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- [00:00]
Mark Zeller
There's these people that are doing that are getting some wrong in the society and then they complain to the society itself and say, hey, that should not be a lull because I'm very sad. That's usually what a law comes from.
- [00:15]
Kane
The point of insider trading laws is not to stop the fairness in the market. It is to stop someone expropriating information that they got from a privileged position stealing from the company that you got the information from. Not it's not about the people that are trading against you on the Nasdaq, Right.
- [00:37]
Taylor Monahan
When people call the the Maduro bet insider trading one, show me any, anything that shows that that information was insider. Right? There's a lot of threads on Twitter right now and let me tell you, especially the like, look on Chain dudes who are like, I'm a sleuth, look at me, they're wrong.
- [00:58]
Kane
Welcome to Uneasy Money because what happens on Chain never stays on Chain. I'm here with my co host Taylor Monahan, Security at Metamask. And today we have a very special guest, Mark Zeller, founder of the Aave Chan Initiative aci, a provider for the Aave Dao. One quick thing before we start, nothing new here 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 of our disclosures@unchained.
- [01:25]
Multichain Advisors Announcer
Crypto.Com uneasymoney 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. Today at Multichain adv. Com.
- [01:48]
Taylor Monahan
You'Re about to make a trade which you do, you listen to. Is it get optioning those options.
- [01:55]
Mark Zeller
Or.
- [01:56]
Multichain Advisors Announcer
Let'S do a little research.
- [01:58]
Taylor Monahan
Learn more@finra.org TradeSmart.
- [02:03]
Multichain Advisors Announcer
Mantle is launching the Global Hackathon 2025 to accelerate the future of real world assets. With a $150,000 prize pool, backing from a $4 billion treasury and direct access to Bybit's 7 million plus users, this is the ultimate ecosystem for builders.
- [02:25]
Kane
Hey guys. So before we get started, Mark, you had one of the most banger tweets of the year so far. We're only a week in your tweet about Macron after the Maduro Exfiltration. I guess we don't have the technology to pull up tweets, but, but if I remember correctly, it was, it was something along the lines of you Know, this is such a terrible situation. I hope that nothing happens to my beloved president who lives at Peru, wherever, wherever the presidential palace is in, in Paris. So, yeah, that was that. I laughed out loud at that one. That was very, very impressive.
- [03:11]
Mark Zeller
In France, we have two parts of our culture that are extremely important. Being a very pissed at our politician and we love the good sarcasm and I think it was a good mix of both that resonate with some people.
- [03:25]
Kane
Yeah, yeah, yeah, definitely, definitely. It landed so really awesome to have you here because our main topic today is going to be Abe's governance war and the question of who really controls aave, but also probably more broadly, who really controls any protocol. Are they controlled? You know, what are the mechanisms? So basically here's, here's the recap, I think. And you know, Tay, you've, you've brushed up on this a little bit, so, you know, jump in if, if anything's off here. But a few weeks ago now, maybe we'll zoom out even more. Right. Um, aave, I would say for most defi enthusiasts is the top, if not, you know, the, the top three absolute worst case examples of good governance in defi. Dao governance not having misaligned incentives, despite the fact that there is a Labs and a Dao and you know, there, there are some, you know, potential points of friction and I think it's, you know, it's worth mentioning. Stanley's a good friend of mine and I think part of that is that, you know, Stani has kind of consistently showed up and, you know, try to do the right thing for aave, but then you also have people like Mark who are, you know, extreme, like maybe the most aligned with AAVE the protocol and AAVE the dao, right. And it creates a really good tension and you know, checks and balances for how a dao should operate. And there's a lot of people who have kind of given up hope on daos, Tay, you may, may not be one.
- [05:13]
Taylor Monahan
Don't look at me. Don't look at me.
- [05:17]
Kane
And, and so, you know, I think like for a lot of us, we look at aave, we've got a bags. First of all, we see a governance as like one of the shining lights of, you know, maybe this dao thing can actually work. And, and that's kind of been the historical backdrop of all of this stuff. Right? And then a few weeks, and this is not the first time there's been tension. Of course, you know, it's a dow, there's going to be tension, but then a few weeks Ago, AAVE Labs switched its front end swap integration from power swap to Cowswap, which, you know, fairly uncontroversial. But then they routed what is a effectively eight figures, low eight figures of fee revenue that used to go into the Dow treasury to the A Labs multisig, I guess. Right. And there was no discussion or vote on this or whatever. And the community was like, whoa, whoa, whoa, you're taking our money and you know, kind of privatizing these fees. Right? And, and then I think the, the next point was this kind of view of like who is owed those fees, this question of like, well, this is a front end and you know, it's not the protocol, et cetera. And so, you know, maybe it's fine if we just do this, right? But there is like a, I think a principled view in the world that, you know, if you are a dao, that things should go through the dao, that there should be governance around it. Uh, and so this kind of escalated, right? A snapshot proposal was drafted by Abe's former cto and this was submitted to transfer Abe's brand assets, domains and IP to DAO control. But, well, and hold on.
- [07:09]
Taylor Monahan
So that thread that, that governance forum thread, that is in part, in my opinion, my view, right? That is in part was sort of kicking off the governance around literally the domains and the brand and stuff, right? But it was actually a reality serving as a, as a, as a central place for everyone to discuss this broader issue. And then there are these little spin off things, which is why what happened next was I think caught everyone off guard because this wasn't necessarily your typical we're going to do a proposal, we're going to do a snapshot, we're going to, that, you know, through the normal governance things, this was like the place for everyone to sort of like get caught up on, on the, the conversation, the drama, et cetera. Yeah.
- [08:04]
Mark Zeller
I think what is important if we have to do the recap of the situation is that it all started by a token holder. So a token holder and also a very large independent delegate of the AVEDAO basically found out that avelab redirected the fee. And it's basically like if you have an Apple Store and you sell the iPhone, the Apple gets the money on the iPhone that are sold, but overnight there's an executive at Apple that say, well, every app that is, every user that some money to use an app on the Apple Store, the fee goes to us then. And the token owner was not very happy. So the community said, well, Maybe we should have a discussion to have a revenue share, this kind of stuff, and make sure unit, your control and redirection of fee cannot happen. And the reaction of avelab at that point was like, well, we do the front end. That's our project, and we don't have anything to discuss with you guys. And that's when the discussion basically escalated to, okay, let's put the fee on the side for one moment and discuss who can do what in the AAVE ecosystem using the AAVE brand and who actually own the AAVE brands. And that's where the proposal from Ernesto, former CTO of AAVE Labs, that spin out to create BGD Labs and is now the core maintainer of the Avicot base for the DAO as a service provider, is created to say, okay, maybe the DAO should have legal entity and own those brand assets and then delegate that back to AAVE Labs. So we are sure that those strategic assets cannot be monetized unilaterally to one party or redirected completely to other purpose that would not serve the AAVE protocol or the AAVE token or something. And that's where I think the conversation got interesting, because the swap feed itself is not so important. It's less than 10% of the Avec local revenue. Obviously, it's important that most revenue goes back to the token holders. But I think the real meat of this conversation is about ownership of those assets.
- [10:18]
Taylor Monahan
Yeah, 100%.
- [10:19]
Kane
And we joke about IP ownership and who owns a brand and DAO structures all the time. I remember back in the day when we were deprecating Haven and moving to Synthetics, we got on a call with the lawyers and I was like, guys, this is taking so long. Like, why can't we shut it down? And they're like, we don't have anywhere to put. If you don't have an entity, you got to put the Haven brand somewhere. And I was like, what? Like, no, just like, I don't, like, just put it in, you know, look, like, put it on the chain or something. I don't know. I was like, I don't know what to tell you guys. And so. So there is, I think, you know, an interesting nuance in this as well, of like, okay, how do you even wrap IP and brand assets, et cetera, into a legal wrapper and then put that on chain? You make it an NFT that says aave. Like, what?
- [11:20]
Taylor Monahan
You know, there's the AAVE brand, not.
