🎙 Layer Zero | Eric Conner

welcome to layer zero layer zero is a podcast of unscripted conversations with the people that make up the ethereum community ethereum is built by code but it's composed by people and each individual member of the ethereum community has their own story to tell Cipher punks understood that the code they write impacts the people they use it and layer zero focuses on the people behind the code because ethereum is people all the way down and it always has been I'm David Hoffman and today we are talking with Eric Connor Eric Connor is uh what I have been calling The

Unofficial Community manager of ethereum uh he the metaphor I like to use is that he was uh stoking the fire during the 2018 1920 bar Market keeping the fire warm for all of us uh while we all kind of coped with having uh absolutely no interesting price action at all while meanwhile the uh innov and development behind ethereum and what what was going on in the early early stages of defi was absolutely insane and Eric was one of those people who uh helped everyone I

think understand that no we're not crazy everything that's happening here is insanely awesome and cool and just because the prices don't reflect that doesn't mean that it's not awesome and cool um Eric has gone in and out of being a prominent uh crypto Twitter individual as soon as the the bull market came on he started to kind of take take a step back and now he's kind of graduated into more or less just a posting position uh and I actually kind of find his journey in relationship to ethereum pretty interesting uh as we

all know ethereum is very as an ecosystem is very dominating very overwhelming uh and Eric has gone through the whole entire stages of like you know early stage interest in ethereum deep diving all the way into it getting overwhelmed having a bull market come taking a step back and and learning how to really um walk the line of of like ethereum life balance where you can actually live a life that is actually not completely defined by like being an ethereum or crypto Twitter person um Eric has always been a mentor to me in

in learning how to navigate the space and some of the insights and just you know things that he says I always I always find are are more and more true as time goes on so I hope you enjoy this conversation with Eric Connor but first before we get there we have to take a moment to talk about some of these fantastic sponsors that make this show possible living a bankless life requires taking control of your own private keys not your keys not your crypto that's why so many in the bankless nation already have their Ledger Hardware wallets which makes proper private Key Management a breeze but The Ledger ecosystem is more

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Discord hey Eric how's it going hey David good how are you pretty good pretty good you are guest number two on layer zero nice yeah I'm excited for this new format you were telling me about it sounds like a nice little change up I feel like in the podcast space like we were just talking about this before recording but stuff gets a little like not scripted but like you kind of hear the same questions and formats over and over so just kind of a freestyle is is my vibe these days yeah and and freestyling is definitely

something like missing in crypto because like there's so many projects to talk about and some people like explain the the rationale behind their projects and really like awes ways but to me that makes me think of like okay why is this person like so good at a coming up with a project and then B explaining it like that that tells me there's like a little bit more behind the scenes of what's going on there yeah totally no I know there's so many like I mean in cryptos in general is funny right like I feel like going Beyond just the typical like interviews and talks is when you get

into the more interesting conversations like doing into the ether when I would do guest episodes The Best Stuff always happened after the mics got turned off and it's not dude it's not because people are like scared to say stuff either it's just like when you just I don't know when there's just free flow conversation with no one's looking at questions and stuff I feel like people just say and it's not like they're saying stuff they wouldn't have wanted to say on mic it's just like a more natural conversation I mean it's definitely like a little bit of that right it's like all right now that we're sto stopping recording I can like take the Persona off and I can like like kind

of speak a little bit more freely a little bit more uh like I don't I don't have to consider like lawyers or anything um but then also to some degree like it's just like you bring up all the things that you forgot to talk about while you were on the actual recording right and then that's like like you said like the super interesting stuff uh I it's it's terrible practice and you know I would never actually do this but like I always wanted to like just leave the recording actually going like all right we're done now but I'm Gonna Leave it I'm gonna still record though yeah then

