🎙 "Ethereum is About Six Months Away from Proof-of-Stake:" Preston Van Loon

In today’s episode, we interview Preston Van Loon. Preston co-founded Prysmatic Labs, one of the main teams building Ethereum 2.0, and has been leading that team for the past three years. On top of that, he recently founded a DeFi project which bundles the entire crypto market cap in one token to allow anyone to easily buy something like a crypto index. We talk about how the desire to make a bigger impact inspired him to leave his job as a Google engineer and work in crypto full time. And how it was a spontaneous donation via Twitter from Vitalik Buterin what pushed him to finally make the jump. 

Preston talks about the latest in ETH2 —he says Etheruem’s big migration into its proof-of-stake chain is about six months away, give or take two months. He says Ethereum may be at a disadvantage relative to other Layer 1s, which are launching with more scalable technologies. But he also believes it will be hard for other chains to build the community Ethereum has, faster than Ethereum will upgrade.

He talks about why he found the time to start Cryptex with its TCAP token, he explains how the fully collateralized token works, how traders can mint it, add liquidity, and even yield farm it. But ultimately, the main goal of TCAP is to give people who are interested in buying cryptocurrencies and may not know the difference among the thousands of tokens out there, to simply get exposure to everything. He also said they’re not stopping with TCAP and that more tokenized indexes are coming up.

The podcast was led by Camila Russo, and edited by Alp Gasimov. Transcript was edited by Owen Fernau and Dan Kahan.

🎙Listen to the interview in this week’s podcast episode here:

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🙌 Together with: 

  • Balancer, one of the leading DeFi automated market makers (AMM) for multiple tokens. Dive into their pools at https://balancer.finance/!

  • Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi

  • Aave, an open-source and non-custodial liquidity protocol where users can earn interest on deposits and borrow assets. 

  • The DeFi Pulse Index, a capitalization-weighted index that tracks the performance of selected DeFi assets across the market. 

Preston Van Loon: So I'm Preston Van Loon. I'm a career software engineer, interested in tackling high-impact and difficult problems. So I was working at Google for some time, and in 2017, I was introduced to Ethereum. It was really the first time I had taken blockchain seriously, and really looked at what it was and what it could be used for. I'd heard of Bitcoin, but it didn't seem as interesting to me. 

I just saw this bubble thing, price goes up and down, and didn't seem to really fulfill some of its core goals of being peer-to-peer money. So looking at Ethereum, where it's really more of an application platform, and really has more use cases than just peer-to-peer money, or sound money, or however you want to think of Bitcoin. 

So 2017, this was the time, just last market cycle, ICO craze, things are going crazy, CryptoKitties, stuff like that. We're seeing the blockchain, Ethereum, really max out its throughput for the first time with all this public activity. And I said, wow, this is really interesting technology. But it's actually not quite ready yet for the level of activity it’s getting. If CryptoKitties, if a single application can really cripple the throughput of Ethereum, well, it really has a long way to go. 

I started trying to get involved, just trying to see how can I contribute to open source technology, it's really a fulfilling thing to do. And I found that there’s this effort called Sharding, that can take Ethereum and split it up into multiple independent shards that increase the capacity by the number of shards that you have. And I saw that a specification was kind of there, but no one was really making substantial progress. 

I met Raul Jordan online. He and I were asking the same questions around the same time, of why is nobody building this and who wants to build it with me? So we linked up a couple days later in New York City, and said, you seem like a cool person. And you think I'm a cool person. You know, it's kind of like a first date.

“I see this tweet from Vitalik that he had sent us 1,000 Ether, which was around $100,000 at the time, with just the word ‘YOLO’ in the tweet.”

But we went from there. We said, this is a really great opportunity. We're both hungry for some high-impact work, let's just start building it and see what happens. We ended up getting a great group of people by asking around on Reddit and in the Go Ethereum forums and things like that. And since then, we thought, okay, this will be a cool moonlight project and we'll do it just for fun. But we started to see opportunities where it can be grant funded.

