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Anduro: A Bitcoin Sidechain Ecosystem with Jullian Duran - Product Lead at Marathon Digital Holdings

March 24, 2024

Delve into the world of Enduro, a revolutionary sidechain ecosystem launched by Marathon Digital Holdings. Julian Duran, the Product Lead at Marathon Digital Holdings, shares the exciting features of Enduro, including its focus on privacy, integration with Bitcoin core, and Ethereum Virtual Machine (EVM) compatibility for institutions. Discover how Enduro's hybrid consensus models are set to enhance transaction speeds and pave the way for a new era of DeFi on the Bitcoin network.

Transcripts are autogenerated. May contain typos.

00:00

what is a Bitcoin public minor doing launching an L2 that's the topic of this episode this week I have Julian Duran on the Pod who is a product laid at Marathon digital which is one of the larger public Bitcoin miners out there and they're doing some very interesting things going into the having one of them being this thing called Enduro which is a hub that can launch an ecosystem of l2s privacy focused one they have a Bitcoin core one that you can like bring ordinals into they have a new one called Alice which

00:40

is an evm based one mainly targeted for large institutions which are very risk off when it comes to new languages and stuff so they like solidity and evm so big topic there's a bunch to cover here uh marathon's doing some very interesting things so had to get them on this one was fantastic but before we jump in we are going into to bull market Vibes we're hitting alltime highs things are just getting started and so to bring the best content I freaking can to you guys I'm doing a couple things first I'm looking for one

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to two sponsors to uh expand the podcast a little bit so if you think it'd be a good fit uh to be sponsored on this show then hit me up second way you could support the pod is check out this QR code right here you can pause the video scan this lightning QR code and send me some sweet sat love I would love you forever appreciate all you guys who've been listening over the years okay without further Ado let me shut up and bring my excellent guest Julian Duran product lead at Marathon [Music] digital welc welcome to built on

02:05

[Music] bitcoin Julian how you doing today my man doing well coming off a long journey from Dubai but happy happy Friday how are you Jacob not not flying from Dubai for sure so don't have any of that but uh also feeling good uh lots of stuff happening at Bitcoin it's a crazy crazy time including what you guys are working on so there's a ton of talk about and uh yeah it's it's interesting because I think we first connected maybe six or eight months ago oh yeah yeah yeah we I think you talked to me the the last time

02:41

we actually spoke was when this was a full R&D phase I mean we were ideas on a whiteboard now y it's crazy too because I remember when I first met you and I heard the idea I'm like that's crazy like a public Miner is doing R&D for an L2 and then like it made sense to go evm because of all the developer support and I was like there's no way that's going to that's so risky and now it's like you you announced it at eth Denver there's so many l2s in the narrative that it's not even crazy it's

03:14

like you were ahead of the curve and thinking very you know pragmatically um so that's a lot we want to touch on but I love to always start with a basic background question for my guest of like how didd you get into Bitcoin because everyone gets you for different reasons so yeah I'm curious like just just a brief overview like what's your what's your background and how didd you get into bigood yeah um my background's kind of all over the place so I I mean I started my my career in finance and

03:40

Consulting um ended up giving up that life because of the monotony I guess you could say and ended up in social impact work in Latin America started a number of full nonprofits there I'm originally from Ecuador and so I always had a had an interest in the region um after like the nth nonprofit realized that China and East Asia generally speaking play a big role in social impact work in latam and so I ended up doing a master's program in Beijing learned Chinese did the whole works ended up in Chinese

04:07

clean energy covid policies made it really hard to live there um I ended up in fintech and Southeast Asia and just while I was in fintech that's really where I started getting alerted to cryptos this was maybe like four or five years ago where I started getting the sense that maybe this is actually I mean my fintech job was was I love the company but admittedly it wasn't very technology technology forward you know nowadays it's basically navigating regulations and so I started hearing about different friends raising for

04:35

startups in crypto and I started saying oh well you know a lot of this like blockchain technology even something simple like a multisig is pretty revolutionary and like that's technology and so anyway ended up pivoting into I actually started my crypto journey in the ethereum world anathema right uh but it was never for like the the tokens or like the icos or anything like that for me the interest has always been what could it mean for the emerging world and in particular what new Financial PR can you create and so started a number of

05:02

defi companies was a part of a number as well somewh better than others of course um and yeah wound up in Marathon about a year ago um and that was really the start of my my Bitcoin journey and again came at it much less from the price perspective and much more for the Innovation potential I think it's the one blockchain asset that the number of defi startups I've begun and the number of times I would get asked by users hey is this Bitcoin was just astounding and so after like the end time of getting

05:28

that question you know begs the question all right why am I just not in Bitcoin like this is what people know this is what people love and here we go now I'm starting a layer two love it love it so yeah so the the big angle for you initially sounds like it was the kind of like Financial Freedom and the open permissions networks that crypto allows um and you started over on the east side but then came to bitcoin does how's that transition been because like we're seeing it more now but they've been very

05:57

divided for years now they're blending and kind of it's hard to tell where one starts and one one begins um but I'm curious how the move was from eth especially into a Bitcoin mining company like Marathon like what was that transition like yeah I mean look it it was much easier given the people that I work with like in particular um the director of engineering and Marathon like my technical counterpart for Enduro has basically Michael Casey taught me everything that I need to know so really it it it helps it made it a lot easier

06:26

coming and working with somebody who's been in the industry since 2012 um and so it's funny like people will ask me about Bitcoin history and I'll I'll know a lot of things like a lot more than somebody who's just been into it for like a year would know and it's uh it's largely from him and and that's the thing about marathon is you have a lot of people the vast majority of the company very very Bitcoin forward very very intrigued in the technology we got some people experimenting with like

06:50

lightning nodes and others that you know early participants at Stacks like it's it's it's a very diverse set of people and so because of that it was really easy to get up to speed I mean I also just love learning about new things and I'm never I've never been much of a tribalistic person so it's just I I was never like you know eth Camp only there was a brief time where I did a startup actually in salana and so I even stepped in that ecosystem briefly but yeah Bitcoin what I liked about it and what

