The Power of Writing in Crypto

In the fast-paced world of cryptocurrency, where trends and technologies evolve at breakneck speed, the importance of clear communication cannot be overstated. Mert Mumtaz, a prominent figure in the Solana ecosystem, emphasizes the power of writing as a tool for organizing thoughts and clarifying ideas in the crypto space.

"Writing is the best organization tool for a busy mind," Mert explains. For those navigating the complex landscape of blockchain technology and decentralized finance, the act of writing serves multiple purposes. It helps to organize thoughts, separate the relevant from the irrelevant, and form coherent strategies for the future.

But the benefits of writing extend beyond personal organization. In an industry where persuasion and storytelling play crucial roles, honing one's writing skills can significantly impact one's ability to sell ideas, market projects, and even inject humor into technical discussions. As Mert puts it, "Everything is words, so trying to get better at those is just fun for me."

The importance of clear communication in crypto is further underscored by the industry's technical complexity. Unlike other fields where one might get away with surface-level understanding, crypto demands precision. Jack Cubanack, host of the Lightspeed podcast, shares his mantra for effective writing in the space: "How can you say the truest thing the most simply?"

This approach to writing - striving for accuracy and simplicity - serves as a valuable guide for anyone looking to contribute meaningfully to the crypto discourse. In an ecosystem rife with jargon and complex concepts, the ability to distill ideas into clear, accessible language is invaluable.

Hyperliquid: Decentralization in Progress

One of the hottest topics in the crypto space as we enter 2025 is Hyperliquid, a platform that has been generating significant buzz. Positioned as a competitor to Solana, Hyperliquid presents an interesting case study in the ongoing debate about decentralization in blockchain technologies.

Mert provides a nuanced perspective on Hyperliquid's approach. Initially skeptical due to discrepancies between the platform's claims of decentralization and its actual infrastructure, he acknowledges the potential merits of their strategy. "They tried what they built, product, that's just a product. It's not a chain. It's not a blockchain, but it will become a blockchain and then it will progressively decentralize," he explains.

This approach - starting with a centralized product and gradually moving towards decentralization - represents a departure from the typical blockchain development path. Most layer 1 blockchains begin as decentralized networks and then attempt to attract products and users. Hyperliquid, in contrast, has built a user base and product first, with plans to decentralize later.

However, this strategy comes with its own set of challenges. The recent controversy involving potential security threats from North Korean actors highlights the vulnerabilities that can arise in a more centralized system. As Mert points out, "If there's any criticism of the chain, people seem to come out and attack the others criticizing."

Despite these challenges, Hyperliquid has shown promise in terms of user adoption and revenue generation. Its focus on perpetual futures trading - a highly lucrative market in the crypto space - positions it as a potential competitor to centralized exchanges like Binance.

The Decentralization Dilemma

The Hyperliquid case brings to the forefront a fundamental question in the blockchain space: Does decentralization really matter? Or is it simply a buzzword that projects use to gain credibility in the crypto community?

Mert offers a pragmatic perspective on this issue. "Decentralization doesn't matter until it does," he states. The importance of decentralization, he argues, depends largely on the specific use case and user requirements. For a platform primarily focused on trading perpetual futures, the level of decentralization might not be as critical as for a platform handling more complex financial operations or storing large amounts of user funds.

This nuanced view challenges the notion that decentralization is an absolute necessity for all blockchain projects. Instead, it suggests that the degree of decentralization should be tailored to the specific needs and risks associated with each platform.

However, Mert also highlights the potential regulatory implications of decentralization. As new regulations emerge, the level of decentralization could become a key factor in determining how a platform is classified and regulated. This adds another layer of complexity to the decentralization debate, potentially influencing project development strategies in the coming years.

The User Perspective on Decentralization

An often overlooked aspect of the decentralization debate is the user perspective. Mert argues that builders and developers shouldn't expect users to inherently care about decentralization. "It's not their job to care about this," he explains, drawing a parallel to how users don't typically concern themselves with the specific cloud servers used by applications they use.

Instead, Mert suggests that the focus should be on communicating the tangible benefits that decentralization brings to users. These benefits could include enhanced security, censorship resistance, or the ability to use services that might otherwise be restricted due to regulations.

