00:01 welcome back to another episode of the
00:04 pipeline really excited for this one we
00:07 have some awesome guests today inhouse
00:10 we have keone CEO of monad labs joined
00:14 also by co-host Kevin and a new guest we
00:18 have Mike kahill the CEO of Doro labs
00:22 and pith contributor I am ready to go I
00:26 have my OG pith swag here I guess the
00:30 logo's been updated in the meantime I've
00:33 been getting some grief on on Twitter
00:35 for it but wanted to wanted to bring
00:38 whatever merch I I had to the to the
00:40 game today so thanks for coming on Mike
00:42 really appreciate it thanks so much for
00:44 having me on Danny you get OG credit
00:46 whenever you have the the previous
00:47 version of the logo so well done don't
00:49 let them give you grief awesome awesome
00:52 well that's that's what I was hoping for
00:54 I'll I'll keep it out as best I can here
00:57 it's a little chilly um but yeah would
01:00 love to give any listeners a background
01:03 on yourself briefly who you are where
01:06 you come from and and how you ended up
01:09 at Dural labs in pith cool um so like
01:12 keone my pre previous role was at Jump
01:16 crypto and so we worked together um I
01:19 joined jump in 2019 um we actually
01:22 worked together before that at kcg or
01:24 Geto um so my background is in FX
01:27 trading or sales and trading I'm
01:29 starting at Banks and um I've been
01:32 working on pith since we've started um
01:36 2021 um and Doro Labs came about last
01:40 year it was a point in the network where
01:43 the team from jump that was contributing
01:46 um that I was leading um had the
01:48 opportunity to form D labs this gave us
01:52 a bit of agency to contribute full-time
01:54 to pth which is what we wanted to do um
01:57 and contribute to the network um at a at
01:59 a really exciting time for for the
02:01 Network's growth so that happened the
02:03 middle of last year um and um we're
02:05 really excited about it we're excited
02:07 about the growth of the network and we
02:08 can kind of talk about where things are
02:11 but that's a little bit about me awesome
02:13 yeah re really exciting stuff and
02:15 certainly no secret there's a lot of
02:17 synergy already between the manad
02:20 community the pith community and on the
02:23 Builder side as well for sure would love
02:26 to hear your perspective on why you're
02:30 excited about manad and why do you see
02:33 such a strong collaborative relationship
02:37 pith yeah I think that the the things
02:41 that excited me about pith are some of
02:43 the same things that excite me about
02:45 manat um there is the the intersection
02:49 of finance and Technology that's being
02:53 built um and the optimizations that get
02:56 done require a lot of hard tech and and
03:00 it's just the the long hours of work and
03:04 optimization and really just never
03:07 stopping um kind of approaching the best
03:10 possible and most efficient systems you
03:12 can have so there's really no secret or
03:14 surprise to me that you get people that
03:16 come from systematic trading backgrounds
03:18 to work on this and I don't think you
03:21 needed that before when you were in kind
03:24 of the web of no value um but now that
03:27 you've got something of value
03:28 transacting over you know blockchains
03:31 and and kind of over the Internet um you
03:33 do actually need a much more efficient
03:37 upgrade to the infrastructure and that's
03:38 what we've been seeing you know
03:39 infrastructure continues to upgrade um
03:43 and I think that we'll continue to see
03:45 this happen you know the first
03:47 generations of blockchains were were
03:50 good proofs of Concepts and then we saw
03:52 breakthroughs with things like you know
03:54 salana during a time where they had a
03:57 really fast loock times that became
04:00 um layer twos have given evm
04:04 compatibility some of those attributes
04:06 um but what Mana does I think is really
04:09 exciting because it gives you some of
04:11 synergistic um opportunities that you
04:13 see on something like salana but built
04:15 on an evm uh layer which is you know a
04:19 benefit of kind of the community
04:21 ecosystem that predates the manad
04:24 ecosystem and what I think what I
04:27 expected to have happen was for it to be
04:30 incredibly performant because I know ke
04:33 and I know James really well and we work
04:35 together and I know what they hold
04:38 themselves to in terms of benchmarking
04:40 and making things really um really fast
04:43 and Performing and I know they don't
04:44 stop right and you know you see some of
04:46 this happening with um um with the fire
04:50 dancer um team as well like there's a
04:52 lot of performance that needs to be done
04:55 what I've been really surprised by and
04:57 Incredibly impressed by is the community
04:59 in the social layer I think that um
05:02 Monet has developed this probably Second
05:04 To None uh in terms of getting
05:07 excitement throughout the community and
05:09 that's something that you know is is
05:11 completely I would never have expected
05:13 it from keone and James um but they have
05:16 attracted an incredibly passionate team
05:19 of people and a community that really
05:21 resonates with this idea and so I think
05:23 that's a very powerful combination of
05:25 two things that you need to be
05:26 successful in um in building a crypto
05:31 yeah it's it's definitely a powerful
05:33 combination and it's a unique
05:35 combination as well I think you you put
05:37 it perfectly there and would love to
05:40 hear keone's perspective on this from
05:43 the manad side of things how did this
05:45 collaboration come to be and what does
05:50 manad yeah I think that we have a lot of
05:53 shared values in terms of um highly
05:57 valuing decentralization highly valuing
06:00 Community um the yeah the the fact that
06:04 um some folks that are contributors at
06:06 pith and people contributing to monad um
06:09 knowing each other in the past has
