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Liraz Siri

General Partner

Ethereum Ecosystem Fund

play_circle_outline Overview of Ethereum Foundation event in Palo Alto

play_circle_outline Creation of Ethereum Ecosystem Fund to support projects in the crypto space

play_circle_outline Importance of long-term value creation and sustainability in crypto projects

play_circle_outline Optimism and opportunities for meaningful impact in the US crypto community

play_circle_outline Quality of participants at events

play_circle_outline Ethereum seen as a movement, not a silver bullet

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Liraz Siri, Ethereum Ecosystem Fund

Liraz Siri

General Partner Ethereum Ecosystem Fund

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>> Welcome back, everyone, to theCUBE studios here in Palo Alto, California. My name is John Furrier, host of theCUBE. Welcome to our Crypto Trailblazer series. It's a two-day event here in the valley as Ethereum Foundation, their entire community is in town, but also a lot of the other thought leaders and people making it happen, building the next generation infrastructure, going to bring in decentralized value, it's all happening series here. The founding partner of Ethereum Ecosystem Fund, he's part of the community that helps companies, one, get funding, support and also help them build and navigate this ever-growing and changing landscape that's about to hit escape velocity, part two. Siri, thanks for coming in today. Appreciate you coming in.

Liraz Siri

>> Thank you. Thank you.

>> So I said part two mainly because Ethereum has had a great run, I would say, on part one of the double-header, use a baseball metaphor. Ethereum, you go back to 2016, '17, '18, '19, out of that range, that wave came in. Developers were building, it was known for being very developer-friendly. The language is there, building smart contracts. It was very exciting at that time. I remember vividly. And then the climate changed a little bit. Now we're back into real rationalization and validation that this is the future. This scale, this performance, this value being created. You guys are doing a fund with an ecosystem. Explain what you guys are doing. How does it work? What kind of money is it? Is it money-money, or is it Ethereum? How does it work? Take a minute to explain the Ethereum ecosystem fund.

Liraz Siri

>> Right. So the team involved has a diverse set of experience, but the core part of it was we were involved in creating key pieces of infrastructure that, for example, the one that I co-founded was the account abstraction team. And the goal was to make Ethereum as usable as a Web 2.0 application. So it shouldn't require you to have any special technical expertise to use applications in this space if you want to reach mass adoption. But the way it worked before with key management, and it's like you have to be a cyber security expert to not lose your money, either forget it or just have it stolen somehow. So we built that, and we built it as an open-source public good. At some point we became part of the EF, the Ethereum Foundation, and this wonderful community of projects formed around, which we saw a lot of potential in, and these are a lot of very talented teams, but they needed help. And there seemed to be an opportunity. So we were helping them just in our capacity as the developers of this project. But many times they needed other forms of help. They needed capital. They also needed expertise to navigate just the weird meanderings of crypto. There's a lot of things that don't make sense. There's also maybe the pull to turn every good project into a Ponzi scheme.

>> Exactly. That kicks in. It's just natural evolution.

Liraz Siri

>> It is. It is. And what we believe in is that if we want to maximize for long-term value, if we want the pie to be actually bigger in the future, it's hard to do that if you're just playing zero-sum games. Because it's just like an ever-shrinking pie, it also takes resources to play this game, and we're just shifting money from one pocket to the other, but that doesn't benefit people in ways that generate sustainable value. So we created the fund in order to help teams really focus on the long-term greedy path, where your eyes are on that ball. And also I think there's something much more satisfying about building a protocol or a product that you know has a meaningful, positive impact on the world as opposed to, we played another iteration of this game and then ...

>> I think that whole get rich, I want to be rich, I'm seeing really a confluence of tech, finance and impact right now at this community level. And it's interesting, I've never seen it in my career. I've seen those other waves. Even all the conventional wisdom that you were taught in school or you learned on the street is changed. The mindset, there's actually, you can do social impact. And I don't mean that in a philanthropy way. I mean just in a human way. Money's available, but it's not about just money. And I know there's a community angle here too. The success of Dow's, the success of group production. We're what, five years into past-COVID? The whole world knows how to work virtually. Developers have been doing virtual remote work forever, so it's normal to them. But as the world connects and commerce comes in, relationships come in, and that's going to be driven by these apps. That's what I see coming that no one's talking about. In communities they are, but mainstream, I don't think there's a lot of conversations around the collective benefit of synergy around this, and that the long game is open-source, kind of like where let's build it and make sure it's enough rules that it's scalable, secure. So I always love that about certain tech communities. It's like let chaos reign a little bit and then reign it in, but it can't be one person doing it. So I guess I'm just riffing here with you, but I like the idea of this notion. And then the next question is, how do I do what I want to do? And whether my intentions are to make money, it could be a fiduciary job, someone's in a banking role or some sort of money role, I get that. Someone might not be in. So how does this all come together? I guess the question is, what is the state of the community now with that context? What's your reaction to that? How would you describe the state of the market?

