The debates at Breakpoint 2024 covered a range of topics shaping the future of the Solana ecosystem and crypto in general. From dissolving the Solana Foundation to whether NFTs and DePIN have staying power, each argument highlighted the complexities of the space. Themes of centralization versus decentralization, institutional involvement, and speculative use cases were revisited throughout, demonstrating the varied perspectives from key players in the ecosystem. As the industry matures, it faces pivotal decisions on governance, infrastructure, and the balance between open access and regulatory challenges, with these debates providing a snapshot of the current state of discourse.
Here are the 14 debates from Breakpoint 2024 that centered the industry:
The Solana Foundation should be dissolved
Crypto’s only use-case is speculation
Most DePIN is overhyped and capital inefficient
NFTs have no future
100 validators are sufficient to run a decentralized L1
Every large app should inevitably launch its own L1 or L2
Western crypto has technology with no users & Eastern crypto has users with no technology
SVMs on Ethereum are competitive to Solana mainnet
Non-custodial wallets are overrated
Wall Street doesn’t need blockchain
Scams should be actively reported to the SEC
The future of Web3 games will rely on SVM L2s
Bring back ICOs
The tradeoff of institutionalization is network centralization
1. The Solana Foundation Should Be Dissolved
For - Dan Albert (Solana Foundation)
Against - Viktor Fischer (Rockaway X)
Moderator - Joel John (Decentralised)
FOR:
The Solana Foundation was created with the launch of Solana Mainnet to manage funds and support grant programs. Its operations are funded by an initial token allocation.
The Foundation's role is to support the network and ecosystem, but it did not earn its SOL tokens, unlike the community that contributed labor or capital.
The ecosystem has grown and matured, reducing the need for the Foundation. The community is capable of solving its own challenges more efficiently now.
The Foundation’s role should diminish as the ecosystem becomes self-sufficient. Eventually, its dissolution would signify success, as the network would no longer need centralized support.
The need for capital-intensive projects (like R&D) still exists, but the ecosystem is approaching a point where companies and teams could take on this responsibility.
Maintaining a large, permanent foundation risks becoming a bureaucratic and inefficient organization.
AGAINST:
Solana Foundation acts as a "family" for the ecosystem, providing stability, strategic direction, and a sense of community.
The Foundation has guided Solana through difficult times, such as organizing hackathons during bear markets and fostering developer engagement.
It provides essential support through programs like grants, hackathons, and validator delegation, which help ensure network security and participation.
The Foundation acts as a single point of contact for traditional finance (e.g., PayPal) and provides protection from censorship or regulatory threats (e.g., SEC rulings).
Without the Foundation, certain core aspects of the network, like validator profitability and regulatory protection, might be compromised.
2. Crypto's Only Use-Case Is Speculation
For - Tarun Chitra (Gauntlet)
Against - Vibhu Norby (Drip)
FOR:
Tarun argues that speculation is the dominant use case for crypto, particularly on-chain. He emphasizes that censorship-resistant programmable money naturally leads to speculation due to its properties (store of value, scarcity, liquidity, etc.).
Fragmented liquidity in decentralized systems promotes speculative trading, as new assets are constantly created, pulling liquidity from existing assets. This creates a speculative feedback loop.
Censorship resistance makes it impossible to restrict speculation, unlike traditional systems where governments can regulate speculation (e.g., through reserve requirements).
He points out that low creation costs for assets like meme coins, tokens, and NFTs encourage speculation, and crypto’s programmable nature only enhances this activity.
Tarun concludes that speculation remains the most profitable activity in the crypto space, as it is difficult for any other use case to create more value than trading and arbitrage.
AGAINST:
Vibhu argues that crypto is actually anti-speculative because it increases transparency. On-chain systems like blockchains reveal all information, reducing opportunities for speculation, which thrives on information asymmetry.
He provides examples of on-chain lending, which he claims is less speculative than traditional lending. On-chain lending typically involves fully or over-collateralized assets, reducing speculation compared to real-world lending practices.
Vibhu believes that faster chains like Solana, which provide instant price discovery, help reduce speculation by compressing speculative time frames and uncovering the true value of assets quickly.
He argues that while speculation exists in all economic systems, crypto’s transparency and efficiency minimize its impact compared to traditional systems.
3. Most DePIN Is Overhyped and Capital Inefficient
For - Matt Stephenson (Pantera Capital)
Against - Abhay Kumar (Helium Foundation)
Moderator - Shayon Sengupta (Multicoin Capital)
FOR:
DePIN as a category names a problem, not a solution. Matt raises concerns about monitoring costs and capital inefficiency.