This user-centric approach to decentralization represents a shift in thinking for many in the crypto space. Rather than promoting decentralization as an end in itself, projects need to articulate how decentralization translates into real-world advantages for their users.

Layer 2 Solutions and Decentralization

The conversation around decentralization extends beyond individual projects to encompass broader blockchain architectures, particularly Layer 2 (L2) solutions. These L2 networks, built on top of existing blockchains like Ethereum, aim to improve scalability and reduce transaction costs.

Mert provides insight into the different stages of L2 development and how they relate to decentralization. He explains that L2s typically go through several stages, from highly centralized to increasingly decentralized. The key, he argues, is in understanding the specific guarantees and trade-offs at each stage.

For instance, even in early stages where an L2 might be more centralized, it can still offer strong security guarantees due to its connection to the underlying Layer 1 blockchain. "With an L2, it's actually a better guarantee because... if it's over stage one, let's say, the only thing that would compromise you is really an emergency council update," Mert explains.

This nuanced understanding of L2 decentralization highlights the complexity of the blockchain ecosystem. It suggests that binary classifications of "centralized" or "decentralized" may be overly simplistic, and that a more granular analysis is necessary to truly understand the security and trust models of different blockchain solutions.

Solana ETFs: A New Frontier

As we look towards the future of the Solana ecosystem, one of the most exciting developments on the horizon is the potential for Solana-based Exchange Traded Funds (ETFs). The recent filing for a Solana futures ETF by Volatility Shares marks a significant milestone, even though Solana futures don't currently trade on any major exchange.

This move represents a departure from the traditional path for crypto ETFs, which typically involves listing futures on established exchanges like CME before creating an ETF. The Solana community is taking a more direct approach, with multiple spot ETF filings preceding the futures ETF filing.

Jack provides a cautiously optimistic perspective on these developments. While acknowledging the potential significance of Solana ETFs, he suggests that their impact might not be as dramatic as the Bitcoin and Ethereum ETFs. "Bitcoin and Ether ETFs were very novel. It was like, oh, this is the first time I can get regulated access to crypto price action in my brokerage account. But that's not going to be the case when Solana ETFs begin trading," he explains.

One potential challenge for Solana ETFs is the issue of staking yields. As Jack points out, "If staking isn't included in these ETFs, you lose a lot of the potential yield on your Solana because staking yield is higher on Solana than on Ethereum." This could represent a significant opportunity cost for investors and may impact the attractiveness of these ETFs compared to direct Solana investment.

The Future of Solana ETFs

Despite these challenges, the prospects for Solana ETFs in 2025 and beyond appear promising. Mert, while not claiming expertise in traditional finance ETFs, expresses certainty about the eventual approval of Solana ETFs. "The answer to that question is, yes, of that, I'm 100% certain," he states.

The timing of these ETF approvals could align interestingly with major Solana ecosystem events. Mert speculates about the potential impact if ETF approvals coincide with Breakpoint, Solana's annual conference scheduled for late 2025 in Abu Dhabi. This confluence of events could create significant momentum for Solana, potentially attracting traditional investors looking for easier ways to gain exposure to the Solana ecosystem.

However, both Jack and Mert caution against overestimating the immediate impact of these ETFs. They suggest that while ETFs may provide a new avenue for investment, particularly for tax-advantaged accounts, they may not fundamentally alter the Solana ecosystem overnight.

AI Agents: Hype or Revolution?

As we move into 2025, the buzz around AI agents in the crypto space shows no signs of abating. These AI-powered entities, often touted as the next frontier in blockchain technology, have been a topic of intense discussion and development.

Mert offers a balanced perspective on the AI agent phenomenon. He acknowledges the potential for innovative applications, such as autonomous commerce where AI agents manage shopping, portfolio management, and other tasks. However, he also expresses concern about the hype surrounding many AI agent projects.

"My replies are full of AI slop and it's extremely annoying," Mert remarks, highlighting the prevalence of low-quality AI implementations that add little value to the ecosystem. He draws parallels to previous crypto trends like NFTs, where initial excitement often outpaced practical utility.

Despite these concerns, Mert emphasizes the importance of not dismissing the potential of AI agents entirely. He points to projects like Crossmint, which is leveraging AI agents for innovative applications in commerce and payments. Such examples demonstrate the potential for AI to bring meaningful advancements to the blockchain space when applied thoughtfully.

