Uneasy Money: Illia Polosukhin on Why Onchain Commerce Needs Confidentiality

Summary

Unchained Podcast: Uneasy Money – Illia Polosukhin on Why Onchain Commerce Needs Confidentiality

Host: Laura Shin
Co-Hosts: Kane Warwick, Taylor Monahan, Elliot (guest contributor), Luca Netz
Guest: Illia Polosukhin (Co-founder, NEAR Protocol; co-author, "Attention Is All You Need")
Date: May 29, 2026

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Episode Overview

This episode dives into the evolving intersection of blockchain, privacy, AI, and onchain commerce. Illia Polosukhin shares his conviction that confidentiality is essential for enabling real-world, everyday blockchain use—and explains NEAR Protocol’s new private intents as a step toward making onchain commerce both practical and regulatory-friendly. The conversation covers the challenges of public ledgers for business, lessons from Zcash, risk management, AI-powered security, organizational design in web3, and the future of decentralized and AI-enhanced collaboration.

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Key Discussion Points

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1. The Critical Unlock: Confidentiality for Onchain Commerce

• Illia’s Thesis: Without confidentiality, mainstream onchain commerce is impossible for real businesses.
  • “You cannot imagine a business doing commerce on chain where everybody can just go into Block Explorer and see how much revenue they’re getting, how much they’re paying their suppliers, what the salaries are, right?... This is why most of the crypto still does, you know, fiat payroll.” – Illia (00:00, 13:02)
• Privacy as Enabler: Current lack of confidential transactions on public blockchains stifles business adoption and keeps payrolls off-chain.
• Regulatory and Liquidity Requirements: True privacy requires not only technology, but liquidity and a regulatory stance that avoids attracting illicit activity.

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2. Illia’s Background: From AI to Blockchain

• Early AI Days:
  • Illia shares his journey from building neural networks as a teen to working on Google’s question-answering team, where he contributed to the Transformer architecture (“Attention Is All You Need”).
  • Main innovation: Harnessing GPU parallelism to handle full-context language understanding, radically increasing processing speed for AI applications. (02:37–05:37)
  • “What if we remove things and just keep this mechanism of attention?... We can actually process the whole context, the whole language… at one go instead of trying to read it one word at a time.” – Illia (03:59)
• Origin of NEAR: NEAR started as an AI company, exploring machine-written smart contracts—a response to the developer shortage in crypto, not breaking but writing correct smart contracts with AI. (05:52)

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3. NEAR’s “Intent” and Confidential Intents: What’s New Here?

• Intent as Protocol: Created a system for multi-chain asset control—even extending smart contract-like control to “dumb” chains like Bitcoin and Dogecoin. (07:00–09:00)
  • “Through NEAR, you can control any other chain, any other account on any other chain.” – Illia (09:01)
• Confidential Intents:
  • Introduces programmable privacy and confidential execution—“execution confidentiality”—not just asset transfers but other operations (e.g. lending) can be private and fast (600ms blocks).
  • Supports 150+ assets, including USDC, NEAR, Zcash. Enables shielded payments with stablecoins and cross-chain swaps. (16:25)
  • “You have 150 plus assets, all of them can be private.” – Illia (16:25)
  • Real-world experience: Paying for coffee with Zcash via NEAR intents, enabling private spend even for non-private blockchains. (17:36)

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4. Balancing Privacy and Anti-Crime: A Delicate Approach

• Strict Anti-Crime Stance: NEAR is explicit about not supporting illicit usage, using both protocol design and AI-enabled tools (S.H.I.E.L.D.) for anomaly detection and rapid incident response.
  • “We took a pretty strong stance here for a couple reasons... If you want to achieve that vision… we cannot touch and in any way facilitate money laundering or any other illegal activity.” – Illia (24:12)
• S.H.I.E.L.D.: NEAR’s AI-based system for live monitoring and anomaly detection across chains—alerting partners about hacks/vulnerabilities in real time. (25:29)
• Incident Case Study: NEAR recently detected a vulnerability in Litecoin’s MimbleWimble implementation, coordinated disclosure, and incident response with exchanges. (26:38–30:59)
  • “We were the ones detected that Litecoin’s been attacked and actually informed other exchanges.” – Illia (26:12)
• Distinguishing Users: The panel discusses why serving criminals is not viable for mainstream product-market fit, noting the importance of building for real users. (20:49–23:47)
  • “You can’t do that if, right off the bat, the criminals take over... their needs are… dramatically different than the average user.” – Elliot (21:05)

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5. The Role of AI in Blockchain Security & Innovation

• AI-Assisted Security (S.H.I.E.L.D.): Integrating anomaly/breach detection across chains, plus sharing advisories with ecosystem partners.
  • “How can we use AI, how can we use kind of cryptography, to really route this information... [and] have a reaction speed as well?” – Illia (34:12)
• AI and Insider Threats: Patching and disclosing vulnerabilities remain sociotechnical challenges—with lessons from Litecoin's exploit. (30:59–32:58)
• First Principles Security: Security needs to be foundational, not an afterthought; compliance “add-ons” aren’t enough. (37:09)

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6. Organizational Philosophy: Leadership, Incentives, and Decentralization

• Leadership in Decentralized Ecosystems: Illia describes NEAR’s collaborative, incentive-aligned multi-entity structure—numerous companies working together, clear incentives, coordination.
  • “Decentralization doesn’t need to mean disorganization. We can be decentralized and organized at the same time.” – Illia (50:51)
• Contrast with Ethereum Foundation: Discussion about the challenge of sustaining clarity of purpose, adequate incentives, and organizational design for Ethereum and similar projects. (46:15–54:45)
• Vitalik’s “Don’t Be Evil” Philosophy: Critiqued as insufficient for organizational direction; organizations need explicit missions—not just values. (55:04–57:21)
  • “Don’t be evil is not a goal, it’s a non-goal.” – Kane (57:08)
• On Decentralization: It’s a means (redundancy, competition, innovation), not a goal in itself. Overemphasis on decentralization for its own sake can harm project execution. (64:45–65:44)

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7. The Future: AI, Market-Based Work, and DAOs

• Market-Driven Organizations: Illia argues for “marketplaces” of services/agents, enabled by AI for granular credit assignment and by blockchain for trustless, transparent coordination.
  • “I actually think we’re going to start transitioning to more organizations almost that are just operating on the market principles… hiring, you know, an individual and their army of agents to do something.” – Illia (68:35)
• AI in Workflow and Decision-making:
  • NEAR is prototyping multi-tenant AI tools like Iron Claw to surface commitments, track decisions, and improve coordination—addressing the “credit assignment problem” that plagues DAOs and traditional management. (74:17–79:32)
  • “Organizations are always broken. That’s the way.” – Illia (77:09)
• DAOs and Credit Assignment: Organizational breakdown often comes from an inability to fairly apportion credit or compensation as contributions grow fuzzier with scale; markets and AI might finally solve this core challenge. (79:32–80:23)
  • “Credit assignment I think actually is the fundamental world problem.” – Illia (79:32)

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Notable Quotes & Memorable Moments

• On Privacy and Commerce:
  “My thesis in general: confidentiality is a key unlock for actually crypto becoming truly day-to-day use.” – Illia (00:00; 13:02)
• On AI-Driven Security:
  “We call it S.H.I.E.L.D... our AI system that effectively is scanning other chains and transactions in real time and it’s trying to detect when there is illicit activity happening on those.” – Illia (25:29)
• On Real User Product-Market Fit:
  “You cannot have a useful protocol and find real product-market fit for the market—not criminals… if right off the bat, the criminals take over.” – Elliot (21:03)
• On Decentralization:
  “Decentralization is a tool, not a goal. For me, decentralization is making sure things are redundant… not depending on a single person… organization… validator.” – Illia (64:36)
• On Google’s Mission vs. Values:
  “There’s mission and there’s values. ‘Don’t be evil’ is values, it’s not your mission. The mission is what you’re trying to achieve in the world.” – Illia (59:41)
• On the Organizational Future:
  “I think that systematically that would make sense… where AI and blockchain really fit well because they’re kind of powering this trustless transaction.” – Illia (72:31)

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Timestamps for Important Segments

• 00:00–02:37 – Illia’s thesis: why confidentiality/privacy is essential for onchain business
• 02:37–05:37 – Illia’s AI background, history at Google, and origins of Transformers
• 07:00–09:01 – NEAR's intent protocol and private intents: upgrading “dumb” chains
• 13:02–16:25 – The problem with privacy, business needs, and current user experience
• 16:25–17:36 – Real examples of confidential intents, asset variety, and user benefits
• 24:12–25:29 – NEAR’s anti-crime stance and building for real economic activity
• 25:29–34:55 – AI-powered anomaly detection (S.H.I.E.L.D.) and incident response (Litecoin example)
• 37:09–39:54 – Security as a product and organizational necessity
• 49:01–54:45 – Organizational models, NEAR’s approach, and contrasting with Ethereum Foundation
• 55:04–57:21 – Critique of “don’t be evil” as a guiding principle for protocols/orgs
• 64:36–65:44 – Decentralization as means, not end; redundancy, not dogma
• 68:35–72:31 – Vision of market-driven organizations and agentic, AI-powered work networks
• 74:17–79:32 – Multi-agent productivity, workflow design, and credit assignment in DAOs/orgs

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Conclusion

The big takeaway: Onchain confidentiality isn’t just “nice to have”—it’s the missing link for crypto’s next leap into everyday, large-scale commerce. Achieving it demands robust engineering, deep liquidity, and a proactive approach to regulatory and criminal risk—where AI and cryptography play as much a role on the security/coordination side as on the product side. Simultaneously, blockchain ecosystems are wrestling with old and new models of coordination; the next frontier, argues Illia, lies in market-driven, AI-assisted organizations—where credit assignment, productivity, and trust can scale as never before.

