Does Crypto Need L1s?

Recorded remotely.

Hodl Up: Hello everyone, and welcome back to the show. Today we have Pep the Ghost, head of marketing at Alephium, joining us. This episode has been a long time coming, so I'm very excited to finally make it happen. Pep, first of all, thanks for joining us.

Pep: Thank you very much for having me. I'm very happy to be here. It's been a few months of back and forth, but we finally made it happen.

Hodl Up: A quick question. Is it over? Is crypto over?

Pep: Oh, starting with the heavy artillery there.

Hodl Up: Let's get the heavy stuff out of the way from the beginning.

Pep: No, we're at the dippiest point of the dip, guys. Come on. We're waiting for our big old pump. I don't know if it will ever come, but who knows? I've got a lot of friends in this industry. Some of them are pretty bearish, some are very bullish. Some of them have big tax bills to pay and are sitting on massive losses, and those guys are extremely bearish. I think I'm a realist. I think there's a small chance that things are going to take off from here, but I'd like to think it's on a case-by-case basis for each chain. I'd like to think the chains that are building and shipping good products are going to do well, and the chains that have burned all their runway, wasting it on big events and booths in a quiet market, are maybe going to fizzle out. I think we're going to see a lot of consolidation in the short term.

Hodl Up: What makes good projects stand out is that they keep building regardless of bearish or bullish sentiment. And speaking of building, you're launching the core dApp, the DEX, tomorrow, February 17th. Talk to us a little bit about that. What should we expect long term?

Pep: Well, knowing that this episode is going out after it's launched: currently we haven't even revealed the name. So, world exclusive for you guys, the first people outside of Alephium to know the name: it's Powfi, proof-of-work finance. It's a CLMM and CPMM hybrid DEX, and it's been a real sprint for our devs over the last six months to build it. I joined Alephium near the end of August, and the day I started, they announced they were going to build this. So I joined right at the announcement, and my main goal over the last six months has been to improve the sentiment and prepare people for this amazing product launch.

I've tested it on the internal testnet, and it's so good. It's so clean. The product team is amazing. The back-end devs are incredible. What's even more impressive is that they've built this DEX in our own smart contract language, which is called Ralph, and Ralph was designed to prevent exploits. So I would say this is just about the most secure DEX possible. It's built on proof of work in our own exploit-resistant language. I'm really excited to see it go live.

The other thing being built is staking for our coin, which is ALPH. That won't be on the testnet, because what's the point? We want people using the DEX and trading, and staking a faucet coin doesn't make any sense. So they'll keep building that. Our community is buzzing, and I'm buzzing too, as you can see. It's chaotic here. There are so many moving parts. A lot goes into building a DEX that people on the outside don't see. It's so much work, and it's looking good. I think people are going to like it, and the sentiment and feedback are going to be really strong. For the community listening in, whether you know Alephium or not: we are going to be doing bug bounties. The goal of our public testnet is for people to look for bugs. We think we've got them all, but you never know. So go in, stress-test it, battle-test it, and have a look.

Hodl Up: Congratulations on the launch, first of all. We were talking about the bear market and the product launch. In the last bear market, in 2022, I remember there were many black swan events, and I don't remember many builders building. But this time around, even though we're in a bear market and sentiment is down, communities and builders like you keep going. So first, do you think a launch at this specific time in the market is going to be successful? And second, what actual issue is your product going to solve in the next few years? Of course, products like these take time to find their place in the market. I know you did a lot of research before launching the product. And also, thank you for sharing the name with us.

Pep: I'll go back to the first point, the crypto winter, the bear market of 2022. I had a different experience from you, being on the writing side. I was a senior copywriter for an agency, and we were working with a lot of projects that were in stealth, and I think that is what happens in a bear market. Builders build because there's not so much noise. They're not out there trading and playing with different protocols. They're doing their own thing, because they know it's harder to capitalize on market movements and price action during a bear market. So they get to work and build, and a lot of it happens in stealth, so you don't really see it. They're out there trying to get VC money, which is a lot harder in a bear market, but a lot of the tools we see and love now were actually built during the bear, and they waited to release strategically once the market improved. That doesn't always work. A lot of projects wait, and by the time they launch, the market's moved and the trends have shifted, and there's no demand for what they built. A lot of it just doesn't work out.

