Original interview: Decypher Podcast;
Guests: Andre Cronje, co-founder of Sonic Labs;
Original translation: Deepseek
Editor's Note: In this episode, Andre Cronje shared his original intention to enter the crypto industry, his views on the current state of the industry, and his future prospects. He mentioned that he was not driven by money, but was attracted by the industry's innovative potential. Although the current industry is full of low-quality projects and capital flow problems, he still insists on solving the problems in the industry. Andre discussed the impact of Meme coins on capital flow, compared the differences between the ICO era and now, and pointed out that the progress of infrastructure has been completed by 50%-60%, but breakthroughs are still needed. He also emphasized that future innovation will come from "crypto-native" developers, and hopes to promote the development of decentralized exchanges and infrastructure, and ultimately realize the transformation of the financial industry.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
AC's original intention to enter the encryption industry
Host: It's really exciting to sit down and chat with Andre today. I've been following your progress in DeFi, and many people are inspired by you. I have a question. You have produced a lot of results and achieved success in this field. I think you are financially free, why are you still holding on?
Andre Cronje: When I entered this field, I was already financially free. I have never been a person driven by money. No matter what the reason, money has never been a guide for me. I was working as a CTO of traditional finance in a bank at the time. The job was stable and the income was enough. Even if I lost my job, my savings would be enough for me to live for five years.
I entered the crypto industry as a skeptic at first because it was full of exaggerations. I don’t know if you know my experience, but I started by doing code reviews on Medium. Because many project companies claim that they have solved a distributed system problem that has plagued the industry for decades, but when you look at their code, you find that it’s just “Hello World” and it doesn’t do anything at all. This gap is very obvious.
The reason I ended up staying was that although 99% of the stuff was garbage, 1% was real. There was indeed a new financial paradigm at the bottom of this industry, a better financial model. Although traditional finance always says that crypto is a scam, according to the data, cryptocurrency fraud accounts for less than 0.02% of all financial fraud.
Of course, this is also a numbers game, and traditional finance is much larger in scale. But in essence, you can see a highly opaque system on one side and an extremely open and transparent system on the other side that anyone can view.
The reason I stayed was simple. I am a problem solver by nature, and there are still too many problems to be solved in this industry. In my previous career, most of the problems had been solved, and there was a lack of real innovation. In the banking industry, the financial industry, and even now, you see, although there are some innovations, such as the optimization of user experience (UX/UI), the launch of mobile applications, etc., these are not real problems for me. Of course, this is not disrespectful to designers and UX/UI practitioners, their work is important, but it is not something that excites my brain.
In the blockchain industry, especially now, not many people are really trying to innovate. In 2016 and 2017, when I first entered the industry, I saw multiple in-depth and valuable white papers every day. Now, it’s considered a lot to publish a decent white paper every six months. I can understand this change because I have experienced it myself. For example, when ACC (the protocol founded by Andre Cronje) was squeezed out of the industry, I know how it feels and why many developers gradually gave up.
In addition, there is a big problem with the flow of funds. Most developers are inherently lazy. If a capable developer has two choices - either spend five minutes issuing an ERC20 meme coin on Solana or Ethereum and potentially make millions of dollars. Or spend years writing papers, peer reviewing, verifying contracts, and solving vulnerabilities - the lazy choice is almost obvious.
Host: What's more, the lazy choice is more advantageous, right? Just like meme coins are not safe now, right?
Andre Cronje: No, you are 100% safe, and now we have legislation that makes it clear that you are safe here. But this actually makes it worse, right? Because it further discourages people who are willing to take risks and innovate, and this is something I've been thinking about.
For example, when I launched my first token, it was seen as a community-driven model and a way to be immune to regulation because there was no fundraising, it was 100% community-driven, there was no team allocation, and therefore no expectations of "what the team should do."
In a way, it also provides a blueprint for others, showing that there are indeed ways to circumvent regulatory restrictions. But at the same time, the incentive mechanism of this model is also problematic - the team lacks economic or future development incentives, and even has no salary guarantee.
So I think people in the industry have stopped trying to innovate, and hopefully that can be reignited. Because right now, all we see is the same codebase being re-released countless times on different blockchains, L2s, or under different names. I don't know, it's exhausting.
Moderator: I’m looking forward to discussing this topic with you in depth, because I feel like you have strong opinions on how the industry can improve. I want to talk about your earlier point that “99% of projects are scams or are harvesting users”. Do you think this ratio still holds true?
Andre Cronje: I think it’s gotten worse, but I’m a bit conflicted about it. On the one hand, in my earliest blog, Building in DeFi Sux, I mentioned that the crypto industry votes with money. If everyone puts their money into low-quality copycat projects, the market will be flooded with them because they’re easier to make money with. Investors don’t want to take the risk of entering new protocols because the risk is too great, so they’d rather park their money on the “5062nd Aave copycat project.”
But on the other hand, I also have to admit that those who participated in the Meme coin craze would not have invested in DeFi infrastructure or real decentralized financial protocols. So now my mentality has adjusted. In the past, I was angry about the misallocation of funds, but now I realize that those who put money into Meme coins or various copycat projects would never touch DeFi or any real decentralized financial protocol.
Moderator: I think a basic assumption of the crypto industry is that all these assets are financialized, right? These assets have pricing and can be traded freely from the beginning. This means that the core of the entire ecosystem is actually around asset trading. And those who really enter the industry for technology (although this has become a meme) are not actually mainstream, or they also want to make money from these things.
Andre Cronje：Yes, I don't blame those who have the ability to develop Meme coins to make money. Even Vitalik has written about this, saying that you can make this money first, but then you should invest the money in the products or projects you really want to build. This may indeed be the case. We can refer to the ICO boom, where many people made a lot of money at that time, and they did reinvest a considerable part of the money back into the crypto ecosystem.
But I think the situation is different now. If you look at the flow of funds in the past, the crypto industry is now more and more integrated into the traditional financial system, which is both a good thing and a bad thing. In the early days, if you participated in a successful ICO, as an investor, you made a lot of ETH on Ethereum - at that time there were no mature cash-out channels such as stablecoins, and you had almost no way to take the money out of the ecosystem. So you would choose to reinvest the funds in new projects, new ideas, or provide liquidity support.
But the current Meme coin market is different, it's more "money in - make a profit - money out". Money won't really flow into the broader ecosystem. But as I mentioned before, you have to adjust your mental model - these funds would not have gone into DeFi or other infrastructure projects.
However, I do think this has led to a new phenomenon - in the past, a development team might have made some money from issuing tokens, but because it was difficult to cash out directly to a bank account at the time, they were more likely to reinvest the funds into new protocols. Now, they can easily withdraw the money to a bank account and retire directly with the money.
Infrastructure progress
Moderator: You mentioned the ICO era. Do you think one of the problems back then was that the infrastructure was not perfect? How much of a role did the infrastructure play in that? After all, you built a very successful product in that environment, and now you are pushing the infrastructure further. So how big of a barrier was the imperfection of infrastructure in the past? How far are we from solving these infrastructure problems now?
Andre Cronje: It was much harder to participate in the past. For example, it was harder to register an exchange account, harder to deposit money into an exchange account, harder to get Ethereum to participate, and even harder to set up a wallet. From an infrastructure perspective, everything was much harder than it is now.
We didn’t even have on-chain oracles at the time. If you don’t talk about ICO participation itself, just from a construction perspective, oracles were almost non-existent. There were no fast RPCs, and a lot of times you had to read data directly from the smart contract.
The infrastructure is much better now, the experience requirements for the team are much lower, and we can launch products that we used to spend a lot of effort to make. Because the tools are better, the infrastructure expenditure is higher, and the user onboarding is smoother. If I had to roughly estimate, I think we have completed more than 50% of the infrastructure evolution, but not much more, probably between 50% and 60%.
Host: So you think this proportion is lower than most people think?
Andre Cronje: It depends on how involved these people are in the industry. Even at the blockchain level, there are still many problems to be solved. And the development of technology is not linear, it advances in leaps and bounds, and each stage requires some kind of breakthrough to enter the next stage. Just like the development of the Internet, there were 56K dial-up modems at the beginning, and you needed specific hardware, specific ways of connecting, accessing through telephone lines, and specific network cards. These were the thresholds at the time. And if you fast forward to today, you just turn on your phone and all these things have been integrated wirelessly.
The development path of blockchain is similar. I don't think it has entered the fiber era yet, but if we use the traditional Internet as an analogy, it is probably in the stage between ISDN and ADSL, and is on the verge of the next major breakthrough. Ultimately, our infrastructure will only be truly successful when users no longer care which blockchain they are using. Because when using an application, you don't consider whether its server is Hetzner or Amazon Cloud (AWS), these details are irrelevant to users. Blockchain applications also need to achieve this experience. Only when the infrastructure develops to this level can it be considered truly mature.
Developer Ecosystem
Moderator: Do you think it's worth building applications now? You used to think it was worth building applications, but then you turned to infrastructure construction. I'm also curious about your transition. But if we have only solved half of the infrastructure problem now, should we focus more on infrastructure?
Andre Cronje: To use the Internet analogy, it's like waiting for fiber optic networks to become popular before developing applications. But in fact, there were valuable applications for decades before fiber optics appeared. Of course, you can say, looking back at MySpace, is it still valuable? Now it is a failed project, but at the time, its existence was necessary because it was products like MySpace that paved the way for later social platforms.
The current investment environment is more inclined to look for companies that can last for centuries, but this is not the case. Even if some companies will eventually be replaced, they still have value. The entire industry needs such iterations, and people must start building applications now so that future applications can be developed.
