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- [00:00]
Tarun
You gotta admit, the vibe shift in one week from like everyone pointing their lawyers at each other to this is like, that's pretty incredible.
- [00:08]
Tom
Not a dividend.
- [00:09]
Tarun
It's a tale of two Kwan.
- [00:10]
Haseeb
Now your losses are on someone else's balance sheet.
- [00:13]
Tom
Generally speaking, airdrops are kind of pointless anyways.
- [00:15]
Haseeb
Unnamed trading firms who are very involved.
- [00:18]
Tarun
Alec Eth is the ultimate on this.
- [00:20]
Haseeb
Defi protocols are the antidote to this problem. Hello everybody. Welcome to the chopping block. Every couple weeks, four of us get together and give the industry insider's perspective on the crypto topics of the day. So quick intro is first. You got Tom the Defi maven and master of memes.
- [00:34]
Tom
Hello everyone.
- [00:36]
Haseeb
Next we've got Sharun the Geo brain and Grand Poobah at Gauntlet.
- [00:40]
Tarun
Yo.
- [00:41]
Haseeb
Joining us today we have Brother Bing, heiress of Hotpot Dao. Welcome.
- [00:46]
Sharun
Nice intro. Mega gm guys.
- [00:49]
Tom
Like matriarch of Mega or something, you know?
- [00:52]
Haseeb
Yeah, well, no, no, it's a no. We had her on the show previously and it was Brother Bang. So we're keeping. We're keeping Brother Bing. And I am Haseeb, the head hype man at Dragonfly. We're early stage investors in crypto and onto kavet that nothing we say here is investment advice, legal advice, or even life advice. Please see shopping blocks at XYZ for more disclosures. So, Brother Bing, before we get into what's happening in mega eth land, we've got a story about common prosperity in Defi land. Okay, so there's a new initiative, new initiative called Defi United. So we were talking last time about the massive hack that took place in crypto, particularly on this protocol called KelpDao, which led to bad debt being created on AAVE as well as other lending protocols on chain. So there was a lot of question about how is this going to be remediated? Who's going to put up the money to potentially create this bailout? Apparently everybody was lawyering up and there wasn't a lot of clarity about how depositors were going to get unfrozen. Well, we now have part of the answer this initiative called Defi United. Now, Defi United is apparently entirely a charitable effort where many of the parties in Defi have pledged their eth essentially as a donation to make depositors whole and unfreeze all of the activity happening in Defi. So there was over 100k eth total that's been pledged right now. According to the Defi United homepage, about 300 million total dollars worth of ETH has been pledged. Now the biggest pledges have come from consensus. Joe Lubin and consensus have just pledged 30k eth of course AAVE has pledged 25k mantle has 30k that they've structured as a loan not as a donation. Stani from AAVE has personally pledged 5k ether 5 5k lido 21 a half k. KelpDao has done 5k. Golem foundation which I don't know how they're affected by this.
- [02:40]
Tom
They have a huge treasury they have
- [02:42]
Tarun
one of the largest Treasuries by just never selling since why they're on the
- [02:47]
Haseeb
hook like why they felt compelled to donate here but they were very early. They donated a thousand eth to a bunch of other people Apparent Circle Ventures is also in in that they're buying aave. So Circle's buying AAVE Layer zero Athena Inc. Frax they've all committed unclear amounts. So basically and they're now just taking donations from the public and so just people in Defi have been sending there's now I believe over 100,000 wallets have now contributed to Defi United. So absolutely crazy outcome. I think people were expecting that some company or some set of companies are going to be contributing but instead it looks like it's mostly been this kind of community crowdsourced effort to unfreeze Defi. And the total amount here, the dollar amount is greater than the hack. So now Arbitrum is also being counted in here. The Arbitrum dao was about 30,000 eth that was frozen. This was not a contribution but rather a you know, sort of hack back that that Arbitrum Dao did. Now one thing to be clear is that not all of these have passed governance. So these are proposals being made by these groups to contribute to Defi United. They need to be ratified by the token holders for many these cases but some of them already have been finalized as contributions. Now there's been a lot of discussion about this so nothing is done yet but maybe in part as a result of this you've now seen the A market unfrozen. So unfrozen meaning that previously the rates were not allowed to float above I think it was capped at 14% and at 14% the markets were not clearing. So there are people not depositing enough capital to allow people to start withdrawing. That is now over. Rates are now at around 7 to 8% the utilization of the pools around 92% meaning that there's enough, there's enough liquidity that you can actually pull your money out if you want to. So things are looking like they're okay in Defi, at least for mainnet. I believe on some of the layer twos the liquidity isn't fully there yet. But at least on Mainnet things are clearing now. So there's been a lot of discussion about this. Some people saying this is amazing. You know, isn't it great that everybody came together and defi came to save their own? No bailouts needed. Other people criticizing this and saying, hey, isn't this moral hazard? Isn't this just a bailout in another name? People maybe got pressured into contributing to this thing. And so now we have exactly what you don't want to have, which is people who lent against bad collateral or took risks that they shouldn't have been taking are not bearing the cost of those risks. So let's go around and say good thing, bad thing. Thoughts on the common prosperity moment? I'll start with you, Xiao. What do you think about Defi United?
