief that this is a- Yeah... good way to move forward. So what's like the nature of the relationship more directly? 164 00:28:33.930 --> 00:28:44.180 Is, are they participating as a staker in the system? Are they taking out a position in staker tokens, like, or Shark Bar tokens? Can you tell me a little bit more about that? 165 00:28:44.580 --> 00:28:56.169 Um, they are contributors to the StarkNet ecosystem. They have chosen to build, uh, a bunch of things on it. They are, uh, in that sense, they are one of many, many, uh, different, you know, other protocols- Yeah... 166 00:28:56.200 --> 00:29:09.770 and teams that have, uh, that are believing in StarkNet. They don't have a, you know, unique strategic sort of, uh, uh, position, right? Yeah. In, uh, um, whatever, in running StarkNet, those things like that. 167 00:29:10.270 --> 00:29:26.200 So, um, we are supportive of them and, uh, we are grateful for them for choosing this. Um, what they are offering is, uh, I believe, right? But, you know, do your own research and, you know, go look at their website. 168 00:29:26.500 --> 00:29:41.350 Totally. But they are offering a bunch of different, um, investment channels or funds- Okay... for accredited investors. And, uh, those-- I think the different legs of those 169 00:29:42.440 --> 00:29:51.800 investment funds are things like, uh, option trading on Bitcoin options. That's one kind of thing, which isn't directly on StarkNet. Yeah. Okay? 170 00:29:52.560 --> 00:30:05.640 Um, another is leveraged, uh, staking of Bitcoin using lending protocols on StarkNet, and the third is, um, pure staking on StarkNet of BTC. Yeah. 171 00:30:05.669 --> 00:30:20.900 And this v- offers a variety of, you know, yield profiles and, uh, all of them, like Bitcoin yield profiles, um, forBitcoin whales, uh- Mm... you know, uh, institutional investors. Um, yeah. Okay. 172 00:30:20.960 --> 00:30:31.220 And so that's part of the, the pitch here, right? Is, and I think it's a necessary one. This goes back to my comments on Compound and Aave, is like, you're a Bitcoin whale. You've been tied up in your Bitcoin forever. 173 00:30:31.660 --> 00:30:44.440 Uh, there's certainly a lot of TradFi ways of maybe getting additional exposure to liquidity with it. Like we saw Adam Back roll all his into a, a SPAC, um, or I believe some sort of SPAC function. 174 00:30:44.480 --> 00:30:48.340 We've seen a lot of his, uh, digital asset treasury companies pop up. 175 00:30:48.920 --> 00:31:05.040 But this is like a native crypto project, and this is for, you know, the Bitcoiner who has enough Bitcoin to deposit into this lending function or other, uh, financial tools you guys have, and then they can take out dollars and then 176 00:31:06.120 --> 00:31:16.930 use them, you know, actually use them in life. So that seems to be sort of like the main pitch here. I believe that what RE7 are offering is something where you put inside either Bitcoin or- Yeah... 177 00:31:17.010 --> 00:31:31.700 stables or dollars or, you know, fiat, and you wait some time, and you get, hopefully, a lot more or, you know, some yield on your- Yeah... Bitcoin denominated in Bitcoin. And again, not investment advice, go read. 178 00:31:31.760 --> 00:31:40.370 But, uh, it's a little bit like a fund, right? Where you, you know, um, you buy it, uh- Yeah... you hold it a little bit, and then hopefully you get more. So I think it's one of those kind of things. Okay. 179 00:31:40.400 --> 00:31:47.020 But a lot of it is based or gonna happen and unfold on StarkNet because of the technology that is there. Okay. 180 00:31:47.160 --> 00:31:55.259 So I wanna pivot, unless we have any more details on that announcement, and I wanna talk about Bitcoin development right now just for- Yes... the last five, 10 minutes here. 181 00:31:56.300 --> 00:32:07.020 So 2023, we had, uh, a lot of capital and excitement around Bitcoin L2s. You know, I think a lot of it was probably misplaced excitement, enthusiasm out of what happened with inscriptions and ordinals. 