Your first question was whether it's wise to launch right now. For us, it is. Alephium's history precedes my time here: it's been on mainnet for over four years, and the core team has always had a policy of building one important thing at a time. They announce what they're going to build, then they build it, test it, ship it, and move on to the next thing. By doing that, you have clarity with your audience. It builds transparency and trust. It tells them: we're not going to pivot to chase bandwagons. We're not going to pivot to the next trend, whether it's AI or whatever. We are absolutely focused on our mission, and the mission has been communicated very clearly from day one. That's something I really like about Alephium. It's moving forward all the time. So releasing now, in a bear market or a bull market, is kind of irrelevant. Alephium has tried to separate itself from the overall market movements, stay in its own lane, and stay focused on what we want to build.

The problem we want to solve is DeFi on proof of work. If you look at our ecosystem, we've been giving grants to and nurturing really good DeFi primitives, and we've got even more in the works right now. That's really important. We want to grow our TVL. We want to create an ecosystem not just for traders but for DeFi enthusiasts, on a proof-of-work system, because it's secure and it's proven. Everybody loves Bitcoin, and everybody loves Ethereum or Solana to some extent, but they all have their own shortcomings. So we've tried to build a hybrid ecosystem of really solid, robust tech. We've got the security of Bitcoin, the smart contract programmability of Ethereum, and the scalability of Solana. Not quite as high as Solana, but we can still do over 20,000 transactions per second, which is super fast for a proof-of-work blockchain.

So that's the problem we're solving, and we believe our community recognizes that. But we need to talk to people outside our community, the wider Web3 DeFi community, and that's incredibly hard to do. There are so many products and tools out there competing for attention. But when people find what we've built, we believe they're going to see us as a sleeping giant, a ghost in the machine, and think, "Oh, these guys are doing something really cool. They deserve more attention." So our goal is to stay under the radar until something happens, the flywheel triggers, and suddenly we grow and grow.

One last point on that: we've communicated quite clearly throughout this process that our DEX, Powfi, as you now know, is not designed to compete with the other DEXs already built on Alephium. The goal is actually to support them, to build more primitives for them, and to attract more liquidity and money into the ecosystem overall, so that every single dApp benefits, because what we're building is completely composable. Every dApp in our ecosystem will be able to integrate it and benefit.

Hodl Up: I really like that approach, because we've seen a lot of companies, oracles or whatever, whose whole point is to outcompete or outshine their competitors, whereas why not focus on providing a solution that benefits them all? I was going to ask you to explain the proof-of-less-work concept to those who may not be familiar, but you already explained it quite well. So this brings me to my next point, which is the Danube upgrade you had last year, which basically removed the limited supply of the token. What was the thought process behind that decision, how do you think investors who prefer deflationary properties viewed it, and how do you explain it to them?

Pep: Oh, I would love it if our COO were here to explain that. It actually doesn't change anything. The burn rate, the emissions, all of that, it doesn't really change. When you look on CoinMarketCap, it may say infinite supply or whatever, but that's not really the case. It continues at the same rate, and that's part of the proof-of-less-work mechanism. It's just that the listing websites don't have the same kind of data we have to show them, so they don't display it the same way.

The Danube upgrade halved everything. It halved the transaction times and all this stuff, and it made for a much better experience. Confirmations happen faster, and blocks process faster. It improved our proof-of-work performance so much more. And in theory, we can do it again and again. There are these incredible discussions between our devs, who are top-level proof-of-work consensus mechanism geniuses. They have incredible ideas for the future about how we can get near-instant finality on proof of work, but that's much further down the line. Right now we have great performance, and we're very happy with it.

You asked about proof of less work. Obviously, it's proof of work, but as it scales, if you were to place the Alephium blockchain under the same conditions as Bitcoin, for example, it becomes more sustainable. The energy emissions actually drop by up to 87%, and it does that through a burning mechanism that balances proof of work with staking. It's quite complex, and it's all on our website if you want to read about it. I'm not the most technical guy to explain it, but it's very smart. It only kicks in if we were under the same kind of conditions as Bitcoin, with a lot more transactions and a lot more happening. Right now activity is a little bit low across the whole of Web3, but if we were to scale and get a lot more users, the energy consumption of the miners would drop over time.

Hodl Up: Now I want to touch on the fact that you use your own programming language. How hard is it to market it to developers? Bitcoin gave us the security model. Ethereum gave us the programmability of smart contracts. Solana gave us, I don't know, user experience maybe. So with Alephium and your own programming language, how do you get across to developers who are maxis of their own ecosystems and convince them to come to you and build on top of Alephium?

Pep: Great question. That is a challenge, and we are fully aware of it. We've talked about this in articles. EVM-compatible chains benefit from Solidity; it's easier for them. The vast majority of smart contract developers code in Solidity or Rust, and that's kind of it. The chains that have their own language struggle to attract people. I know Move is growing, but it is hard.