- [05:17]
Sharun
I can't imagine anyone who does not like it. To be very honest. I think people who criticize it or point out the ambiguity is a good intellectual exercise. But I can't imagine the debacle end any other way other than people pulling money in. In fact, I think the Ethereum foundation should have chimed in. I'm very surprised that they did not. I even asked folks in the EF and you know, I was told the budget is not allowed. And part of me just thinking you this is like the best marketing expense you can ever get. So yeah, I think this is great. Reminds me a bit of the DAO hack. I don't know if you guys would agree, it's like very ambiguous. But you know what, it's gonna happen. Like there's a bit of a social consensus being played. So I'm really happy. I feel warm. I think Stanie absolutely had a giga ch. I think he's a founder that I look up to. To be very honest, I think people like guy who had very intelligent take on the whole situation was very inspiring. I saw this morning that consensus my former boss Joe put in 30K. I thought okay, you know, this is what the OG founder should behave. So in general feel very good about it. Thought that was inevitable. Now how do we deal with the consequence afterwards or whether there's legal action? I'm not certain. I think this thing is actually going to drag longer. But I do hope that the next time I go on chopping blog we don't have to talk about it.
- [06:48]
Haseeb
All right, Tom, do you have any criticism you want to give to Defi United.
- [06:52]
Tom
I'm trying to think of a phrase. I guess I'm trying to think how I would think about it. I think the moral hazard argument I get, I understand why people, maybe that's their gut intuition, is like, hey, didn't you just privatize, you know, all the profits? And now you want to socialize the losses. But in this case, like, they're not really being socialized. I mean, it's independent people and organizations choosing to donate their own capital. It's like one bank donating to save a small community bank. It's like, yeah, they can do that. It's not the taxpayer really bearing the brunt of that or something like that, which I don't know what the equivalent would be here.
- [07:25]
Tarun
I'm surprised by seeing rewards staking, rewards being diverted to cover.
- [07:30]
Tom
Yes, I guess that would be the equivalent. And so we're like very far away from that. I think some of these people, clearly some of these entities have a very strong vested interest, almost existential interest in seeing AAVE and Defi continue to work. Some of them a little bit more kind of surprised by. Because I was also imagining these being structured as a credit facility, which is kind of like what the Mantle proposal is, versus just a straight up donation. Again, kind of like a tarp rabbit hole before this episode, because I was like, it's been so long. And I was like, oh yeah, how did that program work? And I was like, this is kind of like the TARP for Defi, but not really, because this is just free money. It's not actually a loan necessarily. So look, the two universes, one in which people out of the goodness of their heart choose to donate and sort of make the system whole and one where they don't. I'm glad to be living in this one. But it is maybe just a bit perplexing to me. Maybe the answer is you just need to show that you have a bazooka and you're not afraid to use it. I forget who the Fed chair was, but is that Greenspan? I don't know.
- [08:33]
Tarun
Obviously in the world this didn't get covered and you had this. PvP vs Kelp vs Layer 0 vs Aave and their legal lawyers fighting was probably the worst outcome because Defi would be dead and would be in the court system for 20 years. Because by the time you explain this to a jury, it's already 2030. I just feel like it's a complicated thing to. To kind of explain. And so obviously this is like the Best outcome. Clearly I do agree with. There's something idiosyncratic about it in that. Suppose it was North Korea and North Korea is like, haha, great. This is a great attack place to attack. Every time I attack, they just keep refilling. And so like having a little bit more. Yeah, like the credits facility thing is like repeatable. The like, okay, we're going to donate thing is like a little less repeatable. So. So you know, Kim Jong Un, if you're listening, you should. Should try to be a little benevolent. I know you're a girl dad, so you can like bring that energy to the. The like the vibe energy of that to the. I don't know. Have you seen all the memes of Kim Jong Un's girl dad stuff?