182 00:32:07.660 --> 00:32:17.460 People are like, "Okay, we're back," right? "There's, there's money here." You know, we're, we're kinda getting past the FTX doldrums, and so we saw private investments into Citria, into Alpen. 183 00:32:18.100 --> 00:32:22.060 Uh, we saw BitVM get funded a few times by a few different players. 184 00:32:22.679 --> 00:32:33.560 Um, saw a bunch of other names not worth mentioning because [chuckles] a lot of them didn't turn into anything besides yield farming and then shutting down after a little bit. But we certainly saw some innovation. 185 00:32:34.380 --> 00:32:36.720 Since then, it's kinda bled out and been pretty quiet, right? 186 00:32:36.980 --> 00:32:46.760 And I think a lot of these teams are now just kinda diligently working the back end, making BitVM better or making their bridging solution better or making whatever project they're doing a little better. 187 00:32:47.260 --> 00:32:56.140 At the same time, we had the covenants debate kinda kick up a little bit more with CTV, Cat certainly, uh, and then a few others kinda pop up. 188 00:32:56.960 --> 00:33:01.940 That's also sort of subsided, and we didn't really see anything necessarily like happen. 189 00:33:03.380 --> 00:33:18.340 From those two data points, and then with what you guys are doing now, I'm curious how you are seeing the Bitcoin ecosystem and how you guys at StarkWare, with a good treasury, great technical team, are trying to, uh, run the landscape, so to speak. 190 00:33:18.760 --> 00:33:29.860 Yeah. So, uh, we're advocating for Opcat, but doing so very, you know, very, um, [lips smack] cautiously because Bitcoin, we have too much love and respect for it to try and move like aggressively. 191 00:33:30.420 --> 00:33:47.050 And anyways, it won't work. It will backfire, and it's fine. So we put $1 million into a research fund into Opcat. Um, I'm a big supporter of any sort of soft fork that advances Bitcoin. I think that, um, [lips smack] 192 00:33:47.540 --> 00:34:01.300 I agree with Jack Dorsey that, uh... The way I phrase it is that if, uh, God forbid, Bitcoin becomes a Rolex, this asset that only the rich hold directly- Yeah... 193 00:34:01.340 --> 00:34:08.980 and the rest of us, you know, may buy exposure through our local centralized thing, then it will have failed. And you know what? 194 00:34:09.080 --> 00:34:17.380 I don't even care if it goes to a million dollars and, uh, you know, Saylor, uh, uh, gets to sail bigger yachts or whatever. Yeah. 195 00:34:17.760 --> 00:34:29.620 For me, like, I'm not interested in creating, uh, a new Rolex or a new set of Picassos for, uh, the rich. Yeah. There, there's enough of that. Um, I'm drawn to the 196 00:34:30.700 --> 00:34:44.010 words of Satoshi, who said, "We need a way for any two parties to interact with no trusted intermediary." Yeah. Now, sadly, Bitcoin is not it today. Yeah. 197 00:34:44.020 --> 00:34:58.060 Bitcoin cannot allow any two parties to transact without a third intermediary. Mm-hmm. It simply cannot. The only way it will be able to do it is to allow some Opcats-- Sorry, some opcodes. 198 00:34:58.180 --> 00:35:10.740 Uh, Opcat by itself would be a huge thing, but I would love to see a few more. I know that folks like Adam Back, Luke Dash Jr., others, would like to see what we call Opstark. Yeah. 199 00:35:10.780 --> 00:35:17.180 Which is a bunch of opcodes that would allow for efficient Stark verification. What you'll get is post-quantum security. 