One tool we have given a grant to and nurtured is called HenryCoder. It's a Solidity-to-Ralph AI translation tool, and it works really well. They've just done a load of updates, and we are sponsoring a hackathon, I believe next week, with a university blockchain association, and that's going to test HenryCoder. Most of the students already know how to code in Solidity, so they can just translate it to Ralph. That's one way.

For the devs who sat down and learned Ralph, the feedback's been really good. They said things that would take them eight hours to code in Solidity, they can do in about 15 minutes with Ralph, and without the possibility of exploits. Things like double spending and other common smart contract exploits are just not possible. We even have our own smart contract expert on the team who tries to break our own contracts. It's part of his job. He tries to find the flaws, and if he can't, that's good, because he's a real crack. He's amazing. He's also coded almost all of the smart contracts for Powfi, so we're in good hands. It's going to be super secure. And one more point: yes, it is difficult, but it's worth it. That's what we say to them. There might be some challenges, but the reward is there. If it were easy, it wouldn't be worth it, right?

Hodl Up: Now I want to focus a little on the marketing side, given that you're head of marketing at Alephium, and given your experience in both Web2 and Web3. I believe you have a deep understanding of audience psychology, not just within crypto but outside of it, and you've been quite vocal about how the Web3 space prioritizes immediate dopamine hits, like with memecoins. At the same time, we're seeing a lot of shifts towards more institutional crypto, and we're seeing that in marketing at crypto companies as well. So my question is: how are you applying long-form storytelling to Alephium's community, and how do you build that community so it actually understands concepts such as the sUTXO architecture?

The reason I'm asking is that the last time we talked, you recommended a podcast to me called Ruined by the Internet, and I did look into it a bit. There's a recurring theme about how the internet was maybe hijacked by mass corporations and governments, and I feel like we're seeing the same with Web3, this new form of internet, being hijacked by institutions. As much as I dislike all the memecoin cycles and hype-driven narratives, I'm not too supportive of this institutional meta either. I don't know if my question made sense or was too long, but I had to vent.

Pep: I'm with you. I'm with you. I've vented plenty. A few months ago I went to a conference in Malaysia to speak about how big tech is infiltrating Web3 and ruining it from the inside. It's a Trojan horse. I really don't like that, and I've talked about it on our blog.

You mentioned long-form content. I'm a big fan of long-form content. I've been a career copywriter and marketer for over a decade. When you're talking about good tech, and I believe Alephium is good tech, you have to separate your audience into different segments. There are going to be value extractors in any ecosystem. They come and only look at the numbers: price extraction, maybe ambassador programs or airdrops, wherever they can get quick value. Whereas genuine community members, long-termers, potential whales who may want to fill their bags because they really believe in it, want to consume as much information as possible. They want long form. They want in-depth articles and deep dives, and they want thought leadership from the team. It's one thing to have your team fully doxxed, which is a great thing, and I believe a lot of teams should be. But it's another level to invite those team members to explore their expertise and opinions and draw on their experience in Web3 to share them.

You also touched on dopamine. My colleague Carla, who is head of ecosystem, wrote a great piece called "TikTok Syndrome," and she believes it's that instant gratification: dopamine hits, everything, everywhere, right now, immediately. That's perhaps a generational thing. Older people maybe have more patience to sit, read, consume, and process things. Nowadays, with short attention spans and the attention economy Web3 is in, it needs to be quick-fire. You need to get your point across really fast, and that goes against me rambling on for a few minutes. So I hope that answered your question.

Hodl Up: To touch on that, and it is tied to crypto: where are we in terms of Web3 and crypto content as an industry? I think we need more education, more educational content. But how do you convince people to actually listen to or read educational and informational content in crypto, when most of them are here for money? Your answer can be as short as you like; it's up to you.

Pep: Well, I think we do need more thought leadership. We need the best minds in the industry to guide the others, and I think that means we collectively need to stop using AI to write our content. It pains me that some of the smartest, most attentive, switched-on people just throw their ideas into ChatGPT and copy and paste the result. It bothers me. I know not everyone is a native English speaker who loves writing, but as soon as I start reading a post that has all those classic AI tropes, I don't want to read it. I move on. So I think education should be really original and really authentic. People need to connect with the content they're reading.

I think there's loads of great education out there already. There are loads of podcasts like yours. There's value in talking to somebody directly and letting them free-flow and pour out their experience to an audience. That's really valuable. You can also take that and refine it: take the ideas that come off the top of your head and refine them into more content that you can share. You can clip it, put out short posts and long posts, and there's a lot you can do. One quote can carry a lot of weight. There's loads of very good video content out there, but there's also loads of bad video content, and the same with articles. It's not just AI. There's a lot of stuff that's just wrong, bad takes.

