Julius Schmidt, the co-founder and COO of Staking Facilities, shared his profound insights into the blockchain ecosystem, touching upon its socio-economic dimensions, the evolving validator landscape, and the internal philosophy driving his company. With a background in politics and economics, not technology, Schmidt's journey into crypto began in late 2016. Initially investing in Ethereum without understanding, he challenged himself to delve deep into the technology, starting with the Ethereum white paper. This led to a "click" moment where he grasped the larger socio-economic picture of the space, a realization that became a core motivator for his work. Schmidt highlighted that the incentives within the blockchain ecosystem operate entirely differently from traditional systems. He cited the example of Jump Trading, a financial entity, investing significant resources to build and open-source a new client for Solana. Their motivation, he explained, stems from the understanding that a more efficient network ultimately benefits their own trading activities. Similarly, validators are incentivized to collaborate with competitors, sharing knowledge about security risks and collectively striving to enhance network security, rather than merely maximizing individual stake. He emphasized that if a network becomes too centralized, its appeal to users, particularly large corporations seeking decentralization, diminishes, ultimately harming the ecosystem and all its participants. As Schmidt put it, "if you're hurting the ecosystem, you're technically also hurting yourself because less people will use the ecosystem." He believes that blockchain offers a crucial shift from failing capitalistic models by fostering collaboration and integrating a broader societal benefit into its incentive structures. Humans, by nature, might sometimes prioritize self-interest, but "if we integrate a structure or if we use a structure as a basis that kind of incentivizes us also to think of others by nature, then we take away that little piece that we actually know humans are not really good in." The validator space itself has undergone significant transformation. Schmidt expressed concern about the increasing institutional involvement, with large companies like Blockdaemon, Figment, and even Google entering the infrastructure sector. While acknowledging their role, he stressed that "it's not about the name that runs the infrastructure, it's also about thinking about the whole network and not just your personal gain." He defined "institutionals" as regulated entities such as exchanges, banks, or custody providers who face strict requirements like SLAs and insurance against slashing, often preferring larger, established validators. This preference, combined with the reality that "stake is still driven by money in a sense, or stake is money in that sense," contributes to centralization. Schmidt underscored the critical need for the validator community to actively educate users on the importance of delegating to smaller validators to maintain decentralization. Staking Facilities, with about 30 employees, operates on a self-funded model, having used early ICO investments to grow sustainably. Schmidt firmly believes in avoiding "hyper growth" fueled by external venture capital. He argued that raising capital can alter a company's structure and motivations, potentially leading to short-term, profit-driven decisions that harm the company in the long run. "it's really important to get the right people because if there's just someone who wants to maximize on profits, you might make decisions that are bad because they're profitable in the short run, but in the long run, they hurt your company." He also pointed out that rapid expansion can disconnect employees from the ecosystem, making it harder to stay updated and responsive. Given the volatile nature of bear and bull markets, he asserted, "sustainable growth in this space is super important just because it moves so fast and it's so dynamic." Internally, Staking Facilities champions "low hierarchies," aiming to build a company not dependent on a few individuals. Their philosophy is to hire individuals who excel in their roles, empowering them to contribute ideas and make decisions. They implement "circle models," forming small, cross-functional teams to address specific topics. A core value is "decentralized knowledge" within the team, coupled with high transparency in decision-making and financials. Schmidt sees employees as the company's "most valuable asset," offering an employee share program, a token pool, and profit sharing. He views himself and his co-founders as providing value just like every other employee, striving to build "new structures that are also more healthy... and more sustainable." Addressing the topic of liquid staking, Schmidt acknowledged its advantages, particularly for Ethereum where native delegation is not broadly accessible. It allows users to participate in securing the network without running infrastructure and, from a regulatory standpoint, could prevent staked assets from being classified as securities if they can be used while locked. However, he also highlighted the inherent risks. Liquid staking adds another layer of technological complexity, potentially introducing new and unforeseen vulnerabilities like "deep-hacks or whatever that could have... a huge impact on the ecosystem." He noted, "It's another layer of exposure to certain risks that we I think... don't necessarily can see right now or understand." For protocols with native delegation like Cosmos Hub, the primary benefit of liquid staking lies in the ability to use the derivative token. As a founding member of Lido, he mentioned its goal of decentralization by onboarding more validators, including smaller ones, and establishing security standards. A significant challenge for Staking Facilities, especially in Germany, is the legal ambiguity around "administration of crypto assets," where voting with delegators' stake could be construed as requiring an expensive custody license, thereby deterring their participation in governance. When asked about daily motivations, Schmidt expressed enjoyment in working with passionate people in the space, like the podcast host, and seeing the potential for "changes on such an amazing big level." He also draws motivation from his team's enthusiasm and their enjoyment of the company's unique structures. He concluded by advising against blindly following any single individual, instead suggesting to "take things that you like. Don't follow just one person and take everything that it's there for granted. Just try also to filter that and pick from different ideas and concepts."