06:11 definitely been um a nice bonus but at
06:14 the end of the day it's really driven by
06:16 shared values and um Honestly by the
06:19 strength of the communities I think that
06:21 Community is incredibly important in
06:23 crypto and um it's very easy
06:26 to sort of under underweight that but I
06:30 think both sides of the bell curve um
06:33 both 70 IQ and 130 IQ folks really
06:38 understand that Community is everything
06:39 in crypto and I think that um you know
06:42 both that Ed monad and Ed pith we we
06:45 both appreciate that Community is is
06:47 certainly everything um it's also the
06:50 most fun thing to work on in my opinion
06:52 so it helps when when people are excited
06:54 about what's going on
06:57 um yeah so Mike would would love to to
07:00 dive into right like I think the you
07:03 know the average person listening to
07:05 this right they have uh at least a
07:08 semi-solid understanding of what pith is
07:10 Right pith is a a super performant
07:12 Oracle um would be great to kind of dive
07:16 into like some of you know what you
07:19 think some of the most valuable aspects
07:21 of pith are like what are some new
07:24 things that using pith unlocks to you
07:27 know crypto in general yeah so the the
07:30 mission for pith is really to solve for
07:32 the source of Truth at t0 um and so
07:35 you'll never get there um so you're kind
07:37 of always approaching that um and
07:40 there's a couple of things that pith has
07:42 done to try and be the best of this we
07:45 think that in blockchain space pith is
07:47 definitely the best um I still think
07:50 it's you know still relatively premature
07:51 there's a lot of optimizations that are
07:53 yet to have happen I give us about a six
07:55 out of a 10 um the idea is to build this
07:59 Universal data primitive um so pith is
08:01 designed to be a source people are
08:03 probably familiar with other protocols
08:05 that they refer to as Oracles in most
08:07 cases they're messaging protocols um so
08:10 for instance chain link runs a set of
08:12 messenger nodes or automation nodes and
08:14 you could think of them as saying Hey I
08:17 want to fetch or I need I need something
08:19 from you or I need some data some from
08:21 somewhere and these automation noes say
08:23 great I'll go fetch it from you I'll
08:24 fetch it from the internet um and I
08:27 think that's like a a decent way to
08:28 bootstrap things but there are going to
08:30 be limitations to how performant you can
08:32 get it and so the idea with pith was to
08:34 create a singular Source that's trying
08:36 to constantly solve for this Truth at t0
08:39 and you do it in a way that borrows from
08:42 some of the backgrounds on you know how
08:43 you would set up like a trading
08:44 infrastructure you need to figure out
08:46 what you know your kind of um your your
08:49 your neutral price is so that you can be
08:51 predictive on a time scale greater than
08:53 zero right so high frequency trading
08:55 firms and systematic fir uh trading
08:57 firms tend to be solving for predictive
08:59 value of sometime t plus um some some
09:03 level um but pith is really trying to do
09:05 this at at t0 now there's one Trend that
09:08 I think is an important one to kind of
09:10 talk about which I haven't really talked
09:11 about all that much um the business
09:14 model of the internet you know back in
09:17 the early days of the internet nobody
09:19 valued data and then at various points
09:22 in time data has become valuable usually
09:24 it's through companies and they realize
09:26 oh wow data is digital gold and of
09:28 course now every everyone knows that
09:29 data is digital gold and there's
09:31 frustrations with people that feel like
09:33 they've been disintermediated and
09:34 they're not getting the value from it
09:35 it's being extracted away from somebody
09:37 else um but the business model of Google
09:40 had encouraged um companies to have all
09:43 of their data open on websites because
09:46 you would search for something and then
09:48 Google would redirect traffic to your
09:49 website and you could could convert that
09:52 advertisements and that went on for a
09:54 long time and you know if you're a
09:56 company you basically are constantly
09:57 doing the calculus um am I making enough
10:00 from advertisements to keep this open
10:02 and if not I'll I'll put it behind a pay
10:03 wall um the trend that happened over the
10:06 last basically 10 years is most
10:08 newspapers or news organizations have
10:11 moved to behind pay walls they said you
10:12 know what this is no longer working for
10:14 me and we're at an inflection point now
10:16 where I think that's going to be
10:17 exacerbated because large language
10:19 models completely change the way that
10:21 people ask for information over the
10:22 internet and large language models do
10:26 not route you to other websites in fact
10:28 they don't even give you citations or
10:29 sources um so what I think will end up
10:32 happening is that the open internet's
10:34 ability to be able to Source data um for
10:37 these like messenger style Oracle or
10:39 messenger networks to go grab from is
10:42 going to become limited and so the idea
10:44 around pith was we're incentivizing the
10:47 owners of data to publish it so you can
10:49 think of it as pay wall dat data to
10:52 publish their paywall data to this
10:55 source of Truth so um you can have a
10:59 um many different Publishers that are
11:02 contributing to it and then they'll all
11:04 be rewarded based on the utility of that
11:07 price on chain it gives you a powerful
11:09 economic model um for people to not have
11:12 to rely on Advertising to actually get
11:14 compensation for something of value and
11:17 to make it available for people to use
11:19 and it gives us this level of robustness
11:22 um that um you know effectively should
11:24 be around forever um and that that was
11:27 what was important to to us when we were
