Much of this piece is inspired by and, in part, a reflection of "SoK: Cross-Domain MEV" by Conor McMenamin.

There is an obvious rise of shared sequencers, settlement layers, and superbuilders. This shift has brought the concept of cross-chain extractable value to the forefront, challenging us to quantify and mitigate its impact across multiple domains. I wanted to utilize this piece to document and discuss some key learning from Conor’s piece, “SoK: Cross-Domain MEV”.

One of the most pressing issues in this space is time-dependent extractable value. The naive solution of simply decreasing block confirmation times comes with its own set of challenges. Increasing base chain throughput risks centralization, while fast inclusion confirmations on slower chains face technical hurdles. However, the idea of a decentralized shared sequencer network (see Astria) with immediate soft commitments and atomic cross-chain transactions is pretty interesting. Under ideal conditions such as immediate soft commitments (Astria clock in at ~1 second) as well as atomic cross-chain transactions,  the system could potentially mitigate much of the signal and time-dependent extractable value we currently grapple with.

Yet, there are a couple of persistent questions to address. How do we ensure that pre-sequenced bundles from various rollups are built in the correct order? What's the best approach for validating cross-dependent transactions across multiple rollups? The need for verifiable builders and accurate sequencing of cross-rollup transactions adds another layer of complexity to an already intricate system.

Interestingly, the introduction of programmable intents with embedded cross-chain dependencies might level the playing field between single-domain and shared sequencers. Meanwhile, app-chains offer a promising solution to the state staleness problem, potentially providing a superior experience for certain applications. However, they come with their own cross-chain limitations.

Another interesting point was slot auctions for builders. The idea of a secondary market for building rights presents both opportunities and challenges. While it could help distribute centralization risks, the already oligopolistic nature of cross-domain building raises concerns about creating new single points of failure.

It’ll be interesting to see the quantification of cross-chain extractable value as we develop shared interoperable domains. However, the line continues to blur, and I think we will soon see flexible domains of verifiable and programmable sequencing rules. This’ll enable everything from application-specific ordering rules for priority interaction to based rollups with fast confirmation and asynchronous composability.

The views and opinions expressed on this article are solely those of the original author and mentioned contributors. These views and opinions do not necessarily represent those of Placeholder Management LLC or its team.

Memetic frenzies seem to dominate the early adoption of any technology in this sector. And given a blockchain’s openness, each of these frenzies are usually attributed with a financial token that showcases their relative social value. It manifested early with memecoins tokenizing real-world events, internet memes, and other cultural trends. Now, early versions of AI agents represent an extension of memecoins as they have live capabilities and are also financialized for community involvement. 

Most of these early agentic platforms closely represent memecoins with live extensions such as creative content creation, real-time streaming, or even financial alpha. These are naive first steps that showcase increasingly blurred lines between agents and humans for basic tasks. What makes them unique, however, is that we’ve paired freebased AI agents with creative inputs/outputs, and financial independence through self-hosted wallets and associated tokenization. Now, not only can individuals speculate on stagnant memes, but can have financial skin-in-the-game for dynamic agents that not only represent memetic culture, but also produce content and engage with their community.

But when do we move on from early memetic experiments and onto more practical use cases?

The transition from early memetic experiments to practical use cases in the realm of AI agents is already underway, with significant advancements emerging in integrated agentic ecosystems on platforms like Base and Solana. These ecosystems are paving the way for sophisticated agent-to-agent interactions, marking a shift towards more tangible applications. Two key developments stand out: hyper-personalized agents and secure autonomous on-chain trading with robust risk management protocols. A prime example of this evolution is Coinbase's initiative to create fully-autonomous DeFi management agents within their wallet ecosystem. This innovative approach allows users to delegate their funds to personalized agents capable of making informed investment decisions based on user-defined parameters such as preferred assets and risk tolerance. Such practical applications demonstrate that we are moving beyond the initial experimental phase, and into a fully on-chain agentic environment.

The views and opinions expressed on this article are solely those of the original author and mentioned contributors. These views and opinions do not necessarily represent those of Placeholder Management LLC or its team.

Thanks to the Placeholder investment team and Tim Robinson for the discussions here, our conversations inspired some of these takeaways.