- [11:25]
Mark Zeller
Something that is new in the ecosystem. There's been a bunch of Implementation of all the daos and other ecosystems. So Lido has Ligamentity Morpho as a French nonprofit association owning the brand, the assets, all this kind of stuff. So it's not really a problem. Like it's a technical problem, it's a little problem, but it's something that can be solved literally overnight.
- [11:51]
Kane
Yeah, it's fairly easy to solve it. It is I think somewhat interesting, right that we have these intangible assets, right. Ip, brand, et cetera. Um, and in order for a dao to own them, they kind of have to be inside this legal wrapper. It's like one of the weird meatspace things that like bridges across, you know, both, both a dao and yeah, no one's, no one's turned them into an NFP yet. I don't know, maybe.
- [12:21]
Mark Zeller
No, that would be a good option. But at the end of the day, I think ownership and safeguard is important when you do a business and especially when that business, the dao and the protocol is a billion dollar business and hundreds of millions of dollars per year business. And what you want to prevent when you have this kind of business is to have unity or control that can redirect the revenue or redirect the brand or redirect the product. And I'm actually old enough to remember maybe Taylor had a submit to that. But you remember when my Ether wallet crypto account became my crypto.
- [13:04]
Kane
Oh, I remember.
- [13:09]
Mark Zeller
The situation was very different because obviously I was a big my crypto.com fan and we use the project and most of the team follow you tailored. So the situation is quite, quite different. But at the end of the day one very important product asset got changed overnight in terms of control. And maybe that's a situation the Avidao wants to prevent in the future. If Stani wants to create MyAVI.com and change the brand assets, change the because he has the front end the domains and deposit on another code base and you know The Kotakodi owns 100% where the token owners are new control. That's something we want to prevent. I know Stani and I worked with him for nearly a decade now. I know he's very heavily aligned and he has his own alignment as well. And it's also a bit of game theory of where you put the right Nash equilibrium to make sure that everyone have their own incentive. But you need to have a framework that is safe for every actor best interest. And I think the best Nash equilibrium is to say okay, there's going to be a neutral legal wrapper that is the DAO that will own the asset that will protect them. And then there's going to be mandates back to have a labs back to Stanley to say, okay, you can continue to do exactly what you do right now, but ultimate ownership belongs to the dao. So if there's something that breaks the trust between the token holders and the labs for any kind of reason in the future, there's less of an asymmetric relationship.
- [14:55]
Kane
Yeah, there's recourse. Right? You have, you have some level of recourse. Right. But.
- [14:58]
Taylor Monahan
Well, and it also, it sets expectations and, and in reality, like the mu. My crypto split and this situation, they're not, they're. They're very different in basically every way, except for like the core root of everything, which is that we were all working on something that was valuable to other people, that other people's livelihoods, like our team. But also like everyone that was using our product was relying on. Thank goodness we did not.
- [15:29]
Mark Zeller
Tokens, by the way.
- [15:31]
Kane
Everyone, everyone, the entire, like, it was systemically risky for all of like Ethereum for this.
- [15:38]
Taylor Monahan
Yes. And we were wildly aware of this. But we were also, when we had first started, was just like this open source GitHub repo. We had no company. There was no company, guys. There was none whatsoever. Like, it wasn't a Dao. No, it was literally just a repo that we threw together. Right. And so then fast forward that the combination of the value and the risk on the table, combined with the lack of clarity that we even had with ourselves and that evolves over time and as the stakes get higher and you know, people's lives intersect with work, intersect with like, wait, how did we end up here? Right? And then all of a sudden you're sitting there and you're like, wow, we have. Because we never got. We never established clarity on even the basics. Now it's like every little thing just sort of amplifies and compounds that initial uncertainty. Yeah, it was fine in the early days, right.
- [16:37]
Kane
When it was sitting in a room.
- [16:39]
Taylor Monahan
We're friends and by the way, there was two of us and we were committing directly to master on GitHub. Like, it was fine, everything was fine. But, you know, once you got to. Once we got past ICO era, I mean really, even past the dao, like, that was not fine anymore. And so, you know, in that situation, like, our, our processes and our security evolved, but the company structure like Ethereum has never been good on. We don't have companies here. We have to learn it on our own.
- [17:13]
Mark Zeller
But I think it's great to learn from the past as well. And it's all a sign of maturity. It's like there's a very good naivety when you are a builder and you start building films from scratch and, and, but as things evolve and it gets more and more serious and then you have some value and you have actual revenue, then you cannot just sit down and say, okay, everything's going to be all right and we all going to be friends forever. It's part of becoming an adult. You know, if you say we need.
- [17:45]
Kane
Like a Claude slash command neo robust.
- [17:50]
Taylor Monahan
Dao to slap, well, yeah, just get the clarity, right? And that's part of, part of some of the stuff. Well, so one of the things that I think is most sort of disappointing about the timeline for AAVE and stuff is like in a certain sense everyone had just got this clarity, right? The SEC finally was like, actually jk lol, sorry for ruining your last four years. And then like immediately it's like just like little certainty and then.
- [18:23]
Kane
But there's something to that, right? I don't think it's, I don't think it's a coincidence. Like there was no way while the SEC was circling with their, you know, goon squad, right, that A Labs was going to be like, hey, why don't we just take some revenue from the Dow and divert it to our private company? That was never going to happen. So soon as the SEC capitulates, then it's like, oh, well actually. And this is the problem, right? Like without that clarity, without the right structure in place, you can't trust that in three years, five years, 10 years. And I think, you know, your point, Mark, is, is really important. This is a billion, multi billion dollar project, right? This is not like, you know, two people sitting in a room, you know, hacking some stuff together anymore. Like this is systemically important to Ethereum, to crypto. And if you don't have certainty around governance and around how the thing will operate, then that's just like a drag on the value of the entity because no one can look at it and go, well, I know what's going to happen in this scenario. It's like anything could happen. And so, you know, even if you ignore governance and all of that stuff, just from a purely financial standpoint, uncertainty is bad. Like remove the uncertainty, have clarity. Like it's good for everyone if everyone knows how things will work.
- [19:47]
Mark Zeller
Yep, completely agree on that. And I think it's also important for the valuation model of the asset because as an investor, if you get a claim of the proxy of revenue of the protocol itself, that's a very thin margin business because the way AAVE works and the way AAVE makes money as a protocol is by the collection of reserve factor mainly. That's the main revenue source paid by the borrowers. So part of the borrower interest paid goes back to the DAO and the protocol. And that's a very, very TM margin. AAVE makes a lot of money because AAVE is extremely big. But at the end of the day, everybody that builds software, and I think one of the reason you launch Infinix is also that when you have a protocol or when you build a fat app like you are building right now, and you are closer to the user, that's where the real margin can be made.
- [20:43]
Kane
Agreed.
- [20:44]
Mark Zeller
And the closer you are to the user, the more you can monetize. And if there's no ownership on the distribution channels and the project side of things to the Dao, then there's a very hard limiter on the valuation model of the AAVE asset because you have the high margin part of the business that is controlled by a third party entity that has no obligation legally or even to redirect that revenue. And that's why ownership is important. Because at the end of the day, nobody is against standing making money, obviously, because we are very aligned. Because usually when he makes money because a big part of his portfolio is, I also make money because a big part of my portfolio also aave. And that's the same thing for the people that own the asset and this kind of stuff and that is linked to the AAVE success as a protocol. And so nobody is against AAVE Labs doing their work. They are doing a fantastic role for nearly a decade now. What we want is clarity about the structure and to say, okay, if you do things and you use the AAVE brands, well, the Ave Dao should get their first share. And we still discuss that from a position that is more on a legal standpoint and less symmetric, where you decide overnight, okay, you guys will get 10% or in one year, oh, I changed my mind. No, it's zero. No, I'm more friendly to you. It's going to be 40%. This kind of stuff. We don't want this kind of relationship. We want something here, something stable that create trust and bring clarity to everyone involved.
