In the crypto world, can good technology really win? This is an old question, but never has it been so urgent.
In this long game involving both technological idealists and market realists, Gavin Wood — co-founder of Ethereum, founder of Polkadot, designer of the Solidity language — has always played the role of someone who believes that technology itself should have the power to prevail.
But when meme coins hit their peak and token market values dominate the narrative, Ethereum’s main chain is suffocated by L2s, this “system architect” must also face a more complex issue: can technological progress still translate into ecological victory?
In the fourth part of the conversation with Kevin Follonier, Gavin maintained a rare frankness and reflective mindset throughout. He discussed his understanding and concerns about “fart coin,” the definition of whether parachains are “successful,” the repositioning of JAM, and his vehement criticism of Ethereum's L2 route being a “complete failure”— not just a problem with the route itself, but a systemic loss influenced by interest groups.
This is a dialogue full of insights, and also a letter of “wake-up call” to the industry: between technology and the market, can we not just compromise, but find direction?
Part Three(“I’m not good at management” — Gavin Wood's choice is also an opportunity for Polkadot!)
Must good technology win?
Kevin: You mentioned before that you don't want to “promote a certain token.” So I’d like to ask your view on the relationship between technology and the market. For instance, the battle between VHS and Betamax was a key moment in consumer electronics history. Although Betamax was developed by Sony and had better video and audio quality, VHS ultimately won because it had longer recording time, lower production costs, and was adopted by more film companies and rental stores. One could say that even though VHS's technology was inferior to Betamax, better marketing and distribution strategies ultimately triumphed. And you have consistently maintained the philosophy that “good technology must win.” So the question arises: in the crypto field, is there a possibility that “the best technology does not prevail”? Why?
Gavin: No! I want to explain through the example you provided.
First of all, this case actually has some issues. You say Betamax's technology is “better,” but it’s just “more complex,” not “better.” VHS does have some practical advantages, such as longer recording time and cheaper production — these are things that good technology should provide.
So, truly good technology is not necessarily complex or advanced technology, but technology that meets needs and provides value. Betamax may be more complex, but it did not help products achieve their goals.
The second point is that VHS was eventually replaced by DVD. The technology of DVD is clearly better; it’s not that “because there are many VHS users, we will never change.” Once the technological gap is significant enough to warrant an upgrade, users will choose to upgrade. This situation is also very common in the computer field — upgrading from 8-bit computers (like the Commodore 64) to 16-bit (Amiga 500), to 32-bit, 64-bit… This upgrade isn’t just something that happens once in a generation; it’s happening all the time.
Of course, there are situations where certain products take the lead and capture market share, causing later entrants to be marginalized, but there are counterexamples as well. For instance, in the gaming console sector, Sega was the first to release the Dreamcast, hoping to capture the market ahead of Sony PlayStation, but PlayStation completely defeated Dreamcast with better products and technology, forcing Sega out of the hardware market.
The third point I want to make is that “marketing” itself is a very broad concept. I went to business school before; although I didn’t do very well, haha, I learned a bit about basic marketing theories. Marketing usually includes three P's: Price, Product, Promotion. In the crypto space, people often equate “marketing” simply with “promotion.” I’m not that interested in “promotion,” and I can even say I don’t really understand it. It’s a very complex field — truly understanding your target users and how to communicate with them is really difficult.
So I focus more on price and product. These two aspects are often driven by technology — technology can bring lower costs and stronger functionalities. For example, in Polkadot, we achieved parachains through technology, which can ensure both high security and high throughput without being affected by congestion on other chains, which is very difficult to achieve.
In comparison, for example, on Solana, if a certain American celebrity issues a meme coin, it would cause the entire network to jam, making other operations impossible. Previously, issuing an ICO on Ethereum was the same; you had to carefully choose the timing, and if it collided with other projects, it could directly fail.
When making products, it is indeed necessary to make some trade-offs — should you prioritize price or functionality? Sometimes you might misjudge because you don't know how the market will develop in two or three years, and some technical directions require a long investment to yield results.
But I usually think that maintaining flexibility is the best approach. And you must be clear about what you are good at, focusing on solving problems that others cannot but you can. Because these problems will eventually have to be solved, and as long as you can solve them, a whole bunch of product directions will surely emerge.
Just like our creation of the Polkadot parachain system, it’s not necessarily a perfect “product,” but it’s an empowering technology that can make many future products possible.
