If you allow us, we'll hit it now. Sure, I'm just testing my microphone. You're good, you're good. Okay, hold on, I just want to make sure the audio levels are good. Perfect, perfect. Okay, yeah, we can go ahead and record. That's fine. All right, Kyle, so we're very excited because I imagine this is the first time you're in a different set of audience, an audience that just watches technology crypto, but in Spanish. But every five episodes we bring an English speaking guest, so I guess this is the first time. So the audience from Colombia, Mexico, Argentina will get to know Kyle Samani, and this is just totally awesome to actually have you here for the first time.
Hey guys, Hermon Dario, pleasure. Thank you all for flagging me down in Singapore and explaining to me about the show. So excited to be here and talk to a new audience.
Yeah, I mean, let's talk a little bit about Singapore because I think it was very interesting. How long did it take you to just go through all the videos and material that we cover in Token2049 and Breakpoint? It took me almost like two weeks, and I still have like two or three videos that are lagging behind. But I've never learned so much in a conference as I did in Breakpoint 2024.
Yeah, I probably took me a week or so after Breakpoint, and I didn't go through all the videos. I went through probably 70%, 60-70% of them. And I do listen at 1.75x, so that's my fault. But even that took me a while.
Well, when English is your second language, we max out at 1.5x, so you got to pay attention, especially when it gets a little bit too technical. Talking about a little bit of technical, I don't know. Well, I think you figured it out. We're very good students of the content that you post, the blog posts and the material. I think the way that I was able to hook you to do the podcast is I actually showed you that it was Camilo. Camilo is also Camilo L Dar, my co-host, and Camilo is managing partner at a venture fund called Better Nor, so he invested in fund of funds. And he helped me explain what composability was from one of the videos. I don't remember which conference it was, but we did like, I don't know, Camilo, it was like 6,000 or 15,000 views, basically us regurgitating everything you have said in English but in Spanish. So I think the podcast, I mean, we're probably the number one fans of Solana in Latin America right now. So it's kind of cool. So before we get started and do an introduction, I know I have to read a disclaimer, so if you allow me for five seconds, I'll just get this over with.
Disclaimer. Yeah, so I know I have to read this first. Although our guest this week is a managing partner of a registered investment adviser, nothing in this podcast should be considered an offer of Multicoin's investment advisory services or should otherwise be confused for investment, tax, legal, or other financial advice. All right, so we got the legal part going. So, Kyle, before we get started, why don't you give us a little bit of your background, Multicoin, how you got started, and also tell us a little bit. I heard that you actually like biking a lot, so probably in a few years or a few months you come and bike down in Colombia, because we definitely have one thing is riding in Texas and another thing is riding in Colombia. And we have a couple pro cyclists, the ones that have even won the Giro d'Italia and Tour de France, so we got the pros here. So whenever you want to come and ride down here, you just let us know.
I love just looking at your background. I see all the jungle trees, it looks pretty sweet. I would love to go ride in Colombia. I was actually supposed to go to Colombia for my 30th birthday, which was during COVID, and obviously because of COVID it got canceled. But I still intend to make it down there one day.
Try to make it to Medellín and we will show you a good time around here. And we'll go biking and we'll go to nice places. I mean, we're all locals from Medellín, so we'll show you around. Nothing beats going out with a local, that's for sure. I hate being the tourist. So give us a little bit of your short, quick background. I know you answered this on most of the podcasts, but this is a new audience, so they want to know a little bit about you.
Sure. So hi everyone, my name is Kyle Samani. I'm a co-founder and managing partner at Multicoin Capital. I grew up in Austin, Texas, which is where I live today. I spoke a little bit of Spanish in middle school and high school. I'd say I'm pretty broken at Spanish at this point, but un poco aquí y allá. Went to NYU, studied finance. I've been programming since I was a little kid, have always been kind of passionate about tech startups. After college, I did my first tech startup in the healthcare space, building software for hospitals. Ultimately, that startup did not work out, but I learned a lot about startups and entrepreneurship. Decided I wanted to work in an unregulated industry instead of a regulated industry, and so made the decision ultimately to get into crypto over the course of 2016-2017. I remember the Gnosis ICO in the middle of May of 2017. After that happened, I think they raised like $12 million in 12 seconds or something. And I called Tushar, who was my best friend and is now my co-founder here at Multicoin, and I was like, 'Tushar, we gotta go for this.' And he's like, 'Yeah, this is our moment, let's go.' So made the decision then to launch Multicoin. It took us a few months to figure out how to launch an investment firm. We had no idea what we were doing. Neither of us had formal training in investing at all, neither of us had worked at an investment firm. So it took us a little while, but ultimately we launched our fund on October 1st, 2017. Today we manage roughly $3 billion or so in assets across a hedge fund and a series of venture funds.
