The Evolution of Blockchain Infrastructure and Revenue Models with Velar

Summary

In this discussion, Julian from Marathon's innovation unit, Duro, interviews M from V, the founder of Val, about the challenges and dynamics of building a Layer 2 (L2) solution for Bitcoin. M uses the analogy of the evolution of web infrastructure to explain the shift towards L2s with native revenue models, criticizing Ethereum's inability to scale due to power dynamics. He advocates for a user-centric approach where L2s act as supportive governments to applications. The conversation touches on the importance of community, the influx of builders into the Bitcoin ecosystem, and the technical requirements for L2s, like low latency and reliable oracles. M shares his journey, the challenges of funding, and offers advice for new builders to stay true to their vision and be prepared for the right timing in the crypto wave.

Takeaways

• 🌐 The conversation revolves around the development of Layer 2 (L2) solutions for Bitcoin, emphasizing the importance of infrastructure that can scale and support a growing ecosystem.
• 🚀 M, the founder of Val, discusses the evolution from Web 1.0 to Web 3.0, highlighting how infrastructure protocols now have the ability to generate revenue through native coins.
• 💡 M uses an analogy comparing the power dynamics in Web 3.0 to those in traditional business, suggesting that L2 infrastructures should act as a supportive government, not controlling entities.
• 🔄 M criticizes Ethereum for its inability to scale due to power dynamics where infrastructure controls the narrative, leading to isolation and lack of user focus.
• 🏦 The discussion points out the need for L2 solutions to be agnostic and user-centric, integrating multiple infrastructures seamlessly to provide a good user experience.
• 🤝 Julian and M agree on the importance of building products with genuine community engagement and the challenges of finding builders truly committed to the Bitcoin ecosystem.
• 🌱 M reflects on the rapid growth and trendiness in the Bitcoin space, noting the influx of builders looking to catch the wave, but also emphasizing the need for a community-focused approach.
• 🛠️ Technical aspects of building on L2 solutions are discussed, with a focus on the need for low latency, reliable oracles, and stable coins to support yield-bearing products.
• 🔮 M shares his journey and the challenges of fundraising in the crypto space, highlighting the importance of having a clear 'why' and being prepared for the right timing.
• 🌟 The conversation concludes with M's bold prediction that by the end of 2025, Bitcoin DeFi could surpass Ethereum, driven by a strong community of builders and believers in Bitcoin's potential.

Q & A

What is the analogy M from V uses to describe building a layer two?

M from V uses the analogy of the evolution of the internet to describe building a layer two. He explains that during the web 1.0 era, infrastructure protocols like HTTP and TCP/IP laid the foundation without direct revenue streams. However, with the advent of web 3.0 and platforms like Ethereum, infrastructure could generate revenue through native tokens, which was a significant shift from the past.

Why does M consider Ethereum a 'failure' in the context of scaling?

M refers to Ethereum as a 'failure' not because it is inherently bad, but because it has not been able to scale effectively due to a power dynamic issue. He argues that Ethereum's infrastructure has controlled the narrative and isolated applications and users, which has hindered its ability to scale.

What is the vision for layer two scalability according to M?

M envisions a future where layer two infrastructures act as a supportive government, while applications are the businesses that provide services to users, who are the true decision-makers. He emphasizes that applications should integrate multiple infrastructures seamlessly without user awareness, similar to how applications like Instagram are available across various platforms.

How does M perceive the current state of Bitcoin DeFi compared to Ethereum?

M believes that the Bitcoin DeFi ecosystem is moving very fast and has the potential to surpass Ethereum by the end of 2025. He notes the rapid development of products and the commitment of Bitcoin builders, which he sees as a significant advantage over other ecosystems.

What is M's perspective on the role of infrastructure in the Bitcoin ecosystem?

M sees infrastructure in the Bitcoin ecosystem as a service provider to applications, which in turn serve users. He stresses the importance of infrastructure being agnostic to specific layer two solutions and focused on providing a good user experience and stability.

Why is the community aspect important to M when discussing Bitcoin DeFi?

M emphasizes that builders in the Bitcoin DeFi space should be community-focused, listening to their needs, and building products that cater to those needs. He believes that this community-centric approach will help filter out projects that are not genuinely committed to the ecosystem.

What challenges does M face as an L2 builder in finding product builders like himself within Bitcoin?

M finds it challenging to find product builders within the Bitcoin ecosystem who are committed to building sustainable products and have a robust community. He notes that many builders are transient, focusing on token raises rather than creating valuable products.

How does M view the importance of oracles in the context of his company's products?

M considers oracles to be critical for his company's yield-bearing products, as they provide real-time price data from various sources to ensure accurate trade execution. He highlights the need for multiple, reliable oracles to maintain a good user experience.

What advice does M have for new builders entering the Bitcoin ecosystem?

M advises new builders to keep their intentions right and focus on building for the community rather than chasing trends or quick profits. He also stresses the importance of being prepared to ride the wave of opportunity when it arises, rather than trying to create it.

What is M's prediction for the Bitcoin DeFi ecosystem's growth?

M predicts that by the end of 2025, it's very possible for Bitcoin DeFi to surpass Ethereum in terms of growth and adoption. He bases this on the rapid development and the strong belief of Bitcoin builders in the ecosystem.