I like to use another analogy to illustrate this. If you look at all the big apps today, their developers are basically people who grew up in the Internet age. I was born before the Internet, so my way of thinking is not as "native" as theirs.
Even to this day, I still find social media strange and unnatural, and I don't like it at all, so I only use Twitter. But for those who grew up with the Internet, they can use more than 20 different applications at the same time, which makes them understand the field better than me and can develop the next generation of applications, which I can't do. I think the development of blockchain is the same. Those who can make killer applications are often those who have been exposed to blockchain since childhood, rather than those who enter this field in their 30s.
Moderator: So do you think this is a distinction between "crypto-native" and "non-crypto-native"? Or is it more like "mass market" and "non-mass market"? You know what I mean?
Andre Cronje: I think that eventually applications will make this question irrelevant. People will not think about "is this a decentralized Uber" or "a centralized Uber", they will only care about which product is better. Therefore, the reason why the decentralized Internet will eventually become popular is that its design itself is more in line with the interest incentive mechanism and can be more directly oriented to consumers without so many middlemen.
For example, you will have a decentralized YouTube. Instead of letting creators be constrained by the huge YouTube platform and go through cumbersome processes such as advertising review and revenue sharing, it is better to achieve more direct benefits directly through decentralization.
In fact, even on YouTube itself, we have already seen this trend. In the past, creators mainly relied on YouTube advertising revenue, but now they are more likely to choose in-video sponsorship because this method is more direct and can build better user relationships. The decentralized version of YouTube is essentially optimized for this model.
Moderator: In the Ethereum white paper and some early documents, Vitalik mentioned the concept of "decentralized Uber". But now this statement has almost become a meme, and many people think that the development of the crypto industry will not really go in this direction. But from what you said, you seem to agree with this view, at least it may be realized someday in the future?
Andre Cronje: I think people always compare the current Internet with current blockchain applications, and such comparisons are only disappointing. If we change our way of thinking, for example, on-chain gaming is a good example. I actually like on-chain gaming. Why? Because it reminds me of those crude Flash games in the early 2000s - you need to download it to a Flash browser, play it for a few minutes, and then crash, and then have to wait 4 minutes to reload before you can continue playing. But if you compare on-chain gaming with those Flash games, the experience of on-chain gaming is already great. The problem is that now people compare it with current AAA 3D games, such as those with ultra-high-definition and next-generation graphics. In this comparison, on-chain gaming certainly looks terrible.
Host: Yes, just like when you run a small game on a graphing calculator, you can't expect the experience to be comparable to that of an Xbox.
Andre Cronje: Right? We are still limited by hardware and capabilities. In fact, there are a lot of similar comparisons here. You see, back in the early days of the Internet, the Internet only made sense in the context of military operations and financial prototypes. In addition to military applications, we are actually seeing the same thing now in the blockchain space. These are the first areas where real value can be realized because people are willing to invest money to build infrastructure to gain access. At that time, for a megabyte of data, you had to pay thousands of dollars a month. Now we are seeing a similar situation with gas fees, where you pay for bandwidth. It is still expensive now, but because of this, only certain types of applications can exist.
However, we are seeing this transition happening, it's just that the process is slower than market cycles and people's attention spans. People ask, "Why don't we have this now?" But in fact, we will have something like this, but it may take another decade.
Host: So, how confident are you about this future development? Do you think cryptocurrency can really change the world?
Andre Cronje: I don't think cryptocurrencies will necessarily "eat" the world. You know, some places are better centralized. But at the same time, if it is centralized, it will be more attractive. However, there will be some people who prefer a decentralized approach. For example, if you are a large bank and all your data is stored in a specific database, such as Oracle, you will definitely be willing to pay for an enterprise license for Oracle because you want to have a dedicated person to solve your problems at any time.
You won't choose the decentralized version, but there are some groups of people who prefer the decentralized approach. If you look at some African countries, they often have community banks, where one person keeps everyone's money. Stockfell, I think that's what they call it. This is an example of something that works because it provides better accounting that everyone can see and still maintains the same trust assumptions.
So I don't think it will completely replace the traditional centralized world, but I do think it can provide advantages in many areas. For example, if you look at the bank settlement system, it is extremely outdated and based on daily settlement, which is full of opportunities for fraud. A lot of times people just send Excel spreadsheets by email, and tokenizing a small step like this can save banks and clearing houses trillions in fees, and this change may be realized in a very short period of time.
Moderator: So what lessons do you think the industry needs to learn to get to the point where you're talking about consumers and businesses having the choice to use decentralized or centralized products? Because at some point in your career, you seemed to be a little tired or jaded with the industry. So the first question is, how tired are you of the industry now? And the second question is, what do you think we should do and how should the industry move forward?
AC's reflections on the crypto industry
Andre Cronje: I am less tired now than before, but it is not because the industry has changed. I used to be very tired because on one side the blockchain community provided almost no support, and on the other side, the SEC (Securities and Exchange Commission) attacked every day.
At that time, there was no reason for developers to stay and work, partly because the participants in blockchain had changed a lot. You know, when I first started developing in 2017 and 2018, the participants were almost all technical people. So the conversations between us were always very valuable. In 2021 and 2022, the participants suddenly became a large number of non-technical people who were more concerned about money, which caused the content of the conversation to change completely, which often made me feel very alienated.
I don't see any way around this because it's just a result of more people coming into the market. I think it's almost inevitable from that perspective. The teams and developers need to change. I don't know how likely that is, but it's a real issue in terms of regulation.
You know, we have a four-year grace period, let's see what we can do in those four years. But it could also flip over in four years. That's what I think everybody has to keep in mind. If we can optimize and integrate blockchain into as many places as possible in those four years, it will become almost impossible to remove. We'll be in a very different situation then, and that's our responsibility as a community.
I think the lesson is that people need to be more tolerant of developers and teams, especially those that are trying new things. But I don't think that's going to happen because if you look at the crypto community now, what it has become, the mental model that I always try to get people to understand is that the difference between starting with someone posting on an internet forum and meeting them in person is huge - they may become more radical.
Add to that the anonymity and the fact that they don’t have to take responsibility for their words, which can make them even more hostile and aggressive. Now imagine this is like a sports game, with two teams competing, there will be more attacks and insults during the game.
Now, let's say it's financially incentivized. It's like a vicious cycle where the worst human behavior is on display. We're still incentivizing that behavior. I don't know how that's going to change. For me personally, I've just become more resilient. You know, when I first started, back in the tech community, my measure of whether people were happy was 99%.
If someone said something hurtful or had a different opinion, I reached out to them privately. I talked to them, made calls, and took the time to understand their position. Nine times out of ten, those people ended up becoming my friends or allies, so I was able to convert them at that time. In 2021, after a lot of self-reflection and my changing perception of the industry, I changed this standard from "let me satisfy 99% of the people" to "let me satisfy 51% of the people."
I don’t just want to satisfy 20% of the real audience and ignore the remaining 80%. But this is also a process I went through, something I had to learn, and almost every team that enters this ecosystem will go through this process. This process will eliminate many teams.
You know, I think there are probably only 5% of the players now that there used to be. There have been more builders leaving the space over the last few years than there have been new builders coming in. All the real builders, those are the same people I used to talk to back in those days.
Moderator: You mentioned the developer problem in the crypto industry, the lack of talent and builders of interesting projects. So what do you think the developers of the future should be like? How can we attract them to this field, especially to let them build projects here?
Andre Cronje: That's a good question, and I don't have an answer. If I knew how to do it, I would have done it a long time ago. Now, I think we're seeing a resurgence of the "Silicon Valley VC funding" model, where all the projects are competing with each other, but I think that's a bit meaningless. But during that time, there will be some applications that will come out and people will interact with them.
What I love about building smart contracts is that they are extremely permissionless and composable. You know, everything I've built, I've built on platforms like Uniswap, Alpha, Compound, I've never had to ask for permission. I've never communicated with any team or contacted anybody on the platform I built. So, anyone who's playing around at home deploying smart contracts has the opportunity to make some changes that could eventually grow into something big.
I think what we need to optimize is probably the continued composability and open source features. Because this is the key to attracting and motivating those developers to start participating. But the trend we are seeing now is that more and more projects are turning to closed source rather than an open environment.
There's no way to incentivize people to build on top of you because they can't, you've blocked them from the beginning. So maybe we need to go back to a more open culture of open source. When I say open source, I mean anyone can build on it, not like my current code, I have to put a license on it to protect it. Right now, it's hard to really open source code because someone could fork it and add a token in 24 hours, which is not good.
Moderator: Yeah, I like to look at crypto sometimes in the same optimistic way that I look at platforms like Shopify or WorldPress. I think some of your early projects exemplified that, where they were like modular things where you were building on top of other things. And actually, some of the limitations that you were dealing with made the products themselves more interesting.
Andre Cronje: Right? Exactly. One quick lesson I learned with the Yearn project is, don't try to solve every problem. Throw some problems out there, and you tend to get better solutions. Sometimes you get better solutions, but often you get better solutions. That's the tradeoff.
Andre Cronje: But that's exactly what, you know, I've been thinking about, why is Yearn more successful than other similar yield aggregators? The reason is simple, those yield aggregators are not prepared for other people to build on top of them. A lot of them have vaults, but they haven't tokenized those vaults. So when I deposit funds, I can't do anything. The first step I took was, okay, I need to tokenize these deposits so that they can be used somewhere else. That's really the key. You need to optimize for composability so that other people can actually build things, which is a different design. You have to think differently about how to build because it's easy to just build products, but if no one can build on top of them, then there's no point. So you have to constantly think about, how do you open up this system to facilitate the building of other things? People will build things, and I don't even know what they're going to build. You can do that with FIFA and in crypto in general.