- [09:39]
Sharun
I think she's as useless as him though.
- [09:42]
Tarun
It's like he's like, he's like. He becomes a little teddy bear and like that's like kind of what the memes are. Right. He becomes like a nice guy and I'm like, all right, have that. Hopefully he views this in that vibe versus like the like, oh great, they're refilling. Let me attack again. You know, like there is a little bit of that part I don't like about the crypto version of this versus the tradfi version is that it's like a repeated game and you keep refilling. It's like you're kind of recreating the attack vector, the honeypot in some ways because you're like, you're kind of implicitly guaranteeing something. So I'm not saying look, again, it's the best outcome, but it's all.
- [10:17]
Haseeb
But recapitalizing through selling tokens or a loan is no different in terms of refilling. Right?
- [10:23]
Tarun
Yeah, but I think the idea that an attacker sees that and is like, I attacked, I took the money out, new money came in, I attack again. The credit facility thing at least encourages the flow of the new capital in to not be immediate. And so it's like I attack again, I don't get back the same amount. Right. Presumably it takes longer. And that part is the part I think just from again, it's like to sh. Point, it's like mainly hypothetical. Right. Like it was existential if this didn't happen in some way, whether it's the company is doing it or you know, how it was structured. But there is. Yeah. I just, I think about this from North Korea's perspective and I'm like, I have that, you know, the meme of the guy behind the tree. Like, that's like, kind. That's kind of. It is kind of saying that that's like. So that. That. All I'm saying is I hope everyone's security is ready for that.
- [11:17]
Haseeb
Okay, Interesting. I try not to think about things from North Korea's perspective, but I guess that also works.
- [11:21]
Tarun
You kind of have to, right? In this case.
- [11:26]
Haseeb
Look, I don't think North Korea is paying that close attention to how AAVE is recapitalizing.
- [11:32]
Tarun
That I disagree with. They're 100% paying attention to this.
- [11:36]
Haseeb
No, no, no, no, no. I'm saying the way in which they recapitalize. I don't think they care if it was donations or a loan or them going and selling tokens. Right. So I tweeted when this happened. I've spent a lot of the last year criticizing the rainbows and unicorns in Ethereum, and this kind of feels like a rainbow and unicorn vindication for Ethereum is like, okay, in 2026, I was not expecting voluntary donations to be the way that we get out of a kind of GFC for Ethereum, but that seems to be what happened. Now, that said, I am naturally skeptical, and maybe this is like me being the asshole who doesn't believe, but I'm like, we know that AAVE was trying to raise money. They were going around talking to people about lending facilities, and then this Defi United thing emerged. And it does strike me that probably I'd love to know the history. Hopefully Laura can write a book someday about how this happened. Because I do think that probably there's a sharper story there of why this ended up being the outcome, as opposed to the obvious answer, which is you sell tokens or you take loans. Right. Like, taking donations is the weirdest way to unwind a financial shortfall. Right. That's usually not how businesses or protocols that are worth billions of dollars would make up a whole. Right. It's not what Maker did. It's not what's happened in previous cases. Not what happened with Drift. They didn't take donations. There was a financial transaction that basically executed the recovery. So the question is, why did it happen this way? And I suspect there's something about lawyers. There's probably something about liability. There's some deeper story here of why we ended up in a donation that is sized proportionally to how much each person was roughly liable. So aave gave more layer. 0 gave this much. Kelp gave this much. How did they decide these numbers? I want to know what was the conversation between Stani and you know, Brian at LayerZero and whoever's at KelpDAO, about how much are each of us doing? Why are we doing this as opposed to some kind of round? Was it that it would take too long? Was it that there was too much legal liability? What was the reason for this? Because this is weird. I don't feel like this is precedent setting. I know I said last time on the show, whatever we do here, whatever the outcome is, is precedent setting. I don't think this is precedent setting. I don't think people will do this again next time. I think this is so weird. And it's unclear what the rules were and why did these people give this much. And usually there's a negotiation and there's some kind of quid pro quo and there's some understanding of liability where something. But in this case, how did we arrive at this? What's the formula we use next time about how you do the next one? You know what I mean?