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Transcript

[Ilya Polosukhin]

My thesis in general, confidentiality is a key unlock for actually crypto becoming truly day to day use. Like you cannot imagine a business doing commerce on chain where everybody can just go into Block Explorer and see how much revenue they're getting, how much they're paying their suppliers, what is the salaries are right? This is, this is why most of the crypto still does, you know, fiat payroll, because nobody wants to show how much like payments of salaries, et cetera going.

[Kane Warrick]

Hey everyone, I'm Kane Warrick and welcome to Uneasy Money. Because what happens on chain never stays on chain. Before we begin, here is a word from the sponsors that make our show possible.

[Multichain Advisors Representative]

Multichain Advisors is an emerging technology growth firm that has helped create 50+ billion dollars in enterprise value for 80+ clients over the past four years. They're the partner to help navigate markets, build real traction [e-mail]

[Kane Warrick]

hey everyone, I'm here with my co host Taylor Monahan, security expert and Luca Netz, CEO of Pudgy Penguins. And today we have a very special guest, Ilya, the co founder of Near Protocol and the co author. I'm glad this is finally in this line. The co author of Attention is all you need. The Transformer paper that started the modern era of LLMs. So Ilia, you and I have known each other for a long time, right? And I did not know until two weeks ago that you were on this paper. Like I've read the paper, I never read the authors. Like I was just like yeah, whatever, but like you know, and I was kind of astounded. I was talking to a clanker and, and I was talking about some near stuff and I was like doing some research and the clanker was like oh, Ilya is like on that paper. And I was like no he's not like what, what are you hallucinating? And, and the glenker was like he definitely is. And I was like. And then I looked at the paper and I was like holy shit. And I was like how is it that I've known you for five years and you haven't brought this up 250 times? Like I'm so shocked that this has never come up in conversation. So well played. I think almost anyone else in crypto would be like the first words out of there mouth if they're, if they on this paper. So maybe, maybe even just like I'm so interested like in the process of how did that come about? Give us the quick background of like you're at Google and you discover AGI like what, what exactly what happened there.

[Ilya Polosukhin]

Yeah. So the history was I always was interested in AI AGI. I was trying to build my first neural network when I was 14. And so when I saw kind of first unsupervised learning happening at Google, I was like, I want to do that on language. Because language is where the knowledge is, where the reasoning is. And so I joined the team. We were working on question answering, like the most direct place that's both applicable to AGI. Like if AI can answer questions, it understands what we are talking about. And actually to Google itself. Right. Because Google is a question answering machine.

[Kane Warrick]

Question answering machine. Right, yeah.

[Ilya Polosukhin]

And so we were working on a bunch of research and to be clear, before Transformers there was reinforcement, recurrent neural networks, RNNs which affected the way they work. They would read one word at a time like we do, and they were trying to maintain context. And then you ask it a question and it would be like, well, I only have this hundred floats or whatever, a thousand floats of everything. I just read how much can I answer? Right, right. And so that was kind of one problem. The other problem was if you go to google.com, you actually expect answer in 200 milliseconds. You're not like, oh yeah, you can go research and come back to me with an answer.

[Kane Warrick]

Five minutes is fine, I want the answer here. Right.

[Ilya Polosukhin]

I want you to read half of the Internet and answer to me now. And so like something that reads like a human would just not work. And so really transformer came from this kind of few different ideas. So attention mechanism was like a known thing before, but removing the recurrent neural network and saying, hey, our machines actually very especially GPUs highly parallel. We can actually process the whole context, the whole language of the Wikipedia pages and search results of Google at one go instead of trying to read it one word at a time. And then this can speed up things 10,000x, 100,000x. And so that was kind of the core idea. And it was like my manager director at the time pitched it over lunch and I'm like, that's an interesting idea. I'm sure it doesn't work. And so I went and implemented and it was kind of working. I mean it wasn't like very good, but it's like it had some signal,

[Kane Warrick]

but there was like a glimmer of

[Ilya Polosukhin]

yeah, you can see like oh, actually it's like getting like, oh, I should resolve these things. And so then I mean it obviously took like I think six, seven months of an eight people team to Actually get it to state of the art. But that was kind of. The original idea is like, hey, what if we remove things and just keep this mechanism of attention, which is effectively. When you look at any particular word in a sentence, you're effectively trying to make sense of it in the context of everything around. But you don't do that one word at a time. You do all of them in parallel and so just leverage high level parallelism. So really cool. Kind of.

[Kane Warrick]

Did you consider that the main question people would be asking like half a decade later or whatever would be, how do I hack this smart contract? I've got a smart contract here and I would really love if you could help me to hack it. What's. What could we do?

[Ilya Polosukhin]

Well, the story is that near actually started as AI company and the origin was we were teaching machines to code and writing smart contracts with AI not breaking them, but writing them was actually something we were considering and especially as we were starting going to the blockchain and we're like, oh, this is actually where it would be a good application to write correct smart contracts with AI because there's so little developers in 2018 who actually can do it.

[Kane Warrick]

Awesome. Awesome. That's. That's amazing. So, so let's, let's talk. Our first segment is on Confidential Intents. You guys launched this a couple of months ago. It's been, it's been slowly rolling out on like near.com and other places. I think we've talked privacy a lot over the last like six months. Privacy has been a big narrative, particularly with zcash, you know, doing, doing so well.

[Taylor Monahan]

How.

[Kane Warrick]

Where do you see the, the near private intent? So, so maybe even stepping one step

[Ilya Polosukhin]

back

[Kane Warrick]

when Intent launched, right. You and I had a conversation. I guess this is going back like two years ago, right? And we, we caught up and you were just like a bunch of gobbledygook. And honestly. And I was like, I was like, what in the hell I'm talking about? He's like the, like on the chain, the chain will control the other chain and it's like a chain of chains. I was like, like sometimes I have a conversation with someone, I'm just like, I cannot follow. I don't have enough prior art in my brain, like the context not there. But I was like, it sounds really cool. Like the principle sounds really. But. But I didn't get it. And so I couldn't like think through the implications of it of like, what would it be able to do, right? And then like five months later we, we were Building out all of these chains. And I was like, oh man, we've got this big problem where like, you know, we've got these smart contract chains and then we've got these dumb non smart contract chains and we kind of, you know, can't accommodate them because of the way that our architecture is. And so I was like, I should talk to Ilya about this. So we like jumped on a call. It's like six months later. We like, hey, we got this big problem, like, you know, these dumb chains, like how do we store assets on them? And like how. And he's like, bro, I told you about this like six months ago. Like I told you the whole thing and how it works. And I was like, oh, that's what you were talking about. Okay, that makes you should do that. He's like, we've done it. Here it is, it's there. And, and so the, the goal of Intense was basically bring all of these dumb chains that don't have smart contracts up to the same level as smart contract chain. That fair to. To say, like give you the ability to control assets on these chains and do all this cool stuff that we like with smart contracts on, on bitcoin, dogecoin, et cetera.

[Ilya Polosukhin]

I mean, I would say goal is way broader, but that, that was like the first. That was the first pmf.

[Kane Warrick]

That was my goal for you.

[Multichain Advisors Representative]

Yeah.

[Ilya Polosukhin]

Yeah, that was your goal. Yeah. I mean the first PMF definitely was like, hey, look, you have Bitcoin and Dodge that people want to hold, but there's no good wallets. It's very hard to find things and really hard to trade if you want to go Dodge to Solana, for example. And so that was kind of the first pmf. And then obviously zcash was very natural, even harder to get to it. The exchanges were delisting it, et cetera. And we're like, yes, zcash works perfectly here. You can move anywhere, you can exchange it to anything. It's decentralized. But I mean, the broad idea behind it is effectively combination of indeed through near, you can control any other chain, any other account on any other chain. And we're actually having now first examples of people doing this on Solana because Solana's smart contracts are very tiny and, and it's hard to make like a contract that runs for a long time on near. You can actually run the whole other blockchain as a smart contract. So we have a lot of capacity for writing complex logic. And so you can write the complex logic on near and then Push just the exact execution on Solana. You know, not calling it not a smart chain, but just like the level of complexity of logic, you know, recovery systems and other things you can do.