Cool, very cool. So as I was saying in the beginning, I try to listen to almost every single podcast that Anatoly has posted out there, but the biggest problem is understanding. I probably get like 10-50%, and then I have to go to Camilo and say, 'Did you actually understand what this means?' So I had to study, for example, the phrase: what is Solana? A stateless composable machine that runs at the speed of what's physically possible. And man, breaking that thing up, it was like Camilo and me dabbling for 30 minutes. But then when we had the opportunity to watch your video, what you do, it's pretty cool for us. I mean, we're engineers and we were born in an age where we're not adept to the world of coding, we're a little bit more analog, but if it's explained to us without using analogies—because I know you don't like analogies to explain stuff—but if you give us a more thorough explanation and you make it from a business perspective, then we get it. So for example, one of the things that you helped us understand is why composability is so important. So why don't you tell us why the keyword composability is of such importance in Solana and why basically it makes it—I mean, to me, it would become the outcome: Solana will have the most amount of transactions and be the fastest, but why is composability such an important element in explaining Kyle's terms?
Yeah, composability is really important, and I think there's kind of a few different layers through which you can think about composability. At one extreme would be atomic on-chain composability, and this would kind of be like the idea in flash loans, meaning I borrow some money and I return that money by the end of the transaction. This is a really, really cool concept intellectually, and it's not super useful, but it's very cool intellectually. And then there's just general composability of, hey, I've got an asset that's the output of protocol A, I want to use that asset in protocol B. So again, the example here would be I have a Uniswap LP position, I want to use that as collateral in a lending protocol. And then there's kind of the next less extreme form of composability. And then as you go from there, you start getting into things that I don't think fit the formal definition of composability, but I think about them on a composability spectrum. And this is really just like having a common standard where everyone knows to read and write from a single place. What I mean by that is, if you open up MetaMask or Rainbow Wallet or Coinbase Wallet today and you have ETH on four different chains, and you have ETH in your wallet four different times, that feels like something is wrong. You're kind of breaking something. What do you mean you have the same asset four times? It's weird. If you open up your stock brokerage account, you don't have Apple stock or Tesla stock listed four different times, right? So it's kind of like you're breaking things down further and creating more complexity. And the beauty of the whole Solana design from inception has been to preserve this single integrated composable layer, so that whenever developers are reading from the chain or writing to the chain, they only have to think about one construct. They don't have to think about L1s, L2s, L3s, and all this complexity. They just think about a single system. And I think that kind of ease of understanding and that ease of integration is honestly probably more important than just the technical composability itself.
Yeah, and it's hard and it's easy to relate. For example, I told Joe McCann a story. I was at a conference and I was explaining to someone why Solana is so important, and this young girl came to me and said, 'You know what? My uncle, who is a rancher, just sold 10% of his cows and actually bought Solana.' But the issue was not buying the cows and transforming it into Solana. The issue was when they started using Phantom, they totally got it. It was easy for them to swap from USDC to whatever coin. But when you told them to do the same thing on MetaMask, it was just an ordeal. And that thing is the one issue that most people miss. When you're super technical, you overthink certain things. But when you're seeing someone like Camilo, we see this with our friends who are 40 and 50. We're onboarding them, and like, 'What does gas fee mean? You're telling me I need to leave $50 in Ethereum just to swap and do stuff?' Like you guys are doing it, it's super complicated. So that's one of the things that actually has helped at least in our region to have more adept people. So yeah, I wanted to explain composability, and I think the read and write is probably the perfect definition. It allows you to read and write in every single stage, and it allows for more adoption. Because I only like asking difficult subjects. One of the other conferences or presentations that happened at Breakpoint that I understood 20% of what Anatoly says, when Kevin Bowers started Fire Dancer, I understood 3%. Can you put in business terms why Fire Dancer is such a tremendous impact and what has been achieved to present date?