Liraz Siri

>> So we're at a very special time. If you go back to five years ago, there were narratives floating around. We're going to do that. We're going to have all these experiments. We're going to change the world. But the technology wasn't there. We didn't know how to scale. We didn't know how to have UX for humans, regular people. We didn't know how to do privacy. Who wants a bank account that everyone can peer into and see everything that's happening? Now we know how to do these things. The technology is ready, and that opens up opportunities that before we're in the realm of the theoretical. So that's something that maybe is a general basis for excitement, but I think the opportunities look very different in the developed world and the developing world. So in places that are very developed, like the US, the opportunity is for experimentation. There are all these things that it's hard to try within the existing traditional structure that we do think. It's very expensive. You need lawyers and accountants. And maybe it's a good idea, but we'll never find out because there's this energy wall, this barrier we have to overcome, and we're going to be credulous until we see examples of that actually playing out. With Ethereum, you can launch your own financial experiment by prompting an LLM, creating smart contracts and then deploying it. We're at the stage where I wouldn't recommend doing this without any experience. It's good to have experience in auditing, but you can deploy your own equivalent of various financial instruments just on the basis of having a good idea. And you don't have to ask permission from anybody. And that's so empowering. Now, most of those experiments will fail. We know this in advance, but that's how evolution works. Most mutations are bad, but then the accumulations of the rare ones that they're adaptive, then the accumulation of that is it gets to us having a conversation like this.

>> I was talking to an entrepreneur last week in LA, and he personally had moved the needle on social freedom in certain countries by avoiding all currency, direct crypto, streamlining supply chain for either materials, and the commerce transaction was on the phones.

Liraz Siri

>> Right.

>> Directly on the phones. No banks.

Liraz Siri

>> Yeah, exactly.

>> Real commerce. Real change. No waste. Totally efficient. Free market. Delivery. Complete no-brainer when you see that. Because the alternative is you go to a consulting firm, they take the money, there's some deployment, who know whose hands is in the money, what the impact is. So his whole point was by using this kind of direct approach to transaction value, there's two sides of that marketplace. There's the people who need, in this case, trying to reach social freedom, and they wanted to organize rallies, but they had no confidence. So having money allowed them to mobilize rallies for freedom movements that never would have happened before. And I'm like, again, that's a use case. But that's the kind of thing we're going to start to see with the Ethereum and these contracts, where you can make change happen instantly,

Liraz Siri

>> You can experiment immediately, and if people like your experiment, they can pile onto it, and suddenly, very quickly you can have something that's making a meaningful ... You can have a bunch of strangers come together to try to buy the US Constitution.

>> That was great.

Liraz Siri

>> Where did that come from? But it's possible. We can do these experiments, and we don't need to get permission from the traditional gatekeepers.

>> So speaking of gatekeepers, since you guys are one of the partners at the Ethereum Ecosystem Fund, you have how many other partners?

Liraz Siri

>> I have three other partners.

>> So you guys have a fund, and you're trying to invest in projects for the betterment of the mission. What is the criteria? It's very VC-like. It's very much investment enabling people to be successful. What's the filter? Because if anyone can do it, is there a mechanism or a filter? How do you identify where to spend your time? Is it a case-by-case basis? Is it more certain traction points? A good idea? Or is it intuition? Or all of the above?

Liraz Siri

>> The bland answer will be, oh, it's always all of the above. But no, I think we're starting with a thesis of what's coming. What are the doors that now we are on the verge of opening them? And then we want to support the teams that are capable of opening and going through those doors first and being able to execute afterwards. So what that looks like is, I think one of the most important things is having the right mix of talent in your team. If you get an amazing technical team but then it doesn't really understand the business, it doesn't understand how to do go-to-market, then that's not going to work. Go-to-market is essential for turning this thing into something that has a real-world impact. And we want to evaluate what future success looks like in a way that's very familiar to the way you think about things in traditional markets. We think ultimately, if this is going to move the needle, there has to be fundamentals. So if it's a protocol, it's a protocol, revenue, transaction fees. It doesn't have to happen up front. It doesn't have to happen in the first day, but then you have to see metrics like growth. So at the early stage, we want to see passion from our founders, that they are working on this, and they're getting so much enjoyment, and they're so curious, and they're just driven to make it happen. And they will absolutely encounter problems, but they will route around them. And I think those kinds of people will survive the next crypto winter when it comes, and it will come. The market is extremely volatile. So I think what happens in some of these summers, you get people who are like, "Oh, wow, I've heard you can make a lot of money in this space." And they come, but then when it gets tough, they don't stick around. And if you want to be there for that 10-year exit, you have to stick it through.