07:15

was great is if you show a if you show a genuine interest in getting to know the community understanding the technology appreciating the history people appreciate that which is something you don't really get in other blockchain ecosystems and it's often a criticism you know people like well Bitcoin like it's very you know cultish or whatever but I actually think it's it's people who like they they have a purpose for for doing what they're doing they're not just in it to again some people are just

07:40

in it to get rich but it's not that it's not as much of a scammy Vibe as I saw in the rest of blockchain so it was an easy transition I think it was a welcomed one makes sense makes sense cool then uh yeah I let just jump into L2 stuff because I think there's a lot to cover here um and so maybe a roundabout way is we're like maybe a month a month and a week from the having we'll see what day it lands on um and you know going back to how we talked eight months ago or so and you were already exploring this R&D

08:10

thing I'm curious how how are miners kind of broadly preparing for the having because most of us don't think about it we just know that you know Supply gets cut in half which by definition means a lot of your revenue is cut in half because the block subsidy um which these are things like R&D like you guys are doing so yeah just broad Strokes like how do miners think about the having going into this one well truthfully I think miners are the best position to innovate ahead of the having because you

08:38

get the best Innovation out of scarcity and the reality is most miners um every minor really you can't be a minor if you're not pragmatic they're intensely intensely pragmatic and intensely profit motive driven and that's something that's missing in most of the layer 2 blockchain adoption space you know most companies they raise eyew watering Venture rounds and then they go off and burn that money on senseless Grand programs but on in the minor business model the minor psyche is always to be

09:06

very very cost focused and to be very profit driven and so because of that how miners look at the having it's new revenue streams that's that's primary it's top of mind there's of course a lot of cost cutting and optimization I think barathon is leading the pack and in that regard um but in terms of finding new ways to earn Revenue you have a lot of different miners trying different things you have some getting involved in you know the inscriptions Market places and you know really being thought leaders

09:31

and ordinals you have others that are getting involved in other sort of layer twos you have others that are just trying to change the script all together and even get into Ai and uh where my initiative at Marathon comes into play is thinking all right well we have this money-making business model earning transaction fees on layer one what if we created a layer two that also you know acred Bitcoin denominated transaction fees and so anyway it's because of that focus on the bottom line that you have with the mining companies broadly

09:59

speaking the money industry um yeah they look at the habing as a as sort of a it's an impetus to to innovate and a very very strong one at that yep no that makes perfect sense I I like the way you frame it as something miners are pragmatic by Nature just because of the way the businesses um and I agree like I come from the VC background and some of those rounds are getting frothy already and that means you know they they can go with crazier ideas or maybe they're not as Frugal with their money and all these

10:27

things become tensions for building a a a good startup because there is something about constraints kind of breed Creative Solutions you see it's ordinals like Bitcoin can't do that but then again it can and now it's toen over this whole new thing so it becomes like the unlock of thinking in a proper way um so through that lens kind of going into into l2s now how do how do you guys think about l2s because like you're building one um there's been there's a wide variety of solutions lightning root stock and merge mining

11:02

which kind of helps M the ideas like settle down to miners Stacks um so before I jump into into Enduro like help me understand how to minor think about L2 yeah look I I'd say the the number one thing that people have to keep in mind with miners is that they didn't get into the vast majority did not get into mining because they were degens at hard looking to go farm a bunch of different tokens they got into mining because they wanted Bitcoin simple as that and so if you're thinking about a layer two and

11:31

you're thinking about well what does a layer two mean right it has to be built on top of something Layer Two is means there must be some layer one right logical logically that would be the case and so any Layer Two that isn't paying layer one for inheriting its security and appeal and in particular that isn't contributing to proof of work by our definition of maratha it's simply it's simply not a layer two you know it's it's it's something else right I don't know what you want to call it but it's

11:54

not a layer two and so the the first way the minor look at it I at least us and I think a lot of other minor as well is they first think all right wait does this actually benefit our business model or is it something completely out of left field creating totally New Economic incentives but the second and very important thing because there's a lot of ecosystems that claim to pay minors but they don't pay them in Bitcoin and dominated assets and this matters you know at the end of the day yeah Bitcoin

12:16

is not the only asset that Acres value I mean again I told as I mentioned earlier I come from the eth world all right there there was a time when I was a you know quote unquote coiner but the the the the point about it is that in the mining world it's inherent profit Centric and again it's very Bitcoin Centric and so to offer rewards to miners that are not in Bitcoin denominated assets you're just shrinking your market share you're you're having you're basically offering a product to a

12:41

group of entities that just don't really care about anything else other than Bitcoin and so when a minor thinks about Layer Two what I've seen at least is they're really keen on how does this actually benefit layer one but they're also very keen on how they can earn Bitcoin off of it right and it's only with that Bitcoin profit motive that they will actually jump and actually provide a lot of network security there are exceptions mining is an incredibly decentral I mean in some ways there's

13:06

some fears of centralization but it is still fairly decentralized you have a lot of mining pools a lot of different miners all across the world many of which are just totally unaccounted for we have no idea where they are so that there are exceptions to this rule of course but if you're a layer two and you're trying to get a vast amount of market share legitimately not by some like funky accounting logic but actually get a majority of mining hash rate devoted to your layer 2 Chain you have to pay in an asset that they care about

13:31

and so that that was one of the defining principles for us was and it it not even just a defining PR it was a defining principle and they brought me on and they said all right look you're a Founder you know how to build businesses tell us if this is correct and and that's the first thing I found it was like one of the earliest like when this was in its earliest R&D phases one of the first things that I was able to validate quicker than anything else was what will it take for other miners to participate Bitcoin to dominated rewards

13:55

simple as that needs to be needs to be at the center yep no that makes sense and and you see that with merge mining like root stock which a big chunk of the miners do root stock um and we're seen and we're seeing this with um rollups which we'll see you know how bit VM plays out and eventually an an OP code upgrade as these things work out but that's most of them say that they'll pass down fees down to miners so all that's um incentive aligned so yeah so so getting into Enduro then like