11:29 thinking about solving this problem
11:34 permanently yeah I think it it opens up
11:36 kind of two main areas that put pith in
11:39 an in an awesome and unique position
11:43 right on one hand you're actually
11:45 getting the S like the information
11:47 directly from the source right uh people
11:49 that are publishing data a lot of the
11:52 time are creating it themselves um the
11:56 other side of that right is that you
11:58 remove a step in the process right it's
12:00 not someone who creating the data making
12:02 it public and then someone else is
12:04 scraping it and adding it to an oracle
12:06 um you're actually getting it again
12:09 directly from the source so it it's much
12:10 quicker right it it gets you guys closer
12:12 to that that t0 uh goal that that we're
12:18 um one thing that that could be
12:20 interesting as well is just
12:21 understanding like what does this mean
12:23 for the end user right I think there's a
12:26 lot of there are a lot of uh very
12:29 valuable projects in crypto that the end
12:32 user doesn't necessarily touch right
12:34 they might be trading on something they
12:36 don't understand that it's powered by
12:38 like two or three other things that are
12:39 working together uh to create that
12:42 experience so yeah would love to hear
12:44 about like you know an end user they
12:46 might be um creating on a a per sex or
12:49 something um how does pith kind of come
12:52 into play for for the end user yeah so
12:56 the the intention for pith is to give
12:59 applications and users of applications
13:01 equal access to the same level of data
13:04 um so you know everything is aggregated
13:07 on an application blockchain called PNET
13:10 um and then pith Net's connected to 50
13:12 blockchains today um the user of like a
13:17 Pur exchange will probably be looking at
13:20 the price from PNET and then when they
13:23 when they look to do an execution
13:25 they'll call or pull the price onto the
13:27 local chain so the workflow could be
13:29 that I'm a per Dex on monad and I'm
13:33 watching this parice update um it's
13:35 coming from pith directly and so there's
13:37 no kind of throughput or passing it on
13:40 latency um I click to execute that then
13:42 pulls it on Shain um it will go through
13:45 say Wormhole um and when the when the
13:48 price is brought on chain the contract
13:51 will execute and so you'll have all the
13:53 attributes of um it being a Bonafide
13:56 transparent um transaction on monad um
14:00 and there will be a small fee that gets
14:02 paid to the um to the pith application
14:06 and that fee can go back to those
14:08 contributors and so that's how we've
14:10 incentivized the Publishers to cut out
14:14 all that um that excess all all those
14:17 excess Hops and to make sure that you
14:19 know it's going to be around right it's
14:21 a business model that isn't going to
14:24 wake up one day and say oh I didn't
14:25 realize that you know someone was taking
14:27 all of this data from Yahoo finance and
14:29 putting it on the blockchain like we're
14:31 going to stop that like that's that's
14:33 like a real concern when you think about
14:36 um the the value within Financial Market
14:39 dat it's a huge industry I mean it's
14:41 it's about7 billion dollar in revenues
14:44 for for real-time Financial Market data
14:46 if you're just relying on scraping that
14:48 data off the internet you're going to
14:50 get sued by one of those exchanges at
14:52 some point so you need to come up with
14:54 an alternative source and um you know
14:56 that was one of the breakthroughs is
14:57 pith has gone and found found new owners
15:01 SO trading firms have never monetized
15:03 their Data before and so you can show up
15:06 and and this was the idea that most of
15:09 them got excited about you know Jane
15:11 Street susah Hannah virtue
15:13 drw they're sitting on troves of data
15:16 that they use to train models they don't
15:19 monetize um pith gives them the
15:21 opportunity to commercialize these huge
15:23 assets they've just been accumulating um
15:26 and contributing to a source that
15:27 actually gives them a commercial
15:29 um return on which is you know an
15:31 entirely new paradigm within the world
15:35 marketing I'm imagining the meme with
15:38 the Trojan Horse and pith is
15:42 the you know you're you're getting them
15:44 crypto pilled in general crypto's hiding
15:46 inside of the horse but um a business
15:50 model for their data is how you're
15:51 getting all of these um huge traditional
15:53 Finance players to get crypto til it's a
15:57 great Point um we don't necessarily tend
16:00 to talk about this but there's a 100
16:02 Publishers in the network just about um
16:04 it's all big institutions pretty much
16:06 every large trading firm um most of the
16:08 exchanges in crypto um all the way up to
16:11 sibo which is the third largest US
16:14 Equity exchange under their bat har and
16:16 obviously the largest for um for options
16:18 on the vix and um you know they're all
16:22 the network but people don't realize
16:23 that that means that they're publishing
16:25 to a blockchain every single day so when
16:28 you think about institutional
16:30 adoption um the level of of people that
16:33 are in this in this network is is very
16:37 high and it's it requires them to be
16:39 engaged in so I think that you've nailed
16:41 it ke um they have gotten excited about
16:45 this as a business model but they've
16:47 been forced to really understand how do
16:50 I actually submit data to a blockchain
16:52 how do I have the gas how do I
16:54 understand how these tokens work how do
16:56 I explain it to a board in some cases is
16:58 there's public companies that are
17:00 contributing virtue sio or public
17:02 companies getting them to understand and
17:04 make sure that they're comfortable um
17:06 with this as a solution was not an easy
17:08 task but something that they finally