Moderator: Also, I know some of your future products are inspired by the problems you faced while building your current products. We see this in Web2, where people often say, build for yourself five years ago, or build for your own problems. I feel like in crypto, we sometimes lack this kind of thinking.
Andre Cronje: I mean, we do have this in crypto. I hear this a lot. A lot of the big products that we have today, they were built by teams that spun off from the original team, they spun off from the original team and continued to build. That's also why I say it's mostly the same builders, because they're from the same original OG team, right? But specifically, because they used to work there, they saw, I can do this, and then maybe that company didn't want to do it, so they spun off and did their own thing. But I agree, we can definitely do more in this area.
I think we could think more about how to make this thing more composable because that's also where a lot of changes have happened over the years. Even looking at Compound and Uniswap, their initial v1, v2 versions were optimized for convertibility and very easy to build on top of. You could easily extend their interfaces and functionality. What's out there now is probably a better product for consumers, but it's much worse for builder integration, right? Much more complicated, much more difficult. You need to communicate with the team, and once you need to do that, you've already ruled out 99% of the builders because they don't have a channel to contact you. So yeah, actually, I don't really think about it that way, but as we continue this conversation, I think what's missing the most right now is that kind of "how do I build for other people to build on top of me" mindset, because I think that's completely missing.
Moderator: What are the applications? You mentioned this 99% and 1% thing, which means there are still some applications that interest and excite you. What applications are you interested in at the moment?
Andre Cronje: So my main interest is in applications that are trying to innovate and try new things. I don't think they're at the scale that they used to be. But I see some teams trying, like Shadow Guys, their Shadow Exchange on Sonic. They're trying new things in terms of token economics that I think no one has done before. I also think that token economics is an extremely underdeveloped area. I think we have a lot of work to do in this area. But everyone, because it's so financially related, is very afraid to try anything new in this area. I don't blame them, it's scary because you're tying your public image to this thing that can go up and down. But we have a lot of work to do in this area, and they're doing great things.
Silo is another team that is releasing some new token economics. I also really like their overall design philosophy. The game content that is coming out now, I think there is a lot of good account abstraction, economic abstraction, user interface, Pasky and other things happening, which is definitely good. Some of the games I play on the chain are Faith, Adventure, Sacrifice for Kingdom. Who else is really innovating? Metropolis is doing a new dlmm AMM, which is good. I know there are some things happening in the yield space, Spectral and Pendle are the main players there. It's not an area I'm very familiar with, but there are definitely more things.
I think we're starting to see on-chain options and other derivatives start to come online. Before, options pricing needed to be very accurate and needed to be very cheap, and you couldn't do both of those things on-chain because you didn't have the data and the fees were prohibitive. Now we're starting to see a resurgence of those, but I think we haven't seen a similar breakout for options, futures, and other derivatives like UNISWAP and AMS did for trading. So I definitely think that's coming. The guys who are playing with Margin Zero Strike are also experimenting and trying new things. So I'm keeping a close eye on them.
I think there's more work to be done on the purpose of on-chain, and that's one of the few innovations that we're seeing, right? Like the GMX model, the Hyperliquid model. That's another one that I forget right now because that's, you know, liquidity pools as counterparties, not exchanges as counterparties. But I think there's still a step to go because right now your liquidity providers in these pools still take on the aggregation risk, right? I think there's also a way for them to just take on the spot risk, just like you take on Uniswap. Insurance, I think is another primitive that we're going to see more of on-chain. There's not a lot going on in that space right now, most of it is still finance-related. I think we're going to see more of that in the next 6 to 12 months. But as fees are lowered and removed, as wallets become less of a necessity, as you no longer realize you're on a blockchain, I think we're going to see more of that in terms of gaming and the social layer.
Sonic Ecosystem
Moderator: A lot of the projects you mentioned seem to be in the Sonic ecosystem or moving towards the Sonic ecosystem. Polymarket is a much discussed app, as is Pump Fun. Do these apps appeal to you? Are there any apps that are not currently on Sonic that you would like to bring into your ecosystem?
Andre Cronje: Polymarket could be, absolutely. I think they're doing some really interesting things with markets, and I feel like they could do more. I feel like their hands are tied a little bit, you know, because of things like lost accounts, let's see, the FTC thing, because they could be more than just a prediction market. You know, one of the new protocols that we're seeing out there, True Markets, it's using the concept of prediction markets to do user-sourced articles, which I think is a really novel idea, right?
Host: Yes, insurance also fits this.
Andre Cronje: Insurance does fit into this because that's one of the problems with decentralized insurance on-chain is that you still need a third party to say, okay, here's the payout. As long as you need this third party, you might as well do it off-chain. You know, there's no reason to do it on-chain. But once you have these sources of truth, all of a sudden there's a reason to do it on-chain.
What else is interesting? I think we've got the major players that we wanted, you know, like there's some nice gaming content. I think the guys at Fantasy Top are building some cool stuff. Never mind that they launched Pump, I think that's a very specific niche product that only works where it is right now. I don't really see a multi-generation strategy for them. There are some IRs, like I'd like to see Fantom Wallet come over because I do think they're getting to the point where people are really aware of the speed that we have. Because currently the slowest part of interacting with Sonic is the wallet. That's where you spend 99% of your time. Because the moment you click from the app to the wallet, that's instantaneous. And then submitting from the wallet, that's also instantaneous. But the part in the middle that loads is the part that's actually slow. Now, there's probably a longer list, but you know, these are the ones that pop into my head.
Moderator: I get the sense that you're particularly passionate about applications, and you have a reputation as an application builder. Why did you eventually pivot to focus on infrastructure?
Andre Cronje: Well, I mean, I did Fantom before I did any applications. So, you know, I've been at Fantom since 2018. So the focus was always with, I recognized that the reason we didn't see a lot of debt was because there were problems at the underlying infrastructure layer. The most obvious thing at the time was that, you know, something as simple as proof of work was designed to be slow. Because it's not designed for speed, it's designed for security, right? So just building a better consensus, you know, the abft consensus that we launched in 2019, we're still using the exact same one now in Sonic. I still think it's the gold standard in consensus.
But my initial move to the application layer was actually because I built Yearn, because I was managing the Fantom Treasury, and I got tired of moving it between protocols. So I thought, I'm a programmer. I'm just going to build an application to do this for me. And then everything else spiraled out of that, too, like mentioned earlier, you know, it was an idea that was inspired by the problems that I saw in that particular thing.
So, you know, from Yearn to Boldkeeper, because we had a problem right now on Yearn where I needed to run a bunch of off-chain infrastructure bots and keepers to handle things like moves and liquidations. So I thought, why can't we build an on-chain version of that? You know, keeper does a great job. It's still used by makers. It's still used by a bunch of on-chain managed things. Because the idea is simple. You know, I pay someone to do the on-chain infrastructure.
And then I think I became fascinated with the more traditional banking problems, which were capital efficiency, which were IMMS, lending, and the rest of my work was pretty much focused on that. And when I built and when I released solidly, that was already my new AMA model, not as perfect as what I have now, but it was a pretty good implementation at the time.
At that point, I started to realize, look, there are some foundational layer problems here that we need to solve in another way before I can actually release my next app. And that's what we've been focusing on with Sonic, you know, Sonic is the culmination of it all. Like, it's not just about speed and the fact that it's fast. I mean, that's what I feel like you need to compete in today's market, but that's not going to make you stand out in today's market. Because even if we were faster, even if we had lower finality, the difference in user experience, you're talking about 400 milliseconds versus 300 milliseconds. Users are not going to notice the time it takes you to blink.
So the real thing that we started focusing on, you know, was fee monetization, where apps get 90% of the fees back, because that already means you can start building a lot of different things. And then fee subsidies, so apps that use that 90% can give it back and subsidize new users, so they don't even need gas and stuff. And then things like native abstractions, so you don't need wallets, because we want to get to a point where apps are built on top of us, and their users don't need to know that they're interacting with us. And when we get there, then I can just release my next series of apps, because they need that. So again, you know, it's not just about the benefit of building in this space is that I build something for myself, and then coincidentally, it might be beneficial to all of our builders. So that's the boon, right? But I mean, ultimately, I'm busy doing all of these things selfishly for me.
Host: Interesting. So a lot of the design of Fantom stems from the problems you encountered there. Are you still motivated to explore new concepts in the future? You have explored fee sharing mechanisms to some extent, such as Berachain, who are trying to integrate DeFi into the base layer. Are you interested in this?
Andre Cronje: I mean, obviously we're doing fee monetization. So I agree 100 percent that there's a fundamental problem with incentive alignment. You know, because the incentives are designed based on the Bitcoin model. And in Bitcoin's model, you have only one actor, which is the miner. So everything obviously flows to the miner. There's no other actor. And every blockchain sensor just replicates that model instead of thinking, okay, who are the other actors? And the other actors are obviously the applications. And that's why, you know, I think our approach is probably oversimplified to just say, hey, this contract gets 90% of the gas it spends, because that automatically aligns with the applications that people are willing to use.
And I think the model of Berachain, again, I like their attempt to solve the incentive alignment problem. It's a problem that needs to be solved, it's currently wrong, it shouldn't all go to the validators. It's a waste. That's what we're seeing. Maybe it's not the only reason, but in my opinion, that's why we saw Uniswap launch Unichain. Because they looked at all the fees that they were generating for Ethereum, $2.8 billion, and they said, we're not getting any of that.