like release like blooper Clips as like one big people would not be too happy about that I'm sure no not not at all not at all uh so I kind of want to start this uh this conversation and then actually work backwards from it with um ether Delta tell us tell us about ether Delta and what it was like to trade on ether Delta yeah man wow that's a huge throwback yeah I guess most people listening probably know at this point I I got into this the ethereum scene because I had was like an IRC trading channels man

it's funny even think of back like IRC now we're on Discord so much I actually don't even know what IRC is I never it was like yeah it's like the original like totally it you didn't miss much like it was kind of like um where people that Anonymous wanted to go and kind of hide and like it wasn't being tracked and stuff but just total shitty just like text channels right and but that's where like a lot of Bitcoin Traders hung out in their early days and I had some friends that got owned in the gox hack and that led us to say okay what are we doing here we've got this technology

potential why are we trading these decentralized assets why are we hiding in IRC channels and all this stuff and we're just trading on centralized exchanges and that sent me down like around that exact time um was when vitalic pitched ethereum at Bitcoin Miami and everything just kind of clicked so long story short we we three of us um couple friends I got owned by GA and myself who didn't get owned by gox luckily um set out to build ether X which was a way too early attempt at building a decent Tri exchange um but

funny enough that ended up one of the people it wasn't like a direct team at the time but he was in like our um slack Channel he went on to build ether Delta um and man like that feels like a totally different Universe at this point right like you had to literally go like people are so spoiled Now by amms right where you go on you just trade and matching happens and even like if you're using like matcha or one inch like all this stuff just happens easily and you get match on ether Delta you literally have to go like click the specific order to get matched um and it was so shady

there was no Market buys right like you couldn't just Market buy you had to actually select an order out of and you could if you were not paying attention you could in theory like select a a less optimal order than what was best offered and sometimes you would actually have to if your trade was larger than like the actual best offer but your trade was so large like it just wouldn't matter and you didn't want to go through all the steps you'd actually have to take a go down the list yeah yeah no it was it was brutal and it's funny because like anybody could list a token which you know that created chaos too and you

could plug in like addresses but like if you think back right like it's funny how sophisticated that actually was it was just like the user experience was horrible we hadn't quite figured out the user experience but like in a way that's kind of how like Unis swap you just plug in an address and it pulls up the token right it's just it was done differently there was too much information on one screen so like you knew you knew something was there um but you weren't sure like how long it was going to take to become mainstream and I would say it happened a lot faster than I actually thought it would I I've kind of always

back then probably would have said ah 10 years down the road mainstream might be using dexes and then all of a sudden you know what two years later people Unis swap came along and stuff like that it's crazy how fast it actually moved that's definitely been like the pattern that I've noticed is like all right we have this ether Delta thing like it's a great proof of of concept it's obviously broken and then you don't see any progress for a really long time and you get a little bit disillusioned you get a little bit frustrated you're like all right what is this thing that we are actually doing here and then all of a sudden boom there's

Unis Swap and then like just a few short months later we've solved all those problems like all at once like it's like there's nothing happens you get frustrated and then boom the solution happens and then it's just like an a step order function and like the way this stuff works it's crazy and I guess it's because of all the Geniuses in this space I think I mean my investment thesis for eth has always been like the smartest people I know are essentially all in ethereum like the smartest people I've run across my life I mean obviously there's some outside of the space but like in general the mo the more amount of smart people I

know are in the ethereum space and like that's always been my investment thesis and I think that's why things happen faster and also like we've totally cut out like the corporate bureaucracy crap too and like even coming down to like creating products right like I have a background in product management before that it was finance and like things just take longer to build in the traditional space you have like managers and you've got these like silos and you're going through like these old outdated processes right and I feel like now

people are like let's just get a small team together and build this and we'll figure out funding later and a lot of that has to do I think with these teams know they can launch a token or easily raise money later right and I think that allows people to fearlessly build things um and that's kind of I believe why things seem to move so fast in this space yeah that that is a good point that I don't think I've thought of before one of the magic things about tokens is like they're easy to issue they're permissionless to issues so they're always a tool for every single team but like people can like quote