Programmable and verifiable on-chain actions should make applications easier, more intuitive, and safer to use for consumers since they remove any ambiguity that is associated with human middlemen. However, we consistently see the opposite result, as is evident by how infrastructure-heavy the industry is. The reason web3 is harder, less intuitive, and perceived as a risky platform to use is because we build from an infrastructure-first mindset and are yet to implement basic design principles that provide users with the confidence to utilize web3-native applications.

Normie users’ gateway to interact on-chain needs to have minimal touchpoints to get started. In the current state, most competitive wallet services require 7+ complicated touchpoints until a user can even begin performing on-chain financial actions. It’s hard enough to understand what “transacting on-chain” actually means, and introducing complicated steps such as saving seed phrases or on-ramping fiat with awfully high fees doesn’t make this journey any easier. Furthermore, on-chain identity remains an unresolved issue, but a long string of characters secured by a private key and seed phrase is certainly not a user-friendly solution. Until an elegant solution for integrating an individual’s web2 identity on-chain can be pioneered, innovative wallet teams such as Sui and Aptos are working on zk-enabled or keyless wallet log-in schemes, respectively, allowing users to retain their familiar web2 internet accounts while transacting on-chain.

The leap to begin interacting on-chain is massive because of a lack of familiarity with the technology. Let’s not make it harder by introducing complex terminology and features. Let’s also not accept these design standards as acceptable because a deeply-motivated crypto-maximalist is willing to overlook these obvious hurdles. We’re building for everyone, not an interested few.

Another pressing area of concern is the incredibly high learning curve and lack of security features that users encounter, leading to a lack of confidence when using web3 wallets. In web2 financial environments, basic tools that help walk the user through an application or fundamental features such as insurance give a new user confidence and help the user establish trust in the service. However, web3 applications assume a crypto-native user, leaving normie users with virtually no options to onboard onto these apps. Innovative implementations of chain abstraction coupled with principles such as intuitive walk-through features within an app and insurance for interacting with risky chains will take us a long way in designing intuitive web3 gateways for normie users.

The applications vs. infrastructure debate is one of the most redundant in the industry, but if we do feel that infrastructure is at a point where we can support a new class of applications, let’s ensure we are building with a user- and design-first approach.

The views and opinions expressed on this article are solely those of the original author and mentioned contributors. These views and opinions do not necessarily represent those of Placeholder Management LLC or its team.

Thanks for the discussions Mario and Aadharsh, our conversations inspired some of these takeaways.

There’s an interesting tug-of-war at play with privacy-first projects and optionally-private incumbents. By principle, blockchain infrastructure is designed to be public, but the limitations of this design principle when deploying applications has become glaring obvious. Hence, the reason for implementing privacy-enhancing technologies within the blockchain stack. 

On one side of this tug-of-war, you have privacy purists who are implementing alternatives to pre-existing infrastructure and applications, but with privacy technology in-built. These players are exemplifying core Internet security design principles, as stated in my CS textbook from college:

“Trying to retrofit security to an existing application after it has already been spec’ed, designed, and implemented is usually a very difficult proposition. Backwards compatibility is often particularly painful, because you can be stuck with supporting the worst insecurities of all previous versions of the software.” - UC Berkeley CS161

The other side acknowledges the network effects at play with incumbent blockchain infrastructure solutions and is approaching privacy as an important plug-and-play feature to exist on top of the existing stack. This is effectively treating privacy as a commodity.

While I acknowledge the strength of the first argument and the importance of privacy as an in-built design feature, recent advancements have demonstrated the validity of the second approach as well.

For example, going “full ZK” has become easier with Optimistic rollups gaining the ability to implement this PET. I recall not long ago when folks regarded the OP stack as a dead model given the eventual proliferation of native ZK rollups. We’re also seeing modular execution networks layer on top of existing VMs, equipping developers with confidential compute and privacy features without leaving their native development language or familiar execution environment. 

Current infrastructure and application products are relatively popular without having privacy as a get-go feature. They’ve reached a certain scale of network effects. While they may be de-throned, it seems an upward battle to compete with incumbents on the principle of privacy. Like it or not, privacy may be an important add-on feature, but people seem to be comfortable with alternative solutions that offer better user experience or have reached a sufficient scale.