- [14:20]
Sharun
Yeah. I'm curious, Haseeb and you guys, what do you think about Solana and Avalanche? And almost everyone and their mother want to chime in. I assume that's now some sort of last bit performative, right?
- [14:32]
Haseeb
That happened today is that Solana foundation announced that they were also, I think, extending a loan, I believe. And then Avalanche announced they were also part of Defi United. No numbers given, no specificity. Right. So, like, the numbers I read to you are numbers that were confirmed. Layer 0 does not have a confirmed number. Athena, not confirmed. Frac's not confirmed. So there's a bunch of people just, like, saying I'm a part of this, but not saying how much or what amount or whether it's a loan or whether it's a donation. So there's a lot of opacity in this. And this $300 million number is combining all of these things in some way that's also not clear in how it's adding up all these numbers. So technically, even the largest contributor is Arbitrum. For Arbitrum, it's not a donation or a loan or anything. It's literally a hackback that also still needs to pass governance. So, anyway, all this is weird. And not to say it's bad. I'm not saying that this is not the right answer. I think probably if I was in that room, I would have been like,
- [15:25]
Tarun
wow, look, look, look, look.
- [15:27]
Haseeb
A great idea and an excellent way to solve all these problems at once.
- [15:30]
Tarun
You got to admit, the vibe shift in one week from, like, everyone pointing their lawyers at Each other to. This is like, that's pretty incredible. Clearly time wise. Time wise, timeline, even. Even. Even then, timeline wise. It's kind of crazy, right? Because, like, there definitely was like a lot of. I mean, the first few days, Fog of War was like everyone writing stuff that was just like, this guy fucking did it. They're fully alive. Right. Our last episode was basically the Spider man meme, except we didn't know who was which Spider Man. And you know, somehow now it's like Kumbaya. That like, that is a crazy. There's no. I don't think. I don't think anyone's ever gone like a week and that's happened, I think about the history of lending. The first loans in known human history were in Mesopotamia and those loans were these cuneiform tablets. And there's this urban myth. I'm not sure if it's true, but the phrase cleaning the slate, if I remove your liabilities, your debt comes from literally breaking the tablet and being like, loan's gone. Because they had the clay tablet that had the loan written on it. And there's sort of a sense in which this feels like Hammurabism. This is like the code of conduct of like break the line. And that's sort. To me, the precedent's actually ironically like this historical one more than the modern day one.
- [16:51]
Tom
Right.
- [16:51]
Tarun
Modern day one's like, okay, we'll do some payment and kind shit and pretend that we didn't mark it down.
- [16:57]
Haseeb
Right.
- [16:58]
Tom
Just like a dead jubilee. But the debtors aren't the one wiping it. It's like random people coming in and being wiped.
- [17:05]
Tarun
Yes, I agree. I agree that part is weird. But I just like, in my head, I feel a little bit of the, like thinking back to the. The original kind of like how people got rid of loans was like this kind of. And it would be a ceremony where like the town's Pete, like whatever the city would like, they would collectively break it.
- [17:23]
Haseeb
Wow.
- [17:24]
Tarun
I don't know, maybe they. Maybe they can have a party for apology.
- [17:27]
Haseeb
Tarun. I didn't know. I didn't know you had this in you.
- [17:30]
Tarun
I have a lot of things. I have a lot of things when I'm. I'm slightly more awake and not okay.
- [17:36]
Sharun
I think Tarun going back beyond Roman Empire is very bullish for crypto in general.
- [17:41]
Tarun
No, no, I think it's actually the history of lending is worth reading about. The history of debt. Very amazing thing to learn about.
- [17:48]
Haseeb
Okay.
- [17:48]
Tarun
Yeah.
- [17:49]
Haseeb
Okay, Beautiful. Well, I mean, the other thing I'll say is that the precedent setting thing, right? Like, I think if this happens again, there will be no willing. Like, there's no DeFi United 2.0. Like, if this happens again, people are like, fuck you. What did you do with the last 300 million I gave you? Like, you can only do this once. You know, I don't think if there's a, even six months from now, a year from now, if there's another blow up like this, nobody's being like, oh, great.
- [18:17]
Tarun
I do have a weird question for you though. Suppose eth was 6,000 and this happened again. I don't know, people might do it. People might do it if they feel rich. Like, I don't say never. Don't say never. Don't say never.
