🎙 Udi Wertheimer | Layer Zero

welcome to layer zero layer zero is a podcast of unscripted conversations with the people that make up the ethereum community crypto is built by code but is composed by people and each individual member of the crypto community has their own story to tell cypherpunks understood that the code they write impacts the people that 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 today i'm talking with udi wertheimer and udi is one of the most interesting and unique characters i think in the crypto industry he's frequently cited as a troll uh by

many of uh the people in the ethereum community um and i think that's just because of his generally cynical and antagonistic uh just um uh disposition uh and he he likes to poke fun he likes to make some funny jokes uh but overall he's also just really insightful and makes some connections that i think a lot of people fail to make or just forget to make or just it tends to be a little bit more pragmatic and so i've always wanted to

get udi on in a much more unfiltered sense so i think this is a perfect podcast for this because uh udi has a persona about him that uh it's hard to tell if it's if it's uh a facade if he's like playing uh playing a role or if that's actually udi so i'll let you determine for yourself what you think about that uh before we get into that conversation with udi we must hear about some of these fantastic sponsors that make the show possible arbitrarily is an ethereum scaling solution that's going

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i like the frogs yeah you're a friend like the frogs i want i want to make sure the frog's here that i like the frogs yeah why why do you like the frogs i think it's i think it's a cool meme i like the bean what is the frog meme to you it's all about the anti-vc movement isn't it that's what it looks like i don't know you never know how real this stuff is like if you're a vc shouldn't you start a meme about being anti-vc and pretend to not be fcc what would be what would be the game

theory behind that why would you want that well i mean you always get a story right there's a narrative for to get people excited that seems like a cool narrative now are you talking about every coin starting out like the big the big thing that everyone has to say about is that now these the vcs they got a location they're trying to dump it on you you know there's the whole jack dorsey thing going on there's a lot of memes around vcs right now yeah um are you saying that like it's a a tactic that people are leaning into

i mean isn't everything yeah for sure it is i'm a very cynical person david yeah you are quite cynical yeah yeah udi uh how did you get into crypto man when was the first time bitcoin you've been in it for so long you forgot it's like it's probably been around uh roughly 2014 and um i uh i back then used to think that you know

like stuff like bittorrent and and decentralized file sharing is cool like technologically like i'm a software engineer by trade so i was excited by the technology behind it then someone told me about bitcoin i was like hey that's similar so that's cool and and also i had some brief experience with online poker i wasn't really very good but i i played like recreationally you could say

i somehow managed to not lose money and and um i i believe there was this big event that they called the black friday of online poker which i think was in 2011 but i i'm not sure anymore and what happened was that you know the fbi kind of froze the funds of a bunch of uh big poker sides and that's where a lot of poker players realize that their money isn't you know their digital money isn't

really theirs because you used to log in you see a number you say okay that's my money and then when one day it's done um so i kind of had this concept that i think a lot of people didn't have back then of well most digital money isn't really yours so that was easy for me to grasp how bitcoin is different in that way which i think a lot of people you know looked at me very confused when i would try to explain that um so that's probably why i was excited

about it it took me a while though to you know get over my fears and to really dive in and and look at it as an investment that took a while for sure uh you know i went through i went through um you know this one hype cycle where you know i bought some bitcoin i saw it i don't know whatever it was like triple in value fairly quickly and then you know dump 50 percent fairly quickly again or whatever and i was like

stressed so i was like okay i'll get out with my 30 gains feeling like a very smart person and it took me a while to see that it's a long-term thing um which is probably how i you know i also kind of realized okay it's not just about the technology to me at least it's also you know there's a financial revolution going on here um probably when i started realizing that

you can you know you can take your bitcoin you could put them in exchanges and you can you know you can use it you can do stuff with it that i knew for a fact that i otherwise couldn't do um like you know i live in israel for me back then it was very difficult to get you know to get an account and a foreign brokerage right it's a difficult thing they will have to go through hell to do that but with bitcoin i was like oh i just deposited the thing i can do whatever i want that's amazing and um