- [22:24]
Kane
And so, you know, clarity, right. Like the AAVE holders rejected this brand transfer. It got voted down in spite of the fact that it was on like Christmas Day or whatever. And AAVE Labs is now saying, okay, we will share the off protocol revenue with AAVE holders. But again, I think it's less about. All right, fine guys, we'll give you this because this didn't go well and more about now saying, well, we'd prefer if it's not discretionary, right? We'd prefer if you were obligated to do this thing because what happens in 10 years time if you know the AAVE front end is making a billion dollars a year in front end revenue for some reason, right Then.
- [23:08]
Taylor Monahan
Or, or what happens if, like the question for me, right, and it's very hypothetical, right, but what if the front end starts doing something that actually works against the Dow?
- [23:19]
Kane
Like actually no, that would never happen, Taylor.
- [23:24]
Taylor Monahan
And there is, there are a lot of incentives that make it unlikely to happen. But like that is like a scary future state of things. And again, I don't think this is going to happen, but. Right. I think everyone is looking at this and saying like, oh, they redirected the revenue but they could, when you control the front end, you get a lot.
- [23:43]
Kane
Just to be clear, they could fork. This is like we, we can't live in fantasy land, right? They could fork the protocol if they have the main entry point to the protocol. And I don't think anyone is saying that this will happen, but what happens if, you know, something happens to Stani and some person inside of ALV Labs turns up and goes, Stany was a nice guy but like, honestly, like fuck the foul stuff, right? And we're going to fork it and we're going to take 100% of the revenue. And sure you might say, well, people aren't going to follow that, but some people will. And so you know, that is that.
- [24:18]
Mark Zeller
Level of ownership of this brand asset is that if tomorrow Stany wants to do Avilabs.com and do his own front end, his own protocol, he should get 100% of the revenue on that. Sure. The issue is doing this kind of thing on aave.com because the DAO and the protocol and Stanley as well and labs, everyone worked very hard and spent hundreds of millions of dollars in incentive, in development, in research, in risk parameters, all this kind of stuff to build the muscle memory that if you want to do on chain lending, you type aave.com on your browser and then you end up on Aave. And that's what has value and what is important is to make sure that a more likely scenario, let's say have a labs raised from ekitwis and do IPO in five years, in 10 years and I wish them the best. I wish them for that to happen and to be a billion dollars company on itself. What happen if there's a administration council that decide that? Well, Stani, you are a great CEO. Thank you for your vision and thank you for being a founder. But now the big boys are in place. I'm blackrock and I will see. Tap your share, goodbye. Easy, your share, goodbye. And then decide to implement many things that are not so decentralized anymore or not so aligned with the token anymore.
- [25:43]
Kane
Are you aligned with DAO governance?
- [25:46]
Mark Zeller
Maybe not naturally or maybe they are. But the thing is that these kind of things happen in techs and in startup every single day for the past decades. And if we have no recourse and if we have no ownership of this kind of asset from the Dao, we cannot prevent that. And that's not serious for a billion dollar protocol.
- [26:08]
Taylor Monahan
Yeah, it's. Yeah, you have no recourse. And that drives the uncertainty. It also just drives. I think there's this thing where, you know, on the one hand the DAO governance can be very inefficient and drama filled, but it also just like naturally lends itself to everyone assuming that they're talking their bags and like assuming this malicious intent even when there is none. It's been really prevalent with this specific drama where everyone's like, you're just talking to your bags, blah, blah. And I'm like, these are like, I don't know, I find that super insulting because, you know, all of the players involved are actually looking out for aave. Like above all, it's just like in the details of what AAVE is. But you know, you can imagine that the conversation and the governance and everything would just be, it would be easier, there'd be more clarity and people could focus on building and delivering new value if they weren't, they weren't expending all this energy arguing about whose bags, like who's aligned where and who's trying to get the best for their bags and whatever, you know, like ultimately the goal is to build and to deliver value and to, to iterate and to do all of these things and, and these sorts of things just like, they just get in the way. Like we have to get past these barriers.
- [27:32]
Kane
So I have one, I have one question for Mark before we wrap up the AAVE conversation. So AAVE started as Eatland and it was okay, wasn't going amazingly well, right? And then Stani turned up and said, what if we change the name to aave, which is Finnish for Ghost so Stani, as I can only assume the president of Finland has some claim over the Finnish language, right. And, and he was like, hey, we'll change it to aave. And then from there it kind of went parabolic. Right. So you could pretty much point at the proximate cause of all of the success of AAVE as the rebrand to aave. What if you just pay Stanley some money like, like, you know, give him 5 million bucks for the name and maybe we can settle it all like that.
- [28:27]
Mark Zeller
I think there's zero opposition to that in the DAO side the issue and I think the situation escalated because labs didn't want to negotiate. Basically what they did is that they went to the forum and they flipped the negotiation table saying we own everything, we own the asset and fuck you. That was basically the first message. Then it was more constructive approach. That was very welcome. And if we are at the last update, like basically what happened like five days ago is that Stanley, we went back to the forum and said, okay guys, the communication was not so great. We're going to work with you guys to do the revenue and discuss the ip, this kind of stuff. So at the end of the day, I don't want to antagonize anybody and paint anybody in the situation as the villain. Like people love binary stuff. But I think it's clear from our conversation that everyone involved in this debate is looking for the best of the AAVE protocol itself. So we most likely going to end up with what we call a phase two. So the proposition was phase one, we should have a mandate as the DAO to seek ownership of this broad asset. And phase two was, okay, how do we do things? And the idea was like, phase one is short term, give a mandate, give a signal from the DAO to avalabs to say, okay, we want this to happen. And phase two is this is, oh, it's going to happen and how it's going to be implemented and we are working constructively to build phase two. And I think Availabs is now in a position to discuss these kind of things and I'm very optimistic for the future of that.
- [30:12]
Taylor Monahan
Yeah, yeah, I think you'll get there. And I think, you know, even two, three weeks ago when, when Kane and I were discussing this, we had faith that it would, yeah, everyone would get through, but we were going to enjoy.
- [30:24]
Multichain Advisors Announcer
The dumb.
- [30:27]
Mark Zeller
Is that we have the historical market data on that. So earlier this year in February, if I remember correctly, Stanin went to the forum and said, hey, we're going to do Horizon, it's going to be a real world asset and there's going to be a second token. And I was not very happy with that. And the token owner as well say, well, that's not going to be a second token and obviously you can have a revenue share. We love the idea of having real world assets and we think Horizon is a great idea. But the second token, it's not going to be an option and there's no second token on Apple. And I think everybody, at the end of the day, it's simple game theory. Every actor will look for their best personal interest. But what we need to do is to make sure the Nash equilibrium is somewhere that benefits everybody. So no single party, not the dao, not me, the aci, not bjd, the core developers, not labs, the maintainer of the front end and the brand have too much power and we end up in the situation that is more, less asymmetric and better for the protocol itself. And I think AAVE has an historical way as historical proof to say, okay, we find good solution. And that's for the best of aave.
- [31:45]
Taylor Monahan
Yeah, I have a question about. So in the ideal, I guess, ideal world, right, you have the protocol, you have the dao and then you have these other entities sort of around that are doing really good tangible work that is for the benefit of the protocol, not necessarily the benefit of the dao, but for the protocol. The dao is also sort of one of those, right? The dao is also supposed to be serving the protocol and the token holders in the future, right? The front end is, I think, more important than DEFI has ever really made it out to be. That is literally the thing that has the relationship with the users. Every time someone stands up and claims that a user can go interact with the contracts raw, like I just laugh. I'm sorry, that's not how the world works, guys. But I'm curious if you guys are thinking about like ideally there's, there's actually some sort of baked in incentives or rewards or something for the front ends, right? The people that have that relationship with the user so that they can build their thing, they can do so in a way that's like a sustainable business. They can serve the users and give them, say access to AAVE and let them unlock that value and doing that, they're incentivized to do that. Right? Again, they can have a really sustainable business doing that. I think that's sort of what I guess the crux of the issue is here though, right, Is like Sonia is Saying, like, we have the front end, like, we should get the rewards for that because we are the one that has the relationship with the user. And that's not wrong in my opinion. If you want to have great front ends and great experiences for users, you have to reward those things. Right. Because they need to be able to, to be aligned to serve the users and the protocol on the other end. And they need to have the resources.