17:10 figured out and you know that's a huge
17:12 milestone not just for pith but for the
17:14 industry you know the the bar is now
17:16 lowered for them to do the next thing
17:18 maybe it's custody of assets or it's
17:20 trading on chain so yeah I think that's
17:25 Point yeah I think it's it's a trend
17:29 will not slow down right like as data
17:31 becomes more and more valuable people
17:33 try to protect it um I think of of like
17:36 Twitter I believe it was like three or
17:38 four months ago um I was actually
17:41 running some scripts to to scrape a lot
17:43 of data from Twitter and it was working
17:45 well and then one day it just stopped
17:47 and I like pinged my brother who's
17:49 actually the guy who's writing the
17:50 scripts and I was like what's going on
17:51 here what's the problem he's like Elon
17:53 shut it off and then Elon ended up
17:56 making a statement that was like I'm not
17:58 just just giving all of these massive AI
18:00 companies all of our data for free like
18:03 no way so it's uh he introduced rate
18:05 limiting so I think as more like that's
18:08 definitely a trend that we expect to
18:09 pick up right um yeah as as this data
18:13 and I I agree like I think you'll see
18:15 that more and more and that's like the
18:16 proof point of P like if you start to
18:18 see data that was open go payal then
18:22 you'll be like okay pth is pith is
18:24 solving that now it's solving it for a
18:25 very specific use case today this is for
18:27 financial Market data but as more things
18:30 become premium it could be solving it
18:33 for them so for instance right now you
18:36 can get weather data anywhere on the
18:37 Internet it's very easy to do it could
18:40 be the case though that those websites
18:43 that are publishing the weather data
18:45 start to close their data they say you
18:46 know what I'm not getting enough
18:47 advertising Revenue to be able to keep
18:49 the thermometers going whatever it is
18:51 they have to do so we're gonna make
18:59 so we're going to make this premium data
19:01 well if it becomes premium you want
19:03 aggregated Solutions brought onto a
19:05 blockchain like that's that's an
19:07 expansion set that you could eventually
19:08 add on pth and you could use that for
19:10 pretty much any type of continuous data
19:12 that's going to be of
19:14 value yeah it makes me think of um chat
19:18 gbt also or open AI kind of recently got
19:21 in trouble with uh the Wall Street
19:23 Journal because people would ask a
19:25 question that was paywalled and then
19:27 chat gbt at access with they scraped it
19:29 so there's a lot of conversation right
19:30 now around you know should open AI be
19:34 paying for that can people get like an
19:36 elite subscription so if you have the
19:37 Wall Street Journal subscription you can
19:39 now update your version of chat gbt to
19:43 information um like this is right at at
19:47 some of like the larger kind of
19:49 more uh abstract or or conceptual
19:52 discussions that's happening with like
19:54 the massive amount of of data inflow
19:56 right now yeah the data must flow
19:59 the data must data must and you know my
20:03 the the data that it's trained on so
20:06 that historical data you know good luck
20:08 getting money on that getting good luck
20:10 getting com that ship is s so when
20:13 you're gonna unless there's some new
20:17 know turn turns out Napoleon had a son
20:19 and they discovered it later and chat
20:21 gbt doesn't have access to that because
20:23 they figured out how to pay wall that
20:25 you know it's going to know pretty much
20:26 everything that happened in history but
20:28 when you want to ask it hey what's the
20:30 price of the Euro or what's the price of
20:31 Bitcoin right now that's the stuff
20:33 that's interesting it's the real- time
20:35 data and that's where people are going
20:36 to figure out the business model because
20:37 it's immediately as soon as it's delayed
20:41 and that's why you know the the model
20:42 for pith is to be the source of Truth or
20:44 t0 as soon as it's delayed by the time
20:46 that it's on the open internet um it's
20:49 not going to be all that valuable it's
20:50 not usable um anymore in in smart
20:53 contracts you can you know um you can
20:57 get equities data on the Internet it's
21:00 just usually delayed by the time it gets
21:03 to the Internet it's free um and so like
21:06 you can think about this as a curve if
21:11 billion and it's free after 15 minutes
21:13 well all the value of the data exists
21:16 between t0 and 15 minutes and you know
21:19 it's actually heavily concentrated
21:23 t0 yeah it's actually pretty shocking
21:25 how hard it is to find good data or good
21:28 financial data on the Internet it's like
21:31 I feel like whenever I'm trying to and
21:33 it's not that often but you know like
21:36 it's like go to Yahoo finance and then
21:38 they guess they have like the end of day
21:40 data and I guess you can you can
21:42 download it but it's it is a giant pain
21:44 so having very granular data for um how
21:48 how many instruments do you have at this
21:54 awesome yeah think about ke like how
21:56 much work when you you were a portfolio
22:00 manager running a systematic strategy
22:02 how important was it to have the data
22:05 you know obviously getting access to it
22:07 and some of the the structuring that you
22:09 you guys have put behind making monad
22:12 faster and making the paralized evm
22:15 actually work like our components of it
22:17 but just think about like the amount of
22:19 effort that at place like jump puts into
22:22 just cleaning up its Market data so that
22:28 um it's a without getting into too many
22:31 details it's it's definitely a big
22:34 effort yeah it seems like this is a
22:37 really critical aspect particularly in
22:41 the blockchain space with markets never
22:44 closing with apps like a variety of
22:48 different apps really ryant on Fast and
22:51 accessible data to be able to to run