The Challenge of AI Agent Development

One of the key challenges in the AI agent space is distinguishing between genuine innovation and opportunistic projects riding the hype wave. Mert calls for more visibility from legitimate AI agent developers, suggesting that they need to "sell better, talk about it, message it better, and make sure that people understand that it's not all just chatbot slop."

This call for better communication from serious AI agent developers echoes the earlier discussion about the importance of clear writing in the crypto space. As the technology evolves, the ability to articulate the real-world benefits and use cases of AI agents will be crucial in separating substantive projects from mere hype.

Jack adds another perspective, questioning the value of AI agents in social media contexts. He expresses skepticism about the desire for AI-generated content on platforms like Twitter, suggesting that human-centric interactions will likely remain central to social media experiences.

However, both hosts acknowledge the potential of AI swarms - collections of AI agents working together to accomplish complex tasks. This concept, while still in its early stages, represents a promising direction for AI integration in blockchain technologies.

Crypto's Biggest Challenge: Short-Term Incentives

As the discussion turns to the broader challenges facing the crypto industry, Mert identifies what he considers to be the most significant hurdle: the prevalence of short-term incentives that often overshadow long-term value creation.

"The greatest problem in crypto will always be the short-term incentives compared to traditional business creation," Mert asserts. He explains that the ability to quickly monetize projects through token issuance can distort incentives, leading developers to prioritize immediate gains over sustainable progress.

This dynamic, Mert argues, can create a cycle where the focus shifts from building valuable products and services to simply "getting rich" through token launches. The result is a landscape where genuine innovation can be overshadowed by projects designed primarily to capitalize on short-term hype.

The challenge is compounded by the ease with which new tokens can be created and the FOMO (Fear of Missing Out) that often drives investment in these tokens. As Mert points out, even developers who initially set out to build legitimate products can be tempted by the quick returns offered by token launches.

Addressing the Incentive Problem

Solving this incentive problem is not straightforward, as it's deeply ingrained in the current crypto ecosystem. However, Mert and Jack discuss some potential approaches to mitigate its effects.

One strategy is to focus on building products that create genuine value for users, prioritizing long-term sustainability over short-term gains. This approach requires a shift in mindset, both from developers and investors, to value steady progress and real-world utility over speculative hype.

Another potential solution lies in improved education and transparency. By helping users and investors understand the difference between substantive projects and those primarily designed to capitalize on trends, the community can create a more discerning market that rewards genuine innovation.

Regulatory developments may also play a role in addressing this challenge. As the crypto space matures and faces increased scrutiny, projects may be incentivized to prioritize long-term value creation to meet regulatory requirements and build trust with users and investors.

Developer Thesis for 2025

Looking ahead to 2025, Mert outlines his developer thesis, providing insight into how he sees the blockchain development landscape evolving. He identifies three main ecosystems that developers will be working with: EVM (Ethereum Virtual Machine), SVM (Solana Virtual Machine), and Move.

For the EVM ecosystem, Mert predicts increased competition among various chains and Layer 2 solutions. This competition could lead to a fragmented landscape where developers have numerous options but may struggle to achieve significant traction on any single platform.

The SVM ecosystem, dominated by Solana, presents a different dynamic. With fewer options for cross-deployment, Solana developers have more incentive to build and optimize specifically for the Solana blockchain. This focus could lead to more refined and efficient applications within the Solana ecosystem.

The Move ecosystem, while newer, benefits from lessons learned from both EVM and SVM. However, it faces challenges in terms of adoption and ecosystem growth.

Solana's Unique Position

Mert positions Solana in what he calls a "Goldilocks zone" for 2025. He argues that Solana has achieved significant traction in terms of liquidity, startups, and other key metrics, while still maintaining a technical edge over competitors.

"If Solana developer experience can improve, let's say, 2, 3x, I think the results will not be 2, 3x in turn. I think there will be 10x. I think it will be non-linear," Mert predicts. This potential for exponential growth is tied to ongoing improvements in Solana's infrastructure, including increased block space, the implementation of Firedancer, and improvements in transaction processing capabilities.