- [18:30]
Haseeb
You've got the money. Yeah. No, like, you do it because eth has 6,000. Why do you need our money to bail out your shooting protocols?
- [18:37]
Tarun
Maybe, maybe, maybe, maybe. I'm just, you know, I'm just trying to give some hypothetical. Like in a bull market, if something like this happened, I feel like you have the wormhole.
- [18:47]
Haseeb
Yeah, maybe so. Maybe so. I think it's more just the, like the Kumbaya. I agree with. The Kumbaya is real. A lot of people talking about, like, wow, I haven't felt these vibes in so many years on Ethereum, you know, like, really this feeling, like, wow, this is all this crazy experiment we're doing together. This is this little candle that we're protecting the flame and it's on us to do it. This, like, that feeling. A lot of people are like, wow, I, it feels really special, like the OGs are back, you know, Like, Shreya, you were saying with, with Uncle Lubin stepping up to the plate, like, wow, it's just like 2000. It's like, it's like, you know, 2017 again, but you only get, you only get to do that once, you know, like, this is not a solution generally for how you deal with these big complex chains of, of protocols that get snarled up together. Like, I, I, I don't know, I kind of feel like, okay, well, next time is it just going to be lawyers pointing guns at each other again? Because this won't be the last time this happens. Almost certainly because Defi is just too complex now. So, I don't know, I mean, maybe that. Okay, that's our dose of cynicism. Let's move on from there.
- [19:46]
Tom
Okay.
- [19:46]
Tarun
Okay. The other thing I will say is the public donations. The number of airdrop farmers depositing is pretty funny, you gotta admit.
- [19:54]
Tom
Totally
- [19:56]
Tarun
the airdrop farming is kind of funny.
- [19:59]
Haseeb
Yes. That is actually the most crypto thing ever. So if you go look at the feed of transactions going into the default United address, I told you, there's 100,000 addresses. There's not 100,000 people sending meaningful amounts of money. There's a lot of people sending dust to this address because they think maybe there'll be an airdrop, maybe this will be a registry, somebody's going to do an airdrop. So thank God, crypto, please never change. Okay, so a second extension of this conversation. Our good friend Tom Dunleavy, who is, I think we just talked about him recently when I'm talking about how crypto VC is dead. He wrote a thread that went viral over the weekend about how what this proves is that defi rates are too low. So, you know, before this time, you know, rates on lending protocols were like you know, 4 to 6%. And even now they're clearing at like 8%, 7, 8%. If you look at what's happening on mainnet now, even though you can, you know, markets are clearing, but they're still not at, you know, absurdly high rates. And he kind of does some bond math and basically shows like, look, these are kind of behaving like triple C basically. These are junk bonds. Right. And if these are junk bonds, you're not getting paid. Junk bond type risk or rates for this kind of risk. Right. If you just add together the risk free rate plus the risk of contagion, plus the risk of oracles and composability cascades and smart contract exploits, really you should be paying closer to something like 12, 13% instead of the 4 to 6% that you've been being paid historically. So his argument is that defi is just structurally overpaying or sorry, under whatever the term is, claiming it way too low of a price and the yield needs to be higher in order to be able to attract any kind of meaningful capital at this point. Got a lot of reactions, both agreeing and disagreeing. Just want to quickly go around the horn and get reactions here. Does that sound right to you? Is defi structurally paying too little yield? Tom, why don't we start with you?
- [21:55]
Tom
I think he makes a good argument that yes, the risk adjusted return of lending in something, maybe even ame a kind of lesser, smaller money market probably doesn't make sense. You're probably not getting appropriately compensated. But again, I do kind of take an empiricist view, which is like, well, people are willing to do it and you can make these same Arguments around savings accounts in the US Why doesn't everyone just sweep that into a money market fund and get paid short term risk free rate and it's stored in a custodian. But people don't do that. People are lazy. Maybe people don't know and I think maybe capital is stuck. And I think you could apply all the same arguments to defi right? Like okay, people forget that about old wallets or they want to constantly rotate to new assets or maybe they don't want to off ramp or they can't off ramp. There's many things that kind of explain this way. And so I think for his purposes maybe he's correct that for him it's not really worth it. But clearly you look at what people are saying, what people are doing and that's kind of like the revealed preference here.
- [23:00]
Haseeb
Tarun, what's your take?