unquote like go public and get liquidity way faster in the ethereum world than they ever could in in the traditional world right you would have to go like seed round after seed round after seed round just to stay alive uh and like now we're seeing like things and projects develop with just like one or two seed rounds and then token and then like they at that point they have all the money that they could ever ask for that they would ever need yeah totally it's interesting and like you're putting that risk more on just random speculators

which back in like the I guess in the 17 Ico days that wasn't ideal because people there were a lot of promises made and like the icos happened and teams disappeared but now like you just said we kind of are getting the product first at least like I don't I can't remember a team in the last like two years that launched a token really before product like maybe a few scammy ones but nothing like legit right and I think that's been the big shift I mean tying this all the way back like ether Delta right that was the first time we were like oh man these tokens like tokens have been talked about in the white paper and theorized

on Reddit and all this but that was the first time we were like wow I can get like instant liquidity for anything I create and that that was a huge breakthrough that ethereum created and I think got lost in a lot of the 17 Ico fud was it wasn't like about scammy icos it was about anybody in the world being able to fundra at a click of a button like and that's that's insanely powerful um and now at least we're seeing products be built before you launch like a governance token and that gives speculators a little more me to work with right and I think it's less risky

yeah they're taking on risks that the team disappears if the token doesn't do well but that's a way better model that we're at now than back in The Ether Delta days there's probably like a connection between the how powerful the concept of early liquidity and token liquidity that we were just talking about and the magnitude of like the Ico craze like early liquidity is such a powerful concept that it accidentally created the Ico Mania because like it we got just like over our ski tips like way too soon uh and so like there's a connection there like the Ico Mania was

so incredibly massive because this tool of early liquidity is so incredibly powerful yeah no absolutely and it's like we saw people just totally fomo into that and it's funny the other the flip side of that is not only could anybody raise liquidity anybody could get into early startups right and that's something that I think people underappreciate as well and like I think Regulators are most scared of that I would say um I think when the SEC claims they're trying to protect investors really they want to have a say on like who they want the Gates ventry Right

controlled of who can get into these things and traditionally it's just been accredited investors which are people that are already well off and Wealthy that can get into seed rounds and series a and early Equity Investments right and that this is a huge paradigm shift so I think on one side you saw these teams say oh wow we can raise money instantly let's do it and on the flip side it was like a perfect boiling point right on the other side it's like oh wow for the first time ever I could try to be an early investor in a project and those two concepts are not going anywhere and I think oddly enough we're kind of self-regulating pretty well as an

ethereum Community um I think it pretty quickly on Twitter like if something seems scammy like called out um you know some people are going to get burnt of course like we we're going to go through booms and bus but um I think we're doing a pretty good job as a community and realizing you know these models I think we're at a good point now where it's like at least like we were just saying you have a product and then you do it but it'll be interesting to see like is the SEC are Regulators going to try to really crack down on this like Anthony and I were just talking last week I mean Pon X got fine but it was only like $10

million and it's like how big is the sec's bite really right like palon X has made way more money than that and that was their fine we saw that with EOS too so I think that's G to be an interesting narrative to watch going forward totally here's something I want I want to get your perspective on and this is something that Ryan and I talk about on like the weekly rollups all the time where we talk about like the SEC Regulators preventing like IMX and like uh the other like token air drops from going to US citizens and like it's all under the guise of like yeah we're protecting investors but like in this

format they're definitely not because all they're doing is protecting investors from aird drops and like the one of the cool things we've unlocked with early liquidity is you know putting like like potential 1,000x opportunities into the hands of individuals so like there's two rationals that like could come out of this one is that like the uh tax reporting requirements gets a lot hairier when like it moves from just like you know small funds and and accredited investors and there's only