One thing I do expect to see over the next few years is some level of AI verifiability. I don't think AI should be writing the content, but I do think AI should be verifying it. On X, you sometimes have notes under a post saying, "This actually isn't correct, it's misinterpreted," or "This is true, it comes from here." If AI could do that and give us more clarity over what we're reading, whether it's true, biased, misleading, or a potential scam, I think that would be really helpful.

Hodl Up: I agree with you. We're oversaturated with AI slop in different forms of content. I always use LinkedIn as the example: every single post on LinkedIn is AI-generated. "It's not this, it's that," or those em dashes. I used to use em dashes, and now I can't even use them, because it's nauseating to even look at, and people will think it was written by AI. But to add to the question, since he asked how we stand out: well, you should basically gamify every piece of content you make and add brainrot to it. That seems to be what works, right?

Pep: Yeah. I'm expecting you to clip this and put Temple Run on the bottom half of the video or something. Somebody running along in Subway Surfers.

Hodl Up: Yeah, Subway Surfers on the bottom half.

Pep: And me talking about Alephium on the top half. Maybe then Gen Z will listen to the benefits of proof of work.

Hodl Up: They might listen, but what will they understand if they're focused on Subway Surfers or Temple Run? I have no idea.

Pep: And you mentioned LinkedIn. I think LinkedIn's going to die with this generation. It's going downhill so badly. It's not just most of the posts, it's almost every single post. It's unbelievable. I can't believe what I'm experiencing whenever I go on LinkedIn. One of my old colleagues used to laugh at me because I was a LinkedIn maxi. I only joined X with my own account just over a year ago. Before that I had a lurker account; I didn't post anything, I just observed, looking for good techniques. I ran client accounts, but I never did it myself. And now I go to LinkedIn and think, this is so unappealing. It used to be a wonderful hub for business and networking. I got so many clients and job opportunities and learned so many things there. And now it's just awful. It's terrible UX. Gen Z laughs so much at LinkedIn. They call it a boomer website. It's gone more boomer than Facebook, and Facebook is pretty much only used by boomers now, yet it's somehow less boomer than LinkedIn.

Hodl Up: You mentioned Facebook. I think Facebook is way better than LinkedIn, because you have actual honest takes. LinkedIn is crazy. I'm not exaggerating when I say that whenever I go on LinkedIn, I slap my face at least twice. I'm reading something and it's the most soul-destroying thing ever. It destroys my whole being. They start with something like, "A car was parked on the highway. This is what it taught me about podcasts." What do you mean?

Pep: Let's talk about this. I got engaged to my fiancée in May last year, and as a joke I posted something like, "I just got engaged to my fiancée. Here are five things I learned about proposals," because I've seen it so many times, and it's painful for me personally. I go on LinkedIn, I check if I have any messages or connection requests, and then I go to the news feed, and as soon as I start reading AI slop, I leave the website. If you're a marketer, and you guys are marketers, you know that time spent on a website is one of the best indicators for SEO. Surely LinkedIn must have terrible performance for time on site, because people just aren't enjoying it. But then I look at the posts, and some trash AI slop post has so much engagement. It's like five years ago on Facebook, when somebody posted a fake image and all the boomers were like, "I can't believe it, I'm outraged." Now I go on LinkedIn and it's almost every post.

There's one that did massive numbers, tens of millions of views and loads and loads of comments. A guy goes into the woods, there's a huge tree that's fallen down, and he cuts into it and builds an apartment inside the tree. Have you seen this?

Hodl Up: No, I haven't.

Pep: They've done very well on the prompts and the editing. It looks like those videos of the guy in the jungle, I think he's in Mexico, who builds little palaces in the ground. It's that kind of style. It looks like that, but it's so AI. It's so bad. For anyone who knows AI, who deals with it or works in content like us and sees all kinds of content, it's so easy to spot. But for consumers of the internet who aren't creators and don't have to think about it much, it's not so easy to spot. And look at the quality of the video generators, and especially the image generators. The age of photo verifiability is over. It's just over. I've seen some incredible things.