Let's launch our own chain so we can capture that $2.8 billion. But launching a chain is not as easy as the people at X have convinced us. You can deploy a second layer like you click a button. Technically yes, you technically will have it, but you don't have the infrastructure, you don't have the integrations, you don't have third parties, you're missing a lot of things, and it's going to cost you tens of millions of dollars to get there. So instead, it should happen on chains that already have existing infrastructure. You see, we saw different applications approaching in different ways, like Arbitrum, trying to build their native fee switch so you could use different tokens. I know they eventually removed it, but that was still them trying, okay, how do we incentivize our applications? Avalanche is obviously there, they call it the subnet model. So I think a lot of people realize, hey, there's an incentive alignment problem here.
My only critique of Berachain is that it requires too much active involvement from the validators. I think that's a different, team of people. We run our devops or great running devops, but I don't want to confuse them with needing like, you know, voting protocols or what pools or things should go. I think especially when it comes to validators, less is more. You just want them to protect your network. You know, you want somebody to have it installed on hardware in a bunker somewhere that's gonna live for 10 years and they don't touch it. Like that's ideal because it's supposed to provide network security. The more you try to do on top of it, the more attack surface and areas you have. So that's my only gripe with their model, but I do think it's definitely going in the right direction, you know, hey, the rewards shouldn't all go to the validators. It should go to the applications. And then what the applications do, that's their business, you know, whether they pass it on to their users or as their own fee model. Whatever.
Moderator: You mentioned that you're still interested in building apps. You just need the infrastructure to catch up. I'd be remiss if I didn't ask you what you're most interested in.
Andre Cronje: A lot of the things I've mentioned already. We have essentially two formulas. You know, you have the constant product, which is Uniswap, or you have the constant sum, which is stablecoin swap. We're not looking at anything else right now. We have pooled liquidity, which allows you to change the shape. But at the end of the day, it's still the constant product. Like that's still the quote that's used. At the end of the day.
I'm trying not to be specific, but anyway, I built a new AMM that has a curve that self-references volatility. So what that means is that the more volatile the asset, the closer it is to a constant product. The less volatile the asset, the closer it is to concentration. And the beauty of doing that is, because my North Star is always, I foresee a world where 99.9% of real world assets are on-chain. Now you can't do that with a constant product. You can't do it with a constant sum. You need something that's like, 80% constant sum and 20% constant product. So that's exactly what this does. So every time a trade happens and measures volatility, it has the recent deviation, one hour, one day, one month, 200-day moving average, whatever, and then annualized. So that informs the quotes. So that already gives you better quotes, that already gives you better pricing, that gives LPs more fees. Now on top of that, I believe there's also a new way to do lending markets.
This is actually something I released in Solidly. I don't know how much time we have, so you'll have to see if you want to interrupt me at any arbitrary point, but I'll try to go through it quickly. So, in Solidly, I've introduced this concept called the reserve weighted asset price. So, Uniswap introduced TWAP. The problem I have with TWAP is that it gives you a fixed price, regardless of size. So no matter if I sell one unit, it's going to tell me it's worth $3. If I tell it I'm selling a trillion units, it's also going to tell me it's worth $3. Which is not true at all. If I give you 1,000 of this thing, what price are you going to give me? The main reason I want this on-chain is, one, to notify liquidations, and two, because the counter-question to that question is, if I give you, how much of another asset can I liquidate with this asset?
Now if I can answer that question, that means I know my loan-to-value ratio. In other words, how much can I borrow against this asset? So now you can start borrowing. So now here comes the next question. You can't borrow without knowing what your interest rate model is because you need to know the peak to make sure the LPs stay safe. In crypto, we have two interest rate models. We have volatility and stability. We already have volatility inputs. So now I can already have these graphs based on the same inputs, input into my AMM. So now I can do a lending market. So now I can borrow B against A, I can borrow A against B. Next, because I can borrow A against B and B against A, that means I can have implied leverage. So once someone wants to trade on this AMM, they can create a leveraged position. And leverage is a function of LTV. So leverage is also implied, relative to the size of the actual pool. So the more liquidity, the higher the leverage. So these things again become self-referential. And then because you have leverage and interest rates, you can have implicit perpetual positions, which are perpetual positions that only have counterparty risk to the people in the AMM who are providing liquidity. So that's what I mentioned earlier, and I think it's still going to be solved.
I've got it solved, but it's not launched yet. And then the last one, because you already have volatility and all these other data points, you can start writing options in the same AMM. You do a couple of perpetual options until you get volatility applied, and then you can start doing standard European and American options. I've got some other stuff in there.
Host: So how are these features being developed?
Andre Cronje: Now? It's all done. The only reason we haven't launched yet is that we're waiting for the regulatory environment to change because this falls squarely under the jurisdiction of the CFTC. So we're waiting to see, you know, Brian's new appointment and their attitude towards this kind of thing. Because that determines whether we can launch this product with or without derivatives, right?
Moderator: Okay. Do you think these features will be integrated together? Like you're looking at this all-in-one super app for finance, or something like that basically.
Andre Cronje: Again, this is built around the idea of composability, so I think all the applications in our ecosystem can interact in some way.
Moderator: Founders should pay attention to this model because as we discussed, this solution leads to this problem, but this solution and the application, this is one of the beautiful things about cryptocurrency.
Andre Cronje: The platform. So you need to leverage composability and create problems for people to solve.
Moderator: Also, there is no shortage of creativity in crypto. Sometimes people say, oh, this has been done before. No, man, you need to be more creative.
Andre Cronje: The reason I didn't do Yearn originally was because I felt like, oh, other people are already doing this, why should I build it? I've stopped launching a lot of apps in my career because of this. Or if I see something that's not being built, I tell myself, oh, but it's such a basic idea, someone must have already done it and failed. That's why it doesn't exist. It's actually garbage. It just worked nine times out of ten. The reason it doesn't exist is because I thought about it too early, right.
Host: What is your biggest regret in your crypto career?
Andre Cronje: Oh, my god, that's a long list. We don't have time to go through that. I mean, all the things that I would go back and change. I used to always blame the participants because, you know, they put money into the contract, someone saw my deployer deploy the contract, and just because I didn't change it in half an hour, you shouldn't put millions of dollars into it. But at the same time, I should acknowledge that I had so much attention, I need to communicate better, right? You know, I've learned to communicate better since then. Because that's the problem. I need to make it clear that unless I announce X on these platforms, it's not real, please stay away.
I had to start doing things like address rotation, every time I did something new, I had to use a new address. That's definitely one area I would change. The other really big regret is probably the trust I put in Multichain. I think we did get burned because we were told we were part of the original ceremony. So from our perspective, everyone destroyed those original validator keys, there was no way to recreate it. We had no idea that their CEO had been keeping a backup key from the original ceremony so that he had full access.
Host: Does this affect the current bridging infrastructure?
Andre Cronje: That definitely impacted a lot of things, and we learned a lot of lessons there. You know, it was also because Fantom launched before the bridge infrastructure existed. I mean, now all the blockchains have launched their own canonical bridges, Sonic did the same. You need that now. But, you know, at the time we were probably a little bit naive in believing too much in decentralization and thinking that it should be other parties that connect, and we didn't want to do it ourselves because we felt we didn't have the expertise in-house. It turns out you have to do it, so that was definitely a lesson learned. Most of the things I did.
The things that I regret and the things that I changed are mostly about communication and proper expectation management. Because the way that I used to talk to people is not the way that I have to talk to people now. Because it's, I mean, I see this happening with Vitalik now as well, right? Because he's been away from X and Twitter for so long, and now that he's back, almost every piece of content that he posts is under attack. It's because he needs to adapt to change. You can't talk to the technical crowd on chain the same way that he used to.
I think those are lessons that I had to learn. The things that I regret are people lost money because of those lessons, that's for sure. If there was a way to reverse it, absolutely. But at the same time, you know, those same lessons also shaped who I am today. So, I don't know. That's always a hard question, right? Because you fundamentally change who you are. I mean, if those things hadn't happened, I wouldn't have learned those lessons. And then it might happen again in the future, on a bigger scale, and in a worse way.
Host: Also, it's almost a punishment to stick around, right? You know, if you leave, you get hacked for $600 million and leave, no one's going to mention your name again. But if you keep trying to develop it.
Andre Cronje: It comes back every time, right? People remind you of it every day. So you just need to, like I mentioned before, you need to develop a thick skin. I think that's the only thing you can do.
AC's ultimate goal
Moderator: You're really an icon in this space, and I think you've really influenced a lot of DeFi development. People look up to you in a lot of ways, and you're very influential in this space. What do you hope to create with your legacy, and what is your ultimate goal in crypto?
Andre Cronje: Ask me this question again in five years, the answer will be different. But right now, it's getting the financial/Coinbase/whatever exchange your North Star is fully on-chain. I mean, including fiat deposits and withdrawals, the user experience is the same or even better. That's my goal for the next two to five years, the largest crypto exchage has to be a decentralized exchange, and I think we'll get there. I think we're finally getting to the stage of infrastructure and tooling, which will be launched within this year. And soon after that, it will completely destroy centralized exchanges because the barrier to entry for decentralized exchanges will be lower than centralized exchanges. So I think that's the big goal for the next five years. And then obviously, more integration into traditional finance to the point where it's very difficult to remove. I think we need to ensure that in the four years after the current administration. And then we'll see. But I mean, after that, the infrastructure will get to the stage where you can start doing games and social. I think you'll see a lot of other cool things that I can't even theorize about right now.
Host: Yeah, that's very cool. So you're personally really interested in embedding encryption layers into the social layer.
Andre Cronje: Yes, it needs to be part of the social layer, the technical layer, the settlement layer, everything.
Host: Great. Andre, I think that's all our time for today. It's been great talking to you. Thank you very much for your time.