Yeah, Fire Dancer is a Solana client written from scratch in C, the C programming language, written by the Jump team. So let's kind of unpack that statement. First, it's a new Solana client. What does that mean? Today, the Solana network is composed of about 300 nodes around the world that are running a piece of Solana software on that local computer, and that computer is downloading transactions, gossiping transactions, executing them, etc. That piece of code is written predominantly in Rust, and it was written by what was the Solana Labs team and has since been transitioned over to the Agave/Anza team. And that's like one kind of big binary file. Just imagine you go to the App Store, you download an app from the App Store. Basically, there's a Solana app that was created and maintained by Anza. The Solana system is open, meaning anyone else is free to write another piece of software that interfaces with the Solana network, and that's what Fire Dancer is. So Fire Dancer is a brand new code base. It shares no components in common with the existing code base. It's written in a different programming language, it's written in C instead of Rust, and it's written to be as performant as humanly possible. Written by Jump Trading, and the team at Jump Trading—they're a high-frequency trading firm. I think they have 2,000 employees. They're one of the largest trading firms in the world, and among high-frequency trading firms, Jump is specifically known for being the fastest. They're taking all of their accumulated knowledge and expertise and saying, 'How can we write a Solana implementation that is as fast as possible?' And that's what Fire Dancer is. They've been working on it for a little over two years now. There are now Fire Dancer nodes running on both Solana mainnet and on Solana testnet. It's still fairly small, kind of in a beta test phase. Over the next 12 months or so, I expect the percentage of the Solana network running Fire Dancer will increase pretty substantially. And as that happens, the network will gain a few major attributes. One, network performance should increase overall, as the Fire Dancer code base is substantially more performant than the Anza code base. And two, it will increase the resiliency of the network, meaning if there happens to be a bug in one of the code bases, there will be another. The probability that the exact same bug exists in a separate code base is extremely low. So in the event there is a bad bug in one code base, the system can fall over to the other code base and keep on running, which is really good for improving the resiliency of the network.
Which is basically—I mean, it adds to the north star of Solana, which has always intended to be as fast as NASDAQ. And that's the whole purpose of why this is happening, because if you're going to put every single financial transaction and you wanted it to be fast, you want it to be—the word would not be fail-proof, but you want to reduce the amount of probabilities of why this could actually happen. Isn't that true?
That's correct. Yes, okay, correct.
So, shifting gears a little bit. In the past three months, we've seen Elon Musk do the following: launch the Super Heavy and grab it with a pair of chopsticks, the Cybercab, and the second implant of Neuralink. And this all happened in a period of 90 days. Why does it take so long for the Ethereum Foundation to actually accomplish—how many years does it take them to accomplish anything? And that thing that you mentioned at Token2049 just reverberated with me, because it's like you have people accomplishing so many things in a period of short time, and then you have this enormous apparatus that I don't see—when do things happen in Ethereum? At what pace? What velocity?
Yeah, so I'm not an Ethereum insider, so I can't comment based on what I know to be factually 100% true, but I can make some pretty educated guesses as to why Ethereum is so slow. I think there's kind of a few root issues. The first is that Ethereum doesn't know what it wants to be, which is pretty strange. Bitcoin has been very clear: 'Hey, we're digital gold,' and that means that we're not going to introduce change in the system. The rules are set, fixed, and that's it. Solana has always been very clear: 'Hey, we're here to build a decentralized NASDAQ.' If you look at operating systems or other products, it's generally pretty clear what the intended objective of those systems are. In Ethereum, they launched in 2015 and they said it's a world computer. And the word 'world computer' doesn't mean anything. It's a cool marketing term, it sounds sexy and ambitious, but doesn't mean much. And that's okay, I don't fault them for using that term at the time. But it's now been nine years, and we have started to see what people use Ethereum for. And very obviously, Ethereum is being used for trading and for payments. Those are really the only things that anyone is doing on any blockchain. And if you ask Ethereum people, 'Okay, well, what are you optimizing for?' you'll get different answers from different people. Some people say solo stakers at home, some people say settlement layer, some people say ETH is money or ultrasound money, some people say settlement rails for global finance. You'll get a bunch of different answers from different people. And I think that's kind of the crux of the problem: it's not clear what it should be. And each of those different things I mentioned, if you were to optimize the system, would lead you to make different trade-offs in the design. You can't be the best at all of those things, so you have to be intellectually honest and say, 'Well, which one do I want to be?' and then build for that. And I think that statement is objectively true. The way in which I'm wrong is if there is a defined tagline like 'Ethereum is building X' and it's universally known and understood that that's what X is. And that statement just does not exist today at all. And that's a real problem. Obviously, they could try and define X. But I think just factually, I don't think anyone has the moral authority to define X. I would guess if Vitalik comes out and tries to define X, it's actually going to piss a lot of people off, because in the status quo, some people think it's X, some people think it's Y, some people think it's Z, some people think it's A, some people think it's B. So if they come and say it's X, then all the other people are like, 'Oh, well that's not what I wanted to build.' And so the ambiguity has created this weird situation where there's a lot of people at the table doing stuff because they think that they're building for their use case, but they're not. So defining X will be painful, not impossible, but painful. So I think that's one issue: as I like to say, Ethereum does not have a north star. And then I think the other issue is just straight up complacency. Ethereum has not really had credible competition before now. And if you've been around for seven, eight, nine years and you never had incredible competition, all of your processes, all of your culture, all of your employees—those people don't feel any sense of competitive urgency. And that complacency is real. So I'd say those are probably the two. And I think the core Ethereum people don't even consider Solana legitimate competition. And the reason they say that, which I think most people would say, 'Are you crazy? How is Solana not legitimate competition?' I think that's what any normal person would come to that conclusion. And I think the reason that a lot of core Ethereum insiders don't view Solana as competition is: A) they think they're building something else—they're not building a decentralized NASDAQ, I don't know what they're building, but they're building something else; and B) they think they've always had an ideological set of views that Ethereum is making the optimal ideological trade-offs around decentralization or security or whatever, and Solana isn't making those same ideological decisions. So a lot of them actually believe Solana is below Ethereum as some sort of moral or ideological stance. It's like academia building versus engineers building. Correct. And so it's a really tough problem because it's not clear how you resolve these issues. But I'd say those are really the two things that I think are the root of Ethereum's problems.