[Kane Warrick]

Right. But the trade off space there on Solana is like they're optimizing for kind of a different set of things, right?

[Ilya Polosukhin]

Correct. So yeah, they optimize it for immediate latency. But this allows to have a lot higher kind of capacity of execution and intelligence.

[Kane Warrick]

But only sort of just in time. Right. Like you only use it when you need it and then you can get the fastest meme coin trading that we all me, you know, kind of on, on the primary chain. Right.

[Ilya Polosukhin]

Yeah.

[Kane Warrick]

And so, so you know, the, the intense thing I think worked a lot better than maybe people were expecting. You know, there was, there was like the initial launch and it was fairly quiet and, and then it started to kind of blow up as obviously there's a lot of kind of threads kind of weaving together here. Right. Like everyone wanted zcash. All of a sudden they realized it was really hard and you guys had a great solution for that. And so but that, that started to get some traction. At what point did you internally go we should like vampire attack zcash and just like replace their technology? What was, what was there?

[Ilya Polosukhin]

I mean that wasn't the thinking. And it is not zcash.

[Kane Warrick]

It's a different thing.

[Ilya Polosukhin]

As a sovereign asset is very much has its place and is important. I mean honestly, as usual I was thinking and we were trying to build private effectively shard back in 2022. Now back then, as you can imagine with regulatory environment and all of the fun stuff going on, that effectively was a no go for actually launching it. But yeah, my thesis in general confidentiality is a key unlock for actually crypto becoming truly day to day use. You cannot imagine a business doing commerce on chain where everybody can just go into Block Explorer and see how much revenue they're getting, how much they're paying their suppliers, what is the salaries are. Right. This is, this is why most of the crypto still does, you know, fiat payroll because nobody wants to show how much like payments of salaries, et cetera are going. And so like privacy always was like hey, this is a key enabler. But we needed a regulatory positioning that actually worked. We needed to have enough liquidity and kind of flow through this to actually, because we build privacy, but nobody's using it. It's not private.

[Kane Warrick]

Right.

[Ilya Polosukhin]

It's not private. Right. So we needed enough liquidity going through it. And I mean it obviously helps when there is like a broader market acceptance as well, that hey, this is actually needed. And so that was kind of the motivation. It's like, okay, actually now it's time. Dust off the thing we built in 2022, updated to some of the kind of intent based infrastructure and let's launch it and then let's make the experience really rock. Right. And that was a lesson from zcash. Indeed. The Zashi zodel wallet is just like really good experience and you actually want to hold your assets there privately, like you feel good about it. So that's what near.com is kind of for. But obviously we're opening up this API for everyone to use as well. So obviously Infinix and everybody else can actually do that as well.

[Kane Warrick]

Yeah, I think one thing for like, you know, there's like the theory of how something work and then there's like practically when you actually encounter it.

[Taylor Monahan]

Right.

[Kane Warrick]

And you know, it had been a long time since I tell zcash. The last time I held it was like probably on finance or like ages ago in like 2019 or something. 2018, 2019. And I went down the Zcash rabbit hole and I was like, oh, I'm going to try and like figure out how to like implement my own wallet and like did all this stuff and the challenge obviously and like this is well known in zcash community, but it's not really talked about outside. Right. It took me like doing a bit of research to figure this out is zcash is somewhat volatile.

[Ilya Polosukhin]

Like you just noticed that what give

[Kane Warrick]

it away maybe losing millions of dollars trading it on hyper liquid was, was the thing that was the giveaway for me. But, but the core asset is the only one that is private on zcash. Right. And so in order to have privacy, like it might feel really good to hold your zcash privately shielded on Bottle wallet. Right. But it might not feel great. Might feel great one day when it's up 30%, then you know, the next day feels bad when it's down 30%. It, it seems to me like really obvious that like we need private stuff like you know, and, and zcash has thought about this. The community's got like multiple proposals of like ways to do this. But you know, that, that to me seems like the obvious thing that no one's really land like, I mean here Tornado Cash had a USDC pool for a long time, you know, but, but to your point, like it's not enough to just have one pool. You need enough to mit like there's all of these different things for it to actually work and be scalable.

[Taylor Monahan]

So.

[Kane Warrick]

Yeah, how. How are you guys thinking about that in terms of like, what are the assets that you think should be, you know, private by. By default?

[Ilya Polosukhin]

Yeah. So everything is private. So over we have 150. I mean it's changing every day. I think they're launching something right now. 150 plus assets, all of them can be private. I was just checking. There's like few million USDC, 8 million near actually a couple million Zcash as well stored in confidential intents. You can actually check it out on Dune now in the intense analytics, they have a kind of dashboard for all the assets that are in confidential shard. And yeah, I mean, I think as you said, right. If I want to pay for coffee, I mean, yes. If I'm zcash bull, which I am. It's great experience. The cross pay is actually pretty cool because you can go and pay. I don't know if you tried, but Square has a bitcoin payment and so you can pay from your zcash into a bitcoin QR code and it's facilitated so near intense. Right. And so the merchant doesn't see where it came from and you pay in zcash. But that's still a little bit janky experience. The zcash like latencies.

[Kane Warrick]

Yeah.

[Ilya Polosukhin]

The block times are uptime is high.

[Kane Warrick]

I mean they gotta hopefully fix it 200 millisecond.

[Ilya Polosukhin]

Yeah.

[Kane Warrick]

Wait times. Right. Like if you're standing in line at a store trying to waiting more than like 50 milliseconds, you're like, yeah.

[Ilya Polosukhin]

And so with intents we are with confessional intents. The thought is indeed, this is like execution confidentiality. Right. Like we're running a full near effectly shard that's confidential and we're running intents there. We get. We planning to have more applications running there as well, like lending, et cetera. And with that you get all the benefits of near, which is 600 millisecond blocks. You can have your assets there to pay directly with stablecoins, with Solana assets, et cetera. You can pay out into other chains directly as well. And fiat is coming and so you can actually be transacting normally as if you were on, you know, your neobank app instead of kind of feeling. Now importantly, the trade off is we're explicitly fighting against crime. Right. And so it's not, I guess, Tay,

[Kane Warrick]

you gotta jump in here because we were talking about this before and Ilya was like walking me through, like, all of the stuff that they're doing. And I was like, this feels like the inverse Thor chain. Tay's gonna love this. So.

[Elliot]

Yeah. And there's been. There's been a couple incidents. One of my favorite money launderers you was. Was trying to use near and didn't have the best time, let's say yes. And then took to Twitter. And I was like, come on. But I think I told this story, Kate, like, a couple weeks ago. The. Yeah, the money launderers, they. They revert to, like, the most core OG Bitcoin maxi. Why isn't this blah, blah, blah, blah, blah, like, every single.

[Kane Warrick]

How dare you.

[Ilya Polosukhin]

Yeah, they're doing, like, social pressure. Yeah. Like, hey, you know, isn't this supposed to be unstoppable money? We're like, yeah, when your money is clean, it's unstoppable.

[Kane Warrick]

Yeah.

[Elliot]

A bunch of stolen vat. And he was like, and now I am poor. I am poor.

[Kane Warrick]

Good.

[Elliot]

And I was like. I took two seconds. I was like, did you still have a thousand soul in bitcoin? Like, you couldn't find ten of the thousand. I was like, you need to go yourself. But, yeah, I think it's okay. I think it's critically important. Like, let's ignore the ideological side of things just for a second. Right? Because we can, like, debate that all day. I think it's critically important, though, that people understand, like, you cannot have a really good, useful protocol and find real product market fit for the market. Not criminals. Right. But, like, you know, the actual market that has huge tam. Right. You can't do that if right off the bat the criminals take over. Right. Because it impacts you in every single way. Most importantly, though, as you're iterating your product, as you're iterating your protocol, as you're finding the product market fit and understanding what users want. If you're only serving criminals, like thieves and money launderers, their needs are actually dramatically different than average user.

[Kane Warrick]

Than an average user.

[Elliot]

Dramatically different. Like, they do not care. They're very price insensitive.

[Kane Warrick]

They are. They love, like, 1% fees. Amazing. Amazing. No questions. Off. Like, sign me up for that if

[Elliot]

it takes a while.

[Kane Warrick]

People don't appreciate paying 1% of their wealth to group their money around.

[Elliot]

It's. It's just a completely different use case. Their needs are different, their desires are different, et cetera. And so. And I've seen this play out time and time again with protocols, especially when they get flooded when DPRK especially, like, just comes in and floods them right off the bat. They get excited about oh my God, like we have users and if they

[Kane Warrick]

don't fit, baby, let's go.