14:28

how give me the broad Strokes of like what that's one is incentive alignment so we have that kind of locked in but like how are you thinking about you know building an L2 that it's minor incentive aligned and you're also bringing in like how to bring in you know users Etc yeah two core defining principles number one is that every end so Enduro by the way is a vision for a multi-chain ecosystem that is composed of Bitcoin side chains um two defining principles for all of those side chains number one

14:58

is that the native asset has to be Bitcoin pegged and it's funny because when we when we first spoke this was Ana most calls I would get on people would just be like well what's going to be the incentive for Builders to build if it's just Bitcoin at the say why would to me this kind of like I came back to my fintech background where there are multi-billion doll unicorn level fintech startups none of them are creating new currencies they're creating new ways to utilize currency they're not creating a

15:23

new National currency and I think that's the same thing for layer twos is that there are models in which that Mak sense I'm not going to make a claim on every single layer two has to be exactly toward my definition I'm not saying that but at its core you can drive value without creating a new native asset and so for us that was one of the most important things it's like whatever we're creating we're not doing a token raise we're not doing a pre-int we're not doing a prell and we've gotten some

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people on Twitter like oh look at Marathon getting into the L2 space and you know releasing another shitcoin no there's none of that like we're building a platform upon which you can issue non-native assets but that's not marathon's game marathon's game is we're going to create a a layer where Bitcoin is at the heart simple as that and the second big defining principle is that proof of work has to be at the center of consensus now note I didn't say proof of work is the only element of consensus

16:10

because the reality is proof of work well there's a few things right it's probabilistic finality at the end of the day so you got to wait a certain number of blocks and it's actually confirmed takes what like 10 minutes maybe if you want actual confirmation 30 minutes that's untenable for most of Defi and so what we've experimented with with all the Enduro chains we're creating is hybrid uh consensus models where you have proof of work again at the center as a central player minor miners are

16:34

intimately involved in Block creation and block propagation however you have the involvement of other actors to speed things along or to provide things like Mev resistance or to do a number of different other protocol innovations that aren't possible with vanilla merge Mining and so that's basically where where we wanted to go with this is how can we create a layer that actually benefits main chain Network secures I.

16:56

E miners but also that keeps with big coin at the heart of it and I think the important thing of all of that is it means that every Enduro side chain that comes to Market is inherently Bitcoin aligned what is bitcoin at the end of the day right it's a piece of technology but it's and I've heard this from a number of different core devs is it is an exercise and social consensus and so in so far as it's an exercise and social consensus you need to adopt the same incentives behind that consensus on a

17:21

layer two for it to also be part of that Bitcoin ecosystem so for us that was most important but beyond that what did I say from the get-go this is a multi-chain ecosystem in terms of which stack which programmability standard what type of hybrid consensus model that were very much leaving up to the community and of course marathon in conjunction with other partners is building the first two side chains making them you know kind of like tailor made ready for the community to experiment with but our ultimate vision

17:48

is we just want side chains that fit the proper definition of what a Bitcoin side chain is but what they do beyond that is completely up to the market and we really want to create an ecosystem as varied and as Innovative as you know others in in you know the non-bitcoin world so that that's really the goal at the end of the day multi-chain obate developer learning curves but keep Bitcoin at the heart of incentives and at the heart of what's driving the the the layer two forward um I want I want to double click on the multi-layer piece

18:17

because it's hard to understand sometimes when what's an L2 what's an L3 who we're not even there to what whatever L4 means like these get application specific or whatever um so just to help us understand like is aduro is it a chain and then these other chains are l3s is it more of a like a hub that the the first point you touch to is going to go through auro and direct directly into a side chain like um uh cord coordinate like we'll get these names here in a second but like help me understand what this might look

18:54

like tactically for people going to use it of course yeah Enduro is a platform for launching side chain so your latter description of it being like the conduit and then from there you have these different side chains being spawned that's it you you can almost consider Enduro it's not like a central like it's not like a SAS platform or anything like that Enduro is in many ways a concept it's a vision it's a vision for here are two standards the made of asset the proof of work for creating side chains

19:20

and we want to create a number of different side chains on top of that standard now I will say in terms of the side chains themselves so the first two like you mentioned the first one is coordinates the second one is Alice um there could be three there could be four there could be five but what classifies an Enduro side chain is really just that that Fidelity to bitcoin main chain incentives as long as it's um truthful to that and tied to that um anchored to that it's it's an endur side Chain by

19:46

our by our definition so then on the on the two that you've put forward uh say more on that like what's what's the focus here how are they different Etc yeah look for for The Listener who might be new to to side chains and all of that world the side chain is just extending Bitcoin functionality off of the Bitcoin main chain so the guiding principle is we don't want to do any sort of soft Fork to bitcoin we're not trying to push some op code change and we're certainly not trying to um you know push the

20:15

conversation on other networks we want to create more functionality tied to bitcoin but not necessarily on bitcoin itself so the concept of a side chain actually predates me and it predates even some of my like most hardcore Bitcoin or colleagues something that's been talked about for a very long time and the goal is essentially all right what what sort of new layer can we create with new types of programmability to enable new types of use cases in other words how can we serve the needs of application developers going forward

20:45

and not just the application developers from the past decade and so in light of that we came with two different strategies that are actually wildly different and that's actually why I love this program this this project this initiative because it's um yeah it puts my my mind in a lot of different directions so the first angle that we took is coordinates and so coordinate it's actually a play on the word ordinals you know ordinals and coordinate grid coordinate because the real idea there is how can we create a

21:12

side chain how can we create uh Layer Two that solves important scalability concerns with how ordinals BRC 20s whatever you know any inscriptions technology with how they currently operate on main chain now this is me recognizing that a big reason people use ordinal brc2 and all that is because it is natively on the main chain I'm I'm not trying to deny that that's an important use case but you know the inscription can live on the main chain the transacting doesn't necessarily have to live there right and you hear this a