22:54 their services and obviously manad is
22:57 striving to be one of if not the most
23:01 performant place to trade across crypto
23:04 um so would love to hear keone's
23:06 perspective on how important are high
23:09 performance oracles on the competitive
23:13 or high frequency trading side of
23:16 things yeah I think that a very high
23:20 fidelity Oracle is extremely important
23:23 for a number of other um D5 Primitives
23:26 for example Lending protocols require
23:29 precise pricing so that um the you know
23:34 the the vaults like ultimately the
23:36 protocol itself is safe um I think you
23:39 know it kind of comes into the public
23:41 awareness like once every six months or
23:44 something when something crazy happens
23:46 on a like most recent I think it was
23:49 like curve token um and someone with a
23:53 large curve uh Equity position baring a
23:56 bunch of St aable coins against it and
23:59 as the value of the curve token dropped
24:01 um and the Vault became in danger of
24:03 going negative in value um that's it's a
24:06 huge issue so having very precise
24:09 pricing that's also still like you know
24:12 taking into account confidence intervals
24:14 and um you know it's aggregating price
24:17 sources from a number of different um
24:22 very accurate sources of data is is
24:24 extremely important to maintaining the
24:26 health of any lending protocol um so
24:30 that's like one very obvious area a
24:31 second one is the enablement of any
24:35 derivatives contracts the derivatives
24:37 themselves are um they depend on
24:40 accurate pricing for for settlement and
24:43 then in the case of perpetuals where
24:45 there's a mark price and some funding
24:48 rate that's calculated based on the The
24:50 Mark Price um you need that price to be
24:52 super accurate so I think that you know
24:58 typical um spreads on centralized
25:02 exchanges versus on decentralized
25:04 exchanges generally and this is a very
25:07 like blanket term um but centralized
25:10 exchanges have cheaper execution costs
25:12 right now um and it's really needed to
25:15 have uh greater efficiency in the in the
25:17 defi side um in order to help defi be
25:21 super competitive against the
25:23 centralized world and ultimately to
25:25 allow decentralized Finance to eat the
25:27 rest of the world and I think having
25:30 really accurate really up-to-date
25:32 pricing um is extremely important toward
25:36 allowing derivatives which you know
25:38 realistically are the majority of the
25:40 market in any Market whether traditional
25:43 markets or crypto markets derivatives
25:45 are the majority of the of the notional
25:48 the trades so they need very accurate
25:50 pricing in order for that to be possible
25:53 yeah it seems like this is one of the
25:55 most critical aspects to solving one of
25:59 the biggest bottlenecks that's
26:01 preventing defi from from scaling beyond
26:04 what we've seen in recent years and Mike
26:08 from my understanding pith has some
26:11 unique aspects to its architecture and
26:15 kind of without getting too deep in the
26:17 the technicals because we have listeners
26:19 all over that Spectrum how does piff's
26:22 architecture compare Andor differentiate
26:26 from uh other Oracles in the crypto
26:30 space yeah so the um pith architecture
26:34 is designed to have a sustainable
26:37 business model built into it so that pth
26:39 can operate as a protocol without having
26:41 to have a permissioned instance um or
26:45 like a direct sales team um and so the
26:48 way that works is pith runs a blockchain
26:52 that only is an application specific
26:54 blockchain it's called PNET um all of
26:56 The 100 Publishers publish there and so
26:59 you've got these 400 symbols that are
27:02 updating a couple times each second um
27:05 there all of the blockchains that it's
27:08 connected to then have equal access to
27:11 all this data so there's 50 blockchains
27:13 today there's about 300 applications
27:15 that use data um across those different
27:18 application or those different
27:19 blockchain environments um and the
27:23 commercial model is such that every time
27:27 a trans transaction is delivered to
27:28 another blockchain for an application to
27:30 use they pay a small fee and then that
27:33 fee is able to be distributed to um the
27:38 the the Publishers now Community will
27:39 decide this over governance um but the
27:42 mechanics are in place where today a
27:45 very small fee is actually collected
27:46 every time p is delivered to a different
27:48 blockchain um there are about 4 million
27:52 transactions updates per day that can
27:55 distribute to those 50 different
27:56 blockchains which is not small it's a
27:57 very large number of of updates um with
28:01 a very small be associated with it um
28:04 but that's you know up to the to the
28:06 kind of the token holders in governance
28:08 to determine you know what's the right
28:09 equilibrium between optimizing for
28:12 continued growth given how early we are
28:14 in in in the market and you know
28:16 optimizing for um kind of the the
28:18 compensation for some of the data
28:19 sources understood yeah I think uh pith
28:23 net is something that a lot of people
28:25 have been very excited about for for a
28:27 long time um so yeah seeing it running
28:30 in the wild is is amazing right there
28:33 it's no small engineering feed to to
28:35 have this performant network that you
28:37 know exists is currently taking in new
28:39 data um at like the lowest latency that
28:46 um also be yeah go ahead sorry I was
28:48 just gonna contrast so so the standard
28:50 model for other oracles is that run
28:54 Messengers um is that they will set a
28:58 timer and basically it's an automation
29:01 job that says hey go fetch me the price
29:03 every 24 hours or 50 basis points from
29:06 you know these three websites and I'm
29:09 going to go pay you some money outside
29:11 of the blockchain and you're going to go