like a handful of those that invest right like for for the first like seed round or Angel round like it's just like maybe 50 different entities right but then when we do like an Ico that moves into like 5,000 plus individuals and so from like a tax collecting and Reporting perspective it's just like two multiple orders of magnitude more hairy to make sure that all the CI citizenry is reporting the taxes that they are obligated to report so there's one perspective the other perspective is that all this regulation is just like done by incumbents to gatekeep so that

they can have all the exposure for themselves and so like you know if only 50 entities are getting into an early you know investment opportunity it's more likely that you know they are the incumbents are one of them and they can keep all the the you know the small fries from having these massive upside opportunities from early stage startups and so that's the other perspective I'm sure it's a little bit of both true but like which do you think is more true yeah I I agree that it's a little bit of both I I think there's so I if I had to pick one I would agree most with the first um because I do think

government IRS are definitely feeling overwhelmed with tax reporting and how to even handle this right like I I don't even know like honestly if someone tried to look at my transactions from 2020 I can barely figure them out enough to report individuals can't figure it out how is how is the IRS going to do it for everyone right exactly and like the reporting rules are still not quite there I think we're years away from those being really clear so I do think it's it's that right there right now like you said a lot of wealth is concentrated in a few entities a few

people and it's easy to audit them and look at those returns right and that's where a lot of the money's being made so that's where a lot of the taxes are coming from now that wealth is spreading out more I I believe crypto is really kind of spreading wealth out to a newer younger generation and amongst more people um yeah if they can't track that they're going to be worried because they're potentially losing out more if people aren't reporting them correctly right um I also think there's a perspective too where in general like within regulators and within the government there's a power game as well

and I think some of these some of these entities need to stay relevant and they're like crypto is the thing coming down the pipeline right and they're all trying to become the agency that regulates crypto right because that gets them more funding more bodies more power um but yeah I don't know how I mean they have to be scared right not scared because scared because it's overwhelming to them it's new and some of this stuff is just really really hard to trace there's there's software out there but like you know LP positions and how that's treated and all this stuff um I

mean I think if ever they're 20 years away from be able to properly understand this so they're trying to figure it out to to some degree this like the think of the people behind behind behind the the with a responsibility of like figuring out all this stuff like I said we can't figure it out it's going to have to be some sort of like automated thing like something like chain analysis or some like government like automation of just because we can read the blockchain like it's going to have to be like an input input your address is receive a number

type of thing and like maybe you can make arguments about like how the calculations were done wrong but like there's so much like and and plus like people I play with my ledger all the time like oh I like sometimes I'll wake up and I'll make 50 transactions in a day for some reason I don't know why um and like all of a sudden there's 50 transactions that I have to like log in report and like again for the indivi if the individuals are overwhelmed there's no way that like the the IRS isn't going to get overwhelmed it's it's and and it's also the perfect substrate to automate right it's literally a blockchain with all the transactions it

has to be an automated thing yeah I agree I think that's the way forward I think really what it's exposing is how ancient and outdated the tax laws are in general right so I think what we might see is agencies just being too overwhelmed and that leading to simplification of tax laws so what might that look like I know some countries have basically just like a Fiat in Fiat out policy where it's like just net gain or loss on your Fiat and you pay just it that simple it's just like that well the problem is that then that incentivizes us never actually going back out to Fiat

which is like definitely something that I preach yeah yeah exactly yeah that's the bankless model right but like something like this right to get things more a flat tax for example and not all these different tax but like ethereum defi has become too complicated for the tax laws like how you handle amm some you know like I report them one way I know some people report it a different way other countries treat like they need to just come up to the times and I think I hope this is going to result in simplification like I don't mind paying my taxes but the the huge of it is

trying to figure this all out 7,000 transactions and all that I do mind spending like 40 hours a month of my life like trying to actually do it right exactly you you you talked about how like these different agencies are trying to like all jostle to for position to try and like be the agency that regulates uh regulates crypto and this is something that like well while generally most all bit all Bitcoin Maxis and most bitcoiners are pretty naive sometimes the stories that they tell and the narratives that they weave are like super accurate uh and maybe maybe this