Andre Cronje: Thank you.
Guests: Andre Cronje, co-founder of Sonic Labs;
Original translation: Deepseek
Editor's Note: In this episode, Andre Cronje shared his original intention to enter the crypto industry, his views on the current state of the industry, and his future prospects. He mentioned that he was not driven by money, but was attracted by the industry's innovative potential. Although the current industry is full of low-quality projects and capital flow problems, he still insists on solving the problems in the industry. Andre discussed the impact of Meme coins on capital flow, compared the differences between the ICO era and now, and pointed out that the progress of infrastructure has been completed by 50%-60%, but breakthroughs are still needed. He also emphasized that future innovation will come from "crypto-native" developers, and hopes to promote the development of decentralized exchanges and infrastructure, and ultimately realize the transformation of the financial industry.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
AC's original intention to enter the encryption industry
Host: It's really exciting to sit down and chat with Andre today. I've been following your progress in DeFi, and many people are inspired by you. I have a question. You have produced a lot of results and achieved success in this field. I think you are financially free, why are you still holding on?
Andre Cronje: When I entered this field, I was already financially free. I have never been a person driven by money. No matter what the reason, money has never been a guide for me. I was working as a CTO of traditional finance in a bank at the time. The job was stable and the income was enough. Even if I lost my job, my savings would be enough for me to live for five years.
I entered the crypto industry as a skeptic at first because it was full of exaggerations. I don’t know if you know my experience, but I started by doing code reviews on Medium. Because many project companies claim that they have solved a distributed system problem that has plagued the industry for decades, but when you look at their code, you find that it’s just “Hello World” and it doesn’t do anything at all. This gap is very obvious.
The reason I ended up staying was that although 99% of the stuff was garbage, 1% was real. There was indeed a new financial paradigm at the bottom of this industry, a better financial model. Although traditional finance always says that crypto is a scam, according to the data, cryptocurrency fraud accounts for less than 0.02% of all financial fraud.
Of course, this is also a numbers game, and traditional finance is much larger in scale. But in essence, you can see a highly opaque system on one side and an extremely open and transparent system on the other side that anyone can view.
The reason I stayed was simple. I am a problem solver by nature, and there are still too many problems to be solved in this industry. In my previous career, most of the problems had been solved, and there was a lack of real innovation. In the banking industry, the financial industry, and even now, you see, although there are some innovations, such as the optimization of user experience (UX/UI), the launch of mobile applications, etc., these are not real problems for me. Of course, this is not disrespectful to designers and UX/UI practitioners, their work is important, but it is not something that excites my brain.
In the blockchain industry, especially now, not many people are really trying to innovate. In 2016 and 2017, when I first entered the industry, I saw multiple in-depth and valuable white papers every day. Now, it’s considered a lot to publish a decent white paper every six months. I can understand this change because I have experienced it myself. For example, when ACC (the protocol founded by Andre Cronje) was squeezed out of the industry, I know how it feels and why many developers gradually gave up.
In addition, there is a big problem with the flow of funds. Most developers are inherently lazy. If a capable developer has two choices - either spend five minutes issuing an ERC20 meme coin on Solana or Ethereum and potentially make millions of dollars. Or spend years writing papers, peer reviewing, verifying contracts, and solving vulnerabilities - the lazy choice is almost obvious.
Host: What's more, the lazy choice is more advantageous, right? Just like meme coins are not safe now, right?
Andre Cronje: No, you are 100% safe, and now we have legislation that makes it clear that you are safe here. But this actually makes it worse, right? Because it further discourages people who are willing to take risks and innovate, and this is something I've been thinking about.
For example, when I launched my first token, it was seen as a community-driven model and a way to be immune to regulation because there was no fundraising, it was 100% community-driven, there was no team allocation, and therefore no expectations of "what the team should do."
In a way, it also provides a blueprint for others, showing that there are indeed ways to circumvent regulatory restrictions. But at the same time, the incentive mechanism of this model is also problematic - the team lacks economic or future development incentives, and even has no salary guarantee.
So I think people in the industry have stopped trying to innovate, and hopefully that can be reignited. Because right now, all we see is the same codebase being re-released countless times on different blockchains, L2s, or under different names. I don't know, it's exhausting.
Moderator: I’m looking forward to discussing this topic with you in depth, because I feel like you have strong opinions on how the industry can improve. I want to talk about your earlier point that “99% of projects are scams or are harvesting users”. Do you think this ratio still holds true?
Andre Cronje: I think it’s gotten worse, but I’m a bit conflicted about it. On the one hand, in my earliest blog, Building in DeFi Sux, I mentioned that the crypto industry votes with money. If everyone puts their money into low-quality copycat projects, the market will be flooded with them because they’re easier to make money with. Investors don’t want to take the risk of entering new protocols because the risk is too great, so they’d rather park their money on the “5062nd Aave copycat project.”
But on the other hand, I also have to admit that those who participated in the Meme coin craze would not have invested in DeFi infrastructure or real decentralized financial protocols. So now my mentality has adjusted. In the past, I was angry about the misallocation of funds, but now I realize that those who put money into Meme coins or various copycat projects would never touch DeFi or any real decentralized financial protocol.
Moderator: I think a basic assumption of the crypto industry is that all these assets are financialized, right? These assets have pricing and can be traded freely from the beginning. This means that the core of the entire ecosystem is actually around asset trading. And those who really enter the industry for technology (although this has become a meme) are not actually mainstream, or they also want to make money from these things.
Andre Cronje：Yes, I don't blame those who have the ability to develop Meme coins to make money. Even Vitalik has written about this, saying that you can make this money first, but then you should invest the money in the products or projects you really want to build. This may indeed be the case. We can refer to the ICO boom, where many people made a lot of money at that time, and they did reinvest a considerable part of the money back into the crypto ecosystem.
But I think the situation is different now. If you look at the flow of funds in the past, the crypto industry is now more and more integrated into the traditional financial system, which is both a good thing and a bad thing. In the early days, if you participated in a successful ICO, as an investor, you made a lot of ETH on Ethereum - at that time there were no mature cash-out channels such as stablecoins, and you had almost no way to take the money out of the ecosystem. So you would choose to reinvest the funds in new projects, new ideas, or provide liquidity support.
But the current Meme coin market is different, it's more "money in - make a profit - money out". Money won't really flow into the broader ecosystem. But as I mentioned before, you have to adjust your mental model - these funds would not have gone into DeFi or other infrastructure projects.
However, I do think this has led to a new phenomenon - in the past, a development team might have made some money from issuing tokens, but because it was difficult to cash out directly to a bank account at the time, they were more likely to reinvest the funds into new protocols. Now, they can easily withdraw the money to a bank account and retire directly with the money.
Infrastructure progress
Moderator: You mentioned the ICO era. Do you think one of the problems back then was that the infrastructure was not perfect? How much of a role did the infrastructure play in that? After all, you built a very successful product in that environment, and now you are pushing the infrastructure further. So how big of a barrier was the imperfection of infrastructure in the past? How far are we from solving these infrastructure problems now?
Andre Cronje: It was much harder to participate in the past. For example, it was harder to register an exchange account, harder to deposit money into an exchange account, harder to get Ethereum to participate, and even harder to set up a wallet. From an infrastructure perspective, everything was much harder than it is now.
We didn’t even have on-chain oracles at the time. If you don’t talk about ICO participation itself, just from a construction perspective, oracles were almost non-existent. There were no fast RPCs, and a lot of times you had to read data directly from the smart contract.
The infrastructure is much better now, the experience requirements for the team are much lower, and we can launch products that we used to spend a lot of effort to make. Because the tools are better, the infrastructure expenditure is higher, and the user onboarding is smoother. If I had to roughly estimate, I think we have completed more than 50% of the infrastructure evolution, but not much more, probably between 50% and 60%.
Host: So you think this proportion is lower than most people think?
Andre Cronje: It depends on how involved these people are in the industry. Even at the blockchain level, there are still many problems to be solved. And the development of technology is not linear, it advances in leaps and bounds, and each stage requires some kind of breakthrough to enter the next stage. Just like the development of the Internet, there were 56K dial-up modems at the beginning, and you needed specific hardware, specific ways of connecting, accessing through telephone lines, and specific network cards. These were the thresholds at the time. And if you fast forward to today, you just turn on your phone and all these things have been integrated wirelessly.
The development path of blockchain is similar. I don't think it has entered the fiber era yet, but if we use the traditional Internet as an analogy, it is probably in the stage between ISDN and ADSL, and is on the verge of the next major breakthrough. Ultimately, our infrastructure will only be truly successful when users no longer care which blockchain they are using. Because when using an application, you don't consider whether its server is Hetzner or Amazon Cloud (AWS), these details are irrelevant to users. Blockchain applications also need to achieve this experience. Only when the infrastructure develops to this level can it be considered truly mature.
Developer Ecosystem
Moderator: Do you think it's worth building applications now? You used to think it was worth building applications, but then you turned to infrastructure construction. I'm also curious about your transition. But if we have only solved half of the infrastructure problem now, should we focus more on infrastructure?
Andre Cronje: To use the Internet analogy, it's like waiting for fiber optic networks to become popular before developing applications. But in fact, there were valuable applications for decades before fiber optics appeared. Of course, you can say, looking back at MySpace, is it still valuable? Now it is a failed project, but at the time, its existence was necessary because it was products like MySpace that paved the way for later social platforms.
The current investment environment is more inclined to look for companies that can last for centuries, but this is not the case. Even if some companies will eventually be replaced, they still have value. The entire industry needs such iterations, and people must start building applications now so that future applications can be developed.