Let me put it this way — in the beginning, laser technology had almost no consumer use. It wasn't until the 1980s when Philips produced the CD (compact disc) that it became a key technology. Later, with just slight improvements, like changing the laser color or adjusting the disc size, they could produce DVDs, Blu-rays, Super Audio CDs… even earlier, there was a strange laser disc that looked like a vinyl record but played MPEG1 video. The core technology behind these products is essentially the same: a laser hitting a metal disc, determining information by reading “whether there are holes.” Once this technology is solved, it can be reused to make many products.
This is our thinking in making Polkadot! We have already solved the hardest part (like creating the CD), and now we can launch various powerful products through slight technical adjustments. But if this underlying technology had not been invented first, those products could not be made.
Of course, there is another way of thinking in the U.S., especially in Silicon Valley — more inclined towards “incremental,” driven by demand. For example, if now people want a “Dogecoin version of Facebook,” then just go do it, regardless of how much value it brings to humanity or whether it will be obsolete next year. It’s just about satisfying what users want “now,” even if it’s a “SOMA”-like product — as long as it can monetize.
That’s true, but it’s not what I’m pursuing. If my job were just to keep making “the products everyone wants in the next 12 months,” I would have left this industry a long time ago.
The liquidity of fart coin is the psychological refuge of this desperate world.
Kevin: You just mentioned “Dogecoin Facebook”; you also said something similar about “the next generation might store wealth in Bitcoin or some ridiculous meme coin.” If you could choose 100 times, would there be one time when you would understand why “fart coin” could have real, lasting monetary value? Because in the internet world, “interesting” and “stupid” often attract attention, and attention brings liquidity.
Gavin: I think being “interesting” is indeed very important. I'm not sure if “stupid” is that important, but I can understand that part of “interesting” actually includes some “quirky” or “silly” elements. Especially in our increasingly deteriorating world, this quirkiness has become a kind of psychological escape.
Look around you; there is despair, darkness, malice, and hatred everywhere, which has almost become the norm. In the 1990s, in the society I was in, when the Berlin Wall fell and the Iron Curtain lifted, we once saw hope, many people gained freedom, and it was relatively non-violent. But that hope has now vanished; this is a huge generational gap.
The world we face today is one of little hope and a general sense of resignation. So I can understand why people need some quirky and interesting things to escape reality. But I don’t think this can serve as a rational basis for a global financial system. Perhaps the market currently doesn’t take this seriously, but I don’t see it that way. I feel this trend indicates that society is drifting away from reality; this is an ominous sign.
Of course, I can understand this sentiment, and I also try to look at it rationally. But I think there is still something enlightening here: your product must be easy to access, easy to use, fun, and close to the user's feelings.
We have already started to realize this when making applications for Polkadot. Especially when making applications related to “individuality” and “identity verification” (proof of personhood), we are particularly thinking about this issue. I think perhaps we can “educate” those meme coin players a few tricks through these things.
Ethereum has been forced to become a rollup platform, while Polkadot was born for it.
Kevin: You like to talk about technology, so let’s talk about technology. You are a co-founder of Ethereum, the creator of the Solidity language and Ethereum virtual machine, and the founder of Polkadot. You should be one of the most suitable people in this field to answer my questions. Ethereum now has Layer2 and rollups, and these things have put the entire Ethereum ecosystem into a kind of “existential crisis” because these L2s are to some extent extracting value from Ethereum's L1. Meanwhile, the core of Polkadot 1.0 was “parachains.” So, are Polkadot's “parachains” the same as Ethereum's Layer 2?
Gavin: We are indeed trying to unify terminology, mainly to help everyone better understand Polkadot. Because the term “parachain” has gradually evolved into a term that is only understood in the specific context of Polkadot, which is not conducive to communicating its true meaning to a broader audience, while Polkadot's influence in the entire industry remains relatively limited.
So technically, they achieve different implementations, and there are significant ideological differences. The intentions behind them are different.
The original intention of Polkadot's birth was to “host” these rollups, these L2s; you could say one of its design goals is to provide services for these L2s. You could say that parachains are the core product of Polkadot. Polkadot's positioning is: I’m not making an L1 smart contract chain; I’m making a “hosting chain.” And JAM (the new version of Polkadot) will be a bit different; its protocol specifications don’t mention “parachains” at all. So the product positioning of JAM is actually different from Polkadot, which may also be one reason we want to treat it as an independent project.