>> There's the term tourists come through. I think that's important because I think to me, technical problems, you said you guys come from a technical background, there's a lot of good problems to work on. So if you're an engineer or you like to solve problems, you mentioned curiosity, that's always going to attract. The blockchain does attract a lot of technical people because there's some cool things to work on. I guess my question would be what doors do you see that's needed to be opened? If you had to lay out a few obvious ones for the folks watching that would move the needle, that a team might want to jump on, or white space you see that are opportunities?

Liraz Siri

>> Right. I think I'll start with one example that's obvious. We need to have the centralized equivalent of a banking experience that's as good as anything centralized out there, but it's available everywhere. You don't need to win the birth lottery to get access to it. And it gives you access to high-quality assets, including the dollar, even if your local government is really intent on stealing as much as they can by giving you only access to unstable currency. That's a real problem in many parts of the world. And once we do that, we plug people into the global economy. So we turn the internet itself into a economic zone, almost like a free zone. And yes, you might still be physically living in another country and maybe you don't have access to all the good services, but there's a lot of stuff that you can get access to. At least you can get amazing financial services through the internet, and you can save for your future. You can start participating in a meaningful way. So I think that's the obvious solution that we're going to have. But then there are things that are slightly less obvious. For example, AI right now is a very useful tool, but it's a tool that's controlled by very few players. With the right infrastructure, it should be possible for us to create AIs that are community owned and operated in a way where you can verify what's coming into the model, what's coming into the training process. So I think with AI right now, you have the potential for a real trust problem. Even there, you have no idea what goes into the training process, what it's going to do in certain edge cases. And a lot of these industries, they always start out as, let's recruit as many people as we can. But then they shift into value extraction mode, and to the degree that you don't have an alternative, that's when it gets nasty.

>> So they monetize too quickly, or they just figure out ...

Liraz Siri

>> As soon as they can shift from, we're going to maximize value to the consumer, how do we get the most of that into our pockets? That could be a bad situation. And so right now, so without a decentralized infrastructure for coordinating the training and operation of these models, you can't have that. Also, it could take a lot of money to train these models. So you need to pool resources together.

>> Resources are key. What would you say is the biggest resource constraint? Is it talent? In this market that you look at in terms of the founders, what's the contention that's out there? Is it time? Is it just intellectual capital, business model?

Liraz Siri

>> So progress is always bottlenecked on talent, but can also be bottlenecked on knowledge. So for example, you can have a great team come in, but they don't have the knowledge peculiar to this space, they don't know who they should be wary of raising money from. They don't know the consequences of using this token economic scheme or maybe deferring or doing token economics at all for a little bit longer. So there's this knowledge that's not written down anywhere. If you ask an LLM, it's not going to give you the right answer. It's something that you need to be on the inside of the community to understand how it works. And then I feel like that could be something that ruins the opportunity of a good team to have a real impact. It can also be very confusing, and that's one of the things that we ... I think aligned capital, capital that's aligned with real-world, long-term growth, I think that's constrained. That's also another thing that we hope to make better. Maybe the other part is just how do you create a win-win scenario in terms of creating ... There's a synergy between for-profit projects and the non-profit public goods that support them. So one of the models that we're innovating on is these spark agreements, where we will give you a grant and then when you receive it, you are committing, to the degree that you successfully commercialize in the future, that you will create your own grants program in the future, and you will pay it forward. So it's like a viral paid forward scheme. And if you get enough buy-in for that, suddenly everyone that's successful, they're dedicating some percentage of their upside to nurturing the ecosystem around them in a way that's just like this virtuous cycle, that now you have better infrastructure. You don't need to have every team reinventing the wheel because the piece is that's just a waste of time.

>> And so you get leverage out of that, too.

Liraz Siri

>> You get a lot of leverage.

>> You're talking about the week here. Obviously we saw a great entourage of folks coming into the Bay Area. There's a lot here too. There's a lot of people here. Love this area too. What's it been like? Vitalik's in town, first time in four years, I heard. I remember meeting his mom at one of the events in Commons in 2018, Crypto Chicks. We had a good time with them. Just a great community. But now there's sunshine out right now. Today it's raining in the Bay Area, but what's it been like here for the group? I know you had a slate of activities for the whole community. What's been the vibe? Give us an update from some of the activities. What have you seen, observations, commentary? What's your take on the scene here?

