How Solana and Pyth Aim To Take DeFi to the Next Level

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:18)

So Tracy, obviously we've done a handful of crypto, DeFi episodes in the last few months.

Obviously, area of growing interest. I would still say, however, that for all the enthusiasm, by and large, it doesn't seem like anything crypto DeFi is like seriously cutting into traditional finance in a big way yet. Like it still feels like a pretty separate universe.

Tracy Alloway (0:46)

Yeah, well, this is a point that you've brought up on a number of those episodes, this idea that we have DeFi, but so far it basically seems to be sort of self-dealing in crypto and in various tokens. There hasn't really been an extension outside of the crypto space.

Joe Weisenthal (1:04)

Right, it feels like it feels very recursive, kind of like a snake eating its tail, like some interesting proof of concepts about how market making works or the idea of like an automated market maker or a sort of like collateralized lending.

But yes, by and large, like, you know, if you were to sort of look at, say, what banks are doing or what trading firms are doing, at this point, the two don't seem to be intersecting all that much. Or, you know, I can't think of like many trading lines or business lines within finance that are like, oh, we're losing money to DeFi or to crypto in some way.

Tracy Alloway (1:41)

Which kind of goes back to a wider point or one of the original criticisms of blockchain, which is that, you know, for all the excitement and all the hype, we didn't actually see that many real economy applications of blockchain.

And the fact that finance hasn't been able to make some of the technology from DeFi work kind of hints at that issue. Although, I mean, I have to say there are regulatory hurdles to actually doing DeFi type things if you're a regulated financial institution.

Joe Weisenthal (2:14)

Tracy, have you ever played around or like, you know, a while ago now, like back in the spring, we did that Hayden Adams one on Uniswap. Have you ever like going around and like playing around with Uniswap at all or seeing how it really works or anything?

Tracy Alloway (2:29)

Yeah, I did. I started like a MetaMask account and was playing around a little bit, but like, I gotta say, even starting a MetaMask account from Hong Kong is a nightmare in and of itself. Like just getting money onto it took me like a full day to figure out.

Joe Weisenthal (2:45)

No, I mean, like it seems cool. And it is, it's actually very impressive. And it's like, there's some interesting breakthroughs, but like, it's just obvious, like it's not up to snuff like for like anything that's sort of like actual like high performance finance, like, you know, trading people are used to like executions, like millisecond scale executions.

The cost of trading is for so many different assets, virtually free. And as everyone knows, you know, it's like, I saw you had a really good joke a while back about gas prices on Uniswap. Like the cost of say like a trading on the Ethereum blockchain or whatever is like far above anything that would be like actual finance scale at this point.

Tracy Alloway (3:24)

Absolutely. And I mean, just the knowledge that you need in order to dip your toes in it. And again, like going back to the Metamask account creation, like that took me ages. And I know like a little bit about what's going on and then actually doing DeFi, you know, picking like what tokens you're interested in and then making the calculations for how much yield you can earn versus the gas fees. Like it kind of boggles the mind and it is worlds away from the kind of, I guess, service, is service the right term? Customer experience that you would get on traditional financial applications.

Joe Weisenthal (4:02)

Right, and like if there's like a hot new NFT drop on Ethereum, like gas fees, which I guess are more or less like the commissions will like shoot to the moon. Like obviously, like if you're like, want a high performance trading environment, like serious trading, it's obviously, it's not there yet. It's super interesting, it might get there, but it's not there yet.

Tracy Alloway (4:21)

Yeah, I would agree with that.

Joe Weisenthal (4:23)

So all of this is to say, to get to our discussion today that I'm very excited about. And we're gonna be talking about a crypto blockchain initiative, which is extremely hot right now. It's lots of interest. And it's kind of like, what I would say is, it's going after sort of like Wall Street grade, finance grade finance. And by that, I mean, actually attempting to, the idea that maybe you couldn't have a blockchain, but it actually is at the speeds that Wall Street is used to, actually at the trading costs Wall Street is used to. And I think it's interesting because one of the things that people say about blockchain, they're like, oh, it's a bad database. A blockchain is just a slow database. And for most use cases, it's not what you want. We're gonna be talking about a blockchain project that actually is attempting to not just be a slow and efficient database, but to actually be high performance.