21:42

lot of times from ordinal Builders and inscriptions teams is man okay well fees SP spiked I can't you know mint my next collection I need to wait until things get better we're entering a bull run we're probably already are in a bull run how is that going to scale going forward and so the goal with coordinate is how can we build an infrastructure that is as Bitcoin native as possible it literally it's even on bitcoin script it's Bitcoin backwards compatible it's a utxo side chain it looks and feels like

22:06

Bitcoin but it has a few key Innovations one in particular which is you can spawn non-native utxos on it in other words you can ass issue assets natively onchain you don't need to rely on offchain indexers or offchain anything for that matter you don't have to rely on Hacks it is literally embedded into the protocol layer that you can have fungible assets non-fungible assets on top of of the Bitcoin native asset and so because of that what coordinate is really supposed to be about is how can we offer a stack that it's very easy

22:36

that in the world where main chain fees continue Rising you can take ordinals you can put them on there and you can still do all of what you were doing before but it's not just that lightning Network as an example you mentioned that earlier as like you know another scaling solution we don't view that as a as a competitor ecosystem in fact on coordinates since it is a utxo chain you can actually Implement light lightning and not deal with any of these problematic Channel opening and closing constraints right like that's the issue

23:03

with lightning is you have to open and close a channel if you want to settle well on coordinate it's very easy to implement the same the same methodology the same technology it's simply now it it's cheaper to do it it's cheaper and faster right so that's coordinate it's it's not us trying to be prescriptive and it's not even us trying to necessarily dictate a direction it's creating interesting technology that looks and feels like Bitcoin but works faster cheaper smoother right that

23:29

that's that's the goal the second side chain this is where things get interesting as well is here we want to be a little bit more prescriptive and here we want to kind of like guide a thesis and something that I believe marathon is uniquely positioned to offer the market that no other Layer Two can and so this is where the Alice side chain comes into play it's an evm compatible side chain so all of the smart contracts somebody can do at ethereum you can do analys but the difference is the native asset again is

23:52

Bitcoin pegged and the consensus mechanism is highly highly dependent on proof of work what does that create I think that's going to be the place for institutional demand and it's a narrative that you hear being talked about with the Bitcoin ETF but R very rarely do you see a Bitcoin layer to talking up their potential to capture institutional demand for things like rwas for things like loyalty for things like deepin whatever the topic it's very hard to imagine other layer twos capturing institutional demand because

24:21

they're not backed by big institutions the vast majority of them are themselves you know Venture back teams and early teams and well that's and that's perfect for like the djen audience we believe that marathon is specially suited to attract blue chip-like institutions a world in which more bonds are issued on for example a layer two we think is one in which it would be un allice right say a token I don't know a commodity provider in a random part of the world wants to tokenize their commodity in

24:47

order to sell it to more investors we think that's more likely to happen on a resilience on a chain that's going to exist for the next 5 to 10 years guaranteed that's where Alice comes into play and the evm part it has nothing to do with my back in ethereum and it really has nothing even to do with our faith and solidity or lack thereof it's just that if you go and get on the phone with institutions literally I can give you the Rolodex 10 institutions right now to talk right after this podcast and

25:11

you ask them hey I'm building a layer two I guarantee you their first question is going to be all right okay I don't understand what that means but the little I know is is it evm right can I can I use erc20 can I use it that's what they ask and we can have a bunch of arguments whether or not ERC is a good standard or where the solidity is a good programming standard but when you speak to institutions and to customers they don't want to hear about anything else and so Alice is a recognition of that

25:38

it's a recognition that innovating the stack for institutions just doesn't make sense and that if you really want to get to the institutional DM so to speak you got to pitch them a solution that makes sense to them or that that causes as few frictions as possible you're already getting these trafi guys to try to accept crypto making them accept new programmability standards out of the question so that that's really the vision with both side chains interesting interesting so institutions see BTC the

26:06

asset as robust and they see evm the the virtual machine as robust infrastructure is that kind of the way you think about it I would say they don't necessarily see the evm as robust they just see it as convenient because let's put ourselves into the mindset of of a decision maker for like a big bank that's thinking of tokenizing some like I don't know uh some private credit vertical just just to give an example right to Port it over to our like crypto understanding all right like you I'm

26:36

sure you was part of a venture capital firm there are a lot of things that you have to do that are not totally related to investment maybe like accounting right like you guys got to figure out accounting at the end of the day the books have to reconcile and you need to get a good accountant on your payroll well how do you judge a good accountant right if I come to you and I pitch you this elaborate beautiful solution for a new finance department or a new type of accountant and I get into all these complex Finance terms and accounting

27:02

terms and Y yada and and give you this full elaborate pitch you as a decision maker are going to tune out because that isn't your core competency your core competency is investing in Bitcoin startups all right that that's where you want to pay your attention to and so if someone comes with a one hour two hour three hour long pitch that requires a college level course to explain to you a new type of accounting you're not going to pay attention it's not that you find your existing accounting department

27:26

robust you just don't want to think about that that's the same how evm works with institutions that are considering any sort of blockchain initiative they don't want to think about the implementation detail and the reality is is if right now I wanted to hire a blockchain engineer I could find a solidity one much quicker than I could find a Bitcoin one I know that I mean we were literally were doing that for a long time with cordinate we were trying to hire a big team of people who are Bitcoin experts

27:50

and it was hard it was hard that's not to say there aren't many Bitcoin experts but the vast majority are tied up in projects so they have different commitments and they're in different parts of the world evm it's it's so easy to find somebody who can just code you up a smart contract because it's like you know it's not rocket science it's right it's JavaScript based language like it's supposed to be accessible and so that that's really how I see it I think they that they view Bitcoin as robust no

28:14

question but evm it's just convenient and that's really what we wanted to do with Enduro let's maximize convenience for everybody trying to use it got it that no that makes a ton of sense as you broke it down so uh appreciate that I want to double click on on coordinate for a second cuz I'm pretty I'm very bullish on evm broadly because of interrup but I think I think utxo based chains are going to have this sweet spot too because the L1 and any subsequent utxo chain will have native assets