And there's also an element of disposition. I was listening to a podcast, I think it's called Unchained, and there was this guy Hasan and this other guy that has some like, I don't know, green hair. And one of the things that they were observing is that we were very critical about Solana, but every single element that we were critical of, you actually fixed it. And Solana's response is, 'You know what? That's actually when I get the most stress is when no one is actually criticizing.' And so it's this disposition of always upgrade, ship, change. And that just gives you—it's like it has the real culture, the driver that pushes it. So you're always going to get a better result because, I don't know, builders that come from research academia have a different perspective of how to execute versus an engineer. So I think that's a crucial element.
Continuing on, just to make this quick search because I still have one more question that I'm dying to ask you because it's a very good intellectual exercise. I obviously, and almost everyone that's on our chat and our podcast, we have bought the Saga and the Seeker. But sometimes I fall short on explaining what's the game theory the team had behind launching hardware, which is super complicated. What's the game theory of Solana launching hardware devices?
There's a near-term and then there's a long-term answer. The near-term answer is there's a set of people out there who are hardcore power users who want a kind of best-in-class crypto mobile experience. That group of people is not that large—maybe it's 50,000 people, maybe it's 200,000 people, maybe it's 500,000 people. I doubt it's more than that. But those people want to pay for the kind of best-in-class crypto mobile experience. So in the near term, Saga and now the upcoming Seeker support those people. And by the way, I have my Saga right here. Yeah, cool. And then there's the long-term answer, which is the more important one, which is we want the Seeker experience to be available to everyone in the world. And the only way that's going to happen is obviously if Apple and Google integrate and implement the Seed Vault SDK and the customizations that Anatoly and the Solana Labs team have made in their operating systems. So the hope is that by doing all this work now, having it be open source, it becomes much easier for at least the other Android OEMs, Android phone manufacturers, to go ahead and incorporate this stuff. Again, Google's probably not going to incorporate this upstream into the core Android codebase in the near term, but there's a case to be made that Xiaomi, Samsung, LG, whoever else, will choose and say, 'You know what? We think some percentage of our customers want these additional crypto features. It doesn't cost us anything to integrate all of the software that Solana Labs is building. It's free, it's open source. May as well put it in there.' And the moment we get to the first tipping point at which one of those guys does that, now the potential user base for a first-class crypto mobile experience just increased dramatically. So the goal here is we've got to push towards this bigger objective, and these are just the baby steps toward getting there.
So okay, that's—I actually have both and they're pretty cool, and a bunch of my friends here bought them in Colombia, and they actually traded their iPhones and just kept their Saga. So it's pretty cool. Now the question that I was longing for: I bought my first Bitcoin in 2013, and since then I was convinced of the thesis. I read almost every single blog post from Nick Szabo and so I took the pill. But in order for you to adapt, you always need to have neuroplasticity, because if you become static, that's when you start losing your edge. And then I started listening to you and certain comments, and they were—I'm not going to say they were counterintuitive, but I like the takes. And you make me double-think things that I already consider static in my brain. So I always have an open gate to listen to the counterargument of why not something. For example, in the little chat that we had today, the single biggest message was like, 'I don't know, Michael Saylor did a $25 billion offer to just buy more Bitcoin, and it just keeps doubling down, doubling down.' But what I listened from you and Anatoly always has this little anchor of like, 'Maybe you should revisit this.' In fact, if you ask Camilo a few months ago, Camilo from his own personal stash, he and I at some point concluded, 'You know what? Maybe we should trade Bitcoin for Solana.' Obviously not financial advice. But I'd like to explore your take of why people should not be so anchored on an idea and not be open to rethink or consider, because I think that's the most important exercise an investor should do. It's not that the price is changing, it's what is the thesis that validates why you made that investment, and what if there is a better thesis about another investment that should make you reconsider? So yeah, I'd just like to hear your take on Bitcoin and what you mentioned in other podcasts, which I find super interesting.
Yeah, I'm probably the only high-profile crypto fund manager who does not like Bitcoin or Ethereum, which is pretty strange.