Hodl Up: Yeah, it's insane. Just the other day I caught myself. I watched a whole video on Instagram, and it wasn't even science fiction or something you wouldn't believe could happen in real life. But I looked at the comments and saw that it was AI, and I felt like such a boomer myself, because I'm supposed to be one of the guys who can easily identify whether something is AI or not, and my eyes were deceiving me. It's crazy. I do believe there needs to be some sort of intervention. I'm not saying to hinder innovation or anything like that, but at least something to help retail, to help people who don't deal with content every day, to be able to distinguish whether something is real or not. So I also agree with you about using AI to fact-check everything, but sometimes even the AI misses things. I used Gemini a few days ago to fact-check something, and as much as it did a very good job, it tends to miss some things. It's crazy. I don't even know what to think.

Pep: Unfortunately, it's not going to get any better, because of the situation we're facing. AI companies, especially the Silicon Valley ones, raised billions upon billions, so they need to earn that back. They need to pay back their investors, and consumer AI, selling subscriptions, is the easiest way for them to do it. So they're going to keep improving their consumer AI models, and that means there's going to be more AI slop, but it's going to look better and sound better. Even AI music and video, it's all going to be fantastic. You're going to see feature-length AI movies. But they're just trying to pay back their investors. If they'd gone about it a different way and raised money differently, through crypto perhaps, they could have built with more integrity and built things that are perhaps more useful, not for consumers but for the world. Go figure.

Hodl Up: Now I want to go back to institutions, because if we keep talking about AI, all of us are probably going to be venting. Since you're a proof-of-work L1: the whole issue with institutions right now, I think, is that most chains see themselves as a business. I know they should see themselves as a business, but there are other aspects to being a crypto project, especially a blockchain, and one of the main ones, in my eyes, is decentralization. When institutions come in, I think that's what pushed many L2s and even some L1s to move most of their load onto AWS. And we saw what happened last October: AWS had an outage, and most blockchains just didn't work. So what's the case with you? How do you manage that? I assume that as a proof-of-work chain you do all of that in a decentralized manner. I'm not that well informed on this specific topic, so I want to hear from you.

Pep: I always say Alephium is very highly decentralized, but we're not perfectly decentralized, which is fair. It's just the truth. One day we will be; that's going to happen one day. We're building the infrastructure so that one day Alephium can stand on its own two legs, or hopefully many legs. When that outage happened, we were fine. Some of the dApps in our ecosystem were not, but we were fine. Of course, the miners just kept going. They just kept mining.

There is decentralized cloud out there, and there are good options. I just don't know how scalable it is so far or how well it performs. I'm not that deep into it. But the options are there. You can host your website in a decentralized way, store all your files in a decentralized way, and host your dApps in a decentralized way, so you don't have to be impacted by outages. But the reality is that when there is a major outage and almost everything goes down, most people are just going to switch off their laptop or go do something else. So I don't think that if 90% of your competitors have an outage and you're still online, you're going to see much benefit from it. I think everyone suffers from every outage by default. So I just don't know if there are enough incentives for chains to go that way. The criticism they receive is probably an incentive, with everyone laughing at them and joking, "You're not really that decentralized, are you?" But a lot of the big chains are not that decentralized.

For those listening who don't have a clear concept of how it works: when a blockchain launches, you have these allocations, and one of the allocations is for the company that manages the blockchain. They're the ones who run the social media and the communities, have employees, and so on. One day, as we've seen with several blockchains, that money runs out, and the blockchain has to exist without its human counterparts. If it's been built the right way, continues to have users, and the price doesn't completely plummet, it has a chance to keep going. I've seen a couple of chains do it successfully, so there's always hope. It's a really cool thing to see when a blockchain survives fully decentralized after the centralized entity is gone.

Hodl Up: One guest we had on the podcast, I think about eight months ago, said what I think is one of the most amazing quotes I've heard: decentralization is a process. I believe that with my whole being, because the idea is there and the goal is there, and the most important thing is to keep pushing and try to be as decentralized as possible, because there's not much incentive to be decentralized, especially in the current economy.

Pep: 100%. Our founder is Cheng Wang. He's a PhD cryptographer who specializes in consensus mechanisms, a really smart guy. He first proposed a Byzantine linear consensus mechanism, so he's really OG. He built Alephium as his vision, his dream, but he always built it for the next century. He said from the start that this is a next-century technology, so his vision was to build out all the infrastructure in the short term so that one day Alephium will thrive without humans meddling with it. I think that's a really beautiful thing. It is a process, and hopefully, far down the timeline when that happens, I'll be able to look back and feel really proud of my contributions to this blockchain.

The reality is that I work for the Alephium company, but in my heart I feel like I work for the community: the users, the dApps, the ecosystem, the builders. They're the ones I'm accountable to and doing my best for every day. I'm here trying not to shill Alephium, but to put forward the realities, because I want them to see it and know that our team is working so hard for our success and for that eventual reality where this will hopefully be a thriving ecosystem when we're all gone, when we're ash and dust.