that's probably where once things started to click it was all ponzi's by the way but still what do you what was so amazing it was possible i mean the the you know the things you could trade also mostly old ponzi's definitely back then you know like it was really ridiculous like the the the altcoins of 2014 and 15 were absolutely insane they were mostly jokes like i think most people saw them as a joke did you did you take any of them seriously

uh no but and you didn't consider bitcoin uh to be a ponzi you you thought it was bitcoin is the one thing and then it's just in inside if it's a sea of ponzi's yeah yeah i did it was i mean it took me a while to see bitcoin that way too but yeah um and and i think it was easy to think that back then right because the the bitcoin the others were literally cloned like you they literally they took what's going they changed a couple of lines they changed

the logo in the name and that's it literally that's all it was so so it was very easy to to see them as jokes and you know have you ever heard of um uh what did they call it aurora coin oh vaguely yeah it's been a while since i've heard that name yeah so that was it was hilarious because that was i think i think the story was that it was the coin of iceland or something like that

and like obviously you know obviously the government had nothing to do with it they they were like they're just saying oh we're gonna i think they have they claimed that the government has some sort of an open database of citizens and they claim that they will just airdrop a number of tokens to every citizen and and but before they did the airdrop there was like a long period of i don't know a month or two where where it was just you know they just sold it

to the market and then you know they pumped the price very nicely it was it was actually one of the biggest everyone everyone was talking about because it grew spectacular but it was complete you know it was ridiculous like obviously i think it was obvious to everyone this was not going to become the coin of iceland but you know people bought into the narrative and then of course you had dozens of other country coins like people popped up with a greek coin and a

friend's coin and they had a coin for every country and obviously like you know two to three months later that stupid narrative died and it disappeared so that was just one example but that was you know just like everyone is talking about leia ones and metaverse now back in those three months everyone was only talking about country coins so i was about to ask yeah this this this antics this behavior seems very very um a lot of parallels to some of the antics i think we see today

in 2021 would you agree with that yeah yeah i i for sure um and you know it's true for uh traditional markets too i think it's just more pronounced here in crypto a lot more pronounced but um but yeah it is similar however um i think you know the quality of the jokes improved they're they're they're not you know it's used to be so so stupid really it was it was absurd and i think

i think it has a lot to do with um um you know how a lot of the earlier bitcoiners still see old coins as a complete joke because you know that's that's what they were um they really were and i i would say they've they've improved somewhat it's not like you know it's not like it's amazing now they've improved somewhat improved in what sense what did they improve upon i think so you know first of all things

you know they're actual things that work right that's a big difference um okay so they're going from ponzi's to actually like legitimate projects with legitimate like things behind a lot of them are a lot of them are still ponzi's so you know like a cool thing to do now apparently is to do a you know a game a playtorn game or whatever and um attach some uh you know attach a token to it and a lot of these tokens aren't going to

name nades a lot of these tokens are really built as a ponzi with 3d or 2d graphics basically and so a lot of them are still ponzi's but at least there's something going on and also you know i don't mind if people want to participate in ponzi's game i guess they're you know but um i would hope do you subscribe to the notion that every financial asset is a ponzi at the end of the day um

you could say that maybe and it's fine um but uh there's you know there are definitely a lot of dynamics around um you know most token projects that you look at today it's like their main focus is how to incentivize people to stake things for the long term or the short term or whatever and like the entire focus of what you're doing is the ponzinomics of it is to make numbers go up right

yeah yeah i mean but you could say that about like an uh a company on like the nasdaq or or um nyse right like the purpose of apple is to make number go up right it's the same thing but there i think the difference you're highlighting is like well in order for apple to make number go up they make really good iphones and they make better and better iphones whereas these games are more they're they're trying to make a fun game but like it's really about like where the intentions and how how quickly they're trying to go after the token price rather than actual like a

legitimate product yeah and i think probably at the end of the day you know some people will say that it's because of regulations like apple would have done the same things if it wasn't regulated that way i i i think that's not true i think that um the reason that it's happening is because that's what stupid now that's probably not gonna continue forever uh the demand for ponzi is at some point i don't know when at some