Liraz Siri

>> So obviously people are a lot more optimistic about being able to do meaningful things in the US now, so that's why everyone is coming back. Or not Vitalik specifically, but people had there's some risk in coming to the US, and it seems to be an antagonistic relationship now with the crypto community. So that shadow has passed. But what I'm most excited about is I'm seeing very talented people that see legitimate opportunities to make a difference. Because it is a bottleneck on talent, like we said before, so you want to recruit them. And SF has the world's highest concentration of very talented, smart people in the world. So coming here is an obvious place to start.

>> What's been any things that surprised you in terms of some of the conversations or discussions or ideas? Not about projects or things you might fund, but just in general, was there any surprises like, wow, that blew my mind, listening to that person say that, or I saw some conversation themes bubbling up that I didn't expect to see? Anything surprise you?

Liraz Siri

>> I think what surprised me was at a mundane level, the events that we curated this week were oversubscribed, and this is the first time that we're organizing things in the Bay Area, so we weren't really expecting that. Also, I was surprised by the buy-in from reputable institutions that supported us very generously, gave us venues, Stanford and Berkeley. And I think what I was most surprised at is how the people in the Bay Area, especially SF, they stepped up around something called DACC, the Defensive Acceleration Movement, that Vitalik is spearheading. And we're also organizing that tomorrow in Berkeley. The quality of people that are coming to this event is mind-blowing. This is not just crypto people. Of course, we know people in crypto, and they come to our event, but we're getting people from all these different cadres, all these different domains. So that was, I think, very encouraging that we can work together on solving these problems. And maybe we don't see Ethereum as a silver bullet for everything. It's like rails for building solutions.

>> It's a movement. Ethereum, again, I call it part two because it's back. It never left, but now we're on an acceleration. Love that mission. It is a movement. And the stories that are coming out of Ethereum are many. We try to document as much as we can on theCUBE, but stories drive movements. That's why I asked what you observed, because this is a movement. It has value. There's a long game clearly in play. Just the things you mentioned, a banking experience for the globe, that's borderless would be cool. Thank you. Would someone work on that, please?

Liraz Siri

>> Yeah, frictionless idiot.

>> Just original, authentic, and trusted. We love that vibe. So I'd love to get more stories. Let us know what's going on. Keep in touch and congratulations on the fund. And there's work to be done, so plenty of things to fund. So I'm sure you've got your hands full. Anything exciting on your plate that you want to put a plug-in for or put a shout-out to?

Liraz Siri

>> Maybe one thing that I'm very excited about is there's this approach where you take the squishy probabilistic AI, and then you pair that together with these very well-defined, formally-verified systems. And basically the formal system, the mathematical, the heart, it functions almost like a skeleton that constrains what the squishy probabilistic part of that. Who knows how it might hallucinate, especially if there are financial transactions involved? So there's a project called Contracts that we're very excited about that's been spearheading that. And I think basically now one of the key insights that we've had through investigating this is we are, thanks to LLMs, on the verge of making programming accessible to basically a much, much larger percentage of the global population. But then the tools that are most appropriate are maybe not the languages that we had before. Because when we had very slow computers, we used assembly, and we were programming everything when machine language. And then later computers got faster, and we're using things like Java.

>> C.

Liraz Siri

>> Or C and then later Java and whatever, because it afforded more overhead. Now we have LLMs. It's a much higher level in which you can basically say, "What is it you want to build?" So the type of technology that enables that, still basically it's try to take the old technology and plug it into, it kind of works, but it kind of doesn't sometimes. So there are ways of making that development process much more reliable. And also I think much safer because AI applications, we don't actually know how they work for many cases, it's just this black box.

>> So you marry the known math into the fuzzy squishy to give it some stability.

Liraz Siri

>> Yeah.

>> Guardrails. People call it guardrails, some people call it-

Liraz Siri

>> We did that with firewalls. In the early days of the internet, we had all these systems. Now we're networking them together, but it's a hostile network. It's not just people that we trust anymore. And now, well, we can't make all the implementation details perfect. Certainly not very quickly. So what did we do? We just wrapped around this complexity with a much, much simpler system that just everything is closed. This system can have access to that system. You can only access this-

>> These four white lists.

Liraz Siri

>> So we need firewalls for AIs, and the firewalls cannot be complex, as complex as the Ais. We have to be also white boxes that are totally transparent. We understand exactly how they work, and they work as the security guards of these very powerful models, which we hope will get more powerful in the future. But we want them to be powerful and also be aligned with our intentions. And that's something I'm very excited about.

>> That's the make things reliable, give people the confidence to run everything on. You're going to need that movement forward. Siri, great to have you on theCUBE here in Palo Alto. Thanks for coming in.

Liraz Siri

>> Thank you, John.

>> And spending time. Really appreciate your time.