The views and opinions expressed on this article are solely those of the original author and mentioned contributors. These views and opinions do not necessarily represent those of Placeholder Management LLC or its team.

Thanks for the context and discussion Brad, our conversation inspired some of these takeaways.

By definition, DePIN is any coordination network that creates a buyer and seller market for some type of data. By that argument, a Layer 1 blockchain like Ethereum can be framed the same way, where sellers provide digital assets and on-chain services to buyers, who utilize this infrastructure and ETH to pay for these transactions. In this vein, the reason Ethereum has been incredibly successful is because it provides a 10x upgrade to existing methods of transacting and storing state: it does so in a transparent, programmable, and trustless way.

What most DePIN projects fail to identify is that to obtain a majority of an existing market, their offering has to be 10x better than the competition. They can’t rely on a marginally-better set of data that is collected in a permissionless, decentralized, and transparent manner because, frankly, buyers do not care as long as the data is somewhat reliable. And in most existing data markets, it is. The question DePIN projects need to ask is how to increase the quality, reliability, frequency, diversity, etc. of the data they are collecting and selling, which can absolutely be achieved through a blockchain backend. 

Another approach is to utilize DePIN to empower individual data providers that are otherwise censored or unable to contribute data to a global network. This questions the relationship between individual <> state. With data that is more sensitive, is actively censored, or is not actively monitored by the state, is it possible that individual citizens could override some state restrictions or shortcomings to provide visibility into this data with Internet-connected devices? This intersection could be an exciting area of opportunity for DePIN projects where independent coordination networks could provide a more accurate and holistic view while providing a resolution to state <> individual tensions.

It has become increasingly obvious that principles of privacy, transparency, and decentralization tacked on to a marginally better product is not enough. While most DePIN networks fall victim to this quality, there exist exciting areas of innovation where DePIN projects can provide strictly better data than their centralized counterparts or shed light to new data sources that are otherwise restricted or unavailable by empowering individual citizens.

We had a very interesting team research meeting last week centered on intellectualizing memecoins. We could very well be overthinking this framework, and in reality, memecoins exist as a 24/7 global casino, but it's an interesting exercise nevertheless. 

We were debating the extent to which memecoins actually represent something - a cultural artifact, a real-time event, a digital meme, etc. While some of us concluded that memecoins serve as a way for people to hold stake in an artifact they align themselves with, Joel brought up an interesting analogy that I agree with - memecoins are the first successful crypto-native on-chain video game.

The core components of any game are goals, rules, challenges, and interactivity. Memecoins can then act as a 24/7 global game played on a multitude of platforms (exchanges and wallets) with these same principles. The goal for any player is to maximize their portfolio balance, and the value of their portfolio provides real-time updates of their performance. The rules of the game are simple: maximize your portfolio by trading a variety of available assets at profitable positions. Traders can develop interesting chart-reading strategies by combining off-chain social and on-chain price movement indicators. The challenges are the volatility of an asset’s performance and the timing of a profitable trade. As for interactivity, the blend of social influence and momentum-driven investing is arguably the most interactive way to engage with such a game.

The reason I agree with this framework more so than the counter is because I loosely believe that memecoins don’t represent something inherently valuable. The conversion rate of people that believe or align themselves with something to those that place financial stake in that thing seems very low. Most memecoins are manifestations of digital memes or real-world events, and a certain set of people may care deeply about these artifacts. However, I believe a majority don’t care enough to place financial value in a representative and volatile token simply to align themselves with that artifact.

While it will remain an interesting space to track and certainly one that isn’t going away, I think it's important not to overvalue a phenomenon that may just be an entertaining, speculative, and successful game that happens to be crypto-native.

Thanks for brunch Lincoln, our conversation inspired some of these research questions.

There are a variety of options that builders have when launching an application. Each of these exist on a cross-sectional spectrum of Ecosystem Alignment & Composability, and Value Capture & Performance. While the debate around which set of solutions will win out is nuanced, a more logical conclusion is that there will exist an increasingly competitive nature for the infrastructure available to builders.

Before the dominant rise of Solana as a chain-maximalist ecosystem (especially after performance increases with Frakendancer/Firedancer implementations), we noticed an industry-shift from chain maximalism around Ethereum mainnet to a more modular environment. This is a natural economic progression since specialization lends itself to efficiency per layer and increased flexibility for builders. Now, we have options at both ends of the spectrum - modularity with Ethereum and a monolithic approach with Solana. 