200 00:35:17.700 --> 00:35:31.260 You will get, uh, for those worried about spam and filtering, all of that stuff will happen on the L2, on the financialization and s- and, um, execution layer for Bitcoin, which is- Yeah... StarkNet. And you'll get 201 00:35:32.420 --> 00:35:47.620 back to what Satoshi wanted, which is any two parties to transact with no- Mm-hmm... trusted third intermediary in between. Because StarkNet is decentralized, its integrity is based on math and nothing other than that. 202 00:35:47.680 --> 00:36:01.100 It has the scale, it has the UX, it has the privacy, it has the low cost to allow global adoption of decentralized Bitcoin. And we need these nine lines of code and a little bit more. 203 00:36:01.900 --> 00:36:11.860 We get that, you know, as Archimedes said, "Give me a place to stand, and I will move the Earth." Mm. The same thing. So I love that. That's, that's a g- that's a great quote. From 204 00:36:12.980 --> 00:36:23.440 the landscape, though, and from the conversation here-Of greater Bitcoin conversation, we haven't seen enough movement on getting into a covenant or getting to something like that. 205 00:36:24.440 --> 00:36:32.490 But people are still building around that, so Alpen building on Vivium, so, uh, Citria- Love Alpen, love Citria. They're building some cool things. Yes. 206 00:36:32.500 --> 00:36:43.360 And, um, you guys are as well, so it seems like the building doesn't stop, right? No. Like, you still have to find a way despite consensus being against any sort of covenant implementation. 207 00:36:43.780 --> 00:36:53.330 I don't think consensus is against covenant implementation. Okay. I'm here-- curious to hear- No, I mean, uh, first of all, it's very hard to gauge consensus on Bitcoin just because- Okay... you know, who decides? 208 00:36:53.360 --> 00:37:01.730 I mean- Yeah... you know, crypto Twitter is the last thing that you can trust because I don't know who's- Yeah... controlling it and, like, uh, you know, who has what incentives. But 209 00:37:02.760 --> 00:37:17.540 again, uh, you know, Satoshi said it himself i-in a variety of ways, by the way, of course. Yeah. You know, supp- when he was still, uh, interacting, he was supportive of ZK. Yeah. He introduced a whole bunch of opcodes. 210 00:37:17.820 --> 00:37:32.520 Okay, he removed them, um, and then disappeared, uh, unfortunately, right? Um, but he was very pro-expansion. If he was conversing with us right now, he would be a ZK Stark maxi- Yeah... like myself. I have no doubt. 211 00:37:32.540 --> 00:37:42.340 And we would have... You know what? I don't think Ethereum would have existed, ZCash wouldn't have existed if Satoshi was still around because- Yeah... he would've said, "This is stuff that we need. 212 00:37:42.380 --> 00:37:50.610 Like, we, we need smart contracts. We need- Yeah... the ability to do more." I have no doubt about that. Yeah. So, and again, go back to the white paper. 213 00:37:51.620 --> 00:38:06.230 Bitcoin was built so that any two parties can interact, can transact with no third party intermediating that. That is not achieved today, and that is what Satoshi set out to do. Yeah. And we need to reach that. 214 00:38:06.540 --> 00:38:18.920 Jack Dorsey is saying it. Uh, a lot of people out there are saying it. You need to find a way to scale it. And unfortunately, I love Lightning, I love Lightning, Lightning ain't it. After five, seven years out there, 215 00:38:20.560 --> 00:38:31.680 the world-- My mom is not gonna use Lightning. Yeah. My mom can use, in fact, she does use StarkNet wallets. Yeah. She's not gonna be able to use Lightning. It's not gonna happen. Sorry. Yeah. I love it. 216 00:38:31.920 --> 00:38:38.620 I think that's a good, good place to end it. Uh, thank you so much for joining the podcast. Where can people follow you on Twitter or learn more? 217 00:38:39.060 --> 00:38:51.800 Uh, I hope we'll have the links, but, uh, my name, Eli Ben Sasson, and follow, uh, StarkNet. Um, those are two good handles. And thanks, Will, for, uh, you know- Yeah... uh, speaking with me here. Yeah. Thanks, Pubkey. 218 00:38:52.950 --> 00:39:04.540 [outro music]