- [33:51]
Kane
Right. Like it's, it's a hard thing to. Especially because the founder of the protocol is also the guy building the front end. Because it turns out that people don't just turn up and throw front ends for you like we thought they might. All right, Mark, I'll let you wrap up AAVE and then we'll, we'll move on to the next topic.
- [34:09]
Mark Zeller
Yeah, so to wrap up, there's two different things. So you have the front ends and you want to incentivize builders to build on top of it. And what we did in 2020 was a referral program, and I think we should bring that back. So we incentivize people building on top of AAVE and we redirect part of the protocol revenue to those builders. And I think now we are mature and especially after these events to bring back these sort of things to invite every builder to build on AAVE or front end, but also other kind of application because the protocol allow it. The second conversation, and that's the most important one, is the domain, because no matter where you are, the reason Stani had this reaction initially is that he knows that if he builds Avilabs.com, it's not going to have the same traffic. Like, everybody loves Stani and I'm part of the E SuperG, despite what people want to believe. But I don't think there will be as much traffic on avenatte.com compared to aave.com and what's a Lewis shopper? Oh, another random finishword.com. so that's the situation and I think the domain should remain to the DAO and operated by the dao. And if the DAO should build a domain itself, there's a large treasury on the DAO and there's a lot of competitive builders out there, but I think the best one out there to do that is Avelat. They just need to have a proper and clear relationship with the DAO on how to operate DA and where the revenue share is defined from a position of ownership of the DAO that will be on this topic.
- [35:51]
Multichain Advisors Announcer
Multichain Advisors is an emerging technology growth firm that has helped create over $50 billion in enterprise value for more than 80 clients. Like PIF, Moonpay Commerce and Wormhole, they've worked with some of the largest and most impactful companies in the space. They're the partner you want when you're navigating markets and trying to break out from the noise. They help navigate TGEs, go to market, BD and partnerships, capital markets, advisory, PR, media placements, KOL activations and more. Driving execution from launch to scale. Their results are measurable. To learn more and start building real traction today, visit multichainadv.com Mantle has entered a new phase as the distribution layer connecting tradfi and on chain liquidity. To accelerate this vision, the Mantle Global Hackathon 2025 is inviting developers to build scalable RWA and DeFi products. Why build on Mantle? It's an ecosystem built for builders. You get direct access to Bybit's 7 million plus users for potential listing exposure, exposure support from the $4 billion mantle treasury and mentorship from top VCs like Spartan and Animoca brands. With six tracks, prioritizing RWAs and RealFi and a $150,000 prize pool plus grants, this is your chance to deploy on a high performance modular L2 register. Now the link is in the show notes.
- [37:22]
Kane
So Infinx. Infinix. Oh my God. So t happened. So the other day you were, you were like, oh, you know, you kind of became the main character for like I don't even know what that, I've forgotten what that even was about, why people were, were losing it. I don't know what I did two weeks ago or three weeks ago when you said that, but someone pointed out on the timeline a couple days ago, they're like Infinix somehow has become the main character last like week. It's, it's quite, it's an interesting dynamic we can get into. Like why is everyone so obsessed with Infinix and the ico? But so I, you know, I've said this many times. I'm a lot, I'm, I'm a long standing fan of ICOs. I think ICOs are a much better way of raising capital. I think they're a much better way of distributing tokens. We stopped doing ICOs because of reasons. We stopped, stopped doing ICOs and started doing airdrops, which just created like the most perverse bad incentives. And so you know, when, when we launched Infinix, we're like, okay, let's do a token sale. This is in 2024. But it was still, you know, a little on the edge, right? And so we did this NFT sale and in fairness, at the time, it took about a month for us to kind of get everyone to understand what we're trying to do because many people were like, NFTs, like, what? Like, why are you doing this? Doesn't make sense. And eventually they got it. And so then, you know, we're about to do TG and we're about to release an actual token, an ERC20 token. And so I was like, okay, before we do that, there's a new sonar meta. You know, someone, Kobe has turned up and said, I'm going to like, help fix capital formation this cycle, right? Built echo, built sonar. And I'm like, this is good, we should use this, we should support it, we should go out and, and make it work. But the parameters we chose were frankly garbage from the perspective of, of everyone on the timeline. They hated the fact that it was locked up. They didn't like the, the ftv, even though the FTV was lower than what the FD was a year ago for, for the NFT sale. But, but yeah, everyone hated it. And then on top of that, we had a really low cap because we were like, let's make it as easy as possible for small participants to get in and not get blown out by whales. So it was like 200 to 2.5k. And everyone hated it. Everyone was unsatisfied by it. And so then we're like, okay, let's change the terms. Which everyone also hates when terms change because we're autistic and we don't like the rules changing on us. And so, yeah, we're now in this weird situation where like, I think we had raised like 500 grand, 600 grand in three days. We changed the terms. It's now 2 million. You know, the momentum is not amazing and I, I still think it will close. I think people are waiting till the last day. There's not a huge advantage to, to going early. But it's just my, my takeaway from all of this, right, is the timeline is like so cynical, so burnt out, so cooked. Like, they feel like so much money has been extracted from them that someone turning up being like, hey, I'm going to sell you tokens cheaply. Like, there's just no belief whatsoever that that's not max extraction. And it's really hard to overcome that sentiment right now. You know, the trenches are really cooked.
- [41:14]
Taylor Monahan
Yeah, no, the timeline is actually super bizarre on this one. They also love calling you names Narcissistic, disingenuous. Kane is the worst person on earth. And I'm like, wait, but are we upset at the terms or do we just not like Kane? I can't decide.
- [41:34]
Kane
I think, I think, you know, the funny thing is, right, that like this is not the first time that I've been the subject of like Max fud, right? Like there was a period of time you guys might remember when synthetics switched from chainlink to pith. Which by the way, I was the person holding back that for years, right? And all of the engineers were like, we need to use pith, chainlink doesn't work for us, et cetera. Um, and I, I resisted and resisted and finally capitulated. And as soon as I capitulated, the link marines came out and they were like, you're the worst founder ever. You're scammer. Like it was. And I was like, bro, I was the one defending you guys for, for a long time. So it's not the first time that people have, have decided they don't like me and look like a little bit in fairness to you, Mark, a little bit like you, I can be a bit of a dick on the timeline. You know, I can, I can be a bit aggressive.
- [42:32]
Mark Zeller
I think everyone in this room has definitely the same fruit.
- [42:41]
Kane
Yeah. So yeah, it's, it's interesting.
- [42:46]
Taylor Monahan
What, what, what do people want though? Because I thought that we were bringing out ICO for fairness and stuff and then that's it.
- [42:57]
Mark Zeller
If I may from an external perspective, I feel part of the reason and I think I would like to get your input and feedback on that based on experience is that I think linking the early days ofinfinix with k2 bring audience and that's good for this kind of protocol and especially application on this sense because that brings a polls and that brings attention and audience and you want audience when you are close to the users. But also I think most Kato audience is garbage. That's my personal opinion on it. And I think Kato did a lot of wrong in the ecosystem and in the discourse. I hate the fucking yappus and I hate the reply bots and all these kind of things that was bring within for five. And I think if you look at the real situation, there's no real big reason to complain. But I think part of the audience that is inside the infidex ecosystem that came from Kaito is not very value add and most likely part of the reason why there's so many vocal people, vocal minority that is so aggressive.