bitcoiners don't have a monopoly on this narrative but like the state is an organization and like all organizations everywhere have a an incentive to grow larger right and so like there's like there cftc SEC the treasury they all have their incentives to to grow their funding and grow their influence and power just because they're by the nature of a very organization right and so like no ma and so this is always why bitcoiners are so like anti-state is because they all like see The Logical conclusion that like some sort of like

three or four-letter agency out of the government is going to want to capture our industry uh and so what what are your thoughts on that like how do you think about that yeah I mean I agree I definitely agree with any organization is going to try to get bigger and over time become get more Barnacles and become less efficient right and I think like you see that in this infrastructure bill right like it's supposed to be an infrastructure bill but then there's all these amendments and tons and the crypto laws are in there and like to me it's just become inefficient I would say and

I I definitely am worried I don't know where what the fix is going to be I personally like for if I had to vote on something I'd probably say like term limits just to kind of keep career politicians out of this um you know I agree but I don't okay so everyone's freaking out over the infrastructure Bill stuff and like kind of rightfully so we need to fight for ourselves we need to lobby but I think what people don't realize is that this crypto generation is growing up and getting larger and a lot of people from this

crypto generation are either going become politicians or have power to vote in politicians right and I think what we're seeing now is a lot of you know politicians maybe going out near the end of their terms life whatever it might be I mean some of these politicians like a hundred years old in Congress um I think they're going to just eventually be replaced with crypto-friendly people um I know it's hard to imagine now because people think that yeah the state's against crypto and all that stuff but you kind of grow up in this it takes a while for a paradigm shift to happen right um that's why I'm not too too

worried about long-term you know regulation of this stuff but at the end of the day right it if we can be regulated if if defi can be shut down then we're doing something wrong right there's some centralized point of failure and that's kind of been my point on the infrastructure Bill like guys okay yes it would suck to get some regulation put in against us some tax reporting requirements but if you can stop defi we're doing something wrong we're here to make sure that this stuff doesn't matter right right yeah all they're doing is they're just putting more and more onus upon the individual

but they're not putting more and more more onus on Unis Swap and that's like that's the important thing right like so long as Unis Swap and so long so long as the actual code is untouched then fine like we'll we'll take we'll concede whatever so long as it's you know reasonable yeah totally I mean I think we have done ourselves a little bit of a dis disservice with um heavy Reliance on centralized stable coins usdt usdc um I do think there's a point of attack there for governments that we need to be careful with I mean most all D5 Protocols are very heavily reliant on

this liquidity from centralized coins I think that's where they would try to go after first if they could um but you know now coinbase is a public company they they they have a bunch of lobbyists themselves so um yeah I mean this is a long battle but I I do wish we would kind of reduce our Reliance on that if anything right yeah uh I do hope and I'm sure Amin would agree with me is like Ry is actually the way that we stop giving so much power over to to usdc right um you you said that you have a background in in finance and so I actually want to

want to pick your brain on that I my uh my old roommate and a bunch of my uh friends from college they were in like the business school part of the college uh part of the university and I kind of like teased them and joke with them about like one of the reasons that I've done so well in crypto is that instead of majoring in business I majored in Psychology so I didn't actually have to unlearn anything in order to learn crypto but you actually majored in in in finance or have a have a background in finance so what was it like coming into crypto with a finance background do you think that was all like relevant or like what was that story like um I would say

yeah it's interesting it's funny I've always been kind of fascinated with Finance I was like my dad set me up with an eade account when I was 10 years old and like dial up internet and gave me a little bit of money in there and I was picking out some stocks that I liked and I so I've always been into trading and kind of my own personal financial stuff which led me to a finance degree but you know the finance degree was more of a play and I've always been a numbers guy and IND trading but more just like it was going to be safety coming out of college into a job but then the financial crisis happened and I graduated in 09 and that wasn't really