I like to use another analogy to illustrate this. If you look at all the big apps today, their developers are basically people who grew up in the Internet age. I was born before the Internet, so my way of thinking is not as "native" as theirs.
Even to this day, I still find social media strange and unnatural, and I don't like it at all, so I only use Twitter. But for those who grew up with the Internet, they can use more than 20 different applications at the same time, which makes them understand the field better than me and can develop the next generation of applications, which I can't do. I think the development of blockchain is the same. Those who can make killer applications are often those who have been exposed to blockchain since childhood, rather than those who enter this field in their 30s.
Moderator: So do you think this is a distinction between "crypto-native" and "non-crypto-native"? Or is it more like "mass market" and "non-mass market"? You know what I mean?
Andre Cronje: I think that eventually applications will make this question irrelevant. People will not think about "is this a decentralized Uber" or "a centralized Uber", they will only care about which product is better. Therefore, the reason why the decentralized Internet will eventually become popular is that its design itself is more in line with the interest incentive mechanism and can be more directly oriented to consumers without so many middlemen.
For example, you will have a decentralized YouTube. Instead of letting creators be constrained by the huge YouTube platform and go through cumbersome processes such as advertising review and revenue sharing, it is better to achieve more direct benefits directly through decentralization.
In fact, even on YouTube itself, we have already seen this trend. In the past, creators mainly relied on YouTube advertising revenue, but now they are more likely to choose in-video sponsorship because this method is more direct and can build better user relationships. The decentralized version of YouTube is essentially optimized for this model.
Moderator: In the Ethereum white paper and some early documents, Vitalik mentioned the concept of "decentralized Uber". But now this statement has almost become a meme, and many people think that the development of the crypto industry will not really go in this direction. But from what you said, you seem to agree with this view, at least it may be realized someday in the future?
Andre Cronje: I think people always compare the current Internet with current blockchain applications, and such comparisons are only disappointing. If we change our way of thinking, for example, on-chain gaming is a good example. I actually like on-chain gaming. Why? Because it reminds me of those crude Flash games in the early 2000s - you need to download it to a Flash browser, play it for a few minutes, and then crash, and then have to wait 4 minutes to reload before you can continue playing. But if you compare on-chain gaming with those Flash games, the experience of on-chain gaming is already great. The problem is that now people compare it with current AAA 3D games, such as those with ultra-high-definition and next-generation graphics. In this comparison, on-chain gaming certainly looks terrible.
Host: Yes, just like when you run a small game on a graphing calculator, you can't expect the experience to be comparable to that of an Xbox.
Andre Cronje: Right? We are still limited by hardware and capabilities. In fact, there are a lot of similar comparisons here. You see, back in the early days of the Internet, the Internet only made sense in the context of military operations and financial prototypes. In addition to military applications, we are actually seeing the same thing now in the blockchain space. These are the first areas where real value can be realized because people are willing to invest money to build infrastructure to gain access. At that time, for a megabyte of data, you had to pay thousands of dollars a month. Now we are seeing a similar situation with gas fees, where you pay for bandwidth. It is still expensive now, but because of this, only certain types of applications can exist.
However, we are seeing this transition happening, it's just that the process is slower than market cycles and people's attention spans. People ask, "Why don't we have this now?" But in fact, we will have something like this, but it may take another decade.
Host: So, how confident are you about this future development? Do you think cryptocurrency can really change the world?
Andre Cronje: I don't think cryptocurrencies will necessarily "eat" the world. You know, some places are better centralized. But at the same time, if it is centralized, it will be more attractive. However, there will be some people who prefer a decentralized approach. For example, if you are a large bank and all your data is stored in a specific database, such as Oracle, you will definitely be willing to pay for an enterprise license for Oracle because you want to have a dedicated person to solve your problems at any time.
You won't choose the decentralized version, but there are some groups of people who prefer the decentralized approach. If you look at some African countries, they often have community banks, where one person keeps everyone's money. Stockfell, I think that's what they call it. This is an example of something that works because it provides better accounting that everyone can see and still maintains the same trust assumptions.
So I don't think it will completely replace the traditional centralized world, but I do think it can provide advantages in many areas. For example, if you look at the bank settlement system, it is extremely outdated and based on daily settlement, which is full of opportunities for fraud. A lot of times people just send Excel spreadsheets by email, and tokenizing a small step like this can save banks and clearing houses trillions in fees, and this change may be realized in a very short period of time.
Moderator: So what lessons do you think the industry needs to learn to get to the point where you're talking about consumers and businesses having the choice to use decentralized or centralized products? Because at some point in your career, you seemed to be a little tired or jaded with the industry. So the first question is, how tired are you of the industry now? And the second question is, what do you think we should do and how should the industry move forward?
AC's reflections on the crypto industry
Andre Cronje: I am less tired now than before, but it is not because the industry has changed. I used to be very tired because on one side the blockchain community provided almost no support, and on the other side, the SEC (Securities and Exchange Commission) attacked every day.
At that time, there was no reason for developers to stay and work, partly because the participants in blockchain had changed a lot. You know, when I first started developing in 2017 and 2018, the participants were almost all technical people. So the conversations between us were always very valuable. In 2021 and 2022, the participants suddenly became a large number of non-technical people who were more concerned about money, which caused the content of the conversation to change completely, which often made me feel very alienated.
I don't see any way around this because it's just a result of more people coming into the market. I think it's almost inevitable from that perspective. The teams and developers need to change. I don't know how likely that is, but it's a real issue in terms of regulation.
You know, we have a four-year grace period, let's see what we can do in those four years. But it could also flip over in four years. That's what I think everybody has to keep in mind. If we can optimize and integrate blockchain into as many places as possible in those four years, it will become almost impossible to remove. We'll be in a very different situation then, and that's our responsibility as a community.
I think the lesson is that people need to be more tolerant of developers and teams, especially those that are trying new things. But I don't think that's going to happen because if you look at the crypto community now, what it has become, the mental model that I always try to get people to understand is that the difference between starting with someone posting on an internet forum and meeting them in person is huge - they may become more radical.
Add to that the anonymity and the fact that they don’t have to take responsibility for their words, which can make them even more hostile and aggressive. Now imagine this is like a sports game, with two teams competing, there will be more attacks and insults during the game.
Now, let's say it's financially incentivized. It's like a vicious cycle where the worst human behavior is on display. We're still incentivizing that behavior. I don't know how that's going to change. For me personally, I've just become more resilient. You know, when I first started, back in the tech community, my measure of whether people were happy was 99%.
If someone said something hurtful or had a different opinion, I reached out to them privately. I talked to them, made calls, and took the time to understand their position. Nine times out of ten, those people ended up becoming my friends or allies, so I was able to convert them at that time. In 2021, after a lot of self-reflection and my changing perception of the industry, I changed this standard from "let me satisfy 99% of the people" to "let me satisfy 51% of the people."
I don’t just want to satisfy 20% of the real audience and ignore the remaining 80%. But this is also a process I went through, something I had to learn, and almost every team that enters this ecosystem will go through this process. This process will eliminate many teams.
You know, I think there are probably only 5% of the players now that there used to be. There have been more builders leaving the space over the last few years than there have been new builders coming in. All the real builders, those are the same people I used to talk to back in those days.
Moderator: You mentioned the developer problem in the crypto industry, the lack of talent and builders of interesting projects. So what do you think the developers of the future should be like? How can we attract them to this field, especially to let them build projects here?
Andre Cronje: That's a good question, and I don't have an answer. If I knew how to do it, I would have done it a long time ago. Now, I think we're seeing a resurgence of the "Silicon Valley VC funding" model, where all the projects are competing with each other, but I think that's a bit meaningless. But during that time, there will be some applications that will come out and people will interact with them.
What I love about building smart contracts is that they are extremely permissionless and composable. You know, everything I've built, I've built on platforms like Uniswap, Alpha, Compound, I've never had to ask for permission. I've never communicated with any team or contacted anybody on the platform I built. So, anyone who's playing around at home deploying smart contracts has the opportunity to make some changes that could eventually grow into something big.
I think what we need to optimize is probably the continued composability and open source features. Because this is the key to attracting and motivating those developers to start participating. But the trend we are seeing now is that more and more projects are turning to closed source rather than an open environment.
There's no way to incentivize people to build on top of you because they can't, you've blocked them from the beginning. So maybe we need to go back to a more open culture of open source. When I say open source, I mean anyone can build on it, not like my current code, I have to put a license on it to protect it. Right now, it's hard to really open source code because someone could fork it and add a token in 24 hours, which is not good.
Moderator: Yeah, I like to look at crypto sometimes in the same optimistic way that I look at platforms like Shopify or WorldPress. I think some of your early projects exemplified that, where they were like modular things where you were building on top of other things. And actually, some of the limitations that you were dealing with made the products themselves more interesting.
Andre Cronje: Right? Exactly. One quick lesson I learned with the Yearn project is, don't try to solve every problem. Throw some problems out there, and you tend to get better solutions. Sometimes you get better solutions, but often you get better solutions. That's the tradeoff.
Andre Cronje: But that's exactly what, you know, I've been thinking about, why is Yearn more successful than other similar yield aggregators? The reason is simple, those yield aggregators are not prepared for other people to build on top of them. A lot of them have vaults, but they haven't tokenized those vaults. So when I deposit funds, I can't do anything. The first step I took was, okay, I need to tokenize these deposits so that they can be used somewhere else. That's really the key. You need to optimize for composability so that other people can actually build things, which is a different design. You have to think differently about how to build because it's easy to just build products, but if no one can build on top of them, then there's no point. So you have to constantly think about, how do you open up this system to facilitate the building of other things? People will build things, and I don't even know what they're going to build. You can do that with FIFA and in crypto in general.