- [44:14]
Kane
Look, I think it's interesting. Yesterday I had a long thread where someone who works for synthetics, right? Like someone I respect works. Who works for synthetics. It was very easy to kind of be like, these are all, like, people value extracting. They're just mad because they didn't get your money for posting AI slop or whatever. And I think that there are some examples of that. But I woke up yesterday and Tom Mitchell Hill had written this thread where he's like, guys, this has gone like, too far now, right? Like, okay, there's some reasonable arguments for, like, why Infinix has done some not amazing things. But in the middle of that thread he said, I've got friends who participated in this and they got rugged. And I read that and I was like, huh? Because in my mind, I've been sort of, you know, I've. We said to people, like, look, you know, we got overrun by bots. We got overrun by like, bot farms, AI slop, you know, people trying to just max extract, right? And so we said, look, we're going to cut this off and there's going to be some people who miss out and they're going to feel sad about it. But the, the alternative is that all of the money gets extracted by like, these, you know, bot farms, right? If we, if we don't do anything, it's just, that's the terminal state. And if someone doesn't stop this, then it's going to be terrible, right? The flip side is that there were actual people who spent, you know, maybe weeks or months posting. And yeah, they might have used AI a little bit or whatever, but they were on the timeline posting about Infinix and they got rugged by this rich asshole plutocrat. And I can see why they'd be like, fuck that guy. Like, you know, like, give me my money. I did the thing. It doesn't feel fair. And so for those people, the ones. Because, like, it makes no sense to me if you're a bot farm like Eigen. There was a lot of FUD around Eigen, right? And a lot of it was manufactured because people were really upset. The ones who were max extracting the farmers, and so they created this, like, over. But there was also a cohort of real people who genuinely had put money in for a long time, didn't get the yield they expected, were really upset. And over time, those people stayed around and they were still mad and they were still upset about it because they didn't forget about it, right? And at some point after six months, you go, this is probably not a Bot farm that's still on the timeline fighting Infinix. Like these are probably real people who are still mad because they feel like they did the work and they didn't get paid. And you know, if you were a trencher grinding, expecting to make, you know, a couple grand for know, a few months work and you got nothing out of it. I can see that. Right. And so this, this post was a bit of a wake up call for me to be like, yeah, okay, we might not love infofi, it might not be amazing and. But someone set up a game. Kaito set up this game. People turned up and played the game and then they got rugged and they're reasonably mad about it. And I think that's actually a fair point, honestly.
- [47:22]
Taylor Monahan
Yeah, yeah. And it does. I don't know, it just sucks whenever like. And this is just so common in crypto. It's like the, the initial goals with these, right, was like, it was like founded and like goodness, right? It's like yo, like you don't have to have a bazillion dollars in order to get it on this project. Like if you are a supporter of the project, they're going to reward you. And the way that we are going to figure out what the reward is based on your support and the support is going to be measured in things like talking about it, supporting it, being part of the community, also contributions with all these different metrics. And then all of it just got freaking destroyed.
- [48:14]
Kane
Overrun.
- [48:14]
Taylor Monahan
It gets overrun, Completely overrun.
- [48:17]
Kane
But I think, you know, Mark, you, you have a strong view of this, right? Like crypto is adversarial. If the game theory is bad, the game will be lost. Right?
- [48:27]
Mark Zeller
Like that's why like I was blaming not the players, but I was blaming the game. I think the forfi is a net negative for the ecosystem and that's why I did not participate in this kind of thing. But I will be interested by your opinion. Like what do you think went wrong for, for you guys that went well for Mega Eats? Because if I remember Mega Eat, they also did the NFT sale with the fluffy stuff and they also did like some eco sell with a low cap. I think it was like $3,000 maximum per participant, this kind of stuff. And I have the feeling from an external perspective that things went pretty well for them. So what is your opinion that change?
- [49:10]
Kane
I think two things. They were the first ones to get a dashboard, we were the third ones and somewhere in that window it went from Kaito is this kind of curated group of people. And then it went Parabolic. Kaito opened it up to anyone. There was no filtering anymore. And that's when the bot farms and AI slop just went parabolic. And so Mega Eth was able to get in early enough and get out and kind of get out of the way of it. And me, you know, I see a fight and I run towards it, not away from it. And I was like, this info fight stuff, if we don't change it like from the inside, I was like, this is going to destroy the timeline. It's going to, you know, it's like absolutely net negative for everyone involved, even the people who are playing the game. We need to change this game. And so I kind of put my foot down and said, we're not going to play the game this way. We're going to stop it and we're going to do something else. But there were people who were already in the game and they're like, hang on a second. I've been playing the game for two months and now you're saying this is a bad game and I shouldn't play it. And they were angry about it and I was like, sorry bro, like, game theory. And they were like, fuck your game theory. Give me my money.
- [50:23]
Taylor Monahan
I don't care about fuck your game theory.
- [50:25]
Kane
Like, I'm like this. If we reward people, you know, you can imagine you've got this guy, right, who's like, you know, sitting, you know, in his mansion who's like, hey, sorry guys, like the game theory is bad. You can't get the thousand bucks that I promised you. Like that's how you get a revolution. They come and burn. Like seriously, like. And fair enough, right? Like I'm surprised that I don't have people outside my house picketing. I think if Australia was a little bit closer to the rest of the world, people probably would have went over here and been like holding up signs like this, this guy, right? So like, and I get it, right? I, I genuinely get it. But I'm also, and I felt self righteous and you know, this goes. Let go back to the AAVE conversation, right? There's two people on both sides. They both think that they're right. They both are trying to do what they think is the right thing. And it's easy to become entrenched and dig yourself in and go, no, no, I'm right. The, the way that Kaiko played this was wrong. And anyone who was harmed by me trying to fix it is just collateral damage, bro. Like, sorry, I don't know what to tell you, right? But that's not a very sympathetic view in hindsight, right? Like that's, that's not going to win you a lot of friends from, from the people who are playing the game. And so I was like, hey, okay, yesterday I was like, I'm sorry, like we, we mishandled this. And so to your question mark, like the, the best thing that I could have done for Infinix was just pay out the bots, let it happen, let someone else fight the battle and, and let someone else get wrecked by it. But I'm an idiot. So I decided to fight the battle and, and you know, we, we paid the consequences. So let's move on. We got a couple more topics and this kind of ties in. Interestingly, right, this, this I was about.
- [52:21]
Taylor Monahan
To say there's an amazing transition here if we have a brain.
- [52:27]
Kane
So prediction markets and insider trading. Now I am from the crypto anarchist wing of the prediction market community and you know, like, I'm not quite at assassination markets, although, you know, there were some OG people that, that believed that that was a good idea. But, but like my, my very strong view is that the goal of prediction markets, it's not, it was not supposed to be a fucking sports betting platform. Like we have sports betting. It exists. We've got that technology like we are supposed to be creating markets where anyone with any information, all of that information is channeled into a single venue. And we learn about the world, we learn about what we think the weather will be. And if someone has some amazing magical weather prediction system, they can express their belief in their accuracy of their weather prediction system and they can get us better information about whether weather will be. And that's useful to the world because knowing what the weather is is really helpful. And so prediction Mark.
- [53:39]
Taylor Monahan
And it offsets the fact that right now, which is the keto problem, right? Right now anyone can just go and say it's for free, for literally free, and if there's a financial reward for that, they will flood everything, right? And that actually degrades the conversation, degrades the value of the information, makes everything untrustworthy. And so by basically backing these statements with actual money, you can actually make the information more reliable. That's the, that's the whole entire point.
- [54:16]
Kane
But, but part of the, the tacit kind of rules of this, right, if we believe it, if we're, if we're prediction market purists, is that anyone with any information must be able, it must be hyper efficient, there must be no gates to it. Anyone with any information must be able to Predict, participate in these markets because otherwise the information is imperfect. And we're back to where we started that. Now there's a whole bunch of, you know, places where you could say, yeah, but like reputationally this is a bad idea. Right? So we tell our staff you're not allowed to trade on Polymarket.
- [54:52]
Taylor Monahan
Yeah. And by the way, we, we do, we have, we have very strict guidelines, policies, all sorts of things, right, that are, that are baked into employment contracts, but are also, you know, just like best practices, right? We have these for PR things, we have these for legal things. We have. All right, Insider trading is a really basic one at any company. Like, it is, it is what it is, right? Evolving those for to take into account prediction markets. Very easy. Very, very easy.