29:14 compensate the gas and you know hire the
29:16 automation nodes choose which sources
29:19 and we have a contract and there's no
29:21 scalability to other people so like when
29:24 you look at it and you squint your eyes
29:26 and you see that like a you know chain
29:28 link or a switchboard is running a lot
29:30 of different um Oracle jobs you know it
29:34 it shows you that they have a lot of
29:37 customers or clients that are looking
29:38 for things that are bespoke but the
29:40 difference is that pith is building a
29:42 singular source that has that same equal
29:44 access for everybody and so as that
29:46 Source becomes more powerful it benefits
29:49 everybody equally and so you end up
29:50 getting these really powerful Network
29:52 effects as opposed to saying you know
29:54 we've got six feeds over on optim ISM
29:57 we've got 15 feeds over on arbitrum and
30:00 you know 30 feeds over on Bas and none
30:03 of them can talk to each other and if
30:05 you want a number 31 because it's over
30:07 on arbitrum well call sales we'll have
30:09 to you know run that for you figure out
30:12 what the schedule is and you know you
30:14 have this terrible tradeoff where um you
30:17 know profit maximization in that
30:19 strategy is often at the detriment to
30:22 the quality of the data because you have
30:24 to basically bake in the gas fees so if
30:27 you're trying to like you say all right
30:29 I'm going to charge you a million
30:30 dollars to do this and we're going to
30:32 update it every hour um and the gas
30:36 spikes it's going to come out of that
30:38 million dollars that you charged as a as
30:40 a protocol so you're sort of
30:42 incentivized to reduce it even further
30:44 and that's why when you look at the
30:45 update times on something like chain
30:47 link it's usually 24 hours or 50 basis
30:50 points which for a um for Market data is
30:55 is not good it's it's you know blatantly
30:58 very bad um you know you need much more
31:02 finely tuned data than that if you're
31:03 going to be running something like a
31:06 perpetuals market or anything that um is
31:08 going to give users a chance of not
31:11 losing money because you're going to get
31:12 just the worst impermanent loss or um
31:15 adverse selection when you've got
31:17 markets that are so um incremental or
31:19 gappy yeah I feel like after uh
31:22 especially since I started working up on
31:24 it listening to Keon and James talk
31:27 about the old high frequency trading
31:29 days um 50 bips seems large compared to
31:35 a lot of the Freds um but that's the
31:37 thing too like when when when we looked
31:39 at this you know you could say like huh
31:42 these only update every 50 bits there's
31:44 two things you could do you could try
31:46 and Arbitrage it and take all the money
31:47 out but the ecosystem is never going to
31:50 grow and so like you know there's only
31:53 so much money it's probably going to get
31:54 smaller and smaller because people are
31:56 going to be like ah you know what this
31:57 this is rigged or you can just solve it
32:00 and get the best Market data on there
32:02 and then you're not playing for like
32:04 just trying to win in this tiny little
32:05 game you're playing for building a brand
32:08 new Financial system that now is
32:10 enabling not just people in the US with
32:12 really great access to Capital markets
32:14 maybe it's everyone in the world so if
32:16 you can go up and like like maybe like
32:19 10x the population of people that are
32:21 having access it's a great trade right
32:24 and so you're willing to do that and
32:25 that's been the history of technological
32:27 innovation especially on the internet
32:29 people are always willing to do stuff
32:31 cheaper if they can increase the scale
32:33 it always works that way so everyone
32:35 ends up getting a better product um
32:41 everybody yeah I think I'm kind of
32:43 reminded specifically of the impermanent
32:46 loss problem on amms and contrasting
32:50 that with um something like like
32:53 synthetics where U because the you know
32:57 the pool is allowing people to to trade
33:00 and basically making markets constantly
33:03 available to anyone pricing off of um
33:07 the pith Oracle and because that's very
33:09 accurate so the you know the LPS to that
33:12 pool are effectively you know they're
33:14 always pricing at a reasonable price
33:17 plus some spread and so that is actually
33:19 a sustainable business model for the LPS
33:22 as opposed to um you know in an
33:25 environment where the effectively the
33:27 markets can't adjust quotes on their own
33:30 and therefore um you know the LPS are
33:33 essentially being adversely selected by
33:35 um any sort of arbitrageur who um who
33:39 has better pricing data than a static
33:42 curve um doesn't mean to say that
33:44 there's no role for amm like I think amm
33:46 are still really valuable for you know
33:48 in a lot of use cases but I can
33:50 definitely see that for from the lp side
33:53 it's a more sustainable business if you
33:55 can adjust the prices based on what's
33:58 actually going on in the in the rest of
33:59 the world um and the synthetics example
34:03 is like one really one that really jumps
34:05 out to me and it's really cool that it's
34:07 you know it's it's been powered by the
34:11 effort yeah and and it should be a
34:14 profitable business to be an LP um when
34:17 when you look at retail Brokers like FX
34:20 retail Brokers outside of the US um they
34:23 call it B booking the trades like that's
34:25 sometimes the most profitable thing they
34:27 can do because the retail Traders can
34:29 net off with one another and they don't
34:32 usually have the most predictive
34:33 short-term predictive or most toxic um
34:38 um you know trade order flow you know
34:40 that's why payment for order flow exists
34:43 it's not anything more more nefarious
34:45 it's just that generally the time that
34:49 when I go and trade and I'm buying Robin