Moderator: Also, I know some of your future products are inspired by the problems you faced while building your current products. We see this in Web2, where people often say, build for yourself five years ago, or build for your own problems. I feel like in crypto, we sometimes lack this kind of thinking.
Andre Cronje: I mean, we do have this in crypto. I hear this a lot. A lot of the big products that we have today, they were built by teams that spun off from the original team, they spun off from the original team and continued to build. That's also why I say it's mostly the same builders, because they're from the same original OG team, right? But specifically, because they used to work there, they saw, I can do this, and then maybe that company didn't want to do it, so they spun off and did their own thing. But I agree, we can definitely do more in this area.
I think we could think more about how to make this thing more composable because that's also where a lot of changes have happened over the years. Even looking at Compound and Uniswap, their initial v1, v2 versions were optimized for convertibility and very easy to build on top of. You could easily extend their interfaces and functionality. What's out there now is probably a better product for consumers, but it's much worse for builder integration, right? Much more complicated, much more difficult. You need to communicate with the team, and once you need to do that, you've already ruled out 99% of the builders because they don't have a channel to contact you. So yeah, actually, I don't really think about it that way, but as we continue this conversation, I think what's missing the most right now is that kind of "how do I build for other people to build on top of me" mindset, because I think that's completely missing.
Moderator: What are the applications? You mentioned this 99% and 1% thing, which means there are still some applications that interest and excite you. What applications are you interested in at the moment?
Andre Cronje: So my main interest is in applications that are trying to innovate and try new things. I don't think they're at the scale that they used to be. But I see some teams trying, like Shadow Guys, their Shadow Exchange on Sonic. They're trying new things in terms of token economics that I think no one has done before. I also think that token economics is an extremely underdeveloped area. I think we have a lot of work to do in this area. But everyone, because it's so financially related, is very afraid to try anything new in this area. I don't blame them, it's scary because you're tying your public image to this thing that can go up and down. But we have a lot of work to do in this area, and they're doing great things.
Silo is another team that is releasing some new token economics. I also really like their overall design philosophy. The game content that is coming out now, I think there is a lot of good account abstraction, economic abstraction, user interface, Pasky and other things happening, which is definitely good. Some of the games I play on the chain are Faith, Adventure, Sacrifice for Kingdom. Who else is really innovating? Metropolis is doing a new dlmm AMM, which is good. I know there are some things happening in the yield space, Spectral and Pendle are the main players there. It's not an area I'm very familiar with, but there are definitely more things.
I think we're starting to see on-chain options and other derivatives start to come online. Before, options pricing needed to be very accurate and needed to be very cheap, and you couldn't do both of those things on-chain because you didn't have the data and the fees were prohibitive. Now we're starting to see a resurgence of those, but I think we haven't seen a similar breakout for options, futures, and other derivatives like UNISWAP and AMS did for trading. So I definitely think that's coming. The guys who are playing with Margin Zero Strike are also experimenting and trying new things. So I'm keeping a close eye on them.
I think there's more work to be done on the purpose of on-chain, and that's one of the few innovations that we're seeing, right? Like the GMX model, the Hyperliquid model. That's another one that I forget right now because that's, you know, liquidity pools as counterparties, not exchanges as counterparties. But I think there's still a step to go because right now your liquidity providers in these pools still take on the aggregation risk, right? I think there's also a way for them to just take on the spot risk, just like you take on Uniswap. Insurance, I think is another primitive that we're going to see more of on-chain. There's not a lot going on in that space right now, most of it is still finance-related. I think we're going to see more of that in the next 6 to 12 months. But as fees are lowered and removed, as wallets become less of a necessity, as you no longer realize you're on a blockchain, I think we're going to see more of that in terms of gaming and the social layer.
Sonic Ecosystem
Moderator: A lot of the projects you mentioned seem to be in the Sonic ecosystem or moving towards the Sonic ecosystem. Polymarket is a much discussed app, as is Pump Fun. Do these apps appeal to you? Are there any apps that are not currently on Sonic that you would like to bring into your ecosystem?
Andre Cronje: Polymarket could be, absolutely. I think they're doing some really interesting things with markets, and I feel like they could do more. I feel like their hands are tied a little bit, you know, because of things like lost accounts, let's see, the FTC thing, because they could be more than just a prediction market. You know, one of the new protocols that we're seeing out there, True Markets, it's using the concept of prediction markets to do user-sourced articles, which I think is a really novel idea, right?
Host: Yes, insurance also fits this.
Andre Cronje: Insurance does fit into this because that's one of the problems with decentralized insurance on-chain is that you still need a third party to say, okay, here's the payout. As long as you need this third party, you might as well do it off-chain. You know, there's no reason to do it on-chain. But once you have these sources of truth, all of a sudden there's a reason to do it on-chain.
What else is interesting? I think we've got the major players that we wanted, you know, like there's some nice gaming content. I think the guys at Fantasy Top are building some cool stuff. Never mind that they launched Pump, I think that's a very specific niche product that only works where it is right now. I don't really see a multi-generation strategy for them. There are some IRs, like I'd like to see Fantom Wallet come over because I do think they're getting to the point where people are really aware of the speed that we have. Because currently the slowest part of interacting with Sonic is the wallet. That's where you spend 99% of your time. Because the moment you click from the app to the wallet, that's instantaneous. And then submitting from the wallet, that's also instantaneous. But the part in the middle that loads is the part that's actually slow. Now, there's probably a longer list, but you know, these are the ones that pop into my head.
Moderator: I get the sense that you're particularly passionate about applications, and you have a reputation as an application builder. Why did you eventually pivot to focus on infrastructure?
Andre Cronje: Well, I mean, I did Fantom before I did any applications. So, you know, I've been at Fantom since 2018. So the focus was always with, I recognized that the reason we didn't see a lot of debt was because there were problems at the underlying infrastructure layer. The most obvious thing at the time was that, you know, something as simple as proof of work was designed to be slow. Because it's not designed for speed, it's designed for security, right? So just building a better consensus, you know, the abft consensus that we launched in 2019, we're still using the exact same one now in Sonic. I still think it's the gold standard in consensus.
But my initial move to the application layer was actually because I built Yearn, because I was managing the Fantom Treasury, and I got tired of moving it between protocols. So I thought, I'm a programmer. I'm just going to build an application to do this for me. And then everything else spiraled out of that, too, like mentioned earlier, you know, it was an idea that was inspired by the problems that I saw in that particular thing.
So, you know, from Yearn to Boldkeeper, because we had a problem right now on Yearn where I needed to run a bunch of off-chain infrastructure bots and keepers to handle things like moves and liquidations. So I thought, why can't we build an on-chain version of that? You know, keeper does a great job. It's still used by makers. It's still used by a bunch of on-chain managed things. Because the idea is simple. You know, I pay someone to do the on-chain infrastructure.
And then I think I became fascinated with the more traditional banking problems, which were capital efficiency, which were IMMS, lending, and the rest of my work was pretty much focused on that. And when I built and when I released solidly, that was already my new AMA model, not as perfect as what I have now, but it was a pretty good implementation at the time.
At that point, I started to realize, look, there are some foundational layer problems here that we need to solve in another way before I can actually release my next app. And that's what we've been focusing on with Sonic, you know, Sonic is the culmination of it all. Like, it's not just about speed and the fact that it's fast. I mean, that's what I feel like you need to compete in today's market, but that's not going to make you stand out in today's market. Because even if we were faster, even if we had lower finality, the difference in user experience, you're talking about 400 milliseconds versus 300 milliseconds. Users are not going to notice the time it takes you to blink.
So the real thing that we started focusing on, you know, was fee monetization, where apps get 90% of the fees back, because that already means you can start building a lot of different things. And then fee subsidies, so apps that use that 90% can give it back and subsidize new users, so they don't even need gas and stuff. And then things like native abstractions, so you don't need wallets, because we want to get to a point where apps are built on top of us, and their users don't need to know that they're interacting with us. And when we get there, then I can just release my next series of apps, because they need that. So again, you know, it's not just about the benefit of building in this space is that I build something for myself, and then coincidentally, it might be beneficial to all of our builders. So that's the boon, right? But I mean, ultimately, I'm busy doing all of these things selfishly for me.
Host: Interesting. So a lot of the design of Fantom stems from the problems you encountered there. Are you still motivated to explore new concepts in the future? You have explored fee sharing mechanisms to some extent, such as Berachain, who are trying to integrate DeFi into the base layer. Are you interested in this?
Andre Cronje: I mean, obviously we're doing fee monetization. So I agree 100 percent that there's a fundamental problem with incentive alignment. You know, because the incentives are designed based on the Bitcoin model. And in Bitcoin's model, you have only one actor, which is the miner. So everything obviously flows to the miner. There's no other actor. And every blockchain sensor just replicates that model instead of thinking, okay, who are the other actors? And the other actors are obviously the applications. And that's why, you know, I think our approach is probably oversimplified to just say, hey, this contract gets 90% of the gas it spends, because that automatically aligns with the applications that people are willing to use.
And I think the model of Berachain, again, I like their attempt to solve the incentive alignment problem. It's a problem that needs to be solved, it's currently wrong, it shouldn't all go to the validators. It's a waste. That's what we're seeing. Maybe it's not the only reason, but in my opinion, that's why we saw Uniswap launch Unichain. Because they looked at all the fees that they were generating for Ethereum, $2.8 billion, and they said, we're not getting any of that.