In contrast to Ethereum, the reason Ethereum's L2s extract value from L1 is that Ethereum itself was not designed to be a purely rollup hosting platform; it is a smart contract platform with everything: DEX, NFTs, and even various meme coins. When you move this content to L2, it actually weakens Ethereum's original product positioning. Moreover, Ethereum is not particularly well-suited to be a rollup hosting chain. For example, when I last checked, if all L2s were ZK rollups, Ethereum's current gas model could support at most 40 to 45 rollups. This does not even include data availability — it is only responsible for verifying whether the computation is correct, not for storing and broadcasting the data.
From the beginning, Polkadot has considered these issues — we have long seen these problems occurring in the Ethereum ecosystem. Therefore, the product vision of Polkadot is to do the rollup main chain better than Ethereum, and I believe we have largely achieved that.
Of course, Ethereum has several inherent advantages:
• First Mover Advantage;
• Greater market capitalization and stronger market influence;
• Ethereum L1 itself can deploy smart contracts, but Polkadot does not have its own smart contract chain.
This third point we are also addressing — Polkadot Hub is a native smart contract environment we are building, and it runs very fast.
Solana figured this out early on — don’t do rollups, Polkadot is already doing that, we just need to focus on smart contracts. Their strategy is quite simple: “We are ten times faster than Ethereum; let’s migrate all the contract projects over!” Then they did major promotions; this method was indeed effective in the short term, but it is unsustainable in the long run.
Because fundamentally, computation must be “horizontally scalable” rather than “vertically enhanced.” This is the only way out.
Another big difference is that Polkadot has a specially designed relay chain, so it is very efficient in passing messages between parachains. Ethereum doesn’t have this function because it wasn’t originally designed as a rollup hosting platform; it only became one later, “forced” into that role. This has turned Ethereum's L2s into “information islands,” making it difficult for them to communicate with each other, leading to more value extraction: once you enter a certain L2, you can't get out. In Polkadot, for example, if you put DOT into Acala, you can immediately transfer it to Moonbeam, with liquidity being almost instantaneous. This is a crucial difference.
The success of parachains is more like a Buffett-style success.
Kevin: So you mean you foresaw Ethereum's predicament on Layer 2 early on and proposed the concept of parachains. Do you think this model is successful?
Gavin: I believe parachains, as a product, have clear value in the market. Many teams are genuinely willing to pay for it. I also know that some projects have been offered large checks by other public chains, lobbying for them to migrate, but these projects declined because they believe only Polkadot can meet their technical needs. This indicates that they care about more than just money; they also care about whether the platform can achieve their goals.
Of course, many people entering the crypto space don’t care about this at all; they just want to make quick money. They’ll sign with thirty million dollars without a second thought. This phenomenon is also very common in the industry, but I find it somewhat pathological. However, we don’t operate that way in Polkadot. We tend to adhere to a technical route and aim to attract those who genuinely need Polkadot technology to build.
If you want to issue a meme coin, you really don’t need to use Polkadot, right? You can issue it on other platforms without much issue. We are more focused on projects that are doing truly useful things.
I believe the parachains product is successful, though not in the sense of “putting a fart coin and it skyrockets tenfold,” but in the way that Buffett describes — success with real, tangible uses.
I don't want to see hollow things. I'm not here to create something empty. I don't mind people building such things on my platform, but that wasn't my original intention in designing the system, right?
Parachains can do useful things, like Frequency creating a decentralized social network map, and Mythos handling asset ownership in games; these are practical applications that can replace centralized services. Although the gaming field may still lean towards entertainment, it is already a mature industry that deserves serious attention.
So I think the parachains product has succeeded in terms of “practicality,” although not in the sense of Dogecoin or fart coin “success,” but in the Warren Buffett sense of success — useful, solid, and implementable.
Multi-core elastic scaling is about to go live, and DOT will welcome a real turning point in practicality.
Kevin: So do you think there is a better alternative to the parachain model?
Gavin: In fact, some projects are suitable to run on their own chains, not needing to interact frequently with other systems. They have their own business logic and their own pace. In this case, it’s entirely possible to give it a dedicated parachain; you can allocate it one core, half a core, or even twelve cores, depending on its throughput needs. Polkadot can do that, and we are working on such products, which we refer to as “multi-core elastic scaling” or “fixed factor scaling,” among other names.
But the core concept is: make your chain run faster, handle more transactions, and pay for additional cores when you need more computing power.