34:52 stock um it's not a great time to do it
34:55 on the scale of like you know a couple
34:57 of milliseconds but if somebody like I
35:00 don't know 72 comes and buys a whole
35:02 bunch you know maybe you want to get out
35:04 of the way from that and so that's
35:06 really what payment for order flow is
35:07 like give me just the stuff that doesn't
35:10 in involve these big hedge funds that
35:12 you know are going to be super super
35:14 toxic um from a market making
35:16 perspective and they're willing to pay
35:18 for it and the and the customers of the
35:21 retail Brokers win they actually get a
35:23 preferential execution price so it's a
35:25 it's a huge win for every body in that
35:27 scenario um but that just shows you that
35:30 when done correctly LP should make money
35:33 right it should never be the scenario
35:35 where the LPS are just losing money you
35:37 know in a couple of years on blockchains
35:40 and you have to continue to subsidize
35:42 them that that means it's broken um you
35:44 need to evolve it it doesn't mean that
35:45 amm are are broken you probably just
35:47 need to make sure that the amm are more
35:49 expressive or that they're updating um
35:52 and they've got some you know more
35:55 attributes right right and then it's not
35:57 even like the arbitragers are making
35:59 that much money either because all the
36:01 profit goes to um you know in the form
36:05 of tips to the validators so yeah it's
36:08 all um there's there's a there's a
36:10 better way yeah well um definitely need
36:14 to include this one as probably the the
36:17 question that a lot of people uh a lot
36:20 of people have that that are listening
36:21 right but you know pith recently has has
36:24 gotten past the when token spamming
36:27 stage um congratulations to everyone who
36:30 who worked on that front um yeah would
36:33 would be would be great to to hear about
36:37 like how does the pith token kind of
36:40 come into play for this you know larger
36:43 product of of pith Network that's going
36:45 to power a lot of the D5 protocols in
36:48 crypto such an exciting time so um pith
36:51 is a decentralized Oracle um which means
36:54 that governance can manage the the
36:56 updates directly on chain um there was
37:00 an airdrop a retrospective airdrop um
37:04 that took place in November it involves
37:07 the largest to date activity um across
37:10 multiple chains so there's 27
37:12 blockchains um the token was made
37:15 eligible to users of applications on
37:18 blockchains um and um there is 100,000
37:22 wallets that were in scope just about um
37:25 about half of those ballets have claimed
37:28 um and it's an SPL token the P token um
37:31 and the intention was really to you know
37:34 socialize this piece of decentralized
37:35 infrastructure right like you're a user
37:37 of synthetics you know maybe you'll want
37:40 to be involved in in the governance so
37:43 how has that turned out so far so there
37:45 50,000 wallets that were airdrops um
37:48 there are currently
37:51 110,000 wallets that are staking in the
37:54 P protocol um so over double which which
37:56 is a tremendous outcome um that just
37:59 shows you the power that you know this
38:02 idea of decentralized infrastructure has
38:06 um people believe in it um there's a
38:08 vote for the Constitution next week um
38:10 which will be the first vote and then
38:11 governance will really be armed with um
38:14 kind of managing the you know taking the
38:16 network into their own hands and being a
38:18 part of the story um so you know that's
38:20 been tremendously rewarding to see and
38:24 shepherding the network to this point
38:26 where it can really just take on its own
38:28 identity um and um and we can start to
38:31 see all this community involvement I
38:33 want to give some context around that
38:35 number because a lot of listeners may
38:37 not know if that's a big or a small
38:39 number 110,000 within dii um so I'll
38:43 give just some comparisons um so a which
38:47 obviously everyone knows um and has an
38:49 which has an active governance has about
38:52 15,000 wallets um GMX has about 20,000
38:58 synthetics has about
38:59 40,000 um so pith at 110,000 is no small
39:03 feat and you know having it launched
39:06 just in November you know is pretty
39:08 important obviously there are some that
39:09 are larger so salana has about 250
39:12 celesia has about 400 million or 400,000
39:15 rather um so there's there's certainly
39:16 space to grow but um it does tell us
39:19 that you know this is something that
39:20 people are very excited in participating
39:23 on and you know there's um certainly a a
39:26 sense of community and involvement that
39:29 um that I'm really pleased to see
39:31 amazing yeah I think that um as a an
39:35 observer uh and someone who has been
39:37 very excited about Pi for a long time um
39:40 just such a yeah exciting part in like
39:43 you know in the maturation of of pth in
39:46 general um I know we coming up on time
39:49 here so usually have uh one question
39:54 that we have shame lessly ripped from
39:57 the up only podcast so shout out to KOB
40:00 and Ledger um but it's the final Alpha
40:03 um and this could be Mike it'll be your
40:06 final Alpha ke we're hoping for um
40:09 something along the lines of
40:11 highfrequency trading or some some
40:14 trading Alpha that you accumulated over
40:15 the years um but Mike this is It's
40:18 open-ended right it doesn't have to be
40:20 crypto specific it can be any you know
40:23 anecdote any piece of wisdom that you
40:26 have uh accumulated over the years um
40:29 something you've gleaned from being a
40:31 builder in the space having experience
40:33 in many different areas um of the crypto
40:36 industry and traditional Finance uh
40:39 traditional Finance Industries um yeah
40:43 really just something that you know the
40:44 end listener can walk away with and feel
40:47 like hopefully they got you know 1%