[Elliot]

Yeah, but it's, it's really hard for them to. Then it's like you're serving this one customer and they're like quite a loud customer by the way. Like, like people think that money launders are like hiding. They're not like they are in, they're in your freaking discord preaching to you like loudly. And it's just, it's. I think people, I think it's, it's definitely like underrated. And so you have to get good core users that, that sort of like are different demographic in my opinion because then as you're iterating your protocol, as you're designing the next features to launch, as you're prioritizing things, you're going to be doing so for a much larger market. Right? Because at the end of the day, money laundering, it's capped like and it's, it's a pretty good in crypto terms like it can look like pretty good product market fit in the short term, but when you're thinking like big picture long term, you can't, it's nothing. Right. Like it's. And the trick if you don't have

[Kane Warrick]

trade off is so bad as well. Right. Because you end up getting pushed the margins, your, your structures are undermined and you end up you know, being like pseudo your brand. Yeah.

[Elliot]

You can't, you, every time you get on a plane, you should, you know. And then, and then I think also again it just goes back to this like what you're prioritizing and if, if you're not prioritizing like real users are have a whole diverse set of things that they screw up, things that they have to get right. And if you don't hone the user experience, if you don't hone right like all these little details, you're never gonna sort of like, like you're gonna actually

[Kane Warrick]

get escape a lot. You're stuck in this. Yeah, yeah. Hellscape of money laundering. But you know, I mean the problem is I think like as a startup in crypto especially you know, in, in a bear market or something, like you're trying to survive and there is a pressure of like, you know, we've got a team, we've got to pay bills, et cetera. And like, you know, this feels like product market fit, you know, especially when you can kind of squint at and go they don't that bad like we're not 100% sure that they're laundering money. Like they're not telling us that they're d. Like so yeah, yeah, I, I, I like,

[Ilya Polosukhin]

yeah. I mean, so we took a pretty strong stance here for a couple reasons. I mean obviously personally I don't want to, I don't want to facilitate that in any way. And then the other reason indeed is we think, and you mentioned like intense is, you know, for, for dumb chains to become smarter. The reality is intense is for facilitate all the economic activity in the world. That's, that's really the goal. Like not just crypto, we, you know, we adding fiat, we're adding all kinds of other assets, but we're also adding work. You will be able to hire, you know, agents and people, you know, buy goods, et cetera. So that's really kind of the broader vision. And if you want to achieve that vision, as they said, we cannot be stuck or I mean like we cannot touch and in any way facilitate money laundering or any other legal activity. And so for us it was a pretty strong stance. It's like, hey, we want to figure out how to balance between like this is a non custodial protocol that is accessible to everyone, that unites liquidity across all those chains and at the same time we don't want crime here. Right. And these are two very hard problems.

[Kane Warrick]

Yeah, that's a tough balance to strike. Balance.

[Ilya Polosukhin]

And so one of the things we've been working internally and we kind of starting to roll it out, we call it S.H.I.E.L.D. this is our AI system that effectively is scanning other chains and transactions in real time and it's trying to detect when there is illicit activity happening on those. Like if you know an account that historically didn't have a balance just got $100 million, that's probably suspicious and we should not.

[Kane Warrick]

No, it's great. That's. What are you talking about? That's amazing. One of our customers is rich now. This is going to be great for us.

[Ilya Polosukhin]

Yeah, so a lot of it is affecting anomaly detection on all kinds of criteria. Same for chains, Right. We were the ones detected the litecoin has been attacked and actually informed other exchanges that they should pause litecoin because we had few transactions went through. But then we're like, hey, something is wrong. Right.

[Kane Warrick]

The finale Bitcoin didn't just suddenly get rich, right. Like something's going on.

[Ilya Polosukhin]

Well, I mean so the, the, the actually attacker exploited their Mimble Wimble. There was a vulnerability in Mimble Wimble and they effectively withdrew money from their privacy pool without any, like, was effectively fake proof. And. And then. And then DDoS the rest of the network to drop the hash power. So only the, like invalid. Like the blockchain was invalid code build blocks.

[Elliot]

Yeah, it was a. That was. That was. Hold on. That was a. That was a good attack.

[Kane Warrick]

I was going to say. I was going to say it was a good one.

[Elliot]

Okay. So it. They basically used a vulnerability in the core, like one of the core features of Litecoin. Right. They use this vulnerability to essentially be able to do a double spend, which typically, let's just say it's not actually double spent.

[Ilya Polosukhin]

They literally withdrew fake money. So they withdrew money that they didn't have. It's not even double double spend. You use the same money. They literally withdrew somebody else's money from the privacy pool.

[Elliot]

Oh, okay. Yeah. And then because they were able to. And there was like three vulns, like or three sort of pieces that stacked on top of each other because you essentially. You had the first thing which was the memble Wimbledon being able to pull this money out. And then they found this other one that DDoS half the network. Right. But the whole thing was. Right. Correct me if I'm wrong, the whole thing was racing. And that's why they went through. They tried Thor chain, they tried near to get these funds out while this side of the network was like offline, was basically DDoS.

[Ilya Polosukhin]

Yeah. So what happened is Litecoin core developers knew about this vulnerability two months ahead. They patched it and they then sent it to their miners. And so a lot of the network has upgraded. They did not let anyone else know, like, you know, intents, exchanges, Thorchain, anyone else that this exists.

[Elliot]

Just the miners.

[Ilya Polosukhin]

Just the miners.

[Kane Warrick]

And so it seems weird to me because the miners, I would have thought they don't know them. So how strange.

[Ilya Polosukhin]

Yeah. This is one thing about crypto. Like, whenever you say somebody doesn't know anyone, there's probably. It's probably a telegram group.

[Kane Warrick]

They're able to get in touch with them. They must have their emails.

[Elliot]

Yeah, it was definitely. I mean, I was one of my first times where I genuinely said, like, in the age of mythos, this is unacceptable because the like sort of rollout disclosure timeline was months.

[Ilya Polosukhin]

Yeah.

[Elliot]

Vulnerability. Yeah. For a vulnerability that they themselves found with AI.

[Kane Warrick]

Oh, they found it with AI.

[Elliot]

Yeah. And so then they patched it. But, like, they were as. And, you know, this is like, I'm not, I'm. Let's be clear, like, when you're rolling out a Fix to keep it in a privileged thing and try to get the network like, and then ramp it up. But you, you have to understand like it's still like a, like let's say like a zero day, meaning that you, you're, you're racing against someone else finding the same vulnerability. And when it's something that AI found originally, you have to know someone else will find it. Someone else's AI, someone else's thinker is going to find this. Two months was a while, like when we started going through the time, it was a wild one, crazy. There's a lot of things like this that I think it's like everyone's scared of my eye right now, like rightfully so, but in weird ways that we don't necessarily talk about, right, like too much.

[Ilya Polosukhin]

And to be clear, like this is where you, you, you find this thing and then the next next thing is like you need to let everyone know who can be potential off ramp because they need to be able to detect this and be aware of it. And then you need to have incident response effectively while it's rolling out, at least to like, you know, whatever percentage of the network they just sent the patch out and they just sent the patch out and waited and effectively waited. Network was upgrading, but then the new version had the bug with DDoS and so effectively the old version had the MimbleWimble bug, the new version had the DDoS bug. And so the attacker withdrew money from ImbalWimble, effectively DDoS, the rest of the network. So only old nodes were staying and producing blocks and then used and then started trying to withdraw this money on different exchanges.

[Kane Warrick]

So, so like this is, this is something we've talked about a lot, right? Like this, this AI assisted hacking situation, right? Like you know, what's, what's your take? Obviously you've been watching this, we've been talking about all these hacks, the hack, you know, number of hacks have come, come through. This is an example where like the good guy found it with AI. Maybe it was just a leak, right? Like, you know, the data that was

[Ilya Polosukhin]

the question is like, hey, is this inside job? Because like it's been two months. Like by this time, you know, internally in any of these organizations there's a

[Kane Warrick]

bunch of people, it's going to leak, people are going to know. The miners know you've sent it out to people. Like did, did they tell the miners that this was like, did they tell them what they were patching or they just send out the patch and they

[Ilya Polosukhin]

said I haven't Seen the exact communication with. Are not a miner, right? Yeah.

[Kane Warrick]

You're not that guy. The guy that they were.

[Elliot]

Yeah. It was all. It was super enlightening for me to realize. You know, obviously, like, I spend most of my time in EVM land. Like, I started on Bitcoin, but I don't live there. It was. It was surprising to me because in EVM land, we naturally prioritize the integrators, the. The sort of the UI layers, the user layers, the exchanges. Right? Even. Even before, like, yeah, from day one, really, it was never just about the miners on Ethereum. It was quite surprising for me to. To learn that some of these chains, like Litecoin, for example, the My. Like everyone else, like the near guys, are just like, not seen as like a. A thing that matters.

[Kane Warrick]

Participating. That. Yeah, yeah, yeah.

[Elliot]

Which is wild because, guys, the only reason people are using you is if they can get to and from your chain. Why are you spoiling the miners? Right? Like, yeah.