However, Mert also acknowledges that maintaining this edge will require continued innovation and improvement in developer experience. He emphasizes the importance of scalability, smart contract functionality, and protocol-level optimizations in keeping Solana competitive.

The Importance of Developer Experience

While a survey of Solana founders suggested that developer experience might not be the top concern, Mert argues for its critical importance, especially as the crypto space attracts new developers in 2025.

He breaks down developer experience into three key areas: smart contracts, the read layer (RPC), and protocol-level considerations. Each of these areas plays a crucial role in determining how efficiently and effectively developers can build on Solana.

Mert also highlights the importance of scalability as a component of developer experience. As applications on Solana potentially reach thousands of transactions per second, the ability of the blockchain to handle this load without significant fee increases becomes crucial.

Looking forward, Mert suggests that as performance differences between chains narrow, other factors like community support, venture ecosystems, and liquidity will become increasingly important in attracting and retaining developers.

AI and Blockchain Development

An interesting point raised in the discussion is the role of AI in blockchain development. Mert notes that the more extensive history and open-source nature of EVM development provides an advantage in terms of AI-assisted coding tools.

"The data that it has access to is either outdated or they just don't have it because for a while, Solana has been around for three years, let's say, whereas the EVM has been around for eight, nine years and with more people," Mert explains. This disparity in available data could potentially impact the effectiveness of AI coding assistants for different blockchain ecosystems.

As AI continues to play a larger role in software development, addressing this imbalance could become an important factor in improving the Solana developer experience and maintaining its competitive edge.

A Heartwarming Crypto Story

The podcast concludes with a touching story that highlights the potential for crypto to make a positive impact in unexpected ways. Jack shares the story of Siqchi Chen, whose daughter Mira was diagnosed with a rare form of cancer.

After posting about his situation and the need for donations to fund research, Chen received an outpouring of support from the crypto community. A meme coin named after his daughter, Mira, was created, and its rapid rise in value allowed Chen to liquidate a significant amount and donate it to cancer research.

This story serves as a powerful example of how the crypto ecosystem can mobilize quickly for charitable causes. As Jack notes, "This type of thing had to happen organically. You can't manufacture a viral meme coin." It demonstrates the unique fundraising capabilities of crypto, which in this case far outperformed traditional platforms like GoFundMe.

The Future of Crypto Philanthropy

The success of the Mira token in raising funds for cancer research points to an intriguing potential use case for cryptocurrencies and meme coins in particular. While many in the crypto space have criticized meme coins as purely speculative assets with no real utility, this case shows how they can be leveraged for significant social good when the right conditions align.

Vitalik Buterin, co-founder of Ethereum, has previously spoken about the potential for meme coins to serve charitable purposes. The Mira token case study provides a concrete example of this potential in action.

However, it's important to note the organic nature of this phenomenon. As Jack points out, the success of the Mira token fundraising effort relied on a unique confluence of events and genuine community engagement. This suggests that while crypto can be a powerful tool for charitable giving, it may not be something that can be easily replicated or manufactured on demand.

Lessons for the Crypto Community

The Mira token story offers several lessons for the broader crypto community. First, it demonstrates the power of the crypto ecosystem to rapidly mobilize resources for a cause. The speed with which the community created, promoted, and traded the token, resulting in substantial funds for cancer research, is remarkable.

Secondly, it highlights the potential for crypto to democratize fundraising. Traditional fundraising methods often rely on established networks and institutions. In contrast, the crypto approach allowed for a more grassroots, community-driven effort that reached a global audience.

Lastly, this story serves as a reminder of the human element in the often technical and speculative world of cryptocurrency. It shows how the technology and communities built around blockchain can be leveraged for tangible, real-world impact.

Looking Ahead to 2025

As we look towards 2025, the Lightspeed podcast offers valuable insights into the evolving landscape of blockchain technology and cryptocurrency. From the ongoing debates about decentralization to the emergence of new financial products like Solana ETFs, the industry continues to mature and innovate.

The discussions around AI agents and developer experiences highlight the importance of balancing hype with genuine utility. As the crypto space attracts more developers and users, the focus on creating real value and improving user experiences will likely become even more crucial.