40:49 smarter after listening to to Mike Alpha
40:52 yeah anything that you'd like to share
40:54 sure yeah I don't know how much smarter
40:55 they'll get but um it's something I've
40:57 been thinking about um a lot I I
41:00 recently read this book um called the
41:01 coming wave which is by one of the
41:04 founders of Deep Mind and it sort of
41:07 went through different epochs of um
41:09 technology changes and you know there's
41:12 that um you know amar's law where it's
41:15 people overestimate the effects of
41:16 technology in the short term and
41:18 underestimate them in the long term and
41:20 this has always been the case so if you
41:21 go back to the railroads um or to
41:24 electricity or radio or TV automobiles
41:27 airplanes um even the internet uh it's
41:30 always the case and it's certainly the
41:32 case with crypto um and the thing that I
41:35 think people tend to forget when you're
41:38 in the moment is that the infrastructure
41:41 is the most important right people are
41:43 always asking you know what is the
41:45 killer app why can I why can't I use
41:47 this oh everyone's building some new
41:49 infrastructure that's what you have to
41:50 do um you cannot build an Uber app
41:54 without the iPhone right the Uber Uber
41:56 app needed a GPS it needed the ability
41:59 to talk to you on a computer that's in
42:01 your pocket um so I think that you know
42:04 people just need to stay optimistic that
42:07 things are being built and get excited
42:10 about infrastructure and think about
42:12 what those things potentially can unlock
42:14 um and you know stay positive in the the
42:17 ecosystem even though you won't see
42:19 things happen overnight these things
42:22 tend to have an overnight success factor
42:25 at some point when the infrastructure is
42:27 really good then you know there's the
42:28 chat GPT moment but you know chat GPT
42:32 came out of many years of AI Winters and
42:36 it started in the 1950s and people just
42:38 thought it was never going to happen and
42:40 then there was the overnight success so
42:42 um you know that's that would be my
42:43 advice is don't get too frustrated when
42:46 thinking about um you know why aren't
42:48 the use cases coming yet the use cases
42:50 are actually coming and seeing the
42:52 improvements of infrastructure are going
42:54 to leave to that overnight success and
42:56 around the corner yeah I think that's
42:58 that's a great Point um I think it's
43:01 easy to because crypto moves so fast and
43:04 and so much happens so quickly um it's
43:07 easy to lose perspective and realize
43:09 that defi summer only happened in 2020
43:12 and um that was really an explosion of
43:16 volume and and usage and tvl um I think
43:20 prior to defi summer tvl was like a
43:23 billion dollars or less and and is like
43:26 I'm going to get these numbers wrong so
43:28 um sorry in advance I'm not a very
43:30 accurate um data provider but I think
43:33 it's probably like 50 billion right now
43:35 on chain um so you know I think there's
43:39 that that's a good I'll Echo what Mike
43:41 said that there's um it's like you know
43:45 something Brewing under the surface
43:46 under the water but then you know it's
43:49 it's When the tide goes down a little
43:51 bit then you actually see like you know
43:53 this massive structure that's that's
43:56 um and and things can change very
43:58 quickly that's not U that's just me
44:00 piggybacking off of Mike's Alpha though
44:02 um trying to I would say like you know
44:05 since we're talking a lot about data and
44:07 trading and trading Dynamics and
44:09 thinking back to to former days of jump
44:11 trading I would say my Alpha is going to
44:14 be very trading related this time it's
44:16 just you know cut up your trades don't
44:18 don't like make one big trade um all at
44:21 once um use t-w or vwap um Jupiter
44:25 aggregate on salana has a great um
44:29 feature for for cutting up trades you
44:31 can send once a minute or just much more
44:34 frequently that really reduces price
44:35 impact uh the reason that's not that
44:38 popular in in crypto right now is
44:39 because the gas fees of each one of
44:40 those submissions would be too high so
44:43 um in high performance blockchains where
44:46 that isn't an issue um we should see
44:48 much better execution but yeah just in
44:51 general like putting a big order on any
44:53 Exchange in any Market um is is either
44:56 going to result in you crossing the
44:58 spread very deeply and paying up a lot
45:00 or if you leave a big order in the book
45:03 that's also um you know people signal
45:06 off of that and that that reduces the
45:08 likelihood that that order actually will
45:09 get filled which is actually adverse
45:11 selection um so you know think about
45:14 your adverse selection and um what is it
45:18 I it's like uh always use stops like
45:20 people have these different trading
45:22 advices but mine would just be to to cut
45:27 amazing yeah you heard it heard it here
45:30 first right infrastructure allows for
45:32 applications to be successful in
45:35 performing um and do not put it all in
45:38 one trade uh Keon and James of people
45:42 similar to that eat lunch because of
45:43 that so there you go and zoom out and
45:47 zoom out sure back in the day yeah
45:51 yeah yeah that's that's awesome Alpha to
45:54 end on I think the the pith Community as
45:57 well as the manad community Are Gonna
45:58 Love diving into this episode so I'd
46:01 certainly be excited to run it back in
46:04 the near future hopefully once manad is
46:07 live in practice and we're able to
46:09 leverage this collaboration with the
46:11 awesome p pith Network Mike thanks so
46:14 much for joining us today as well as
46:16 keone and Kevin really appreciate
46:19 it thanks so much for having me and
46:21 thanks for welcoming me into your
46:23 beautiful office I really love it here
46:27 amazing yeah thank you guys that was
46:29 awesome M and coyote
