Hello,
Imagine dropping out of a Computer Science degree to write about basketball analytics for USA Today. That's how Mika Honkasalo's journey began before he fell down the crypto rabbit hole watching Andreas Antonopoulos and Erik Voorhees.
Fast forward to the DeFi summer, and Mika's making waves with a liquidity mining calculator that became the yield farmer's best friend. This hands-on experience laid the foundation for his deep understanding of DeFi's inner workings. Mika went on to work for The Block, ParaFi, and co-founded Access Protocol before assuming the position of investment partner at Equilibrium Labs.
In our chat, we revisited Mika's November 2023 post on Solana's transaction dynamics, using it as a springboard to dive into the Ethereum vs Solana debate. Here's where it gets interesting: while Ethereum's Layer 2s are all about boosting transaction throughput, Solana is focusing on slashing latency. Why? To compete against centralised exchanges NASDAQ and democratise access to finance.
Whether Layer 2 fragmentation affects Ethereum depends on how you view ETH. If you see ETH as money, transaction fees are less relevant. This is because ETH’s value comes from being pristine collateral rather than fee generation. In this case, the fragmentation and L2s capturing fees and MEV don’t significantly impact its "moneyness." However, if you lean towards viewing Ethereum as a business like Mika does, then cash flow is critical. Right now, Layer 2s have diverted fees and MEV away from Ethereum, reducing its direct revenue, at least for the time being.
Adoption is what we are all after. Mika introduces the concept of "concentric circles" of growth. It is a refreshing take that suggests real progress comes from small, steady advances across multiple fronts. It's a view that challenges the boom-and-bust narrative we're all too familiar with in crypto. We explored this view in a recent article titled ‘Does Crypto Matter?’.
Mika argued that crypto's secret weapon might be its knack for distributing hardware globally. From Bitcoin miners to Solana's ambitious phone project, this could be the industry's ace in the hole.
Echoing Jon Charbonneau's views, Mika suggests that despite different approaches, we're all building towards the same endgame. It's a perspective that might just change how you view the future of crypto.
If you're keen to look beyond the hype and understand the subtle forces shaping crypto's future, this episode is your ticket. Mika's insights may very well reshape your outlook on where this wild industry is really headed.
Signing out,
Saurabh Deshpande
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