- [55:26]
Kane
Yeah. Now, but again, just to be clear, right, like my, my view is that someone participating in a prediction market, right, if, if you know at the end of the day, especially if it's an uncertain outcome, let's say that someone knew that how they were going to vote, right? Someone at Andreessen knows how Andreessen's going to vote on the AAVE proposal. Proposal. And I don't think they hold, Abe, right. This is a very hypothetical scenario, right? It is valuable for everyone to know that information as soon as possible. If Andreessen is sitting there waiting until the last minute and they're going to rug the vote, right? And someone from Andreessen knows how they're going to vote and they go and like, first of all, not securities. It's not even in my view, insider trading for them to do that. But it is net positive for everyone to have the information and someone should go and do that. They should express that, that view if they know what's going to happen. Because we will have more perfect information about the world and we can make better predictions and do better things. That is aggressive, like, I'm not going to lie. But reputationally, it is absolutely not a good idea for Andreessen to have their employees running around betting on prediction markets as to like, what is the next round that Andreessen's going to close, Even.
- [56:48]
Taylor Monahan
If that is because.
- [56:50]
Multichain Advisors Announcer
Because.
- [56:53]
Taylor Monahan
You'Re looking at it from two different perspectives, right? The first is that the more information and the faster that information gets to the prediction market, the better off, the more fair it gets. Because then everyone has the same information and they can assign a monetary value to it and therefore they can trust it more or less, et cetera. On the other hand, there's a bro sitting in an office somewhere who just made 50k. And you didn't, right? And so the, the, there is still a core unfairness to this and especially when it comes to things where there are already controls in place to disseminate the information at a very specific time to allow that fairness. Right? So like again, like, if we go back to the, the open sea situation, right, With Nate, like, yeah, he was sitting in this position where he was deciding what projects were going to go on the front page, right? And then he went and bought those things because he knows that he's going to put on the front page and then the price is going to go up.
- [57:59]
Kane
Okay, now, but, but, but, but if he had been. And again, this is like very on, on the edge here. But if instead of going and buying the thing right now, whether an NFT is a security or whatever, if instead of buying an nft he had gone onto a prediction market and there was a prediction market for like, what will the NFT thing be? And this is like not a contrived example. Like, I'll give you a very specific example. If let's say Nate knew next Wednesday he's going to put pudgy penguins on the front page of OpenSea and so he expresses that and votes on it. He could get hit by a bus, he could get fired. Things could happen. Like, he is not God. He doesn't know that that's going to happen, right? Expressing a view through a prediction market of, based on the information that I know about the world, my prediction is this. He has no control over whether that thing will actually happen in the sense that like all kinds of things, they could decide they're not going to do projects on the front page anymore. So there is still, there is still a measure of like imperfect information. And, and you know, there is, there is.
- [59:09]
Taylor Monahan
But I still think that he, him get, it feels unfair that he would get that money because he's in a position to make the decision. But then also there is now an incentive for someone else to put the bet and then pay Nate to put that on the front page or whatever, right? Like you can just keep going down the rabbit hole. And ultimately the goal needs to be more fairness, right? More people have more opportunities and there's lots of these privileged situations. And that's actually what prediction markets are attempting to solve, right? Is like get rid of the privileged.
- [59:46]
Kane
Situations by disseminating the information as quickly as possible. Don't remove information asymmetry as quickly as possible. At some point, if you wind it all the way back, there is some information asymmetry, some Point. But most of the time in these markets, especially now, right, like they're not that liquid. So you know, he would have made less money probably buying, buying, you know, share like shares in a polymarket market than he made from buying the NFTs, right? Because there has to be someone to counter trade him. And that is the other thing, right? Like by buying the nft, he's taking money away from someone else who was holding that nft. Right. And like I get that fairness, but.
- [60:28]
Mark Zeller
If you are playing insider trading is usually illegal.
- [60:31]
Kane
100% it, it is, right. And you know, he went to jail. But if you are playing on polymarket, and this is the thing that I think is really important, like if you don't understand this dynamic or you don't have a strong view of what a prediction market is for and you think that you're just doing like, you know, sports betting, then like I'm sorry, but you're a fucking idiot. Like I don't care what you say. Like if you're participating in a prediction market and you're like, no, no, no, like someone can't know information that I don't know. That is literally the entire point. That is literally the entire point. Right.
- [61:07]
Taylor Monahan
I think we need to, I think we do separate from, we need a new classification for what, like this is. Because the main issue that I have with the conversation is that everyone's just calling everything insider trading. No, no. Insider trading is when a person, a person in an actual privileged position actually acts on actually confidential information, like actual work product.
- [61:30]
Kane
But also, but also importantly, in the US the, the, the point of insider trading laws is not to stop the fairness in the market. It is to stop someone expropriating information that they got from a privileged position and making. You're stealing from the company that you got the information from. Not, it's not about the people that are trading against you on the nasdaq. Right, like.
- [62:00]
Taylor Monahan
The shareholders.
- [62:01]
Kane
Exactly right. You're taking money away from the entity itself. And so you know, like in this case it gets really interesting.
- [62:11]
Taylor Monahan
You're not.
- [62:12]
Kane
So, so you know, a few hours before the U.S. so like first of all U.S. governments, not even a company, right. But a few hours before the US announced the capture of Maduro, betting activity spiked, right. And a newly created account bet I think about 30 grand that Maduro would exit and made 400 grand and profit. So the timing was concerning, right, because of insider information. But this is not a secure. It's about the head of state of Venezuela being abducted. This is not Insider trading. Right?
- [62:53]
Taylor Monahan
It's not. And that's the thing, is that when people call the. The Maduro BET insider trading one. Show me any. Anything that shows that that information was insider. Right? There's a lot of threads on Twitter right now. And let me tell you, especially the like, look on Chain Dudes who are like, I'm a sleuth, look at me. They're wrong. Like, there are a lot of really bad traces out there, specifically around this one. Okay. Number two, we're not talking about a company. We're literally talking about like. Like the accusations are against the intelligence community of the United States government. That is a big accusation to make. You are saying that someone whose entire job and livelihood and career. Career. Right. It is like, really criminal if they disseminate information.
- [63:37]
Kane
They're saying it's barren. Right? Like everything.
- [63:40]
Taylor Monahan
I mean, they're. They said, yeah, and they said it was like a world financial guy. But like, I don't know. I looked on tame for two seconds and I was like, someone knows who it is, but it's not this bro that's tweeting about it right now. They're just. They're. They're just making stuff up. There was one where they were like, we correlated the Binance deposits and withdrawals, and I was like, do you guys have any idea how much volume is on Binance? You're telling me that these two $20 deposits are associated? That's your proof that it's the world financial guy? Like, I'm sorry. Shut up. Get off of my timeline. Yeah, it's a. It's a wild accusation. Okay. And I think that, like, in a lot of other situations with these insider trading things, it's a much more interesting conversation. I think that if we actually want to be productive and have a solid path forward, like the tweeters. Absolutely. Stop accusing people in the U.S. government of Insider trading a polling market. Like, it was absurd. This is.
- [64:41]
Kane
Even if. Even if they were, the market, the market where the money was made was not the nasdaq. It was polymarket. It is a prediction of market. If you are counter trading that and you have no information, you are a. I'm sorry, but, like, you shouldn't be trading that market. There are people who have information asymmetry. If you're like, I have some thoughts about Maduro and whether or not he is going to be in power next January, and you're just some like, pleb sitting in your basement. What are you doing? That is not like, you're like, at that point, you are just gambling and someone who has more information is going to take your money. And instead of crying about it on the timeline, you should really think about your life choices. You should not betray all the market that you have no information about. That's not.
- [65:30]
Mark Zeller
People are free to do whatever they want with their money. Of course. Don't cry about it.
- [65:40]
Kane
Right.