Historically in traditional businesses, capital hires labor. In DePIN, labor hires capital (through decentralized ownership), but this can fail when monitoring and capital costs are high.
High Monitoring Costs: The reliance on decentralized oracles adds complexity, token incentives can worsen these issues.
High Capital Costs: Long-term capital costs could remain high, making it hard to justify the investment, especially for hardware that may need upgrades (e.g., 5G).
Token Incentive issues: These structures can encourage exploitation like spoofing or Sybil attacks, further complicating decentralization.
AGAINST:
Abhay frames DePIN as solving fundamental human needs, likening it to Maslow’s hierarchy (e.g., connectivity, safety, financial security). DePIN projects like Helium address these, making them essential to the future of crypto.
He acknowledges that building large-scale infrastructure is expensive but argues that traditional telecoms have spent trillions with limited results. DePIN offers a more capital-efficient way to build infrastructure like broadband and energy systems.
Abhay champions experimentation and believes that having multiple DePIN projects is necessary for the space to evolve, citing examples from other industries (e.g., food delivery) where competition ultimately led to efficiency and success.
The goal of DePIN is to leverage existing infrastructure—like a coffee shop providing Wi-Fi. The focus should be on aligning latent infrastructure with decentralized networks, reducing the need for expensive new hardware.
4. NFTs Have No Future
For - Luca (CEO of Igloo, Pudgy Penguins)
Against - Frank DeGods (DeGods)
Moderator - Tiff Huang (ME Foundation)
FOR:
Luca argues that NFTs remain the best way to create community and identity through symbols like profile pictures (PFPs), which foster connections and build relationships.
Successful NFT projects are currently illiquid for both retail and whales. His solution is to continue innovating in NFT ecosystems without constantly minting new collections, which dilutes value.
Luca highlights that distribution and awareness are key to making NFTs more valuable, likening NFT ecosystems to traditional brands like Pokemon where demand for first editions grows as more people engage with the brand.
He believes NFTs will continue to provide status symbols within broader ecosystems, pointing to Pudgy Penguins' success in integrating toys, social media presence, and retail connections to engage a mass audience.
AGAINST:
Frank acknowledges that NFT trading volume has decreased significantly from its peak, with no new retail participants and royalties becoming optional, undermining creator incentives.
He argues that meme coins have captured the speculative market that NFTs once held, with many participants now focusing on coins rather than new NFT mints.
However, he defends the value of small collections and suggests that NFT communities are evolving, becoming more fungible over time, with mechanisms like tokens (e.g., DGOD) providing communities with new options while maintaining the original NFT appeal.
Frank believes NFTs are not dead but sees the current PFP dominance as limiting. He suggests a shift toward small, more exclusive collections could be the future.
5. 100 Validators Are Sufficient to Run a Decentralized L1
For - Brian Long (Co-founder of Triton One)
Against - Anatoly Yakovenko (CEO of Solana Labs)
Moderator - Dan Albert (Solana Foundation)
FOR:
Brian argues that 100 validators are sufficient to run Solana's L1, citing economic incentives and performance improvements.
He explains that larger validators are more financially healthy and can reinvest in advanced infrastructure, leading to better performance and security. Smaller validators struggle due to higher operational costs, especially from voting expenses.
Brian asserts that concentration of stake is inevitable, as larger validators offer better returns to stakeholders.
He emphasizes that a smaller set of well-funded validators can improve network performance, reduce congestion, and offer better user experiences.
He believes this will also incentivize validators to expand globally, enhancing geographic diversity and increasing the network's physical security.
AGAINST:
Anatoly argues that physical security and decentralization require a much larger validator set than 100 to prevent network partitions.
He highlights the importance of ensuring that validators are spread across multiple jurisdictions and infrastructures to maintain resilience against attacks or failures.
Anatoly uses the CAP theorem to explain that maximizing physical decentralization can help prevent network partitions and ensure economic security.
He stresses that having more validators around the world ensures that if the network fails to make a block, it gets fixed quickly due to the broad geographic and organizational spread.
Anatoly believes that economic incentives alone are not enough and that a larger validator set guarantees more robust security through physical decentralization.
6. Every Large App Should Inevitably Launch Its Own L1 or L2
For - Mason Nystrom (Pantera Capital)
Against - Ben Chow (Meteora)
Moderator - Zaki Manian
FOR:
Mason argues that as applications grow, they inevitably want to launch their own L2s or L1s for greater value capture and control over block space.