The story of the Mira token serves as an inspiring note to end on, reminding us of the potential for blockchain technology to make a positive impact beyond financial speculation. It suggests that as the crypto ecosystem matures, we may see more innovative uses of the technology for social good.

As we move into 2025, the Solana ecosystem appears well-positioned to play a significant role in the ongoing evolution of blockchain technology. With its focus on scalability, developer experience, and growing adoption, Solana continues to be a key player in shaping the future of decentralized technologies.

The Lightspeed podcast, through its in-depth discussions and analysis, continues to provide valuable insights for anyone looking to understand and navigate the complex and exciting world of cryptocurrency and blockchain technology. As we enter a new year, the conversations and debates highlighted in this episode will undoubtedly continue to shape the direction of the industry.

Facts + Figures

• Hyperliquid currently operates with four closed-source validators but plans to increase to 16 or 12 validators in the future.
• Hyperliquid has gained traction and generates significant revenue despite concerns about its level of decentralization.
• A Solana futures ETF filing has been made by Volatility Shares, even though Solana futures don't currently trade on any major exchange.
• Multiple spot Solana ETF filings have been made, preceding the futures ETF filing.
• Solana staking yields are higher than Ethereum, potentially making Solana ETFs without staking less attractive to investors.
• The Solana annual conference, Breakpoint, is scheduled for late 2025 in Abu Dhabi.
• Mert identifies three main blockchain development ecosystems for 2025: EVM, SVM, and Move.
• Solana has been around for approximately three years, compared to the EVM's eight to nine years of existence.
• The Mira token, created to raise funds for cancer research, allowed for the liquidation and donation of over $1 million in a short period.
• The crypto fundraising effort for cancer research significantly outperformed traditional platforms like GoFundMe.

Questions Answered

What is Hyperliquid and how does it differ from traditional blockchain projects?

Hyperliquid is a platform that started as a centralized product focused on perpetual futures trading and plans to progressively decentralize. Unlike traditional blockchain projects that start as decentralized networks and then try to attract products and users, Hyperliquid built its user base and product first, with plans to decentralize later. This approach has allowed them to gain traction and generate revenue quickly, but it also raises questions about security and trust in the early stages of the platform.

Why is decentralization important in blockchain projects?

Decentralization is important in blockchain projects because it provides security, censorship resistance, and can affect how a platform is regulated. However, the importance of decentralization can vary depending on the specific use case and user requirements. For some applications, like simple trading platforms, a lower level of decentralization might be acceptable if it provides better performance or user experience. The key is to balance the level of decentralization with the specific needs and risks associated with each platform.

What are the prospects for Solana ETFs in 2025?

The prospects for Solana ETFs in 2025 appear promising, with multiple filings already in place. However, their impact may not be as dramatic as the Bitcoin and Ethereum ETFs due to the novelty factor having worn off. The success of Solana ETFs will likely depend on factors such as whether staking yields are included, regulatory approvals, and the overall performance of the Solana ecosystem. While they may provide a new avenue for investment, particularly for tax-advantaged accounts, they may not fundamentally alter the Solana ecosystem overnight.

What is the developer thesis for 2025 in the blockchain space?

The developer thesis for 2025 identifies three main ecosystems: EVM (Ethereum Virtual Machine), SVM (Solana Virtual Machine), and Move. The EVM ecosystem is expected to see increased competition among various chains and Layer 2 solutions. The SVM ecosystem, dominated by Solana, presents fewer options for cross-deployment but potentially more refined and efficient applications. The Move ecosystem, while newer, benefits from lessons learned from both EVM and SVM but faces challenges in adoption and ecosystem growth. Solana is positioned in a "Goldilocks zone" with significant traction and technical advantages, but maintaining this edge will require continued innovation and improvement in developer experience.

How are AI agents being used in the crypto space?

AI agents in the crypto space are being explored for various applications, including autonomous commerce where they can manage tasks like shopping and portfolio management. However, there's a mix of genuine innovation and hype surrounding AI agents. Some projects, like Crossmint, are using AI agents for innovative applications in commerce and payments. At the same time, there's concern about low-quality implementations that add little value to the ecosystem. The potential of AI swarms - collections of AI agents working together to accomplish complex tasks - is seen as a promising direction for AI integration in blockchain technologies.