- [65:41]
Mark Zeller
I think there's three layers here. So I'm very aligned with you, Kane, on the fact that even in economic theory, like the faster information is delivered to the market, the better it is. And I think no one disagree with that. The second layer is the law itself. And insider trading is illegal. Most jurisdiction. I cannot name one jurisdiction where you can just do whatever you want. In this kind of probably, yes. And the intent of the law is to make sure the counterparty, there's fairness to the counterparty. So when you are doing insider trading, as you said, you are stealing your own company and you are also stealing from the counterparty of the market that don't have your information. That's something that is very clear about the loo and it's about securities and these kind of things. But I think the third layer is on the betting should market itself. And the do we consider like to me the parallel with Nate from OpenSea is very clear. Instead of trading the asset itself, if as you said, it traded on some prediction market, is Puget Penguin going to be listed before jre this kind of things? I think the damage is completely different because on one side you are an intender that buy and dump and retain on assets directly because you have information and that information lead to people buying that asset. And then you sell to other people on the market at a premium in order to generate a profit. On the second situation, you are bringing information to the market and people can trade accordingly. And if you see a position like that as a market participant, you take that information and you react. And EU can decide to buy the asset or not on the market and play the market rules as you want. And I think it's a fairly different situation. But the thing is that there's fairness, there's philosophy and there's the fucking law. And usually we have to follow the fucking law even if we don't agree with it. Even if the pure theoretical alignments will say otherwise. The law is the law. And if you are an employee and you are doing this kind of stuff and your company wants to fire you, they have the full right to do so. And they had the right to implement their own policy in the UN government.
- [68:03]
Kane
That they could Put you in jail. Yeah.
- [68:08]
Taylor Monahan
Guys. Disseminating like, military secrets before a major military operation is insanely criminal. And that's the funniest is like, oh, yeah. And someone is one of these bros is like, let me go, let me go. 8:30k on polymarket real quick. Sorry. Like, just stop.
- [68:28]
Kane
It's wild.
- [68:31]
Taylor Monahan
I do think I. Mark, I really appreciate your perspective that, like, and I just want to emphasize this, right? There is a relationship between employees and companies, and those are policies. Those are part of your employment contract. That does not necessarily mean that, like, every single person on earth needs to abide by that. Right? Like, everything is going to be different. Um, and I think that's an important thing to keep in mind, right?
- [68:54]
Mark Zeller
It.
- [68:54]
Taylor Monahan
It is what it is. And for some companies, depending on the situation, depending on the employees, depending on, you know, there's a lot of companies these days that don't even have employees. It's just a, you know, it's like a dao, right? If they don't want to enforce these strong policies because there's no risk to their business, there's no loss to the business, that's fine. That's on them. It'll be really interesting to see how the nation state laws that apply to all the citizens and all the companies within that jurisdiction, how those evolve. I don't think it's as simple as. And I think that we need to get away from this idea of insider.
- [69:33]
Kane
Trading because it's just cope. It's cope from people who are trading on polymarket who shouldn't be, and then they lose and they get sad, like, yeah, that, like, genuinely. That that's the thing, right?
- [69:47]
Mark Zeller
Like, but, you know, if all law comes from that usually. Yeah, yeah.
- [69:50]
Kane
I mean, there's, there's, there's a lot.
- [69:53]
Mark Zeller
Of people that are doing that are getting some wrong in the society and then they complain to the society itself and say, hey, that should not be allowed because I'm very sad. That's usually what a law comes from.
- [70:06]
Kane
It's where the law comes from.
- [70:07]
Mark Zeller
Yeah.
- [70:07]
Taylor Monahan
It literally is.
- [70:10]
Kane
You know, this to your point. There's a tension here between like financial theory and the law, right? Like, if we turn up and you know, someone did, right. Richie Torres said, all right, we're gonna, we're gonna introduce this, like, integrity in financial prediction markets act, right? And, you know, it's possible that you create laws that make prediction markets bad and less useful, right? Like, you can, that you can have the unintended consequences of, like, by creating this law where you can't trade if you have information we have actually defeated.
- [70:42]
Taylor Monahan
Ruined it.
- [70:43]
Mark Zeller
Yeah.
- [70:44]
Taylor Monahan
And made it more privileged almost. Right. Because now people are operating on assumptions that aren't necessarily true. It's. Yeah. That's a whole different world in my opinion. Polymarket needs to be deeply researching this and understanding this and understanding the user perspectives and eliminating the gap.
- [71:05]
Kane
They can't get a polygon. Come on. Like you want them to do deep philosophical research about like.
- [71:12]
Taylor Monahan
No, they need to close the gap of understanding that's on them in my opinion. Right. They have the relationship. When their users have misunderstandings and are sad, they should make them not sad.
- [71:26]
Kane
Yeah, fair.
- [71:28]
Taylor Monahan
And the way that you do that is mostly. Well, I mean you can bribe them after the fact and make them less hurt or whatever. But I think, you know, to your point, why are people under this assumption in the first place? And it's because so many people are on these platforms thinking that it's like sports betting.
- [71:46]
Kane
They think it's gambling site.
- [71:47]
Taylor Monahan
Right.
- [71:48]
Kane
They beat their buddy on like the Raiders to score 14 points.
- [71:51]
Taylor Monahan
Like and that's only going to get worse unless polymarket or Culture go and instead of doubling down on the sports betting comparisons, you know, actually sort of lay the stage and reposition this in people's minds as a fundamentally different venue because it is.
- [72:09]
Kane
The puzzle is though, that that's boring and sports betting makes a lot of money and so you're going to have this like, you know, really perverse incentive to blur the lines between go and bet on a baseball game and Maduro's capture.
- [72:25]
Taylor Monahan
Right.
- [72:26]
Mark Zeller
I don't see if any market makes most of their money on sport betting currently. I think the largest market ever was the Trump election.
- [72:34]
Taylor Monahan
Yeah, well, yeah, the election was big, but right now at least most of the volume is in, in these short term sports betting things. And you're also, you're seeing, it's just a huge conversation right now. But, but also in sports there are criminal, but there are also contractual agreements. There are very, very, very defined rules on how the players on the managers and what can be done with information who can do it. And every once in a while someone decides that they're going to sell out and it's going to make the game unfair. And that is one. I mean the leagues themselves, right. Are the problems primary enforcer of those laws.
- [73:18]
Kane
And it's the, it's the most detrimental to them. So they should be. Right. Like the incentives are there.
- [73:22]
Multichain Advisors Announcer
Right.
- [73:23]
Kane
If you have coaches and players that are rigging games, people will lose interest in your multi Billion dollar.
- [73:30]
Taylor Monahan
And so it's on them to correct those incentives. Right. And that's why the leagues correct those incentives. There are laws in, in most states that also play a role here. But it's because the fairness of the game is more important than the fairness of the gambling markets. Right. But the gamblers are gambling on the fact like they're all, they must operate under the assumption that the game is being fair. If the game is rigged, the gamblers get screwed. But also the players get screwed. Also the league gets screwed. Also the fans get screwed. The people that aren't gambling money that are there for the love of the game get screwed. And so that's why you have then the laws and the policies come to place to correct those perverse incentives to make sure that it's of sufficient fairness. Right. And then everyone's happy. And I think that a similar thing is going to have to happen here. Right. This isn't like as simple as insider trading. It's where are the incentives, what ultimately is fair for everyone, including the participants. Right. Not just like some stock over here that's completely separate from holymarket. We like, how do you, you know, what are the baseline rules and the assumptions? Let's define those, let's define what happens if someone breaks those rules. Right. Let's enforce them.
- [74:44]
Kane
Straight to jail.
- [74:47]
Taylor Monahan
Straight to polymarket jail.
- [74:49]
Mark Zeller
Yeah.
- [74:51]
Kane
Their own jail that they set up for flu. Manipulate. So we've got one final topic to cover before we wrap up. I know we're a little bit over, so let's, let's try and keep it quick. But I, I, we would be remiss without mentioning Kyle Samani. We missed out on, on Kyle Samani last week because we didn't have a show. We would have been talking about the fact that he tobuta cleaner with my 25k Ethereum.
- [75:16]
Taylor Monahan
Oh my God. Did you pay him?
- [75:18]
Kane
Yeah, I paid him. Yeah. Yeah.
- [75:20]
Taylor Monahan
Okay, nice. Kane lost a bet a year and a half ago to Kyle and he came to collect like two weeks ago.