[Ilya Polosukhin]

So that's kind of what we're doing with SHIELD Is like, we're trying to build almost like an information network as well as AI detection so that you can actually subscribe if you are an exchange or kind of partner and you can get advisories. Like, you will not get the actual, like, what's happening, but you at least get advisory that. I mean, in different severities. Yeah. You get an alert, like. Yeah. I mean, including like, hey, we think you should shut down this network right now. Like, up to that level. Right? Or like, hey, this hashes of addresses are like, suspicious, right? We don't know, like, you will not know which ones, but you will be able to check your deposits against that list. Right? And so, like, we can push Bloom Filter. Like, you can do a lot of interesting things where, like, we preserve privacy, we don't reveal the underlying, but we actually give everyone an ability to check and then decide on themselves. Right? And so that's kind of the general approach we're taking is how can we use AI how can we use kind of cryptography to really route this information and then also build the network, right? We're working with Zero Shadow. We work with like, a few other kind of professionals in the space. How can we make sure that we have a reaction speed as well? Because that is the other thing right now. Every time, it's almost like everybody's learned from scratch how to do incident response with these things, right? Because, I mean, and we've been on the other side of this where, like, you know, I mean, like, drifts Got hacked, right? Like you know, my like signal lights up effect. You're like, hey, war room, let's go. You know, I go to my team like war room, let's go. It's like, you know, okay, let's actually like we should have like a you know, information highway where like they can push really quickly that gets propagated everywhere and then we can like figure out okay, then you can have time to analyze what happened. But like at least we like, you know, like at least like slow down the propagation and can like take time to investigate.

[Kane Warrick]

I mean I think, I think you know, the, the challenge with this, right? And like it's easy to, to say, you know, people should have done this before, et cetera. Like, you know, there's a bunch of proximate causes of why we're still bad at this stuff, right? Like you know, the centralized exchanges don't have necessarily like the expertise to be able to monitor like deeply a chain, whatever. Like they've got services they can subscribe to but you know, they're much more concerned historically at least on like their internal infrastructure, making sure that that's secure. Right. Like what's happening on the chain is like eh, like not really our problem, right. Like we don't care about the chains. We're bucket shop here that's like you know, moving tokens around. And then the people who have been at the center of like these bridge issues, you know, like the Thor chains or whatever, have like a perverse incentive to like not be monitoring this or like, you know, be like oh, we could never know who's using the thing. You know, know it's, it's kind of unusual that a team that has like the domain expertise as well as like a stated goal of not accepting crime is kind of, you know, in the epicenter of this, like moving funds and you know, bridging, etc. So I do think that like this, this feels like a bit of a shift in terms of the, the setup here is slightly different to you know, someone who needs to work cross chain but also is trying to, you know, be aware of this, but also has their own chain that they're like, they've got that domain expertise. So yeah, it feels, it feels like the right group of people to be thinking about this problem.

[Ilya Polosukhin]

Yeah, I mean for context obviously we, sorry, yeah, we've interviewed most of the you know, modern blockchains and like know actually exactly how they work. We broke some of them. Solana actually paid bounty to us for breaking it back in the day. So we indeed very well aware on all the kind of risk vectors and general design of all the systems.

[Elliot]

Yeah, I think a lot of people approach and it probably stems from just the compliance people and stuff, but it's like their approach is sort of this, like, we need to be compliant or we need to like stop bad guys. And it's like not really from first principles, right? It's this add on where you're like, I want to do this thing, I have this goal that I'm trying to build for, but in order to do that, in order to not go to jail, I need to like slap a thing on so that I don't go to jail. And I think that that's always been very problematic because like with anything that you build, if you just slap something on it, it's not going to do, do anything well and it's all going to work against your goals of the protocol. But if you think about it, right, if you think about like, what are the goals of the protocol long term, what are you're trying to give your users, you know, it, it actually is more about like security risk, where, where is the danger and when you approach it from that way, which I say like, that's like first principles, right? How do we de risk this for ourselves, for our partners, for our LPs, for our users, whatever it is. How do you de risk this? Very quickly, especially in crypto, you have to confront the fact that like things break and things get hacked. And if you're sitting at the center of that, you're also going to be impacted by that. And it's not because like law enforcement is going to come and arrest you, like maybe, right? In some cases, maybe. But the bigger issue is everything around that, you know, and so like, especially with the bridges and stuff, the first principle is don't like, don't get hacked yourself. But a lot of times that's relying on a huge number of other things. And if you don't have any detection in place, you have no way to monitor and react to this stuff. You know, circuit breakers. That's how we have, you know, name a bridge hack, right? And there's been a lot of bridge hacks, like a lot of really, really, really big, obvious bridge hacks. And a lot of them, like Ronin is the. Is the infamous example, but a lot of them didn't even notice that their

[Kane Warrick]

money was d. It's crazy for like two weeks. It's nuts, right?

[Elliot]

Like, you know, and so that's the thing is like I get, I get the pushback where people are just like I don't want to know what the don't tell me that Lazarus is using my thing. Like it doesn't matter like what is bad, what is good? I got it at the same time,

[Kane Warrick]

like what is bad? It's good when it, when it like devolves into like the philosophy of like evil. You know you're in a good place, right? Like, yeah, is it really North Korea? Like is it really bad? Can anything be bad?

[Ilya Polosukhin]

I mean this is like code is law until code is wrong. Right? That's. Yeah.

[Kane Warrick]

Yeah, exactly.

[Ilya Polosukhin]

Like what do we do with link thought is wrong.

[Kane Warrick]

All right, let's, let's take a quick ad break here and then we'll come back and talk about the EF and lay eye drop. So let's, let's go to break here.

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[Kane Warrick]

All right everyone, we are back. So let's talk Vitalik's smaller ship ef I guess we still need analogies for what the EF is because we can't actually talk about it directly. So the so for like first of all, so Vitalik dropped a 1500 word X post, which should be illegal in my view. Like we have articles, we have threads, there's many options. Don't drop a 1500. I don't like I read the whole thing. I saw a bunch of people like no one's going to read this. I was like I'm reading this whole I'm a masochist. But like why, why are you doing this? Like just put in a thread, bro. It's not hard. You can get AI to do it for you. It can slice it out anyway. So, so I think the, the reality of the situation is there's been a bunch of people who've been leaving. And you know, the funny thing is usually when people leave, right, you get the like vesting cliff reached meme. You know, it's like the person jumping off the, the cliff. No one posted that in the F because I think they know they're not given any tokens. So not the same. That's not the problem. It's not like that they were paid too much money.

[Elliot]

That's actually such a good point. G. That part of the confusion with everything else when people leave there's like three reasons.

[Kane Warrick]

Why are they though? They need a job. So so obviously, you know, it's a bare market. Everything's, everything's been been ripped pretty hard except for NEAR and zcash. So, so you know, ETH is still struggling. You've got like the, the people like David Hoffman capitulating. And, and I think there's like a very like direct question of like what is the EF for? Like what is, what is their purpose? What are they trying to do? You know, there was a period where they, they like the 2025 EF, I guess, right, where they tried to do a bunch of things. I know. Like, Luca, like, you know, you talked to Vitalik for the first time. I remember. I, I intro you guys. They were like, boarding builders and, and all of this stuff. And it seems like, you know, that that era is over. But at the same time, the bullish thing for me, right, is there was at least some clarity about, like, what is, What. What is Ethereum for? Even if it's unclear what the EF is for and what the purpose of the EF is. And I, I was very, I was excited to sort of see Vitalik saying, like, we're going to lean into being the most impressive chain from, like, a technological perspective. Don't get too triggered. Yeah, okay. But, but, you know, the, the, the fact that, you know, they have all of these properties that are, like, you know, very unique to Ethereum, that they've worked hard for, that metallic push for, and those are the things that people will ultimately care about, I think is bright. And, And I think, like, you know, the thing that probably people have been frustrated by is that there hasn't been, like, a clarity of purpose. Like, you know, what is Ethereum for? Right? Like, you know, there's. We've had so many different narratives. The world computer and, you know, in absence, in a vacuum, people will invent their own things, right? Like ultrasound money and like, nonsensical things that, that have been, you know, markets come up with to try and explain, like, what is eat. Right, you know, and, and so Vitalik stepping up and saying, like, no, no, this, this is going to be like a technological thing, maybe the best technology. We're working towards it, et cetera, at least feels like a good response from my perspective to the market. What, what did you think, Luca? Do you read this thing?

[Taylor Monahan]

Yeah, I read parts of it. I didn't read the whole thing like you did.

[Kane Warrick]

You know, I can't speak on it

[Taylor Monahan]

just to turn to the te, but I mean, I mean, you're seeing it across all Blockchain guys, except for Ilia. It's brutal out there, right? And Ilia had the foresight to at least, like, see where the puck is going kind of, or at least, like, build something that was, like, novelly different. But, I mean, you're also seeing some of the things with to and Salana, some of the tweets that he's been dropping lately. I don't know if you've been seeing that, Kane. I think it's just hard there across the board, right.

[Kane Warrick]

It's just.