Hodl Up: I think everyone in crypto should be like you. I mean it, because first of all, not everything should be binary. Things should be on a scale. And second, it's much more important to put the community first. So huge shout-out to you.

Pep: No, no...

Hodl Up: I saw somewhere that you're also a Muay Thai enthusiast. Is that correct?

Pep: Yes. I've just started training again. I had a horrible injury and was off for about 18 months. I gained a lot of weight, which is why I don't look like an athlete, but I was getting ready for my first fight about a year and a half ago, and I suffered a really bad hip injury. The dream is still there, a little bit, that I could fight one day.

Hodl Up: It's all about making that decision and being proactive about it. Again, it's not a binary thing. It's a scale, it's a process, the same way as decentralization. But has the discipline that martial arts brings affected how you approach your day-to-day with Alephium's growth, the marketing side, but also in a general sense?

Pep: I really feel like this is a Joe Rogan type of question. How does it reflect my working style? I actually love... sorry, I love Alephium. I love Muay Thai because of the social element. I love going to the gym. I train at the same time with the same people. We have a community. We go and eat together afterwards, and we share clips with each other. It's very social. We're basically a tribe of people who love this thing and are bullish about it. And that's how I like to see Alephium. I like to engage with the people who show up the most regularly and give them a platform.

We have our own internal video podcast that we do every two weeks, and one time I managed to get our Nigeria community lead on. I was so happy to have him, because he's really nice. His name is Tony, and he's one of our best creators. He found Alephium, loved it, vouched for it, became an enthusiast, then became a creator, and he's doing it. He's living it. That's kind of how I see Muay Thai. I started as a fan, tried a couple of sessions, got hooked really quickly, and suddenly it filtered into my life and became an important part of my lifestyle and my social groups. It became all-encompassing. I think that happens to a lot of people in Web3 when they find a project. You become a maxi, you become a whale or whatever, you get really involved, and then you may even become a builder. I think that's the highest level to aspire to: building something for the ecosystem you love most. And I would equate that to finally having your first fight.

Hodl Up: You're giving me motivation to go to the gym again, because I haven't been in months. So, I know Alephium has, let's say, two main types of users: the miners, and the community members interested in the market structure and everything. How hard is it to navigate both of these communities within communities? I know there aren't many L1s that use proof of work anymore, so I don't think you have a blueprint for that in the market, and you have to do everything your own way. And when it comes to market structure, I think it's totally different, because most people join a project in a bull run and usually leave when the cycle is done, but the miners stay. They're the loyal ones. So how hard is it to market to these two types of people and keep them in?

Pep: That's a very good and very tough question. On the miner side, most of the good work had been done before I joined. I joined three and a half years into the project, when the miners were already established. I'd say there's not much work being done to look for new miners, because we have quite a lot. They're consistent, and they're in long-term deals. As far as I'm aware, you can only mine Alephium on a specific device, so they had to invest in that, and they will continue to mine ALPH. I know it's not always profitable, but they want to keep filling their bags, and I'm happy that they vouch for it.

As for the users, we're talking more about DeFi. Although it's proof of work, we have the DeFi element, so we're nurturing projects and protocols that we believe will bring more users, more activity, and more liquidity. That's really our focus. If I can shout out a couple of projects: Aura. Aura Markets is on testnet right now, and they're doing really well. Their token is doing well, their testnet is busy, and their community is growing. It's a fully decentralized prediction market, and there aren't many of those. We had them on our internal podcast recently, and the level of detail they've gone into is extraordinary. They're building hard, and there are a lot of bullish people in that community who can't wait for it to drop. So I think having a prediction market is really cool.

We've also got Linx. Linx is probably the star boy right now. From launch a few weeks ago, they're already at over 330k in TVL, and it keeps growing. The APY on their loans is amazing. They're really, really good, and really well managed by a very competent and experienced team. They've also been good at helping with thought leadership and explaining their vision, which I think is really important. They're really up for discussions, and communication is key. I need our best protocols to build on their thought leadership, share articles and videos, and jump on podcasts, and I try to pass on X Spaces opportunities when they come up. I need them to talk more. They need to stop being so developer-led and put their marketing hats on, because they're fantastic protocols and they're out there now.

So I think that's a big challenge. Marketing is always going to be a big challenge in a saturated market. But if you look at our market cap and TVL compared to the size of our community and ecosystem, it's incredible. There's so much upside. But it's hard, and it's going to be hard if the market keeps getting more bearish and price action doesn't improve. We will face more challenges.