- [23:02]
Tarun
I think that turning everything into zero coupon bond is a little simplified for defi. Why are rates lower? It's because people are looping and have always effectively been. The form of looping has changed over time. In 2017, December 2017 it was just like I have a bunch of eth. I want to get some tiny amount of leverage on chain because I don't want to go to an exchange and I'll do 2x in MakerDAO, right? And whatever. There's kind of always been that hidden thing where composability does allow you to not even allow you sort of forces you to model in pricing with leverage almost immediately versus pricing as a bond that there might be leverage like I borrowed from a bank to then go buy this bond. But it's so kind of disconnected in a different way that it's not an immediate thing that hits the pricing. So there's sort of a structural bias downwards to rates from just the looping effect. The composability effect of looping is now easy to do. So I think it's probably upper bound, upper estimate. That being said, I think directionally is probably correct in some ways of you know, the default risk like jump to zero risk is like never priced in correctly in crypto it's like basically impossible because you're kind of. It's like Cyber Insurance in 2010, 2011 like when the cloud era started and like started really growing. There was this like two to three year period where like cyber insurers were just like going bankrupt left and right because there were a ton of hacks when people moved from on prem to cloud and then. Or like people not even hacks in Some cases just like I left my database open because I didn't know that I needed to sandbox it or restrict it or whatever. Right. Because they wrote the code initially internally and they, and there was all this stuff in the cloud transition that happened, except you had like this five year period where like cyber insurance. I think cyber insurers are probably the correct analogy to look at where like they all blew up for many years until people figured out a sandbox, figured out how to correctly containerize things, figured out how to think about supply chain attacks, et cetera.
- [25:13]
Haseeb
So defi depositors are the new cyber insurers.
- [25:16]
Tarun
Yeah, kind of. They're kind of pricing this default risk implicitly. Right. And they are probably underpricing it, just like cyber insurers who blew up 2010 to 2015 were underpricing it and then eventually the market corrected. And so I view it more like that in that it probably is directionally correct. But will the market adjust to it?
- [25:37]
Haseeb
Well, so, okay, obviously my, my counterpoint, my counterpoint is is I tweeted a response to this over the weekend which is that if you look, I mean these, these lending markets have been operating now for about 10 years and in that 10 years there's been maybe like five days total that you couldn't withdraw. And none of them have ever taken haircuts. Right. So like compound aave maker, never a haircut in 10 years despite insane volatility hacks galore, fucking collateral going up and down like crazy and still zero haircuts. So that does speak to clearly. These things are pretty credit worthy and very, very liquid.
- [26:14]
Tarun
No haircut, but my yield reset to zero are two different things. Right.
- [26:19]
Haseeb
But you can always withdraw, Right. It's like floating.
- [26:22]
Tarun
Yeah. The kind of Faustian bargain of defi is that everything is demand, deposit, everything is about liquidity profile. Can I withdraw at any time? Is there sufficient liquidity? And most products outside of crypto don't offer you instant demand withdrawals. Right. They always have some edge case where they're like, no, no, no, we're going to like freeze you for some reason. And that obviously is the thing everyone in crypto wants. But that structurally is a different rates market. Right. It's like you look at this private credit thing right now, right, where they're like gating people Even though like 80% of the fund wants to leave. Yes. By doing that they probably are preserving the yield long term for the people who stay in. But at this cost of liquidity. Right. So that's another reason for having kind of Rates be biased downwards. But do I think directionally you're not pricing in the cyber edge risk, this AI risk and especially all the stuff we've talked about the last few weeks, it's hard to disagree with that, that the implied premium from that is not priced in correctly.
- [27:31]
Haseeb
Specifically for cyber risk. What do you think the rate ought to be?
- [27:35]
Tarun
I don't know. I want to give you an answer but I spend all the. All this. It's ironic, I probably spend the most time analyzing this, but no answer.
- [27:45]
Haseeb
Okay.
- [27:46]
Tarun
The last six weeks is like every. No, no, no. And last six weeks has been like everything. You have to remodel a lot of stuff. Like, and I think I would say like his 12% is probably a little high. But like if you're telling me seven or eight, I'm much more amenable to that being closer to the.
- [28:08]
Haseeb
Oh, it is seven or eight right now.
- [28:11]
Tarun
Yes, but it's seven or eight with like duress and like lots of liquidity leaving at the like, like, I mean when it equilibrates a bit, a couple weeks, hopefully like that then you can kind of get the really equilibrium rate. Whereas right now there's still a bit of capital flight. Right.