28:47

DLCs you know lightning is getting tap rot channels there's a lot of interoperability to float from chain to chain that you lose if you go evm and you have to wrap it in some kind of clever way so just to double click on on coordinate you said it's utxo based faster cheaper um what's the last word this say smarter I think what's that smoother smoother SM y so can we expect then um is this going to be closer to bitcoin core but just with more you know bigger blocks or whatever so you get better there or you know

29:23

liquid does have some things that core doesn't have like opcat for example so could we see coordinate be like a testing bed um for this utxo stuff that you can turn on or will be closer to core curious on that question yeah very very much so look at the end of the day both chains and cordinate in particular we putting it out there to the Comm they're right now an alpha heading into a public beta but with cordinate when it hits public beta our big focus is not going to be pitching everybody on our exact way of implementing um you know

29:54

upgrades to to bitcoin core to in particular like our Fork of Bitcoin core that is that is coordinate the goal is really just to it's to Showcase it to the community and see hey where do you guys think this should go and we do see it as like a good place where it could be a testing ground for future innovations that maybe one day lead to Downstream impacts on bitcoin core but to be very very clear here the goal of coordinate is not to push the envelope on any of the Bitcoin core debates I mean maybe it ends up doing so because

30:20

people transact or they do an OP um upgrade and you know people end up using it a lot who knows our real goal is all right there's all these heated debates about how to change Bitcoin core let's just have a side chain that looks and feels like that and that here we can push and we can offload so to speak all of that Innovative transacting um Bitcoin main chain should be Lean by design it should be the way it needs to be we we respect the consensus that has been achieved it's been a hardfought consensus I wasn't here for it but from

30:50

when I hear the horror stories I'm I the last thing I want to do is start another battle right like the goal is create a layer two where those battles can play out the proxy wars right like no nobody needs to go and fight and change the Beloved Bitcoin that we know that you know that that we know today it's how can we create another place where that Innovation can happen so yeah that's essentially what coordinate is it's the current Innovation that we put on it is we basically took a softwork of Bitcoin

31:16

core and we added in Native asset issuance capabilities um we also added in something called pre-confirmation in where you can for example one could build uh a decentralized exchange on coordinate and benefit from much lower slippage Mev resistance etc etc in a way that you can't really on an evm chain there's no evm chain that has really solved that issue of Mev resistance to the same extent that coordinate Will on day one so um that that's really the goal is like provide those like peac meal um Innovations and yeah then kind

31:52

of see where the community wants to take it maybe they want to experiment with some new OP return awesome let's do let's let's work together and figure it out but coordinate like I said very very different approaches Alice we have a thesis and we're pushing it coordinate we're building Cool Tech and we want you guys to come and you know contribute to that cool Tech with us let's see where it goes we're excited love it love it okay um then question on you know whenever you go to L2 there's a question

32:21

of trust assumptions which has an element of you know Peg mechanism and how is this secured consensus all these kind of things so help me understand those two mechanisms so how how is Bitcoin go flowing in and out and then what is kind of node running and consensus look like in Enduro of course yeah just to preface that I'd say one of the biggest priorities I have for how Enduro is pitch to The World Is I'm not trying to hide anything right the first thing we did is when we announced we released the light paper um more than

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welcome anybody to read it and J.O that's where you can find all that stuff I'm not hiding anything and it and it's funny because most a lot I'm not going to say most but a lot of Bitcoin layer twos that come out you go and you try to double click on these sort of trust assumptions oh and the Link's broken or oh there's no there's no light paper oops forgot to include technical docs that's not what we're trying to do here we want to be very very explicit about what's possible and in many ways

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recognizing the fact that Bitcoin still has some some way to go we are very excited about Innovations like BVM and we're very excited to see the future of ZK rollups but none of those things are possible at a production at a production level um scale today and so to go back to your particular question how is Bitcoin flowing in and out via uh basically a Consortium of entities you can call it a Federated it's a Federated main chain Peg trying to use a different word the collective that the Enduro Collective is basically a Consortium of

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up to 15 entities that attest to pegin and Peg outs from main chain Bitcoin into side chain into you know into Alice into coordinate and then you know vice versa so how does that work you have a multisig on the main chain you have a multisig on each of the side chains anytime Bitcoin is locked in the main chain multisig one of the side chains will have side chain um Bitcoin that native asset minted anytime that side chain native asset is returned to a multisig on a on a particular side chain that's burned and the Bitcoin and the

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main chain gets unlocked we're not burning Bitcoin at any process at any point in this process we're not creating uh an asset that isn't backed one to one by Bitcoin and the redemptions happen at multiple points in a day now this is actually important and there's a lot of people ask you know well what's your Competitive Edge as such a large minor to building a layer two it's actually Peg outs and in fact that's one of the most important things to us is we want everybody to know that pegging in can

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happen um as as soon as we're trying to aim it for you know maybe once every hour or something around around that that timetable but Peg outs we strive to make it possible for three times a day pegging out and the only reason we can do that is because we have the hash rate to back it up because think about it a peg out at the end of the day no matter how you're trying to do it and no ZK rollups are not at a state where you can just do it trustless at the end of the day somebody is going to have to make a

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Bitcoin transaction right because Bitcoin from one address from one one multi- or one address or one whatever is going to have to be unlocked and sent to another address that is how ping out is going to work no matter the layer two the benefit is Marathon mines several many blocks a day and so we can we can guarantee we can at least we we can be rest assured that users wanting to Peg out there is a commitment on the side of marathon to include that in the next block or the next available Block in a way that no other Layer Two can can can

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guarantee you know other layer twos they wait you know 100 confirmations or maybe a few days whatever in our case we can we can make sure that no matter the fee market conditions Peg outs will be happening so that's how Bitcoin Flows In and Out it's via multi it's a very simple approach it's we try to make it as decentralized as possible but it's definitely not permissionless that's just the state of Bitcoin today and we really hope that bit VM continues um advancing and there are ways to make