the case but everything worked out yeah I would say graduated and oh no I know that Finance fin Jesus Christ I got lucky enough to find a good internship and then a job right after somehow but yeah it wasn't the best timing in the world um you know I would say like what helped me most was more that background I had in like trading and finance I don't think my finance degree specifically has been too applicable um in crypto but what it has helped me with is like realizing how outdated the

traditional Finance world is right I I worked at a bank for five years and like it was great experience met great people but man just like the processes in place and the technology what's funny is I discovered crypto while sitting at my desk working at a bank yeah I ran across an article about Bitcoin in early 2013 as I was like bored at work scrolling through something I think it was on Reddit um and I what a hilarious just like snapshot of his of of just like oh yeah bored at work at a bank discovered Bitcoin because he was bored right

exactly and then it you know it fascinated me I sent it to my girlfriend at the time now my wife I sent it to her and I'm like oh we should probably like kind of look into this thing led me to buying some what's really funny wait so you bought Bitcoin and and saw that thought that Bitcoin was cool on your first exposure to it yeah well never hear that I would I didn't buy it that day but a few days after I did a little research and created a coinbase account and then most people like they get exposed to bitcoin and then they're like n this is

and then the price runs up and they're like oh I miss out on that and then that's when they get in you know what's funny about me is like I I get very upset if I miss out on something that I after the fact find to be really awesome and so I was already mad that it had gone from a dollar to like $200 at the time so I'm like oh man I already missed this but I'm G to buy some anyways um so like you know I felt like some of that was some nfts these days too but um yeah anyways then I I found it and then I

just kind of went down the Reddit Rabbit Hole IRC Rabbit Hole um and then what what's really funny about this story to kind of tie it all back to my finance degree is like I worked in the treasury Department and our Treasurer at the time had this little like box in the kitchen you could put questions in so I I wrote a question mainly i' I've been a troll I guess my whole life but I put a question in there and I said what do you think of Bitcoin like it's been on this big run lately and this is the treasur of like a large Regional Bank right and he responded to it and he actually had a good response and like it kind of he

would respond over email to the whole group and like he he was like you know the typical was probably in a blah blah blah blah blah but he had some good thoughts on it and it kind of like sent this like Bitcoin like exploration across the whole floor of the Treasury Department at this Bank you know I don't know if many people actually bought into it but um I gave a I would say at least 30 people exposure to bitcoin at about $200 so hopefully some of bought it wow that's hilarious asking uh who who is like the was the CEO of the company or who was who the question end up the

treasurer yeah the treasurer so a asking some like leader of a of a financial organization their opinions on bitcoin after it just ran up in price you can repeat that story like every four years up until today that's what's funny you I mean you know some people you know I haven't worked there for a while I still have some friends from there but you know some people think back oh man remember when that guy was talking about Bitcoin in 13 I really wish I bought it yeah I really wish I who was that guy like I gotta look him up right yeah it's funny right like early on I I mean I

know you were in ether early too and like just all these Technologies early like No One Believes you really like I never really talked about it early on because I didn't want to be the guy giving out like Financial advice when something could go to zero but like I had friends and family I would men around no one gave it a thought and like during bare markets no one talks to you and then the second price starts going up and it's way past where it was one day everyone starts talking about it right no F first you're the crazy crypto person and then and then you're the poor crazy crypto person and then you're like the rich crazy crypto person but but

people love you when you're at the third point exactly and you know what's funny is it's happened like three times in ethereum now with eth and then defi tokens and now nfts they've all kind of gone through the same like wait now crazy on E no you're crazy defi is never going to happen nfts why would I buy JPEG and like all three have gone through the same cycle right yeah no people people like assets and people like digital assets for some reason yeah my uh during uh during 2018 and 19 when I for was first getting into into crypto