The realization of this capability also marks the completion of Polkadot 2.0. It will have a significant impact on DOT's token economy — the greatest utility of DOT is actually in paying for parachain slots. While staking and governance are important, they are more of an internal cycle, whereas parachains have clear external utilities. Currently, the limitation is that we only have about 45 core resources and only 45 parachains, each of which can only use one core. Because the technology hasn't been upgraded, the supply-demand relationship is perfectly balanced, and the price will naturally tend toward zero. Since there are only 45 buyers, and the supply is also 45, demand is inelastic, so prices won’t move. But once the technology goes live, demand will expand. We already know that some chains are willing to pay a high price to buy multiple cores for faster transaction processing speeds and lower gas costs.
The issue is that the technology hasn't gone live yet; once we complete the upgrade, we can support a chain with 10 cores. Logically, that would mean paying 10 times the amount — though the price may not actually be 10 times, because while demand is opened up, supply remains fixed. This will greatly change the economic model of DOT and bring an interesting turning point.
Kevin: When will it be realized?
Gavin: Uh, I'm not so sure, maybe in a month or two? Perhaps late summer to early autumn; in any case, it’s soon. The relevant technology has already gone live on Westend (the testnet); I remember it is currently being deployed on Kusama, and once Kusama runs smoothly, it will migrate to the Polkadot mainnet. I said something similar last month, “maybe in a month or two,” so it’s really soon. But this isn't my area of responsibility, so I can't say much about the specifics. You can follow the monthly meetings of Fellowship for updates.
JAM is a bit different; JAM does not have parachains. For JAM, its product can be seen as the version stripped of the “parachain product” layer. It’s a more primitive product — in a sense, it’s not as refined or specific, but thus offers great flexibility.
For instance, last month we did a “Doom demo,” running arbitrary code on the chain, not just blockchain code, but even a PC executable program, like running Windows on the chain. This is crazy and very interesting. There will be many new play styles for developers to explore.
JAM is the “new PC” for Web3, and everything is just beginning.
Kevin: You are now developing JAM. We briefly talked about it last time; can you explain JAM again in a way that doesn’t involve jargon?
Gavin: Uh, not really. JAM itself is not a consumer-facing product; it’s not something like “fart coin” that users play with. To explain, JAM is somewhat like merging Polkadot’s underlying technology with Ethereum’s smart contract mechanism. It’s a more open and accessible environment.
Kevin: What do you mean by “easier to access”? Is it that developers from different backgrounds and languages can come and develop?
Gavin: It’s not about the language. The reason Ethereum was initially “easy to access” was that the threshold was low: you could send transactions directly without spending too much money, and you could deploy smart contracts that would remain there, allowing you to interact with them even a year later when you returned. However, creating a parachain isn’t that easy; although we have lowered the technical threshold, it still requires a team and ongoing technical investment.
What JAM aims to do is retain Polkadot’s powerful performance while providing a simple user experience similar to Ethereum. You don't need to build an entire chain; you just need to deploy code to run. JAM is designed to be stronger than Ethereum; although I don't want to go into too much technical detail, fundamentally, it is based on Polkadot technology but interacts in a way more like Ethereum. It has all the functions and advantages of Polkadot, but you could say it is 8 to 60 times stronger than Polkadot and significantly stronger than Ethereum, possibly up to ten thousand times the difference.
Why? Since everyone just wants to issue “fart coin,” why bother to make it so powerful? Because if you provide a very weak system, people can only do those very mediocre projects. Ethereum isn’t that bad, or rather, to some extent, it has a certain flexibility and capability in terms of use, stronger than Bitcoin.
So what can we see on Bitcoin? Apart from storing BTC, early users mostly engaged with basic functionalities like colored coins, NFTs, and multi-signature. Theoretically, more could be done, but it’s too difficult to use, and no one wants to tinker with it; it wasn’t designed for that. Then Ethereum emerged, which is more flexible, and people created new plays like NFTs and DEX. But even with Ethereum, if you really count the valuable use cases, you can count them on your fingers. The reason is that it's still not strong enough. Limited computing power and a low gas limit mean many people put the main logic off-chain, like using Eigenlayer and other L2s; Ethereum itself has become just a verification tool, not even doing the “work.” This might not be a good thing for Ethereum. Recently, the Ethereum community has also started to reflect: Do we really want all value to run to L2s that don’t use ETH?
JAM aims to pull all the logic back to L1, deploying the real business logic on the main chain while also having super strong scalability. This will unlock many use cases that are impossible on Ethereum. These scenarios are similarly unimaginable on Bitcoin, but at least Ethereum has achieved some of them, right?
Kevin: Can you give an example?