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this system more trustless but that's how Bitcoin Flows In and Out now in terms of consensus and node running so consensus it depends on the side chain but for actually both Alice and coordinate is fairly similar how we're doing this it's a hybrid proof of work proof of authority um consensus model where you have miners mining blocks and whatnot but where you have the collective this entity that's securing the the main chain pegging in and pegging out as I described is basically signing periodic blocks to ensure Fork

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resistance to ensure Mev resistance and to basically ensure consensus level upgrades on top of vanilla merge mining so that's the hybrid model that we've taken into account now again side chain three side chain four side chain five we don't know like we want big we want proof of work to be at the center of it doesn't matter what other parts come on the side of it and we're open to community feedback as to what are better ways to mix in merge mining with other consent models but at least at the GetGo

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that's basically how consensus is working for both Alice and and coordinate and in terms of node running look for coordinate it's going to be a very similar and light node as Bitcoin in the case of Alice the evm chain it's definitely going to be heavier but the the assumptions are the same right like at the end of the day we want to make node running as easy and as simple as possible we want to make it something that is accessible and in particular we want to make it something where the community is incentivized to run these

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nodes especially people who are building on these chains you know the Network secures the collective etc etc so all of that carries open very cool very cool okay and on so go with the collective or Federation depending how you want to use the word um right is it right to assume that every Collective member is also merge mining so they're all miners not necessarily so obviously you know Marathon will have an entity that is its you know representative in the collective and Marathon The Miner will also be merge mining but that's actually

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not going to be the norm and in fact we're we're not trying to create a a collective that's just all miners you know some of the other Collective members will be announcing them very shortly and you'll soon see that it's a diverse set but look we're we're we're interested in wallet providers and exchanges and custodians um maybe one or two extra miners again we don't want to make it too mining heavy um infrastructure providers oracles um media outlets right like infrastru Layer Two experts a

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number of different companies and entities that we're looking to include in the collective but we wanted to make it a few key rules has to be a proven blockchain Builder we're not trying to bring in some random entity that has nothing to do with blockchain and they have to be Bitcoin forward right number two is that they agree to never create a non-native asset we want this to be as Bitcoin focused as possible this isn't a money grab right you join the collective if you see the vision of Bitcoin defi

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going somewhere hey if you want to create your own defi app and you want to create a new ative asset on the basis of that and go and create a Unis swap competitor go for it but the chain itself remains Bitcoin loyal um and the last thing is that they're diverse right we we want Collective members from all across the world and again the early ones that we're going to be announcing we have some in Europe and Asia and um the one part we don't have is in Latin America and I really I really would like

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to see I mean I'm Latin American right so have to be loyal to my roots would love to see at least one Collective member from there but not too much traction on that continent but the goal is to have a collective member at least one in every continent and hopefully in different verticals as well nice nice nice okay and just to make sure I got this right the one of the Innovations you're doing on the peg out process is because of your guys's hash rate and how much you can secure you know blocks flowing um you're leaving a small subset

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of block space open to prioritize Peg outs coming through the end Enduro train did I hear that right exactly correct yeah got it very cool okay then uh yeah this is a really interesting cool design on the L2 space um if someone's hearing this and they're they're you know they want to get involved in either coordinate Enduro somewhere you keep dropping the word community so like they want to be part of that Community um you know where where can they connect and like has the best way to get involved if

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they're trying to yeah well if they want to send an email Enduro um mea.com um that's a good place where we've been collecting a lot of different inbounds and we've gotten a lot of it ever since announcing you know actually it's funny when when when we announced we were we were kind of like geared up you know because you release anything new in the Bitcoin world and it's like oh man well what's going to be the push back and there's been some push back but largely it's been very very positive and so

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we've gotten a number of different teams in Social fi and Defi and you know totally different fi that is completely you know has no definition yet reach out and say hey I got this cool idea for a project what do you think we've also had some institutions reach out and say hey we were contemplating a blockchain project this is cool that like a major NASDAQ company is sponsoring a new you know Le like behind a new Bitcoin layer to what's what's going on here so there there's been a lot of inbound I'd say

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Enduro mea.com is a good place if you just want to you know check in and and reach out directly via email um I'm on Twitter Julian two L's 0701 um but yeah engaging with anybody in the team it's we're making it very easy to to contact us I think that's one thing within like the crypto Community you often don't have like feedback forms and it's very hard to meet the team but yeah you go on to uro.

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com system as possible because everybody talks of decentralization until it comes time to help and then everybody becomes a jerk like that's not the goal all right the goal is if we're going to be collaborative we're going to be both collaborative and you know in verbally but also in spirit and so yeah it's also just driven by a real reality which is that Marathon has core competencies in Bitcoin mining right this is our first time jumping into the layer two space so in some ways it's not only that we're asking for your help we

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are it's not only that we we are asking from it's that we need it in in many ways right we need that Community to be involved in order for this to be the best layer too and we have to remember what's at stake right at the end of the day I don't see our competitors as being other Bitcoin layer twos at the end of the day if other Bitcoins Layer Two do well and they drive more inflows into Bitcoin awesome great like the more layer twos the more successful layer twos on bitcoin the better our competitors are other ecosystems right

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because the more of other ecosystem layer twos that exist and proliferate is the fewer people holding owning and wanting to own Bitcoin which then impacts us impacts you right the goal is to kind of spread the pie Beyond Bitcoin and so you know anybody who has a cool app idea if it even tangentially involves Bitcoin me and people on my team more than to get on a call and and discuss it more I'm going to be excited to watch some uh Enduro based teams come through my desk and uh invest in some of those one question though on you know

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BTC based asset love it for like inen of alignment BTC is the asset you want to hold the thing that it's difficult to do for any chain that does that is bootstrapping obviously because you know tokens all to print money th air and so you can just throw tokens at devs Poland tvl Etc so how are you guys solving that problem of boot bootstrapping and like getting devs into the ecosystem with like incentives Etc I think you hit the nail right on the head there Jacob and the important thing to remember is with