However, we’re seeing a reversion now, where folks are either working to further modularize and become application-focused, or push for a future that is more intertwined with Ethereum. I think it's a fair conclusion that this is inevitable with any monolithic chain, so long as the market demands a certain level of decentralization at the base layer.

On one end, we have self-sequenced applications (or ASS s/o Tarun), which prioritize feeding extracted value back to the application. This creates a strong competitive environment for startup applications as they compete on the quality of order flow and how much returned value they redistribute to their users. An issue I see here though is a chicken-and-egg problem: new applications need strong activity and order flow to compete, but can’t garner a strong user base without some of these redistributed incentives. A default solution is token incentives and/or points, but this is unsustainable given how difficult customer lock-in is for protocols (s/o Maanav). It may be interesting to explore other sustainable vectors of overcoming this cold-start problem.

On the other hand, we have based rollups, which are an optimistic outlook for utilizing Ethereum to sequence transactions, and as ancillary benefits, rollups gain atomic cross-rollup composability. While this is a great solution for direct value accrual to Ethereum, based rollups lose out extracted value to the base layer transaction supply chain actors. This can be analogized as a “tax” that builders have to pay to Ethereum. With modular solutions on the rise, forcing builders to pay an additional “tax” to the Ethereum base layer to effectively be Ethereum aligned seems like an uncompetitive feature. I welcome some counterarguments here.

Lastly, we have our traditional appchains and rollups, which will continue to serve applications that have enough of a network effect and initial funds to support launching their own ecosystem. I think these will continue to dominate the landscape as builders with enough leverage demand customizability, flexibility, and expressibility.

The implementation of these solutions not only raises interesting questions about which will win out and what competitive landscape will exist, but also how these solutions impact the value accrual to certain assets? How does $ETH get impacted in the face of modular architecture? What about the interoperability of app-based tokens? These are all interesting questions to think about going forward, and I welcome any and all debate, comments, and thoughts about it.

The views and opinions expressed on this article are solely those of the original author and mentioned contributors. These views and opinions do not necessarily represent those of Placeholder Management LLC or its team.

I stumbled upon an interesting discussion over brunch and later on with the Placeholder team about stablecoins and what major American political parties think about them. 

Until centralized stablecoin issuers continue to dominate the stablecoin markets, why are they not being more aggressively welcomed by regulators? Major centralized stablecoin issuers (Tether and Circle) hold a decently large share of U.S. treasuries as collateral for their stablecoin issuing services. Demand for USD-denominated stablecoins are only increasing, so demand for U.S. treasuries by these issuers will also increase, thereby strengthening government economic security.

As stablecoins increasingly capture mindshare, it makes logical sense for regulators to step in and establish frameworks that support this cyclical value capture. Some of the cautious approaches entail capping how many dollars worth of stablecoins can be issued and who can issue them. This seems contradictory to the value stablecoins provide for the U.S Dollar, and its in U.S. government's interest to support them openly, while embodying some of the following values:

• 1:1 collateral backing with verifiable proof of reserves

• Limit or prohibit rehypothecation of reserve assets

• Compatibility with existing banking and issuance regulations

It seems that the value accrual of stablecoins are cyclical, and in direct benefit of the U.S. government. Stablecoins have found PMF and will be a major onboarding tool for global users onto crypto-native financial applications. If achieved at scale, not only does this proliferation eat away at foreign economy’s financial sovereignty, but it also strengthens the U.S. Dollar. This implies that stablecoin proliferation introduces awkward global economic ramifications and strengthens the centralized U.S. monetary system in an international economic context. 

Isn’t the entire ethos of blockchain-enabled financial applications to rid individuals of centralized financial systems in favor of decentralized rails? How, then, can we not only promote global stablecoin proliferation, but tout it as one of the only valid use cases of the technology?

Regardless, it's surprising that both campaigns haven’t actively embraced stablecoins, especially considering its ability to serve as a vehicle to promote U.S. Dollar dominance within global markets.

The views and opinions expressed on this article are solely those of the original author and mentioned contributors. These views and opinions do not necessarily represent those of Placeholder Management LLC or its team.