A final point on this: I joined during really terrible price action, and my first couple of weeks were really stressful. There was some really vicious stuff in the community, with a lot of very unhappy people lashing out. But the OGs who've been there from the start are still there. They backed us and continue to back us. A lot of people, like you said, fizzle out as the price goes down, and it's not such a bad thing to get rid of people who lash out during volatility. We've got so many really good veterans who back us, and I have to lean into that, understand their mentality and why they're still here, and bring that out in our communications: that we're built for centuries, built for longevity, engineered for endurance. These kinds of narratives are key.

Hodl Up: I agree with you on a lot of things. There are a couple I wanted to go into. I agree that a lot of these projects need to take off their developer hats in terms of how they market themselves, but I also think we've moved away from the KOL era, where everything seemed too good to be true, and just because a KOL said something, it was supposed to be the best thing in the world. So I'm kind of glad we're back in this niche that's tailored to developers. Even though I don't understand a lot of the technical stuff myself, it still filters out some of the people who join for quick overnight gains.

And you mentioned Aura, the decentralized prediction market. Do you think one of the reasons they've had the success they've had is the gambling epidemic we're seeing as a society and a culture right now? I'm not against high-risk ventures. I'm just not a huge fan of gambling and everything it represents.

Pep: I'm not a gambler either. They're not promoting themselves as a gambling platform. There's obviously a strong case that prediction markets are gambling, but there's another side to it. It's about information, finding single sources of truth. It's a community engagement tool. I started my career as a journalist, and I wish we'd had prediction markets when I was a journalist 12 years ago. That would have been incredible. What it lets you do is see which markets are performing best, getting the most bets, the most conviction, movement, and liquidity, and then tailor your content to the audience's interests. When you see the outcomes, that creates more useful content that people actually want to read. And you can look at the markets getting no activity and know, "Okay, people really don't care about this, but they do care about this and this." Suddenly you're really speaking to your community by integrating these markets. And to do that in a decentralized way, where instead of oracles you use a community resolution system, I think that's good. They have penalties for people who vote incorrectly, so there's an incentive to resolve things correctly. It's a very smart system.

As for the gambling epidemic, yeah, it's bad, but it's a reality of life. People want to gamble, and I think right now people want to be entertained. A bear market is not entertaining. That rush or enjoyment you get from seeing green candles, we're not seeing a lot of right now. Maybe one day a week we see some green candles, and the rest of the time it's pretty dull. So people are sitting on crypto that may be 90% or 95% down. They don't know what to do with it. They don't want to sell, but they can try to have some fun with it, because suddenly it's not a meaningful amount of money anymore. They've already written off its financial value, so they say, "Okay, let's just have some fun with this. Let's use it as a cryptocurrency, for what it was designed for." And that's kind of brought us back to the original crypto scene, where it was about what we can build that's useful, innovative, and fun. Right now there aren't that many devs or communities building products that are good for the world. Most people are building to improve their own world. They're building for themselves. People don't want to make the world a better place; they just want a better seat at the table. So when it comes to prediction markets, I think they're kind of similar to GameFi. They're here to entertain, and I'm not against that.

Hodl Up: Here's the thing, because I love prediction markets. I love the whole concept behind them. My parents have been journalists for 28 years or more, and when I mentioned the concept to them, their first thought wasn't gambling. Yes, you're risking your money so you can win more. It has percentages, odds, and probability. I get it. And I'm going to disagree with him again, because he's mentioned gambling in a few episodes now, and it looks like I'm defending gambling.

But a few days ago I was doing some research on prediction markets, and I came across a report from 2009, so about 17 years ago, about business forecasting. It was a researcher, I don't remember the name, who used three specific methods to see which was best for business forecasting in a specific case, and one of them was prediction markets. I thought prediction markets were something new, something invented in the past few years after the pandemic, but they've been around. And in every single aspect, in terms of accuracy, efficiency, and so on, prediction markets were way better than all the other methods. But he mentioned that they were really hard to do at scale, and now we can do that through crypto. It's amazing, and what Aura is doing sounds amazing too. I'm going to check them out right after the episode, because I'm researching prediction markets a lot. The whole concept of this unified, collective intelligence is just astonishing to me. So that was my point. I just had to say all of this.