point is probably going to die down a little bit and um and then you know people will be forced to do something else to make the number go up uh right now it's easy and effective so that's what people do is because crypto is just like filled with all these ponzis of different flavors and kind of always has been since the genesis is that one of the reasons why you're you are described yourself as cynical or were you cynical before you got into crypto oh i was always cynical always always been cynical yeah it's a genetic thing probably yeah

did your has your sense of humor changed um uh by being in crypto or again has your sense of humor always been what it is uh you know probably probably has been always similar but um but the topic changed yeah yeah it's the same idea did you have you ever developed like uh a core thesis about crypto like have you ever um oh i i have

developed a billion billion core theses and i keep changing them all the time i mean in that case i don't think it counts as core i think it just counts as a species uh fair enough it's a short term or this it's designed it's designed to be a poor thesis but then it fails um i mean i think that i think you know above all else i um

and that i think i think we probably talked about this before actually on one of the other podcasts i think that um to me and i think to most people i see it's not really about the technology even though i'm kind of a technologist at heart i don't think that that's the issue here i think the thing is that we are finally able to just do whatever we want with our money and um and that's very new relatively

and just you know because that happens then then a lot of crazy [ __ ] is gonna is gonna happen with it i think that's i think that's all it is and it's very hard to predict like how it plays out um you know i would imagine that the next year will be very different from them than the last one um you seem like a guy who um rides the wave rather than tries to steer the ship

yeah yeah you can say that yeah um i think steering the ship is hard it's hard and it's it's like there are you know there are um there are things you can affect in life but um you know the market it's probably not whatever right thank you

you if you try with the flow i think the mct makes it easier to you know affect other things in your life that matter more right so i'm i'm a big believer in um not trying to change the world why i that why why do you believe in not trying to change the world you know um jordan peterson has this thing where he says clean your room right i don't know how cringe you think jordan peterson is

but he he has this thing where he says like clean your room and the point is before you try to you know before you sit and try to describe how you should change the government and how you should change society you know you should change like thirst you know figure yourself out and um and the you know the nice side about this it's a feedback loop right because if you if you start with yourself while also you know you integrate yourself in the world you don't become a loner

um and you you go with the flow where it comes to how society as a whole functions while trying to affect you know yourself your friends your family or your immediate community then you know you take power from the world from society and you use it to to change the things around you that you care about that you care deeply about i feel like that's the way to go at least for me um

but there are a lot of you know there are a lot of cool people who are changing the world which i find amazing that's amazing too well isn't isn't his notion of cleaning your room is like if you're interested in changing the world you got to make sure that you are it's like um you know put your oxygen mask on first before you put it on your neighbor right i feel like that's it's a similar metaphor yep yeah yeah it's it's it's yeah it's definitely also about you know um like really how can you think you can

you even can fix society if you haven't fixed you know if you haven't cleaned your room yet right and and how can you even imagine that you can fix the government if you're you know if your family is dysfunctional is your room clean right now ooty yes yes it is room i i i blurred it out i blurted out but it is clean it is actually pristine doesn't that mean that uh according to jordan peterson you're ready to um uh move and start to clean up the world

because your room's clean step one is done step two is to help the world i might i don't i i really you know i don't have aspirations to change the world right i i don't like what would i change i think the world is fine i know that we love to say in crypto that everything is going up in flames and we're the we're gonna save everyone i don't know i don't think i don't think the world i'm old david i don't think the world is going up in flames i think it's fine as it is

and and you know we have a unique challenges fear but um i'm i'm optimistic i'm optimistic so i don't want to change the world but um but you're right um there's definitely there's definitely uh room to venture outside of the room you said you're an optimist rather than a pessimist yeah yeah yeah you're a cynical optimist

how do you see yeah is that an oxymoron or how do you square those two things yeah um so to me at least in my mind i use cynicism to just you know just understand understand the world right and i at least tell myself that it helps remove layers of fake narratives and and

that just helps at least helps me personally analyze things and and i i just happen to once you do that things usually aren't that bad now that said you know a lot of things did go you know did get worse in the last couple of years um i kind of um established a lifestyle uh digital moment kind of because i wasn't happy with how things were

going back home and so you could you know you could call that a pessimistic view but i think you know to me um to me the nice thing is that that and especially you know for me i'm lucky enough to be able to do that to be flexible and to position myself in a way that even if well my home country is kind of flipping out so i can go somewhere else and if