He provides examples like Pyth, Coinbase (Base), and WorldCoin, where successful apps have moved towards launching their own chains for economic benefits and customized execution environments.
He notes that Solana's high TPS is still limited compared to global credit card systems, and future demand will push apps towards modular solutions like launching their own L2s to avoid competing for block space on mainnet.
Customization and economic control are key incentives for apps to create their own block space and take advantage of cheaper costs and specific features tailored to their needs.
AGAINST:
Ben contends that launching a separate chain isolates the app from the broader ecosystem, likening it to building on an island.
He emphasizes the value of composability and collaboration within a large ecosystem like Solana, where apps can integrate and grow together rather than becoming isolated.
Ben suggests that creating a separate chain is more about catering to VC interests than to users, arguing that it distracts apps from focusing on building a user base and achieving product-market fit.
He warns that app-specific chains are more vulnerable to failure during downturns, as they lack the diversity of multiple applications thriving on a shared L1.
7. Western Crypto Has Technology With No Users & Eastern Crypto Has Users With No Technology
For - Cindy Leow (Drift)
Against - Joanna Zeng (Soon)
Moderator - Dovey Wan
FOR:
Cindy argues that while much of crypto innovation originates in the West, distribution and developer ecosystems in the East are far more robust.
She highlights the necessity for crypto in the East due to capital controls in regions like Malaysia, driving the adoption of stablecoins like USDT and USDC.
Cindy also mentions that developer talent in Asia is flourishing, with Drip expanding its team across countries like Taiwan, Vietnam, and Singapore.
Eastern regions like Korea have a higher adoption of centralized exchanges, with 1 in 5 Koreans having an exchange account compared to Western counterparts like Coinbase.
While fundraising and capital markets are often based in the West, the real user base and developer growth occur in the East, making it a critical region for expansion and scaling.
AGAINST:
Joanna contends that while the East has a large population and strong developer talent, Western regions still dominate in terms of innovation and narrative-building.
She argues that Western-educated Eastern founders often move to places like New York for better infrastructure, funding, and opportunities.
Joanna emphasizes that Western companies are better at building narratives around crypto, while Eastern companies excel in viral marketing.
She acknowledges the East’s role in GameFi success stories like Axie Infinity and Stepn but maintains that technical expertise and innovative breakthroughs primarily come from the West.
8. SVMs on Ethereum Are Competitive to Solana Mainnet
For - Terry Chung (Eclipse)
Against - Kevin Galler (Monad Labs)
Moderator - Solomon Ponomarev
FOR:
Eclipse’s SVM roll-ups are not parasitic to Solana as they settle on Ethereum, not Solana.
State fragmentation is avoided because Eclipse operates with non-fungible and non-substitute states; activities like borrowing or trading on Solana are not replicable on Eclipse.
Eclipse acts as a bridge for Solana into Ethereum, attracting Ethereum developers curious about Solana’s performance advantages and easing cross-deployment from Ethereum to Solana.
Enables unique DeFi opportunities such as using Ethereum collateral to borrow or trade Solana assets.
Believes that by focusing on specific tasks like DA (Data Availability), modular systems can innovate faster than integrated systems like Monad.
AGAINST:
Fragmentation of state harms Solana’s mission to unify state into a single global ledger, reducing the network’s composability and overall utility.
L2s dilute the fees and MEV incentives that should go to Solana validators, decreasing long-term network security and sustainability.
External DA layers like Celestia introduce latency and trust assumptions, negatively impacting the user experience and critical financial functions.
Real-time censorship resistance is weakened on L2s, an essential feature for financial markets and secure transactions.
Developers should focus on integrated chains like Monad or Solana to avoid the complexities of cross-chain systems and achieve better composability.
9. Non-Custodial Wallets Are Overrated
For - Nassim Eddequiouaq (Bastion)
Against - Brian Friel (Phantom)
Moderator - Sagar Dhawan (A16Z Crypto)
FOR:
Non-custodial wallets are overrated for the average user, particularly those new to crypto. Most people are onboarded through centralized exchanges like Coinbase and Binance, which have successfully brought millions into the ecosystem.
Custody and self-custody exist on a spectrum, not as a binary choice. Many wallets today are shifting towards shared custody, introducing elements where wallet providers may have some control over keys, such as session keys.
While self-custody is critical for certain users, embedded wallets and solutions that abstract away blockchain complexity, like social logins, are becoming more prevalent, mimicking the convenience of custodial exchanges.