Liraz Siri

>> Thank you.

>> We are here for Crypto Trailblazers. Two days of coverage, people making it happen, bringing their knowledge. Open-source concepts meets real world. You see in more and more applications coming. I'm John Furrier, your host at theCUBE. Thanks for watching.

Liraz Siri, Ethereum Ecosystem Fund

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>> Welcome back, everyone, to theCUBE studios here in Palo Alto, California. My name is John Furrier, host of theCUBE. Welcome to our Crypto Trailblazer series. It's a two-day event here in the valley as Ethereum Foundation, their entire community is in town, but also a lot of the other thought leaders and people making it happen, building the next generation infrastructure, going to bring in decentralized value, it's all happening series here. The founding partner of Ethereum Ecosystem Fund, he's part of the community that helps companies, one, get funding, support and also help them build and navigate this ever-growing and changing landscape that's about to hit escape velocity, part two. Siri, thanks for coming in today. Appreciate you coming in.

Liraz Siri

>> Thank you. Thank you.

>> So I said part two mainly because Ethereum has had a great run, I would say, on part one of the double-header, use a baseball metaphor. Ethereum, you go back to 2016, '17, '18, '19, out of that range, that wave came in. Developers were building, it was known for being very developer-friendly. The language is there, building smart contracts. It was very exciting at that time. I remember vividly. And then the climate changed a little bit. Now we're back into real rationalization and validation that this is the future. This scale, this performance, this value being created. You guys are doing a fund with an ecosystem. Explain what you guys are doing. How does it work? What kind of money is it? Is it money-money, or is it Ethereum? How does it work? Take a minute to explain the Ethereum ecosystem fund.

Liraz Siri

>> Right. So the team involved has a diverse set of experience, but the core part of it was we were involved in creating key pieces of infrastructure that, for example, the one that I co-founded was the account abstraction team. And the goal was to make Ethereum as usable as a Web 2.0 application. So it shouldn't require you to have any special technical expertise to use applications in this space if you want to reach mass adoption. But the way it worked before with key management, and it's like you have to be a cyber security expert to not lose your money, either forget it or just have it stolen somehow. So we built that, and we built it as an open-source public good. At some point we became part of the EF, the Ethereum Foundation, and this wonderful community of projects formed around, which we saw a lot of potential in, and these are a lot of very talented teams, but they needed help. And there seemed to be an opportunity. So we were helping them just in our capacity as the developers of this project. But many times they needed other forms of help. They needed capital. They also needed expertise to navigate just the weird meanderings of crypto. There's a lot of things that don't make sense. There's also maybe the pull to turn every good project into a Ponzi scheme.

>> Exactly. That kicks in. It's just natural evolution.

Liraz Siri

>> It is. It is. And what we believe in is that if we want to maximize for long-term value, if we want the pie to be actually bigger in the future, it's hard to do that if you're just playing zero-sum games. Because it's just like an ever-shrinking pie, it also takes resources to play this game, and we're just shifting money from one pocket to the other, but that doesn't benefit people in ways that generate sustainable value. So we created the fund in order to help teams really focus on the long-term greedy path, where your eyes are on that ball. And also I think there's something much more satisfying about building a protocol or a product that you know has a meaningful, positive impact on the world as opposed to, we played another iteration of this game and then ...

>> I think that whole get rich, I want to be rich, I'm seeing really a confluence of tech, finance and impact right now at this community level. And it's interesting, I've never seen it in my career. I've seen those other waves. Even all the conventional wisdom that you were taught in school or you learned on the street is changed. The mindset, there's actually, you can do social impact. And I don't mean that in a philanthropy way. I mean just in a human way. Money's available, but it's not about just money. And I know there's a community angle here too. The success of Dow's, the success of group production. We're what, five years into past-COVID? The whole world knows how to work virtually. Developers have been doing virtual remote work forever, so it's normal to them. But as the world connects and commerce comes in, relationships come in, and that's going to be driven by these apps. That's what I see coming that no one's talking about. In communities they are, but mainstream, I don't think there's a lot of conversations around the collective benefit of synergy around this, and that the long game is open-source, kind of like where let's build it and make sure it's enough rules that it's scalable, secure. So I always love that about certain tech communities. It's like let chaos reign a little bit and then reign it in, but it can't be one person doing it. So I guess I'm just riffing here with you, but I like the idea of this notion. And then the next question is, how do I do what I want to do? And whether my intentions are to make money, it could be a fiduciary job, someone's in a banking role or some sort of money role, I get that. Someone might not be in. So how does this all come together? I guess the question is, what is the state of the community now with that context? What's your reaction to that? How would you describe the state of the market?