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the layer two it's not so much a technology play as it is an ecosystem one right and in particular this question of bootstrapping is something that I see so many layer twos come up and a lot of them funny enough they'll pitch us on like getting involved in their Layer Two and my first thing I look at the team and I'm like all right are do you guys know how much this is going to cost right because if you're not a big institution or you don't have a big balance sheet behind you it is going to be really really hard to

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bootstrap the benefit I can tell you in the case of Enduro is look I'm not going to commit to in exact any any exact tvl at this stage we'll we'll have announcements on it shortly but I'll just give you some statistics that are important to keep in mind right last quarter marathon made a $176 million investment into new mining equipment um we have 15,000 Bitcoin on the balance sheet and there are many institutions lining up at the door to be part of the collective and really play a governance

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role which look if you're going to play a governance in an ecosystem we're going to be the types of Partners who are going to demand that you have skin in the game so in light of that and in light of the type of Partnerships that we can bring and the types of you know heavy weights that we can get to the table I have no concerns about bootstrapping in the early days and if anything I think our bootstrapping is going to be at a much higher quality than any other chain out there you know printing tokens and giving them out to

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people yeah that sounds great on paper if the token ever rises in value but you know let's imagine a lay or two where people I don't know devs get incentivized via Bitcoin or where they get incentivized via cold hard cash right and balance sheet and you know things that they can actually go and buy things at the grocery store with if anything I'd say that's a better kind of bootstrapping and I think it's going to attract a different kind of developer particularly the ones that are serious

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teams that really want to build something into the future and they're not really just looking to like accumulate a speculative asset the goal here is really to to give to to to pay people for the work that they're putting in and so I'm I'm not too concerned on that front and it's what I think also sets us apart you know we're we're we're creating something that is to last at the end of the day well then one big question is when when made net when test net you know what's the product at yeah

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so right now we're in we're in an alpha period where basically if there's a team that reaches out and wants to view the stack and like kind of like look into it see what we build reach out and doo. we have all our contact info there more than happy to to chat and and give access to the GitHub the goal is in the next month to read to uh release an open Beta And there basically but before having have like a GitHub repo that people can go and observe and test on where particularly we really like me my

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model for a good go to market is kind of like what coin Bas did with base with the whole you know onchain summer and this and that not the same approach but I like that feeling that they created a feeling of camaraderie in the evbm ecosystem to go and test out this new chain I really want to do something like that for for uro um so anyway more news on that coming shortly but the open day beta U period is supposed to be test net where anybody can come in deploy their project see how it works see the transaction speeds you know evaluate

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throughput that's when we can Precision fees make them as low as possible and then when we hit uh the summer after like an auditing process of chorus I think sometime around July August that's really what we want to we want to Target mainten that but again this isn't going to main net until it isn't properly audited and that's another thing again any Layer Two that's coming out if they do not have millions on the balance sheet ready like devoted to audits do not put your money in that right like

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our goal is to have this thoroughly thoroughly audited before it reaches anything close to real real funds and the second bit is tested right we want the community to give their their feedback and who knows maybe the community's feedback is like throw all this out and like here's a totally new chain we think you should build awesome let's do it let's work together on it yeah there's there's some chains out there that don't even have docks with high tvl not not the least of which is

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you know proper audit so respect on that um cool we covered most of the questions I had one kind of kind of a left turn but you mentioned you know you were punish you had your armor up you know expecting a push back from Enduro launch and it was a warmer welcome than you expected at some level I have seen some push back on slipstream um for different reasons and for me like you know I'm I'm not in the fil through a camp I kind of think that consensus and stamus Rule should be closer together and just focus more on

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consensus and not this like disparity because it it's causing the Riff we're seeing now um and you guys have built slipstream very deliberately things go in band all that um but I'm just curious like how how has the response been to slipstream um anything you can say on that yeah I look I I it there it's definitely been more mixed than Enduro I think largely the community recognizes that well slipstream does two things it number one it promotes the anti-censorship ethos of Bitcoin generally speaking we're we're we didn't

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build slipstream to benefit a particular project we're not building it to Pro benefit particular projects we build slipstream to enable Innovative transacting on main chain but then that leads into the second principle which is nothing goes through slipstream that is not consistent with Bitcoin consensus rules right and that that's the most important thing so I you know at the end of the day will consensus rules and you know filtering rules like will will they end up converging let's see but really

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the goal with slipstream is hey this is allowed to be on Bitcoin in the first place if it shouldn't be allowed on bitcoin we leave that to the you know to to the community to decide but we are simply we are we are fulfilling the duty of minors which is to be profit focused right without that profit motive by the way and this is what's underlying Enduro to without that profit motive we don't have Bitcoin right we're not nobody is securing bitcoin's Network out of chur altruism I shouldn't say nobody there

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are always exceptions to that rule but by and large the the greatest the greatest driver of decentralization on bitcoin is that focus on profits and ahead of the having to go back to your first question to me ahead of the having every minor is thinking about how to increase their bottom line line ahead of the fact that you know the block reward is about to cut in half and so Slipstream in that sense it it makes sense from an economic standpoint it makes sense from a philosophical standpoint and so we stand by it in that regard um yeah the the I I

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will say one one interesting thing of slipstream is the inbounds of the number of projects wanting to do different sort of things is just incredible and like we we see a number of different players we see you know like people who are in web 3 people who are not people who are in Bitcoin people who hate the term web3 people who love it it's it's it's a frenzy of different people that are proposing different ideas not all of them make it to the blog space because oh sorry there's a third thing about

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slipstream that's very important is it isn't free in fact it's like you have to pay extra to to use Slipstream that was the whole point it's if you're GNA Force us out of our comfort zone then you're gonna have to pay for it and you're gonna have to pay a top dollar for it so a lot of teams that have come up and said oh we want to do this crazy thing if they're not willing to pay for it and if they're not paying the fair market price for it we're not letting it in to

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the market but if you're willing to pay a very high amount of Bitcoin for some new type of U block standard or not new type of block standard but for a new type of transaction to be added into a block open doors that's the ethos behind slipstream it's it's enable new types of transacting that's willing to pay for it and that follows Bitcoin core consensus so I I yeah in that regard um not too many qualms on slipstream I also think a lot of the criticisms have been off based like you just mentioned for