Nassim highlights that self-custodial wallets can also be vulnerable due to human or software errors, as seen in hacks like Slope, making them similar to custodial wallets in terms of risk.
Non-custodial wallets are overrated for the average user, like his mom, who simply wants to interact with the system and doesn't need full control over their private keys.
AGAINST:
Non-custodial wallets are underrated and should be the foundation of the future of financial freedom. They align with user incentives by giving individuals full control over their assets.
Self-custody ensures that users have the ability to exit a system if it no longer serves them, even leaving wallets like Phantom if desired.
Brian acknowledges the challenges in making self-custody user-friendly but believes it’s important for wallet providers to continue fighting for it. Phantom has onboarded over 7 million monthly users to non-custodial wallets on Solana.
He stresses the need to avoid situations like FTX, where custodial wallets were abused, and pushes for building robust, self-custodial tools for the long term.
Phantom is also focused on secure key management, developing systems where Phantom has no control over users' private keys, such as their recent launch of an embedded wallet product using open-source encryption protocols.
10. Wall Street Doesn't Need Blockchain
For - Anthony Scaramucci (SkyBridge)
Against - Christopher Jensen (Franklin Templeton)
Moderator - Leah Wald
FOR:
Anthony Scaramucci initially takes a stance against blockchain tokenization, channeling the skepticism of traditional finance institutions like the SEC. He argues that Wall Street already has a well-established system for trades and verifications that has stood the test of time.
He raises concerns about potential errors and trade issues in a tokenized system, asking how trades could be unwound in the immutable world of blockchain. He highlights the confidence investors have in the current system with protections like the Securities Insurance Protection Corporation (SIPC).
However, when flipping to the pro-tokenization side, Scaramucci advocates for blockchain's ability to reduce inefficiencies in current systems, claiming that blockchain could eliminate many of the intermediaries involved in trade settlements.
He emphasizes the $7 trillion spent globally on transaction verification that could be reduced through blockchain tokenization, thereby enhancing market efficiency and liquidity.
Scaramucci also envisions a future where tokenization can liquefy illiquid assets, making ownership more accessible and creating a fairer, more decentralized financial system.
AGAINST:
Christopher Jensen contends that while blockchain holds promise, it's not yet a comprehensive replacement for traditional financial systems. He describes blockchain as an augmentation to Wall Street, addressing inefficiencies without the need for a complete overhaul.
Jensen cites real-world examples, including Franklin Templeton’s experiment where tokenizing certain processes led to operational savings of 30,000%. However, he admits that certain challenges, like unwinding trades on an immutable ledger, remain unresolved.
He stresses that tokenization does not automatically create liquidity. Even if assets are brought on-chain, integration with the broader financial ecosystem is necessary to unlock their value.
Regulatory hurdles are a key concern, with Jensen pointing out that global jurisdictions (e.g., Singapore, the Middle East) are advancing faster than the U.S. in adopting blockchain and crypto innovations, making U.S. markets potentially less competitive if they don’t adapt.
11. Scams Should Be Actively Reported to the SEC
For - Emily Meyers (Electric Capital)
Against - Mike Dudas (6th Man Ventures)
Moderator - Logan Jastremsk
FOR:
Emily Meyers argues that actively reporting crypto scams to the SEC is crucial for the growth of the industry by deterring bad actors and protecting users.
She presents four key points:
Deterrence: The SEC has the authority to investigate and prosecute scammers, which can prevent future fraud.
Reputation: Reporting scams can help rehabilitate crypto’s negative reputation, where scams have damaged trust.
Investor Protection: The SEC can assist in recovering funds and preventing scams from expanding.
Crypto Knowledge: The crypto community is well-positioned to identify scams and alert the SEC.
Meyers highlights that reporting scams isn't just about securities but broader misconduct like fraud and misrepresentation that the community should help eliminate for greater trust and innovation.
AGAINST:
Mike Dudas opposes reporting scams to the SEC, arguing that the agency is not the correct body to handle most crypto fraud because the majority of crypto assets are commodities, not securities.
He contends that law enforcement, lawyers, or federal representatives are better suited to address fraud than the SEC, which has been arbitrary and capricious in its enforcement.
Dudas also criticizes the SEC’s political motivations under Gary Gensler, asserting that the agency focuses on headlines rather than effectively protecting investors, as seen in its handling of FTX and OpenSea.
He believes reporting scams to the SEC misallocates resources and discourages innovation by creating regulatory uncertainty.