you know my boss is annoying me i can go somewhere else so that's great um i know that not everyone can do that but um i think that's a good you know that's a great thing to strive for and i think that's something that can give a lot of people optimism you know a lot of people are you know if i feel like a lot of people are complaining about the situation that the world puts them in but it will actually easier to feel hope for when you feel

like you can change things for yourself and for the people you care about instead of changing everyone around you which i'm just not interested in doing anymore i'm too old for them to all they can do whatever they want if there was one thing about the crypto industry that you could snap your fingers and change what would it be or is this something that you don't even consider because this is just not what you think about yeah it's an interesting question probably the meme coins right they're so

triggering i mean the meme points trigger you man it's um it's funny that you say that because some people would call you yourself a meme but i'm not a meme coin that's the difference like like it's memes are great memes are fantastic i love memes but meme coins you know why people are so frustrated about them right like i'm not the only

one uh of course it's um i think it's the it's the it's the text messages you get you get a text message from a friend from high school and he's like hey i heard you're into bitcoin or ethereum and you okay so like so what do you think about uh chib fluffy new yeah and i'm like come on man like i don't even what what what do you even say and you don't want to and you don't want to say don't buy it because

maybe it goes you know maybe 10x is tomorrow i don't know i don't want to be responsible for that so like i don't know i don't know what to you know and and then i know a lot of people in the on the bitcoin side are very frustrated about it and i'm sure a lot of people will be assuming that are very frustrated about it too that that you feel like oh there are so many things that i'm eager to talk to you about that i'm eager to show you and that are you know that are exciting and and that could change your life and you're talking to me about this dog coin

and then to make it worse they make money too like it's terrible do you think that we're uh i kind of think that uh the world's only going to lean more into memes i kind of think that like we are now living in remember in 2017 when um the arizona iced tea company added blockchain to their name and then their stock price like 3x or whatever like that was indicative of

what uh what was to come i i think like dogecoin is now a force to be reckoned with shib is a force i think we're leaning into more and more meme coins and i think with crypto we actually start to uh uh kind of just change the game of what it means to invest so like now now there's the fundamentals but then now there's also like all right well how good is the meme at the same time yeah yeah yep which is kind of in my mind it's a little nihilist it's like a little uh nothing matters therefore like like eff it i'll just ape into ship

because nothing matters yeah it's um well if you think back at you know about let's say when you started up out with ethereum uh i don't know much about that period in your life but i can i can imagine i can guess that um you probably i mean i'm sure that you saw a lot in the technology and i'm sure

you saw a lot in kind of the opportunity to build but also i'm sure you saw you know a community and and and a chance to belong with like-minded people who have similar motivations to you and now if you're you know if you're an investor in your very early 20s right sometimes even younger and um

so first of all your motivations are not going to be about the tech you don't care you don't understand and you don't care to understand either and it doesn't make you a bad or stupid person just not one of your interests right you have other interests in life and the reason you you're doing any of this is because well you can't you will never own a home right if you just continue working as an uber driver that's not gonna work so you have to try other things

that i have no issue with whatsoever i think it's it's excellent and then you find a community of like-minded people who are saying look i'm gonna try anything i will try anything to to get out of this rat race and now you belong to that community and whether or not like i don't know whether or not are you is it actually gonna work for you it's mostly a lottery i don't know but maybe but you are gonna be with those people with

those like-minded people and i think if you stick around with the people not with the coin then eventually you'll probably find something that works so so that's okay um the the counterpoint though is you know those meme coins have such short lives sometimes not all of them but sometimes so like how long is this community gonna last um

but if you if you pick correctly i think there could be something there maybe do you have opinions as to which uh blockchains which currencies which tokens actually like quote unquote win out like do you do you have uh desires about what the end state of crypto looks like um i doubt

that it i doubt that the winners are gonna be the names we're familiar with now um maybe some of them does that include bitcoin i don't know if bitcoin even competes like it it's i think that you know like who's competing with bitcoin right now you might you'll probably say syria but but um i think you know i think it's very different right and and