- [75:27]
Kane
I want like, honestly it's the most classic Kyle thing like within. But before the bet was even over, it was like four hours before the end of the year. He's like, where's my money? I was like, have you been thinking about this every day?
- [75:41]
Taylor Monahan
Like it was, it was like 400 days later.
- [75:44]
Mark Zeller
Yeah, well I, I still find commendable that you, you honor your vote because reputation is always important. And you did the bet and it went wrong and you paid. And I feel that's completely combat able. That you followed through?
- [75:59]
Kane
Yeah, I wasn't larping like I thought eth was going to go to 25k. I was very sure of it and very optimistic. That's why I'm cursed when it comes to buying eth.
- [76:13]
Mark Zeller
So would you like me next time and bet on Polygon value? Because labor was much more profitable. And he actually backburn paid me, so I got the 50K.
- [76:25]
Kane
Oh, nice.
- [76:27]
Mark Zeller
So who was learning so much with the Polygon CEO? Mark Byron.
- [76:34]
Kane
Ah, yes. Yeah. And he paid you?
- [76:35]
Mark Zeller
And he paid me. And it's very commendable from him. And yeah, we decided to. Okay, let's. Let's move on from it and let's start working on the old stuff.
- [76:47]
Kane
Yeah, nice. So Vitalik posted this thing about zktls, right, Saying the blockchain trilemma is solved. We're going to be in this new era of abundance of block space. And first of all, it's like rorty in that era. Gwei is like 0.0001. We have enough block space. But sure. But I think he also came out and said, you know, what is the purpose of Ethereum? What is the purpose of. Of, you know, what. What he created and what we are building. And resilience was like this term that he used. Right. Like minimizing the risk of failure, not optimizing for, like, the average cases. I think it's a way of saying defi without saying defi is my assumption. And. And it's about, you know, users retaining control so that they can't be deplatformed, so that, you know, there's no platform risk, there's no government risk, there's no risk of capture. All of these things that, you know, seem quaint in 2026, but, you know, Vitalik's out there kind of reinforcing that. This is the entire point of the blockchain. And if you don't have these things, then you can't have things like aave. No one would build AAVE on top of a thing that they didn't trust. Was going to be. Be able to, you know, be resistant to capture and turn it look like.
- [78:15]
Mark Zeller
I'm one of the. That's actually what we did. I'm one of the reason there's no RV on Solana, because that's not the same philosophy. Yeah, not a. On some shitty blockchain that can turn the flip off anytime or just don't produce any block for any kind of reason or have like, the validator, like, decide to censor you overnight because they don't like you. All these kind of things are extremely important. And that's why some networks and some blockchain have it and some network don't have it. And I think myself, I've been very adamant on that. And my philosophy is very clear for the past decade of this ecosystem. And the Avenao is very aligned with this and the token holders follow too so far on this kind of stuff.
- [79:01]
Kane
And so Kyle came in over the top and was like, shut up, Vitalik. Like the what? Like, you know, basically it was. And, and you know, Kyle is, is, is very tactical, right? He knows how to just get in.
- [79:19]
Taylor Monahan
And like, oh, he got me.
- [79:21]
Kane
He got right in there, right?
- [79:23]
Taylor Monahan
Okay, so here was his tweet. He goes, so Vitala creates this whole big post, philosophical, it's about builders and users and resiliency and Kyle Ghost. So what Vitalik is explicitly telling us is the EF is not building for what users want, they're building what Vitalik wants. And now what the fuck is that?
- [79:48]
Mark Zeller
I think like Ben is the master of playing the idiot for his own motif and objectives.
- [79:56]
Kane
Like he is a genius.
- [79:57]
Mark Zeller
He's a genius at playing them to push his message and his doctor Ignotes. It's so good. You just have to call the bluff and say, oh come on Kai, nobody believes you.
- [80:08]
Taylor Monahan
No, it was a wild one.
- [80:12]
Kane
My hot take though is that there must be some forcing function, some people within the ecosystem must be a forcing function for these principles or the principles will die. Right? And so the fact that Vitalik, who made the thing, is still out there advocating for the core principles of why he made it is super bullish. He could be, you know, living on an island somewhere, right? Like, and you know, he's still, he's still, you know, out there advocating like, this is why we have founders and yes, it's a blockchain and it's not a company, right? But this is why we have founder led entities in the world. Because the founder is the one who understands deeply why they did the thing and they don't want it to be co opted and you know, turn into something that it wasn't supposed to be. So like I, I saw that and I kind of laughed. I was like, all right, well played Kyle. But also like in this case, and you know, it's funny, right, because I've been very critical of the EF for, for C, you know, certain things, right, like not supporting certain things, you know, and there's this argument of credible neutrality and you know, at the end of the day. This is why you shouldn't let me run the ef because I'm going to pick the things that I like and not pick the things that I don't like. Right. And like, you know, the ef, you can sit there and criticize them, but by maintaining that kind of credible neutrality, they make it accessible for everyone.
- [81:53]
Mark Zeller
And that's the EF before. I think the issue of the EF before was they went too far in crazy bognutc. And I think a lot of people say, come on guys, you have application that works, you have actual users and you don't fucking talk about it. You keep like saying, hey, let's run some nodes in Nairobi, which is a great thing, why not? But maybe you should talk about the application that actually do a great job at promoting your technology and the user that are using your technology every day. And I think WF now is in a more consensus and better position where they actually talk about the blue grace talking about it. But they are not going as far as other ecosystem to basically what Berizen will do all this kind of stuff to say, okay, we are code based, this is the base network, we are code based venture and if you are a code based venture funded business, we are going to talk more about you and put you in the front row position, which is to me a bit of the extreme. And that should not happen in the creative or natural network because infrastructure should be neutral. So there's a spectrum here between we don't support anyone and we pick the winners and the other builders can go, there's a middle ground and I think Ethereum is in a good situation right now.
- [83:15]
Kane
Yeah, agree.
- [83:16]
Mark Zeller
Yeah.
- [83:17]
Taylor Monahan
And I think that I've been critical of the ETF for some of the things that they've done, but I've never disagreed with the core philosophy that the foundation, this idea that the foundation should be smaller over time and that they should basically make room and empower people to build. Right. And in order to do that like part fundamentally how do you create like an optimal environment for people to build applications? Right. Part of it is not picking and choosing. And we've seen this really a lot on base, but we've also seen it on Solana. Right. There's a reason that all of the Solana apps are basically the same. It's like that's what people feel like empowered to build there. Ethereum is different and I think that it's some. There's something to be said about the fact that like you Kane right. Ave too like everyone built On Ethereum, even though Vitalik didn't like defi.
- [84:13]
Mark Zeller
He like doing it.
- [84:15]
Kane
And I was like, shut up. I'm going to do it. I don't care. Right? Like, right.
- [84:19]
Taylor Monahan
That would have never happened on Solana or Base. Right? If Jesse does not. If Jesse does not personally frickin tweet you, you're not going to make it. Meanwhile, on Ethereum, a lot of things that Vitalik actively was like, this doesn't exist in my worldview. Made it. That's a good. That is a good. That is a good, solid platform, in my opinion.
- [84:40]
Kane
And I think the reason is because that core ethos was credible neutrality. Right. And so there's a tension there of like, don't go out and start king making, which Vitalik never did. Right. And, and you know, even why Vitalik stopped investing in things, he's like, people, every time I invest in something, people use it to be like, Vitalik said, I'm the best. Look at me.
- [85:03]
Mark Zeller
You know? Yes.
- [85:04]
Taylor Monahan
This very hard. Like, it's why privacy is why Tornado cash exists. Right? Literally in day one was because Vitalik wanted to be able to spend his money without people, like, creating an entire billion dollar industry around it. There's like one bet that he made.
- [85:21]
Kane
All right, guys, this has been amazing. Thank you so much for joining us. Mark, that was, that was really helpful and appreciate your insights into the AAVE ecosystem and everything else. So, yeah, we'll have to have you on again some other time. So that's it for our first episode of uneasy money from 2026. Thank you for tuning in. If you like the episode, follow us on the Unchained feed on X YouTube or wherever you get your podcasts. We'll see you next week.