12. The Future of Web3 Games Will Rely on SVM L2s
For - Chris Zhu (Sonic SVM)
Against - Andrea Fortugno (MagicBlock Labs)
FOR:
Chris Zhu argues that L2s are necessary for gaming on Solana, as they provide tailored solutions for scaling and ecosystem-building specific to games.
He believes that a gaming-specific SVM (Solana Virtual Machine) enhances Solana games by avoiding congestion on the L1, allowing high-value transactions on the main chain while enabling lower-value transactions on the L2.
He provides examples like Axie Infinity on Ronin, where L2s capture liquidity from players and retain users in a decentralized gaming ecosystem, resulting in a higher velocity of in-game transactions and more revenue for developers.
Chris contends that the L2 environment provides better ecosystem alignment for game development, allowing developers to capture value from various on-chain activities such as transaction fees and protocol usage.
AGAINST:
Andrea Fortugno argues that traditional L2s are unnecessary for games on Solana. He believes that Solana itself can be optimized for gaming without requiring a separate L2.
Andrea focuses on the concept of ephemeral rollups, which allow games to run with low latency and customization without moving state off-chain, maintaining Solana's composability and liquidity.
He believes that fully on-chain games benefit from Solana's ecosystem without fragmentation, allowing seamless interaction with other protocols and assets on the main chain.
Andrea suggests that business advantages like distribution or publishing can still be achieved on Solana without needing an L2, and that L2s add unnecessary complexity for most gaming use cases.
13. Bring Back ICOs
For - Tushar Jain
Against - Qiao Wang
Moderator - Kevin Follonier
FOR:
ICOs (Initial Coin Offerings) offer a more democratic and fair way for participants to access tokens compared to the current low-float, high-FDV (Fully Diluted Valuation) system, which benefits a few while excluding the majority.
He argues that airdrops are inefficient and misleading because they can attract Sybil attacks and inflate user metrics falsely.
The best way to build a community in crypto is to allow real price discovery and broad access, not low-float tokens that only enrich a small group.
Jain advocates for exploring innovative designs for ICOs, like allowing price variation based on lockups, KPI-based lockups, and judging participants based on their past behavior in ICOs.
ICOs can be structured thoughtfully to prevent scams and enhance capital efficiency, avoiding the pitfalls of past ICOs.
He stresses the importance of liquidity and fair price discovery in token launches, allowing everyone to participate equally, unlike the exclusive nature of traditional IPOs.
AGAINST:
Wang highlights that VC-funded projects, like Solana, have outperformed ICO-funded projects like Ethereum in certain metrics. He cites Solana's growth as an example of the value VCs bring by connecting projects with critical partners, even though he ultimately supports ICOs.
VCs offer more than just money; they provide strategic connections and operational guidance, which can be crucial for a project's early success.
He acknowledges that ICOs and VC funding can coexist, but VC investment brings additional value that ICOs can't match, particularly in terms of long-term partnerships.
While Wang sees the value in ICOs for democratizing access, he also emphasizes the importance of transparency and long-term incentives for both the team and investors.
He warns that ICOs, without proper disclosures and transparency, can easily become scams, and many ICOs from the 2017 era have failed despite initial investor success.
14. The Tradeoff of Institutionalization Is Network Centralization
For - Hassan Ahmed (Coinbase)
Against - Eva Lawrence (Figment)
FOR:
Hassan Ahmed argues that institutions participating in crypto do not necessarily lead to centralization. Institutions like asset managers, market makers, and hedge funds have diverse roles and risk appetites, allowing them to engage in crypto networks without compromising decentralization.
He highlights that institutions such as PayPal and BlackRock are building on Solana, using its composability and performance to launch compliant products.
Institutions can also promote decentralization by distributing native assets like SOL through platforms like Coinbase, and by supporting client diversity with projects like Jump's Fire Dancer, which increases Solana’s decentralization.
Hassan emphasizes that Coinbase is playing a crucial role in advancing the crypto economy, bringing institutional products like CVPTC to Solana and ensuring broader distribution of crypto assets.
AGAINST:
Eva Lawrence acknowledges that institutions are indeed entering the crypto space, especially in staking, but questions whether their presence always promotes decentralization.
She argues that even if institutions like Figment avoid centralization by focusing solely on staking, centralization can occur if a large proportion of assets are controlled by a single firm or group, even if they are non-institutional players.
Eva asserts that centralization is a sliding scale, not binary. She sees the role of institutions growing in the future, with large asset managers and banks gradually taking more control of their assets rather than fully outsourcing to third parties.
She emphasizes that Figment does not engage in custody or wallet infrastructure, focusing solely on staking to avoid over-centralizing its operations.