[Taylor Monahan]

And I think they're feeling it. And it's interesting because when price is up, you kind of just become in this, like, lull. And a lot of people try to pretend that, like, they don't care about price until everyone starts caring about price and starts punishing you for it. It's like a fascinating dichotomy. But look, you know, my stance on it is. I personally just think it's a mistake. I think when you look at communities, like, what is a perfect example of a community and an ecosystem. Like, look at your local town, right? Your local commute, your local community in. In your, you know, in your neighborhood, like, there's police stations, there's fire stations, there's the municipal, like, there's the courthouse. Like, these things all need to function and they all need to support each other. And, you know, in this case, you know, Ethereum acts as, you know, the town, town mayor, and the EF at least acts as the town mayor. And whether they like it or not, like, that's just the nature of owning an ecosystem and an asset as an ecosystem asset. And I've always taken the stance that you have to just treat it like you would a town or a city or a country. And I think taking a different approach is maybe more in line with, I guess, the Cypher Funk thesis, but I just don't think that that's how these things win and succeed. But frankly, you're seeing it across the board. I think a lot of guys are starting to feel the pressure, specifically in blockchain land. Maybe the exception of Ilya, who seems to have figured out where the puck is going and is capturing a lot of that mindset.

[Kane Warrick]

Sure, yeah. What was your take, Ilia?

[Ilya Polosukhin]

How did.

[Kane Warrick]

How did you.

[Ilya Polosukhin]

So, I mean, we have a long history with Ethereum because we actually pitched in 2018 to build these two to Ethereum foundation, because if we could just build these two, make it work, we would go back to AI in 2020. Because that was the whole thing. We're like, we needed a blockchain for our near AI stuff. And we looked around, we didn't find anything that would actually match our needs. Right. Scalable, easy to use, kind of abstracted. And so we were like, okay, well, Ethereum was talking about sharding back then, was talking about webassembly, was talking about faster slot time, was talking about better user experience, webassembly.

[Kane Warrick]

You don't hear that very much in there. Hear him land D6.

[Ilya Polosukhin]

And so we're like, cool. We can just build all that. We have a team. We are VC funded. We just need an upside. That was the thing. It's like, hey, we need a way.

[Kane Warrick]

Whoa, whoa, whoa, sorry, I'm gonna stop you right there. I don't know if you're familiar with the concept of communism, but we're not paying you shit. You can build us need two, but we will not pay you a red cent, my friend.

[Ilya Polosukhin]

And so that was kind of where that conversation went. And to be clear, I've pitched this idea multiple times. So before launching mainnet, I've pitched it again because hey look, we've built it now. We had Mainnet, we had Sharding, we

[Kane Warrick]

had webassembly, de risked all of that.

[Ilya Polosukhin]

Yeah, we had a kind of abstraction. Let's figure out what this could look like. We do have VCs. We need to pay the money. I have a team that you know, once upside, they work, you know, 247 effectively for.

[Kane Warrick]

Why would you have PCs? What were you thinking?

[Ilya Polosukhin]

I know. And so, and so I think like, so there, there's like fundamentally to me there's few things. One is I don't think decentralization needs to mean disorganization. Yes. And so this is something I've told my team over and over again. We can be decentralized and organized at the same time. Right. We can have a system that supports a decentralized set of like near is actually whenever people join near they were like holy shit, I didn't realize there's so many things like we have, you know, dozens of companies working together at all times. Like you go to our slack, there's like 20 slack connects that you definitely join by default. Right. Because we actually have lots of different companies working together in close coordination. When we did have, we had a hack as well on near was Ria. We had five different companies effectively working together. They tracked down exactly who did it, they had all the forensic evidence and effectively returned all the money. Right. And it was done because all those teams can come together whenever there's a need and figure out how to work together. And so and that, that is like I see the function of leadership and I mean not perfect obviously there's a lot to improve but that is a function of leadership of both the kind of spokesperson and the vision setter of the ecosystem which is Vitalik in Ethereum. And this is not going to change. And the foundation as a supporting function, it doesn't need to go and do the actual day to day even sales function but they need to Organize and set the framework for that. So for example, near intents all of the bd, like for example, Kane's team working day to day, they're not like, I mean they're originally some of them were in near foundation, but they're all now in the diffuse company, which is like overseeing near intense growth. And that team is like day to day looking at, you know, gross of intense and gross of all of the.

[Kane Warrick]

And they have incentives.

[Ilya Polosukhin]

They have incentives.

[Kane Warrick]

Like you talk to them and you're like, oh, these guys seem pretty incentivized to make this work, right?

[Ilya Polosukhin]

Yeah. And it's both like near incentive and they have bonuses based on success of that specific unit. Right. And so same like if we talk about near AI, right? They're not going and selling near and dense. They have their own product, they have their own market. They still incentivize by near and they incentivize by success of the unit. And so we kind of trying to build that architecture. Like the way I think of it is like, what if you took things like Google, which I actually think internally is very like there's a lot of issues but like has a lot of interesting kind of organizational structure and opened it up, made it open ecosystem that anybody can join, anybody can kind of collaborate, work on each other. But you had like common, you know, Alphabet stock that incentivizes everyone. You have common like HR finance that you can tap into. And so like that is the kind

[Kane Warrick]

of leadership scale plus incentives, right?

[Ilya Polosukhin]

Plus incentives and open like ecosystem. Yeah.

[Kane Warrick]

The interesting thing is like Vitalik's like, well, you know, Google and like I get right, like when I was a teenager, like, I was like, don't be evil. Is like, mate. Like, oh, companies are bad. You know, like, because I was poor and like things were expensive and I was like, oh man, companies charged me so much money. Like there's such jerks. Why can't they make, you know, building a computer cheaper? I want to like do all this stuff and you know, whatever. Right. And so you had this like antipathy towards these large corporations, you know, especially like Microsoft charging you for the operating system. Like, come on man, like make it free like Linux. You don't need to make money. Like, and, and so, you know, there were there, there was like Google was like, oh, we're going to be a corporation but we're not going to be evil like those Microsoft guys. Right? And Vitalik now like seems like has such an ax to grind of like Google became evil and stalked the don't be evil thing. And like did all these evil things and, and like. Yeah.

[Elliot]

What? Okay, so it's not, this is the thing, you can have the goal, don't be evil. Like personally in my life I try not to be evil. Great. It's fantastic, right? I would recommend everyone operate like that.

[Kane Warrick]

Not trying to be evil.

[Elliot]

Yeah, yeah, just try not to be evil. Okay guys, like done in terms of running a frickin organization at scale that is trying to achieve things. If your, let's say bottom line mantra that your employees, your teams, your partners are all living by is don't be evil, what the hell are you doing? Right. And Google, I think when like they, they explicitly removed it, maybe Elliot, maybe you know better. I feel like the explicit removal of this was because it, it kept probably clashing with the actual goals and actual KPIs and actual, you know, mechanisms that they were using for their organization. Right. And so when they say having that as the mantra, it was mostly just bringing in line because they actually have goals. The issue that I have with like Vitalic and the EF and their approach, again, try to do all these things, try not to be evil. Like that's great, but what the hell are you trying to do? Because that's, that's like I can go sit on my fucking couch alone, never talk to anyone, never contribute value to anything, never buy anything, never sell anything. I can go sit on my couch and not be evil. Right. Okay.

[Kane Warrick]

What ends though? Right? Like exactly.

[Elliot]

Like obviously that's not a win if the F is sitting on their couch not being evil or Google is sitting on their couch not being evil, not doing anything, that is not actually a goal. Right. It's just not that you have to define, you have to define like what you guys are going for. And I think that this is core to any organization. If you do not understand what the hell everyone is striving towards and have that like, you know, people call it the North Star, whatever you want to call it, right? To get people moving in the same direction and working together and understanding like where again where the, where their peers were sitting, what their managers are trying to execute, what the partners. Right? Like everyone has to be heading towards that same goal.

[Kane Warrick]

I mean, I think that don't be evil is not a goal. It's not a goal, it's a non goal. Right. Like you can't like it's like telling you like what not to do is

[Elliot]

also not a goal.

[Kane Warrick]

Yeah, right.

[Elliot]

Like whatever comes from that. I understand that Vitalik wants the EF to be smaller, but that's actually not what he wants. What he wants is he wants a flourishing, decentralized community of people who are all executing different things and all have like slightly different incentives and are all using their talents differently. That's the goal. The goal is not to make the EF smaller. The goal is like the EF is not needed because all this other stuff is flourishing. But when we define it as like the EF being smaller, I think just confuses things in my opinion. I think same for don't be evil.

[Taylor Monahan]

Remember a couple weeks ago we were talking about like how this, the skew of morality has just been like, totally left the window and like, I would love for him to define like evil because like me eating a hamburger with like a vegan sitting across from me, like could be evil, right? So like, let's just define evil at least for the sake of like, if that is the goal, like what is with this evil? Evil. Subjective, right?

[Kane Warrick]

Like evil.

[Elliot]

I mean, you could argue, and different than me, you could argue that, you could argue that me sitting on my couch doing absolutely nothing productive for society, for my family, for my community, right? Literally just sitting on my couch wasting away is like quite evil.