Pep: No, thank you for sharing, man. That's really cool that your parents are journalists, so I get it. When I first saw it from a journalist's perspective, I was like, "I like it. This is cool. This gets us closer to seeing conviction." It's a useful tool for things like elections, which impact the whole world. We get to see what people believe en masse. And a lot of people gamble differently from how they predict. They are different things. Gambling is more of a game. Well, it depends on whether you play casino or bet on sports, for example, but it's different. You're using a different kind of conviction. Let's say my football team, who are pretty terrible, are playing a really good team. I might bet on the team that's probably going to win, so that I win either way, right?

Hodl Up: I used to do that as well, because I'm a Liverpool fan, by the way, and whenever we played Manchester City I would bet on Manchester City, because I knew that if Liverpool won, chances were we'd take the lead in the title race, but if Manchester City won, I would at least win some money and be happy. So I understand it's all about hedging. And when you weigh the benefits and costs of prediction markets, first of all there's the fact-checking, and being able to get real-time information on a specific topic, because a lot of topics are covered by prediction markets, even things you wouldn't think about, like whether some deputy prime minister's socks will be blue on a Tuesday morning. So when you weigh the pros and cons like that, it makes sense that we have them, and I'm glad users are being onboarded that way. People are still going to risk money. People would still lose money if it weren't for prediction markets, because there would be the pump.funs and whatever.

Pep: I didn't like the memecoin thing. I didn't get involved; I was not a memecoiner. I do like prediction markets, and what I've found is that they give me breaking news I wouldn't otherwise be exposed to. I really like that. I'm in Aura's Telegram group, and every time a new market is posted on the website, it's there in the group. It's faster than the BBC. I'm seeing news there a day or two before the BBC. For example, when Kim Jong-un announced his daughter as his heir, I saw it on Aura more than 24 hours before.

Back to my point about the difference between gambling and predicting: I guess it's about risk, and what kind of risk you want. I might bet on Tottenham to win the Premier League, because the odds would be a million to one and I could bet just a pound and win a million pounds, because we're terrible. I'm a Spurs fan. We're awful. But on a prediction market, I wouldn't predict Spurs to win. I would predict something I think would actually happen. So it's a completely different game. And again, it gets us closer to that source of truth, which I think is going to be really valuable. Talk about fake news: it's been a problem for years now. I think we can get closer to real news with community conviction. There are also people in the know who put up decentralized markets early, when they have some early information, because they can capitalize on it. So people benefit from sharing inside information, and I think that's a good incentive.

Hodl Up: And just one thing: we have this philosophy that if we're ever going to bet on football games, never bet on Italian teams or Spurs. Those are the only two conditions. And by the way, this is not any kind of promotion for gambling. We're not against it, but we're not promoting it. To wrap things up, because I see we've been going for about an hour...

Pep: It goes quickly when you're having fun, right?

Hodl Up: I mentioned something earlier about measuring success, and I don't want to look at TVL and monthly revenue. Yes, they make sense for potential investors. But how would you measure success for Alephium in five years, besides the obvious marketing metrics that companies use? Does that make sense?

Pep: I won't quantify it with numbers, but I'll qualify it with positive sentiment: a large, active, happy user base, more public awareness of the chain, more powerful institutional partnerships, and a bullish mood, where people smile when they talk about us and say how great it is. More dApps, more builders, more people who can code in Ralph. Obviously, that's quantifying it in a way. We'd want more, but we all want more. I guess the final thing would be for people to talk about Alephium as a success story: having revitalized the proof-of-work industry and shown what can be done, that a blockchain can be super secure, that DeFi can be done on proof of work, and that you can be an ecosystem-first protocol or blockchain and succeed without having to sell out to institutions and build purely for them. We're staying in our own lane. I hope we're able to do that and that people respect it. If we earn respect, that will be a big success.

Hodl Up: Preach. Well, thank you so much, Pep, for joining. It was a huge pleasure to host you. As I said at the beginning, this was a long time coming, and I'm very happy we managed to find the time to discuss all this. We should definitely sit down in the future, live and not just virtually. If you're going to be at any conference this year, we would love to join and see if we can make it happen.

Pep: I have no idea which conferences I'm planning to do, but who knows? I would love to meet you guys. I could do this every week. That was such a good conversation. You guys are superstars. Hodl Up. It's Hodl Up, it's just going up, guys. Thank you so much for having me on. Shout-out to all the Alephium community and the core team. I'm very proud to work for this chain, and despite whatever anyone says, we are working with so much integrity to build positive products. Hopefully the future's bright. I'm optimistic, and I'm bullish on you guys too.

Hodl Up: Thank you, man.

Pep: All right. Have a good day. Thank you very much.

Hodl Up: Thank you for joining us today, and we'll see you in the next episode.

Pep: Yes, sir.