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example the inban side of things like the the transactions going through slipstream are paying us in band so any concerns on like the fpps calcul fee calculation it's it's not based in reality like it's as simple as that yep makes sense yeah I think you guys have worked ordinal spot is one of our portfolio companies I think you guys have worked with them uh a decent amount that that team is awesome um one final kind of point on this um just get get your perspective on is um we have seen you guys have slipstream and it

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goes directly to Mara um I think mol. space has a partnership with Foundry with their accelerate product um so one one view is that there's the public men pool and a bunch of direct to minor you know apis if you will do you see a world where step stream gets kind of open sourced or like many people Leverage The Tech and there's two quasi men pools like I'm trying to figure out this people call it like a dark pool and a public pool um and this is a new IDE to me I'm still for I'm new to understanding mining at a deep level

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yeah um any any perspective that' be great yeah look I I'll I'll put it this way the goal is to offer um or to to have entry points to Slipstream in as many places as possible that that's for sure but again the entry point has to satisfy the conditions that I said before right it has to like it has to be a transaction that follows Bitcoin core consensus we also do have like you know terms that you know you can't be publishing objectionable material we're not we're not just uploading anything right like there

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there's definitely there's a certain category of things that we're we're not going to enable um but in terms of making it accessible we want to make it very accessible now you know to to what extent does that you know does that create like this dark pool or like this like secondary pool at the end of the day remember every transaction going through slipstream has to pay a fee premium and people already complain about Bitcoin being very expensive so in my view I don't think this is going to

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lead to some like bifurcated men pool like there's always going to be a sliver of demand that's willing to go nuts on terms of the fees that they're paying that's never going to be the majority um and so that's that that's the goal and and and again I hope Slipstream in many ways also starts some important conversations over you know all right like what sort of transacting do we want to allow and again we're we're participants We Are One member of many um all across the world in the Bitcoin

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Network and it like I said before it's an excise and social consensus we're here to provide an Innovative product if it ends up um creating negative incentives or um you know I mentioned this in a spaces recently if it ends up you know somehow harming Bitcoin itself we are one of the largest holders of Bitcoin we have a massive incentive to protect the network and we have maintained a strong loyalty to to the Bitcoin community so if we need to end up walking it back if it ends up being a product that ends up harming our

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business model or others business model within Bitcoin um open ears openers to consider it um I I'll just say at least in terms of the what we're seeing now it's Fringe demand it's it's small you know here here and there right it's not the majority of transactions going through slipstream it's just Yeah by and large project projects that want to launch things or ones that want to you know do something Innovative or create like a really big block it's like that sort of stuff so I I don't I don't see a

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world in which it goes too crazy or you know creates some like massive secondary mempool or you know or creates a series of them at I don't see that happening cool well we covered a lot that's all the questions I have I mean I think andur is a super interesting take on an L2 so I'm excited to see how this plays out and any closing thoughts or things that I didn't touch on that you want to close with yeah just say that the the one of the founding principles of Enduro is to really create a proper uh Bitcoin

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side chain and in particular to uh stimulate new kinds of use cases I really think that Bitcoin is an incredible Network and you have an incredible array of layer tws that are doing a number of different things advancing demand in areas that you know Enduro can only hope to to one day reach but really the focus is what are new narratives that Enduro can can stimulate you know I think institutional adoption rwa that's a really big place that some other networks have tried but there's really not much traction there so hoping

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really to like reshape the the the the perception there but in other ways we like much like slipstream we want to enable new forms of transacting things use cases that the market hasn't even dreamt of yet and so my hope is that Enduro feels like a very different network that like marathons layer 2 Team creates something that's very different in nature differentiated and again it all comes back to that minor incentive at the end of the day miners are practical right they're profit-seeking entities they have a balance sheet they

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have robust profit so it's it's nothing of what we do is going to be based on some like pie in the sky mentality or philosophy it's at the end of the day we want to create a business and we want it to be really big and well functioning and only under those set of circumstances will we continue diving into these efforts and so because of that I think Enduro it's going to strike a new narrative in the layer two space I think it's going to be a layer two that uh a lot of Institutions and a lot of

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like credible teams respect um and I think it's going to be something that's going to be around for a while because again what's the incentive for this to continue activity right we don't Enduro doesn't exist 10 years from now if the Press if if if press is just good right like it only exists if there is activity if there are fees flowing to the main chain and so I think that's when you have the great product when you have a product by backed by a great team incentives are aligned um yeah and that

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that that's endure at the end of the day so very bullish myself I'm the one of the creators of it so obviously I'm biased but I I think those those underlying qualities of it really make it uh a formidable L2 and not just you know some fat that dies out in a few months well said yeah I'm I'm excited to see how it plays out but I think it's it's looking damn promising when I'm hearing uh well cool man I got I got nothing to add thank you so much for coming on and you know dropping

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knowledge this is great for everyone listening links will be in the description per usual for email learn about and draw white paper check out their website uh so yeah man Julian thanks for coming on appreciate it thank you Jacob looking forward to the next one thank you for listening this far into the episode if you found it enjoyable please do like subscribe on whatever platform that you're listening on YouTube does me a huge favor to like And subscribe find me on Twitter at Jake blockade show me some love I replied to

57:25

every DM and if you are a Bitcoin Builder that is kind of at the Forefront of building new use cases whether it's L1 lightning Stacks root stock rollups ordinals BRC 20 uh I want to talk to you so when I'm not doing this podcast I am the sourcing partner at the Bitcoin Frontier fund where we invest in Bitcoin startups at the earliest stages give you access to whatever you need whether it's legal product fundra help as well as capital so love to talk to you you can hit me up again find me on Twitter Jak blockchain

58:05

and uh shoot me a DM I I'll read everything love me talk to you guys all right peace welcome to built on bitcoin I know things don't always go your way but I'll be right here waiting waiting now been trying to figure out a way to make it out make it out cuz I don't think about everything