[Taylor Monahan]

And crypto degens that have been trading Ethereum, the price has been the same

[Kane Warrick]

for the last five years. To them, that's evil, right? I know we all don't agree with that statement. I'm sure, like there's a lot of detail their computer. So I mean, coming from, coming from Google, right? Like you saw this transition, you know, there, there's like a view that it's great to say don't be evil. The only reason why you could get away with that, right, Is the same reason why the EF and get away with nonsense and not having, and having non goals and not having to like actually execute and do things because they have so much fucking money. Because they found this money printer and they now are like outside of the realms of like finance and construction, right? Like Google just had this advertising money printer. It's just a money pipe that was just spewing money in that allowed them to do whatever the fuck they wanted, run any experiments or whatever. Like, like what you were in Google, like what's your perspective on that?

[Ilya Polosukhin]

Like, yeah, so the way I think of it, there's mission and there's values, right? And so when Tay was saying like, don't be evil is values, it's not your mission. Mission is actually what you're trying to achieve in the world. And for Google, the original mission was, you know, Organize the the world right and don't be evil was the approach they were taking. Now you're right, that also effectively while they had a dominant position and was kind of, I mean complete monopoly on not even search, but specifically the advertisement like the eyeballs, like they were effectively owned programmatic advertisement market, they could do whatever they wanted. What happened? Actually while I was there, there was this transition where the easiest way in Google to get promoted was to go to ads team and grow some revenue metric. And so I was talking to one of my colleagues who went there from research and he's like, yeah, just got promoted, got the revenue growth. And what did you do is like, well we essentially correlating your maps data to the ads that we scanned from the streets and we're retargeting it on Internet. So you saw on the highway a ad like a billboard and they're like, we will retarget you while you're visiting some web page now this exact ad, this exact product. And I'm like, this sounds kind of evil. And I'm like, why? Why is that? Why, why are we doing this now? And he's like, well, Facebook is doing this, this. And so what happened is Facebook effectively pushed Google to become a lot more aggressive in how they were using user data and approaching in general this. And so I mean we see the same right now AI is pushing Google to be better at AI and everything, right? Even though Transformers were at Google, we had ChatGPT product in like even before Transformers to be clear, like we there was a, you know, chat product is not hard to build. I guess it wasn't maybe as amazing. It just didn't make sense for Google to release it because like, I mean multiple reasons but effectively like it wouldn't be good enough compared to Google search. You would create like dichotomy and you know, you get, you open yourself up for a bunch of lawsuits and there's actual like legit reasons or startups to actually out innovate big companies. But now they're like stepping up and really, really ramping up machines. So competitions always leads to this. But I do think there is a natural kind of tendency in. I also like taking Vitalik's and kind of more cypherpunk side. I do think corporations in general have this tendency of becoming extractive, right? As soon as you effectively achieve your target audience and there's no more to grow, you effectively need to grow how much you're making from a single user. And so you're effectively trying to either upsell them or in some way increase how much they're spending on your, on your platform. And so that I think is actually the problem is that there's no steady state. Like corporation is either growing or shrinking. There's no way for something to be at steady state. And I think in blockchain we actually have something where, because we can have fixed supply, we can have like a different dynamics when we say this is money, when this is, and, and kind of if our vision is forward enough and, and you know, for us again, we, we think the economy going to transition to blockchain. Right. Right now it's extremely ineffective. You know, all of the negotiations like actual supply chains, actual work is done extremely ineffectively. Blockchain will make it, you know, 10 times more effective and AI will make it a hundred times effective. And so together AI and blockchain will make it, you know, a thousand times effective. And that's a tam, right? That's you know, ten hundred trillion tam of effectively post AGI money is what we're targeting. And I think that is like when that is the vision, that is the goal, then you still have values. Right? We want to do it in, you know, no crime, for example. We want to do it in a kind of methodical way. We do want it to be not like I actually think of decentralization as a tool, not as a goal. For me, decentralization is effectively making sure things are redundant. Not depending on a single person, not depending on single organization, not depending on single validator, on single wallet provider, on single RPC provider and all those things. We want redundancy, we want ability to

[Kane Warrick]

kind of work around like user benefits and beneficial to the process.

[Ilya Polosukhin]

Right, Exactly. Yeah.

[Elliot]

No, I have a talk, I read my talk in 2018 where I'm like, this obsession with decentralization for decentralization sake is the silliest shit and we need to stop. Decentralization is good, but it's not, it's not, it's not the decentralization that's good. It's what comes from that. So redundancy, like also, I mean competition

[Ilya Polosukhin]

and innovation comes from this as well.

[Elliot]

Right, exactly. So you have, you have cooperation which achieves certain things and can grow certain things in certain ways. You also have competition which is the same like stability, like security. Right. All of these things can come from decentralization. They don't necessarily do. Right, and that's like the. Again, it's like going back to like, what are you actually aiming for? To just be decentralized. Like, okay, so what you kick Everyone out of the discord and make them and don't support them.

[Ilya Polosukhin]

Yeah. You cannot be on, on the same discord. And then when you have zero day, you have no idea how to actually let everybody know. Right.

[Elliot]

You know, and so it's like, what are you trying to achieve? And I think, again, I think that this, this is like a very, A very big part of, like, what contributes to the Ethereum culture and especially at the app, is like, what is, what are you trying to do with the centralization again? You want other people to build up in ways that you would never build up. You want people to be working together, to be competing with each other. We want everyone to be leveling up and filling the gaps in the ecosystem. And the job is not to do those things. The job should be to build those people up. But by framing it as, like, we want to be decentralized and stuff, what it ends up, like, the execution ends up being is like, we don't tweet about product builders. We don't talk to product builders. We are another one. Neutrality, right? My. One of my favorite ones. Like, okay, so you don't fucking support anyone. You don't care about anyone. You don't incentivize anyone.

[Kane Warrick]

We don't have a favorite child. I would be evil. That'd be horrific. We can't take. No, therefore, therefore it's so important that we don't have a favorite child, that we actually don't talk to our children.

[Ilya Polosukhin]

Yeah, we don't talk to any of the children.

[Kane Warrick]

We don't talk to them at all. They live in a different house in another area. Just to make sure that it is. It's. It's so important that they are totally.

[Elliot]

They're all neglected equally.

[Kane Warrick]

Look, just like, let me in your house, dad, please. I just wanna. I just want to give you a hug. It's like, please, man. Come on. So I, I really wanted to talk about, like, Iron Claw and some of the, like, agentic stuff that you guys are doing, but I think we're out of time, so we might need to, to bring you back. Because I'm, I'm very curious how you are thinking about this from like, a practical standpoint of like, an organization. Right. We've talked a lot about, like, you know, mission and, and, you know, morals and goals and everything. We live in a world, you know, that in the last three months has changed dramatically in ter, you know, to your point, 100x AI, right? We're in maybe the 5x or 10x period of this, right? But it's only going to get crazier in that backdrop. Like, how do you build an organization? How do you structure an organization? How do you get people to coordinate? I'm really curious to get your perspective on this, but I think we're out of time for.

[Elliot]

Give us two sentences though.

[Ilya Polosukhin]

Yeah, I mean, the high level where I want to get to is markets. That's the highest level. Right. Like we're transitioning from corporation or foundation or whatever, needing to be the holder of people because you needed kind of to bundle because you had trouble doing credit assignment. Right. Like if, you know, Infinix done something, it was really hard to like this individual person contributed this much to this product. I think that actually is a lot easier to solve now with AI, right. It can actually estimate this. And then on the other side, each individual is becoming more productive. So like, I mean, it's, you know, I know multiple people who are working on a bunch of projects at the same time now because you kind of have a lot more bandwidth. And so I actually think we're going to start transitioning to more organizations almost that are just operating on the market principles where you're effectively hiring, you know, an individual and their army of agents to do something and you kind of can estimate how much that contribution would have done to the bottom line of the bigger thing you're doing. Right. I don't know if you saw. So Jack Dorsey actually he posted something which is spiritual and kind of going from hierarchical organization to more kind of peer to peer. And again, this is where blockchain and kind of all of the intent based stuff that we've been doing is exactly. That's exactly the world we've been building for. Where you effectively can say, hey, this is intent. Like I want this new feature in Infinix. And now there can be multiple.

[Kane Warrick]

This is what's worth to me.

[Ilya Polosukhin]

Yeah, this is what is worse. Or you can have a bidding in an auction and finding a solver that will say, cool, I'll build it in 24 hours. This is my expectation of quality. It's going to be. And then if you don't agree, right. There's another agent that comes in and reviews it and effectively judges of that was done. And so this is actually what we're building as our near AI marketplace and kind of testing this out right now. This is still early, so I'm not. But we have like first actual businesses starting to use it like for insurance claim filing, for background checks, for event, like actual real use cases where they're Effectively hiring agents to do some jobs. And it can be like, because somebody who is an expert effectively codified the workflow, packaged it up, and now offering

[Kane Warrick]

that for a dollar as a surface, right? Disaggregating what would have had to have been inside of a corporation. You have that function of 3, 4, 5, 10 humans that are manually doing

[Ilya Polosukhin]

that all the time. And sometimes they don't have enough work and sometimes you pulling them to do something else. Now you can disaggregate all this and then have a marketplace. And so that's actually, I think where we're going. I mean, it's not going to be, it's going to be a bumpy ride, but I think that systematically that would make sense. And again, this is where AI and blockchain really fits well because they're kind of powering this trustless transaction. We have escrow, we have verifiable AI to evaluate if the agent does their job well. You can still have human in loop, right, to kind of cross correct if something went wrong. So it doesn't need to be like now everything automated. It can be like, you know, I hire, you know, Kane's agent and you know, Kane will like make sure that his agent done the work right or like correct it before passes is over. Right.