Liraz Siri

>> So we're at a very special time. If you go back to five years ago, there were narratives floating around. We're going to do that. We're going to have all these experiments. We're going to change the world. But the technology wasn't there. We didn't know how to scale. We didn't know how to have UX for humans, regular people. We didn't know how to do privacy. Who wants a bank account that everyone can peer into and see everything that's happening? Now we know how to do these things. The technology is ready, and that opens up opportunities that before we're in the realm of the theoretical. So that's something that maybe is a general basis for excitement, but I think the opportunities look very different in the developed world and the developing world. So in places that are very developed, like the US, the opportunity is for experimentation. There are all these things that it's hard to try within the existing traditional structure that we do think. It's very expensive. You need lawyers and accountants. And maybe it's a good idea, but we'll never find out because there's this energy wall, this barrier we have to overcome, and we're going to be credulous until we see examples of that actually playing out. With Ethereum, you can launch your own financial experiment by prompting an LLM, creating smart contracts and then deploying it. We're at the stage where I wouldn't recommend doing this without any experience. It's good to have experience in auditing, but you can deploy your own equivalent of various financial instruments just on the basis of having a good idea. And you don't have to ask permission from anybody. And that's so empowering. Now, most of those experiments will fail. We know this in advance, but that's how evolution works. Most mutations are bad, but then the accumulations of the rare ones that they're adaptive, then the accumulation of that is it gets to us having a conversation like this.

>> I was talking to an entrepreneur last week in LA, and he personally had moved the needle on social freedom in certain countries by avoiding all currency, direct crypto, streamlining supply chain for either materials, and the commerce transaction was on the phones.

Liraz Siri

>> Right.

>> Directly on the phones. No banks.

Liraz Siri

>> Yeah, exactly.

>> Real commerce. Real change. No waste. Totally efficient. Free market. Delivery. Complete no-brainer when you see that. Because the alternative is you go to a consulting firm, they take the money, there's some deployment, who know whose hands is in the money, what the impact is. So his whole point was by using this kind of direct approach to transaction value, there's two sides of that marketplace. There's the people who need, in this case, trying to reach social freedom, and they wanted to organize rallies, but they had no confidence. So having money allowed them to mobilize rallies for freedom movements that never would have happened before. And I'm like, again, that's a use case. But that's the kind of thing we're going to start to see with the Ethereum and these contracts, where you can make change happen instantly,

Liraz Siri

>> You can experiment immediately, and if people like your experiment, they can pile onto it, and suddenly, very quickly you can have something that's making a meaningful ... You can have a bunch of strangers come together to try to buy the US Constitution.

>> That was great.

Liraz Siri

>> Where did that come from? But it's possible. We can do these experiments, and we don't need to get permission from the traditional gatekeepers.

>> So speaking of gatekeepers, since you guys are one of the partners at the Ethereum Ecosystem Fund, you have how many other partners?

Liraz Siri

>> I have three other partners.

>> So you guys have a fund, and you're trying to invest in projects for the betterment of the mission. What is the criteria? It's very VC-like. It's very much investment enabling people to be successful. What's the filter? Because if anyone can do it, is there a mechanism or a filter? How do you identify where to spend your time? Is it a case-by-case basis? Is it more certain traction points? A good idea? Or is it intuition? Or all of the above?

Liraz Siri

>> The bland answer will be, oh, it's always all of the above. But no, I think we're starting with a thesis of what's coming. What are the doors that now we are on the verge of opening them? And then we want to support the teams that are capable of opening and going through those doors first and being able to execute afterwards. So what that looks like is, I think one of the most important things is having the right mix of talent in your team. If you get an amazing technical team but then it doesn't really understand the business, it doesn't understand how to do go-to-market, then that's not going to work. Go-to-market is essential for turning this thing into something that has a real-world impact. And we want to evaluate what future success looks like in a way that's very familiar to the way you think about things in traditional markets. We think ultimately, if this is going to move the needle, there has to be fundamentals. So if it's a protocol, it's a protocol, revenue, transaction fees. It doesn't have to happen up front. It doesn't have to happen in the first day, but then you have to see metrics like growth. So at the early stage, we want to see passion from our founders, that they are working on this, and they're getting so much enjoyment, and they're so curious, and they're just driven to make it happen. And they will absolutely encounter problems, but they will route around them. And I think those kinds of people will survive the next crypto winter when it comes, and it will come. The market is extremely volatile. So I think what happens in some of these summers, you get people who are like, "Oh, wow, I've heard you can make a lot of money in this space." And they come, but then when it gets tough, they don't stick around. And if you want to be there for that 10-year exit, you have to stick it through.