Let's launch our own chain so we can capture that $2.8 billion. But launching a chain is not as easy as the people at X have convinced us. You can deploy a second layer like you click a button. Technically yes, you technically will have it, but you don't have the infrastructure, you don't have the integrations, you don't have third parties, you're missing a lot of things, and it's going to cost you tens of millions of dollars to get there. So instead, it should happen on chains that already have existing infrastructure. You see, we saw different applications approaching in different ways, like Arbitrum, trying to build their native fee switch so you could use different tokens. I know they eventually removed it, but that was still them trying, okay, how do we incentivize our applications? Avalanche is obviously there, they call it the subnet model. So I think a lot of people realize, hey, there's an incentive alignment problem here.
My only critique of Berachain is that it requires too much active involvement from the validators. I think that's a different, team of people. We run our devops or great running devops, but I don't want to confuse them with needing like, you know, voting protocols or what pools or things should go. I think especially when it comes to validators, less is more. You just want them to protect your network. You know, you want somebody to have it installed on hardware in a bunker somewhere that's gonna live for 10 years and they don't touch it. Like that's ideal because it's supposed to provide network security. The more you try to do on top of it, the more attack surface and areas you have. So that's my only gripe with their model, but I do think it's definitely going in the right direction, you know, hey, the rewards shouldn't all go to the validators. It should go to the applications. And then what the applications do, that's their business, you know, whether they pass it on to their users or as their own fee model. Whatever.
Moderator: You mentioned that you're still interested in building apps. You just need the infrastructure to catch up. I'd be remiss if I didn't ask you what you're most interested in.
Andre Cronje: A lot of the things I've mentioned already. We have essentially two formulas. You know, you have the constant product, which is Uniswap, or you have the constant sum, which is stablecoin swap. We're not looking at anything else right now. We have pooled liquidity, which allows you to change the shape. But at the end of the day, it's still the constant product. Like that's still the quote that's used. At the end of the day.
I'm trying not to be specific, but anyway, I built a new AMM that has a curve that self-references volatility. So what that means is that the more volatile the asset, the closer it is to a constant product. The less volatile the asset, the closer it is to concentration. And the beauty of doing that is, because my North Star is always, I foresee a world where 99.9% of real world assets are on-chain. Now you can't do that with a constant product. You can't do it with a constant sum. You need something that's like, 80% constant sum and 20% constant product. So that's exactly what this does. So every time a trade happens and measures volatility, it has the recent deviation, one hour, one day, one month, 200-day moving average, whatever, and then annualized. So that informs the quotes. So that already gives you better quotes, that already gives you better pricing, that gives LPs more fees. Now on top of that, I believe there's also a new way to do lending markets.
This is actually something I released in Solidly. I don't know how much time we have, so you'll have to see if you want to interrupt me at any arbitrary point, but I'll try to go through it quickly. So, in Solidly, I've introduced this concept called the reserve weighted asset price. So, Uniswap introduced TWAP. The problem I have with TWAP is that it gives you a fixed price, regardless of size. So no matter if I sell one unit, it's going to tell me it's worth $3. If I tell it I'm selling a trillion units, it's also going to tell me it's worth $3. Which is not true at all. If I give you 1,000 of this thing, what price are you going to give me? The main reason I want this on-chain is, one, to notify liquidations, and two, because the counter-question to that question is, if I give you, how much of another asset can I liquidate with this asset?
Now if I can answer that question, that means I know my loan-to-value ratio. In other words, how much can I borrow against this asset? So now you can start borrowing. So now here comes the next question. You can't borrow without knowing what your interest rate model is because you need to know the peak to make sure the LPs stay safe. In crypto, we have two interest rate models. We have volatility and stability. We already have volatility inputs. So now I can already have these graphs based on the same inputs, input into my AMM. So now I can do a lending market. So now I can borrow B against A, I can borrow A against B. Next, because I can borrow A against B and B against A, that means I can have implied leverage. So once someone wants to trade on this AMM, they can create a leveraged position. And leverage is a function of LTV. So leverage is also implied, relative to the size of the actual pool. So the more liquidity, the higher the leverage. So these things again become self-referential. And then because you have leverage and interest rates, you can have implicit perpetual positions, which are perpetual positions that only have counterparty risk to the people in the AMM who are providing liquidity. So that's what I mentioned earlier, and I think it's still going to be solved.
I've got it solved, but it's not launched yet. And then the last one, because you already have volatility and all these other data points, you can start writing options in the same AMM. You do a couple of perpetual options until you get volatility applied, and then you can start doing standard European and American options. I've got some other stuff in there.
Host: So how are these features being developed?
Andre Cronje: Now? It's all done. The only reason we haven't launched yet is that we're waiting for the regulatory environment to change because this falls squarely under the jurisdiction of the CFTC. So we're waiting to see, you know, Brian's new appointment and their attitude towards this kind of thing. Because that determines whether we can launch this product with or without derivatives, right?
Moderator: Okay. Do you think these features will be integrated together? Like you're looking at this all-in-one super app for finance, or something like that basically.
Andre Cronje: Again, this is built around the idea of composability, so I think all the applications in our ecosystem can interact in some way.
Moderator: Founders should pay attention to this model because as we discussed, this solution leads to this problem, but this solution and the application, this is one of the beautiful things about cryptocurrency.
Andre Cronje: The platform. So you need to leverage composability and create problems for people to solve.
Moderator: Also, there is no shortage of creativity in crypto. Sometimes people say, oh, this has been done before. No, man, you need to be more creative.
Andre Cronje: The reason I didn't do Yearn originally was because I felt like, oh, other people are already doing this, why should I build it? I've stopped launching a lot of apps in my career because of this. Or if I see something that's not being built, I tell myself, oh, but it's such a basic idea, someone must have already done it and failed. That's why it doesn't exist. It's actually garbage. It just worked nine times out of ten. The reason it doesn't exist is because I thought about it too early, right.
Host: What is your biggest regret in your crypto career?
Andre Cronje: Oh, my god, that's a long list. We don't have time to go through that. I mean, all the things that I would go back and change. I used to always blame the participants because, you know, they put money into the contract, someone saw my deployer deploy the contract, and just because I didn't change it in half an hour, you shouldn't put millions of dollars into it. But at the same time, I should acknowledge that I had so much attention, I need to communicate better, right? You know, I've learned to communicate better since then. Because that's the problem. I need to make it clear that unless I announce X on these platforms, it's not real, please stay away.
I had to start doing things like address rotation, every time I did something new, I had to use a new address. That's definitely one area I would change. The other really big regret is probably the trust I put in Multichain. I think we did get burned because we were told we were part of the original ceremony. So from our perspective, everyone destroyed those original validator keys, there was no way to recreate it. We had no idea that their CEO had been keeping a backup key from the original ceremony so that he had full access.
Host: Does this affect the current bridging infrastructure?
Andre Cronje: That definitely impacted a lot of things, and we learned a lot of lessons there. You know, it was also because Fantom launched before the bridge infrastructure existed. I mean, now all the blockchains have launched their own canonical bridges, Sonic did the same. You need that now. But, you know, at the time we were probably a little bit naive in believing too much in decentralization and thinking that it should be other parties that connect, and we didn't want to do it ourselves because we felt we didn't have the expertise in-house. It turns out you have to do it, so that was definitely a lesson learned. Most of the things I did.
The things that I regret and the things that I changed are mostly about communication and proper expectation management. Because the way that I used to talk to people is not the way that I have to talk to people now. Because it's, I mean, I see this happening with Vitalik now as well, right? Because he's been away from X and Twitter for so long, and now that he's back, almost every piece of content that he posts is under attack. It's because he needs to adapt to change. You can't talk to the technical crowd on chain the same way that he used to.
I think those are lessons that I had to learn. The things that I regret are people lost money because of those lessons, that's for sure. If there was a way to reverse it, absolutely. But at the same time, you know, those same lessons also shaped who I am today. So, I don't know. That's always a hard question, right? Because you fundamentally change who you are. I mean, if those things hadn't happened, I wouldn't have learned those lessons. And then it might happen again in the future, on a bigger scale, and in a worse way.
Host: Also, it's almost a punishment to stick around, right? You know, if you leave, you get hacked for $600 million and leave, no one's going to mention your name again. But if you keep trying to develop it.
Andre Cronje: It comes back every time, right? People remind you of it every day. So you just need to, like I mentioned before, you need to develop a thick skin. I think that's the only thing you can do.
AC's ultimate goal
Moderator: You're really an icon in this space, and I think you've really influenced a lot of DeFi development. People look up to you in a lot of ways, and you're very influential in this space. What do you hope to create with your legacy, and what is your ultimate goal in crypto?
Andre Cronje: Ask me this question again in five years, the answer will be different. But right now, it's getting the financial/Coinbase/whatever exchange your North Star is fully on-chain. I mean, including fiat deposits and withdrawals, the user experience is the same or even better. That's my goal for the next two to five years, the largest crypto exchage has to be a decentralized exchange, and I think we'll get there. I think we're finally getting to the stage of infrastructure and tooling, which will be launched within this year. And soon after that, it will completely destroy centralized exchanges because the barrier to entry for decentralized exchanges will be lower than centralized exchanges. So I think that's the big goal for the next five years. And then obviously, more integration into traditional finance to the point where it's very difficult to remove. I think we need to ensure that in the four years after the current administration. And then we'll see. But I mean, after that, the infrastructure will get to the stage where you can start doing games and social. I think you'll see a lot of other cool things that I can't even theorize about right now.
Host: Yeah, that's very cool. So you're personally really interested in embedding encryption layers into the social layer.
Andre Cronje: Yes, it needs to be part of the social layer, the technical layer, the settlement layer, everything.
Host: Great. Andre, I think that's all our time for today. It's been great talking to you. Thank you very much for your time.
Andre Cronje: Thank you.