[Kane Warrick]

My other agent will make sure that the other agent did a good job. I, I won't be involved.

[Elliot]

It's going to be fine. Guys don't. It's going to be great.

[Kane Warrick]

Well, so, so like within the near ecosystem and we've experienced this, right? Like you guys are already somewhat in this direction, like these smaller corporate entities, like smaller, smaller business entities.

[Ilya Polosukhin]

I mean that, that has been my principle from long time ago. So I mean, again, to me, AI again is an accelerator. Blockchain is coordinator. The principles are the same.

[Kane Warrick]

So, so very. But from a very practical standpoint, right? Like the. This is something that I'm, I'm like super focused on at the moment. You know, we went from 2025 where like you could grind your way through and get some like production code was really hard then December 2025 through to like maybe March or something like that. You could, you could not just grind your way through. Like, you could just kind of prompt and get like production code if you had, you know, experience with. And so a lot of engineers were like, I don't need to write the code anymore. I can get agents to write the code code and have you. But it was still very much like a synchronous process of like a single person Sitting in front of a computer producing code. Right. That doesn't to me feel like the final form of this. Right? Like it feels like we, we need something else. And so the interesting thing about Centaur, what paradigm dropped last week, is like it's trying to move the agents into slack so that you have like an agentic partner or teammate or whatever that is responsible for the coordination that an individual human would bypass to coordinate and can deploy agents. And then it's really the humans in the loop for taste and judgment and goal seeking and all of that. And then the execution side is all handled by, by agents. Like, you know, given how much you guys are doing in this space and how long you've been involved, like from a near or perspective, are you still in the mode of one person sitting in front of one terminal doing things or are you experimenting in this like multiplayer space?

[Ilya Polosukhin]

Yeah, we're experimenting definitely. And so the Iron Claw itself is actually multi tenant. So open openclaw and Hermes, they're effectively like your system. And so ironclaw actually supports a multi tenant mode where you can log in with Google or near account and you're effectively joining a single instance. You have your memory, you have your kind of missions, et cetera. You also have shared projects, you have shared memory, you have shared workflows. And so yeah, we're experimenting kind of designing how we call it the commitment system. So whenever we having a meeting with UK and like Ilya said, yes, we're going to ship this feature for you. This should actually go somewhere automatically and then pop up. Yeah, well it also should pop up for the team. And then I also like, you know, follow up if it's done, put it on roadmap, update the right documents. Similarly, like I actually have workflows that you know, scan everybody's meeting notes and like give me like decisions that were made.

[Kane Warrick]

This is my. What do my guys commit me to?

[Ilya Polosukhin]

Not for me, but like in general for the organization. But also like actually the most useful been finding where decisions were not made because that's actually where organizations taxes is. People discuss something and did not make a decision because either decision maker is not clear or it wasn't in a room. And so just extracting that and making sure that's visible like it's already helping because then I can and is that

[Kane Warrick]

like an org level Panopticon single agent, multi agent thing?

[Ilya Polosukhin]

Like how right now it will be prototype it more like from my perspective just because I have access. But then we are now building this as a system that everybody Again, the main question is permissions, right. Like, for example, there's some HR things, right. They shouldn't be visible to anyone except maybe some HR people. And so you need to kind of configure that. But otherwise, yeah, I may have full purview and then we kind of can cross cut it into like specific departments. But yeah, we're kind of building it as like a single near foundation, at least right now, Iron Claw, that has everyone kind of as a user. And then there's like a common area with permissions as well.

[Kane Warrick]

Yeah. Nice. Yeah, I think this is like the most fertile ground for efficiency improvements that.

[Elliot]

Oh yeah, 100%.

[Kane Warrick]

But it's super hard. Like it's hard to reason about. You start building something, you're like, this isn't exactly the shape of it. Like it's, it's a really complex design space that we don't have good intuition about. It doesn't. Because it's just like we've only got humans. You just like throw a human at a problem and like, they're just different.

[Elliot]

We're very bad at the human side of this. Like organizations, right? Especially like running like an organization at scale is bad. Is like, it is bad.

[Ilya Polosukhin]

It's always broken. Organizations are always broken. That's the way.

[Elliot]

100% always. And so it's like, then you're like, okay, let me stop an agent on this. And it's like

[Kane Warrick]

solving everything. What are you talking about?

[Elliot]

I mean, so you have to, you have to like either I think like the approach, right? Like, okay, let's, let's just solve the problem which is such a common organization problem. Like, why wasn't the decision made? Or like. And also just tracking the decisions that are made, you can actually solve that and bring efficiency. And then you can then sort of circle back around and be like, okay, clearly this area of the org, this team, whatever. Yeah. And like non. Those. Non decisions. Yeah. I worked at many companies where.

[Ilya Polosukhin]

Yeah.

[Elliot]

I mean my entire life was not making on calls that didn't make decisions and me getting like, just fucking banging my head off. Why are we here?

[Ilya Polosukhin]

Yeah, I mean, so I pitched this actually near con 2023, I pitched this idea of AI CEO, right. This was before any of this AI stuff started to work. Right. And so my, my vision always there was like. Yeah, like working from two directions. One is how to make individuals more. Have more context. Because like a lot of the middle management and kind of it's just like propagating context from like relevant places and at the same time Cutting down stuff that's not relevant because people cannot just have a feed of everything happening in the organization as well. And so that is AI. AI can do that very well. Whatever's relevant to your work, whatever is relevant, you can still query up whatever you want to know. And then the other way is bubbling up in deep information what is going on, what decisions are made, what suggestions, what's improvement, where the trade offs are like, that's the other thing. A lot of it is like we're operating on a trade offs. Like what are the trade offs? Sometimes like people making decisions have no idea what the trade offs were that actually led to this. And this is actually by the way, why I think daos never worked is because all of this infrastructure is missing. And so like for DAOs to truly work, you kind of need to have this system truly working where you don't need middle management, you don't need. You have credit assignment embedded into the, your organizational design. Because right now, again, credit assignment is a very like, credit assignment I think actually is the fundamental world problem.

[Kane Warrick]

Interesting.

[Ilya Polosukhin]

Like on organizational level, in AI machine learning, what gradient descent, like the training of models is credit assignment problem. And so like in every, in every place you go, it's like credit assignment is the main challenge. But like if you can't assign like, oh, this person contributed this much to this bigger thing we've done, if you can do that, then again right now promotions, compensation, all of these things are somewhat arbitrary, very fuzzy and adversarial and DAO couldn't deal with it.

[Elliot]

And then you. Yeah, exactly, because then you put rules like these very hardline rules on things that are fundamentally fuzzy underneath. And then you're like, it's fair, but

[Kane Warrick]

you have to, you're like, we'll just like, yeah, yeah.

[Ilya Polosukhin]

And then you're like, it's fair. I mean, yeah, it's fair, but you know, but this other company gives me like double the compensation, right? So like probably it's not fair.

[Kane Warrick]

It's probably not fair. Yeah, exactly. Exactly. Yeah. And you know, it's funny like there's the unintended consequences of like how you incentivize. People are like so funny to me. Like, you know, I, I kind of vacillate between these like communist bonuses, right, that we call them in, in InfiniteX where it's like, hey, everyone was here. We can't really attribute, you know, perfectly. So we're just going to give everyone the same thing, right, for this particular thing, right. And like the, the people contributing the most fucking hate it. They rage so hard, they're like, this is a travesty. Like.

[Ilya Polosukhin]

Anyway, so, but, but I mean, I know we're over time, but markets actually solve all of this. Like if you forget about inside organization between companies, there is market and so if you don't like the partner, you switch to another provider. Right. If you like, markets actually solve all this problem. We just haven't figured out how to do it on a low scale, lower level. And this is again where AI and blockchain and kind of the intent architecture is actually like built for.

[Kane Warrick]

Yeah, yeah, yeah. There. Awesome. Awesome. Thank you, sir. Amazing having you on the show. Thanks everyone for joining us for this episode of Uneasy Money. Remember, what happens on Chain never stays on Chain. We will be back next week. Until then, do your own research before aiming in. Nothing you hear on Uneasy Money is financial advice. We're just three builders talking about what's happening on Chain. And we want you to always do your own research before aping in. You can find all our disclosures@unchain crypto.com uneasy money. Sam.