>> There's the term tourists come through. I think that's important because I think to me, technical problems, you said you guys come from a technical background, there's a lot of good problems to work on. So if you're an engineer or you like to solve problems, you mentioned curiosity, that's always going to attract. The blockchain does attract a lot of technical people because there's some cool things to work on. I guess my question would be what doors do you see that's needed to be opened? If you had to lay out a few obvious ones for the folks watching that would move the needle, that a team might want to jump on, or white space you see that are opportunities?

Liraz Siri

>> Right. I think I'll start with one example that's obvious. We need to have the centralized equivalent of a banking experience that's as good as anything centralized out there, but it's available everywhere. You don't need to win the birth lottery to get access to it. And it gives you access to high-quality assets, including the dollar, even if your local government is really intent on stealing as much as they can by giving you only access to unstable currency. That's a real problem in many parts of the world. And once we do that, we plug people into the global economy. So we turn the internet itself into a economic zone, almost like a free zone. And yes, you might still be physically living in another country and maybe you don't have access to all the good services, but there's a lot of stuff that you can get access to. At least you can get amazing financial services through the internet, and you can save for your future. You can start participating in a meaningful way. So I think that's the obvious solution that we're going to have. But then there are things that are slightly less obvious. For example, AI right now is a very useful tool, but it's a tool that's controlled by very few players. With the right infrastructure, it should be possible for us to create AIs that are community owned and operated in a way where you can verify what's coming into the model, what's coming into the training process. So I think with AI right now, you have the potential for a real trust problem. Even there, you have no idea what goes into the training process, what it's going to do in certain edge cases. And a lot of these industries, they always start out as, let's recruit as many people as we can. But then they shift into value extraction mode, and to the degree that you don't have an alternative, that's when it gets nasty.

>> So they monetize too quickly, or they just figure out ...

Liraz Siri

>> As soon as they can shift from, we're going to maximize value to the consumer, how do we get the most of that into our pockets? That could be a bad situation. And so right now, so without a decentralized infrastructure for coordinating the training and operation of these models, you can't have that. Also, it could take a lot of money to train these models. So you need to pool resources together.

>> Resources are key. What would you say is the biggest resource constraint? Is it talent? In this market that you look at in terms of the founders, what's the contention that's out there? Is it time? Is it just intellectual capital, business model?

Liraz Siri

>> So progress is always bottlenecked on talent, but can also be bottlenecked on knowledge. So for example, you can have a great team come in, but they don't have the knowledge peculiar to this space, they don't know who they should be wary of raising money from. They don't know the consequences of using this token economic scheme or maybe deferring or doing token economics at all for a little bit longer. So there's this knowledge that's not written down anywhere. If you ask an LLM, it's not going to give you the right answer. It's something that you need to be on the inside of the community to understand how it works. And then I feel like that could be something that ruins the opportunity of a good team to have a real impact. It can also be very confusing, and that's one of the things that we ... I think aligned capital, capital that's aligned with real-world, long-term growth, I think that's constrained. That's also another thing that we hope to make better. Maybe the other part is just how do you create a win-win scenario in terms of creating ... There's a synergy between for-profit projects and the non-profit public goods that support them. So one of the models that we're innovating on is these spark agreements, where we will give you a grant and then when you receive it, you are committing, to the degree that you successfully commercialize in the future, that you will create your own grants program in the future, and you will pay it forward. So it's like a viral paid forward scheme. And if you get enough buy-in for that, suddenly everyone that's successful, they're dedicating some percentage of their upside to nurturing the ecosystem around them in a way that's just like this virtuous cycle, that now you have better infrastructure. You don't need to have every team reinventing the wheel because the piece is that's just a waste of time.

>> And so you get leverage out of that, too.

Liraz Siri

>> You get a lot of leverage.

>> You're talking about the week here. Obviously we saw a great entourage of folks coming into the Bay Area. There's a lot here too. There's a lot of people here. Love this area too. What's it been like? Vitalik's in town, first time in four years, I heard. I remember meeting his mom at one of the events in Commons in 2018, Crypto Chicks. We had a good time with them. Just a great community. But now there's sunshine out right now. Today it's raining in the Bay Area, but what's it been like here for the group? I know you had a slate of activities for the whole community. What's been the vibe? Give us an update from some of the activities. What have you seen, observations, commentary? What's your take on the scene here?

Liraz Siri

>> So obviously people are a lot more optimistic about being able to do meaningful things in the US now, so that's why everyone is coming back. Or not Vitalik specifically, but people had there's some risk in coming to the US, and it seems to be an antagonistic relationship now with the crypto community. So that shadow has passed. But what I'm most excited about is I'm seeing very talented people that see legitimate opportunities to make a difference. Because it is a bottleneck on talent, like we said before, so you want to recruit them. And SF has the world's highest concentration of very talented, smart people in the world. So coming here is an obvious place to start.