Gav: Well… for example, DEX (decentralized exchanges); you can't create a modern DEX on Bitcoin, right? But you can on Ethereum. So what can JAM do? It’s a bit difficult to explain because we have to wait for the system to really run, and people will know what it can achieve once they play with it. But let’s say something “crazy”: you could run a complete Linux operating system on JAM. Yes, directly running Linux on the chain. What does that mean? I don’t know, but it sounds crazy, and it can really do it because JAM has enough computing power.
We also demonstrated an interesting example: running DOOM on the chain. The game's computational logic and data state are all processed on the chain, and it can even output uncompressed video frames in real-time, allowing you to watch the game process live. There will definitely be some latency, but the playing smoothness is sufficient for the human eye to observe. Importantly, this demonstration only used a small portion of JAM's computing power. Think about the possibilities behind it.
I think this might trigger some very interesting changes in the gaming field, like combining game mechanics with economic incentive signals on the chain, which could lead to some interesting new gameplay. Perhaps there will be a dedicated L2 to help handle some real-time interaction scenarios, like shooting games or competitive games that require very low milliseconds of latency.
But for card games, strategy games, such as Settlers of Catan, you don’t need that low latency, so I think imagining the future of crypto and gaming integration will be very interesting. You might indeed need an extremely powerful system to truly merge the two. I can’t give a definitive answer now, but I do know one thing: JAM is a “completely different level” of computing platform.
It's like when you used to play 16-bit old computer games on the Amiga500, and suddenly someone gave you a brand new PC — it’s 32-bit, has ten times the memory, a hard drive, and a floating-point unit, totally a different level of machine. You might not yet know what you can do on this new computer, but you know that what you can do will be far more than before.
Is JAM really “beneficial for DOT”?
Kevin: You previously mentioned that some in the Polkadot community are asking whether JAM will have its own token. Is JAM good for the Polkadot ecosystem and the DOT token?
Gavin: Well, I originally hoped to say “definitely a good thing” decisively, but the reality is, looking at the situation with Ethereum, I’m a bit uncertain. For example, Ethereum is pushing for ETH2.0, promoting so-called “native rollups” to enhance the main chain's throughput capabilities; logically, this should be a good thing, but look at the market response — ETH's price hasn't risen at all; instead, it has fallen.
Kevin: Wasn't that almost the peak of the ETH/BTC exchange rate?
Gavin: Yeah. So I can’t say for sure whether it’s a good thing. From my understanding, JAM at least proves that Polkadot's technical leadership team is capable and visionary, and they are indeed building a very strong product that will be launched soon. From this perspective, I think JAM is good for Polkadot. But maybe I’m out of touch with the market, haha.
L2 is the wrong direction; Ethereum's path has been hijacked by investors.
Kevin: You’re quite honest, which is important. So do you think Ethereum's L2 route has failed? Why?
Gavin: There’s no doubt, it has failed. This route itself is terrible because it lacks any clear philosophy or theoretical support. It’s just a passive response, a compromise to certain major projects that fear that if the Ethereum main chain is strong enough, L2 has no reason to exist at all. In my view, this is a virus of thought that has unfortunately implanted itself in the leadership of Ethereum.
This decision has no logic, no foresight; it has been wrong from the beginning. I can hardly believe that so many smart people in the Ethereum community have not seen this issue? I can only understand it as a result of political maneuvering — some L2 camp with a voice, lobbying and pressuring for their own interests. Otherwise, I really cannot understand why it seems that someone has recently realized that maybe it shouldn't be this way.
Kevin: So you mean that those L2 camps have invested years of time and huge amounts of money, giving them enough power to dominate or even manipulate the entire direction?
Gavin: Yes, I can only explain it this way. I've also talked to some people deeply involved in the Ethereum ecosystem, and they share similar views. You have to know that those top L2 projects (like MATIC) also have their own tokens, and behind those tokens are investors who care more about their invested token's performance than the overall health of the Ethereum ecosystem. So these people don’t need or won’t hold more ETH than MATIC like Ethereum purists — they care about the success of their own projects, which is very realistic. This industry is brutal; everyone is only running for their own interests.
So Ethereum's leadership needs to be clear about this and make the right decisions. As someone who holds a lot of ETH, I sincerely hope they can adjust their direction. I think they may have started to realize the problem and are slowly changing, but this detour has indeed been too long and too far. From my personal perspective, this is a very obvious major mistake.
Original video: https://www.youtube.com/watch?v=jyMxSIFyXwo