So we started to receive grants, and we said, wow, this is crazy, we’re really interested in it. But it wasn't quite enough to leave Google, you know, Google’s a pretty heavy anchor to be moved from. But towards the end of 2018, we had been working on it for about a year and taking it very seriously, really producing content and showing the community we were serious about it. 

I think one of the big driving factors was we were talking on Twitter, as we do. People were complaining, what’s taking so long? And I said, well, we are all mostly at Prysmatic Labs working on it part-time, we still had full-time jobs, because we're not crypto rich or anything like that, we just want to work on it. And I was making dinner, and then my phone starts blowing up. And I see this tweet from Vitalik that he had sent us 1,000 Ether, which was around $100,000 at the time, with just the word ‘YOLO’ in the tweet. And now it’s like a really famous thing that he just sent us this crazy amount of, I don't even know what it's worth now. But that was a huge signal of support from Vitalik, the founder of Ethereum, and the community in general that we're getting these grants.

Escaping the Titanic

Camila Russo: I remember being on Twitter at the time and seeing Vitalik do this. It just completely blew up , that YOLO tweet, It's kind of in the meme Hall of Fame now. He gave Prysmatic Labs 1,000 ETH, and a couple of other projects working on ETH 2.0 1,000 or so ETH, or something of that magnitude. Was that the final push to leave Google?

PV: Yeah, at that point, with the combination of the grants from the community, like random donations, the Ethereum Foundation starting to give us substantial grants, the Ethereum Community Fund, and then this final push from Vitalik, I stuck around Google for just a few more months. I think the YOLO grant was in October. I stuck around to the year end to be eligible for Google's year-end bonus. 

But as soon as that, I was out the door. You know, I think I was out the door as soon as I saw that happen, but I had to stick around and finish out a few things. And we've been working full time ever since the beginning of 2018, so basically two years at this point. And it's been just an incredible journey building ETH 2.0, very fulfilling as well.

CR: Okay, so I definitely want to know more about the latest on ETH 2.0. But just to dive a little bit on your transition from Google to full-time crypto. First, what inspired you to leave this job that most software engineers would kill for? What was it about open source or Ethereum or crypto that really inspired you?

PV: I love this question. Because I thought Google was really an end-goal for me. I got there and I said, I'm going to stick around here for a really long time. The longest job I had was a year and a half or two years, something like that, pretty common in tech.

“The analogy I had conveyed to some people at the time is that I felt like I was working on the Titanic, this great massive ship, but I was redesigning the doorknobs, which already worked, and they were fine. And once I had replaced them with more efficient door knobs, it didn't really feel like it was high impact.”

But at the time, Google was maybe 70,000-80,000 current employees. I think it's maybe like a quarter million now, it’s grown significantly. And I was working on ads which are not that interesting of a problem. But when you get to that scale, you stop feeling like you're making a big splash. You feel more like you're a cog in this great machine. 

The analogy I had conveyed to some people at the time is that I felt like I was working on the Titanic, this great massive ship, but I was redesigning the doorknobs, which already worked, and they were fine. And once I had replaced them with more efficient door knobs, it didn't really feel like it was high impact. Whereas something like building ETH 2.0, which seems like an incredible and global impact, that was just extremely attractive.

Just from working with a lot of new people, smart people, and solving really unique and novel problems in computer science that really only exist in a place like Ethereum or a decentralized application platform.

ETH 2.0 Roadmap

CR: That makes a lot of sense. The potential to make a big impact with something that's so new like Ethereum, and also that has the ambition of being the base layer of everything, a new internet, that is pretty compelling. Good selling point. So then, from that time in Prysmatic Labs to here, how has the ETH 2.0 roadmap evolved? Because there have been so many changes along the way on how ETH 2.0 looks, and when it will be shipped, and all the different phases. So I guess it would be a lot to dig very deeply into all the transitions, but maybe if you can go through in broad strokes what the idea was back then and where we are now. 

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