- [28:26]
Tom
Yeah, I was going to say there have been a number of close calls and obviously maker did do system debt issuance and there was a coordinated effort around buying the mkr. So it's like yes, on paper from a simple analysis you are correct. But I mean obviously with the AAVE thing, okay, we get a weird donation thing and that's why there's not a haircut for people. But I think on ten hundred year timeline you have to assume that the probability of there being a serious haircut is north of zero. And so therefore you should be applying a discount compared to the risk free rate. And again the alternative being, well, why not just go and buy some sort of tokenized treasury product on chain and not have to worry about this kind of thing also being kind of the alternative. So I don't know, I kind of struggle with. I think the answer is in a lot of these cases there is just kind of an oversupply or there's latent stuck capital and the market isn't hyper rationally efficient, but no market ever is.
- [29:27]
Haseeb
Shia, what's your take? Are rates too high or too low? I should say, sorry, rates too low.
- [29:32]
Sharun
I just thought that was a dumb question. I mean obviously I think it serves a purpose for crypto, Twitter and investors who love to analyze. I found that to be a very unnecessary question. And we don't think a lot as a firm because I think on the one hand there are many reasons that people stay in crypto because of lack of access or they can't get the underlyings, even though the underlying is probably not even good enough. And we have to take the access into consideration over the risk premium. And then I think the second part is, I mean right now is like everything's buckled together, right? The lenders and borrowers and you have this weighted average rate. I do think in the very near future we're going to have way more specialized use case and this wouldn't be a question anymore. So it's a good intellectual exercise now, but I don't think it would be applicable going forward. And then I think lastly it's just we have to find more exogenous yield rather than what we have right now, which is looping. And then just the same old thing. I mean just even going back to Defi United is all warm and fuzzy. It's all great, but I feel like Defi has not really moved forward in the last one year. We have just really boring mirrored asset on chain. So yeah, I think the question itself is a good question on the public square, but it's not a fair question because there's just no benchmark against it.
- [31:01]
Haseeb
Yeah, okay, so looping, I mean looping is just leverage, right? Looping in and of itself is not a thing. It's like looping what, so you're leverage, you're, you're getting leverage on exposure to some carry trade or staking or whatever it is that you're doing. Like if you look at like what risk parity funds do, which are some of the largest hedge funds in the world, it's the same shit. They just get leverage and they have this.
- [31:20]
Tarun
But the way they get leverage is weird, right? Like you, they're not guaranteed to, you don't have to model in exactly their leverage in the market immediately. Whereas like here you kind of do. Like if you look at the, there's like one super elastic. Right, right. Like these, these, these, these traditional hedge fund strategies. Like I have a stat Arb fund or a multi strategy fund like Bridgewater Millennium or something, the main fund will borrow a ton of money from a bank at some rate that's unknown. And you're the pod person, you just get some capital. You don't really even know what your implied leverage is. You just go buy a bunch of bonds and you have to go be like, hey bank, can I get some more loan at this rate and there's so much friction that you don't really have to model in this impact cost of leverage as much. Whereas here it's like instant, you literally change a rate and you see everyone's bot immediately deleveraging. Right. So there is kind on the sort of larger loopers. Right. So there is this elasticity of borrowing to rates being very low duration. That is a very unique thing to crypto. I think in the normal economy it takes a while for that to, you have to. It's an effect. But it's not like instant the way it is in crypto.
- [32:37]
Haseeb
Right. I mean we saw something like that with the yen carry trade, right. Where like people were basically getting cheap funding from the yen carry trade. BoJ rates moved slightly and boom, a bunch of stuff exploded.
- [32:47]
Tom
Yeah, but that's because BoJ raised rates, right. It wasn't like, oh, someone, you know, decided.
- [32:51]
Tarun
Yeah.
- [32:52]
Tom
So like it's very intentional manipulation of the interest rate versus like some market dynamic. As sort of pointing out, it's that
- [32:59]
Tarun
elasticity thing is very unique to. I don't think you really have that outside of crypto. That is, but that is like a benefit of composability, right. That if you want to talk about what this system is providing that's different is very fast elasticity to price changes, which in the normal market might actually be quite slow.