>> What's been any things that surprised you in terms of some of the conversations or discussions or ideas? Not about projects or things you might fund, but just in general, was there any surprises like, wow, that blew my mind, listening to that person say that, or I saw some conversation themes bubbling up that I didn't expect to see? Anything surprise you?

Liraz Siri

>> I think what surprised me was at a mundane level, the events that we curated this week were oversubscribed, and this is the first time that we're organizing things in the Bay Area, so we weren't really expecting that. Also, I was surprised by the buy-in from reputable institutions that supported us very generously, gave us venues, Stanford and Berkeley. And I think what I was most surprised at is how the people in the Bay Area, especially SF, they stepped up around something called DACC, the Defensive Acceleration Movement, that Vitalik is spearheading. And we're also organizing that tomorrow in Berkeley. The quality of people that are coming to this event is mind-blowing. This is not just crypto people. Of course, we know people in crypto, and they come to our event, but we're getting people from all these different cadres, all these different domains. So that was, I think, very encouraging that we can work together on solving these problems. And maybe we don't see Ethereum as a silver bullet for everything. It's like rails for building solutions.

>> It's a movement. Ethereum, again, I call it part two because it's back. It never left, but now we're on an acceleration. Love that mission. It is a movement. And the stories that are coming out of Ethereum are many. We try to document as much as we can on theCUBE, but stories drive movements. That's why I asked what you observed, because this is a movement. It has value. There's a long game clearly in play. Just the things you mentioned, a banking experience for the globe, that's borderless would be cool. Thank you. Would someone work on that, please?

Liraz Siri

>> Yeah, frictionless idiot.

>> Just original, authentic, and trusted. We love that vibe. So I'd love to get more stories. Let us know what's going on. Keep in touch and congratulations on the fund. And there's work to be done, so plenty of things to fund. So I'm sure you've got your hands full. Anything exciting on your plate that you want to put a plug-in for or put a shout-out to?

Liraz Siri

>> Maybe one thing that I'm very excited about is there's this approach where you take the squishy probabilistic AI, and then you pair that together with these very well-defined, formally-verified systems. And basically the formal system, the mathematical, the heart, it functions almost like a skeleton that constrains what the squishy probabilistic part of that. Who knows how it might hallucinate, especially if there are financial transactions involved? So there's a project called Contracts that we're very excited about that's been spearheading that. And I think basically now one of the key insights that we've had through investigating this is we are, thanks to LLMs, on the verge of making programming accessible to basically a much, much larger percentage of the global population. But then the tools that are most appropriate are maybe not the languages that we had before. Because when we had very slow computers, we used assembly, and we were programming everything when machine language. And then later computers got faster, and we're using things like Java.

>> C.

Liraz Siri

>> Or C and then later Java and whatever, because it afforded more overhead. Now we have LLMs. It's a much higher level in which you can basically say, "What is it you want to build?" So the type of technology that enables that, still basically it's try to take the old technology and plug it into, it kind of works, but it kind of doesn't sometimes. So there are ways of making that development process much more reliable. And also I think much safer because AI applications, we don't actually know how they work for many cases, it's just this black box.

>> So you marry the known math into the fuzzy squishy to give it some stability.

Liraz Siri

>> Yeah.

>> Guardrails. People call it guardrails, some people call it-

Liraz Siri

>> We did that with firewalls. In the early days of the internet, we had all these systems. Now we're networking them together, but it's a hostile network. It's not just people that we trust anymore. And now, well, we can't make all the implementation details perfect. Certainly not very quickly. So what did we do? We just wrapped around this complexity with a much, much simpler system that just everything is closed. This system can have access to that system. You can only access this-

>> These four white lists.

Liraz Siri

>> So we need firewalls for AIs, and the firewalls cannot be complex, as complex as the Ais. We have to be also white boxes that are totally transparent. We understand exactly how they work, and they work as the security guards of these very powerful models, which we hope will get more powerful in the future. But we want them to be powerful and also be aligned with our intentions. And that's something I'm very excited about.

>> That's the make things reliable, give people the confidence to run everything on. You're going to need that movement forward. Siri, great to have you on theCUBE here in Palo Alto. Thanks for coming in.

Liraz Siri

>> Thank you, John.

>> And spending time. Really appreciate your time.

Liraz Siri

>> Thank you.

>> We are here for Crypto Trailblazers. Two days of coverage, people making it happen, bringing their knowledge. Open-source concepts meets real world. You see in more and more applications coming. I'm John Furrier, your host at theCUBE. Thanks for watching.