- [33:15]
Haseeb
But isn't that just in part because the size of the crypto funding market is just not that big relative to
- [33:21]
Tarun
the demand for these particular immediately algorithm for a lot of these other markets, it's like part of it is not algorithmic. My bank loan is not. This thing is algorithmic. I'm trading. Oh, I have to mix these two systems here. It's like I send a single thing and it immediately goes in.
- [33:36]
Tom
Right?
- [33:37]
Tarun
Sure.
- [33:37]
Haseeb
So it's more efficient, Right. Like the, the interest rate is, is, is propagating faster because of the fact that everything is much more efficient. But the reason why this stuff is so tied to these particular trades is because there's just. If there was way more capital on chain, these trades would already be saturated. Right. So anyway, so my, my, my point is, I do, but I do, I do agree, Shuya, with your argument that a lot of the reason for this is that a lot of the people who are on chain don't have access to overnight rates. They don't have access to treasury yield. These are people who are not Americans in many cases. Obviously crypto is a global market and their opportunity cost is not the risk free rate in terms of holding Treasuries. And for a lot of them they may be like, hey, I really need to be able to move my capital quickly. And if it's sitting in Treasuries that's not quick. Same reason why I have my money sitting in a savings account when I know putting in a money market is going to earn me better yield. But I need to be able to pay my credit card bill quickly as opposed to waiting a day or two for my brokerage stuff to move.
- [34:35]
Sharun
So yeah, I think what Tarun said about the elasticity, I think I feel very. How to say, I think it's a very painful realization to me at least because there are just so many variables that you can't factor into consideration when you're thinking about what's the fair rate. And I feel like everybody needs to somehow be more open minded on the range of the rates would be going forward. So finding I think the right level is. That's not happening.
- [35:07]
Tarun
Yeah, I think this idea of a static single risk free rate that you think is never moving until the Fed intervenes, that's a very tradfi. If everything is dynamic all the time, it's kind of hard to say. I think you can say relative statements relative to this. Is it high or low? But I don't think you can say an absolute statement of like this amount is the real cost of carry. Because like there's also sort of weird things that go on in crypto, right? Like pre Ethereum staking all of the yield metrics or like people using the bitcoin basis trade as their, their, their kind of risk free rate or like some blend of the different exchanges and then staking comes out and then people start being like oh, staking is the real rate. Even though of course they were staking, that was live before Ethereum. No one ever viewed that as a risk free. Even in looping protocols in like Solana, right. The risk free rate in Solana is like 10 times higher than Ethereum. Something is like weird about that. And so because of that you kind of. It's very hard to distill things to one number. And I think again it's just a relative risk. You can only. Not to sound like a philosopher in terms of like relativism but like I think you can only really measure relative things in crypto. You can't really measure absolutely in a lot of ways.
- [36:19]
Haseeb
I guess maybe another thing I'm curious what you think of this Tarun is when we're looking at the rate on aave, we're looking at the wholesale rate. If you think about the cost to borrow as an individual, normally there's not just one rate to borrow as an individual. They look at your credit worthiness based on what you're doing. They look through your book and see how crazy of a motherfucker are you. Before I decide what rate I'm going to quote you. If you are a levered looper, then really like you are, you are like at the margin the, the next person borrowing an AAVE is probably a leverage looper. Right? But if I know that you are somebody who's actually very low risk, maybe I'm willing to pay you a lower rate but, but I can only give the wholesale price on a. And so something about the nature of lending when it's big pooled model leads to systematically like the rate is the looper rate. And if there were some way that I could look at your book and say, hey, you're actually a very low risk type if you're a very low risk user, therefore actually your rates should be better than the rate at the margin.
- [37:21]
Tarun
I mean, I think this was Xuyao's point, right? Like why there's this idea that there's like a single rate is like kind of, it's very hard to really define.
- [37:30]
Haseeb
But in what universe do we move to that model, right? Like what does that even look like to go to that model?
- [37:34]
Tom
I mean, I think that's, that's kind of more of like the isolated lending market, right? Oh, you know, you're, you're pledging like, you know, better collateral. You're naturally going to the market is going to form to offer you a lower rate versus obviously something that's more exotic. And you know, I think it's not quite the exact same but like obviously higher volatility or like less, you know, more liquid assets do get more of a haircut if you're looking at like dcc. And so like, I don't know, it's not like there is a little bit of a market, but you're right that it's not maybe as like dynamic as you would expect or you know, kind of the same way it happens in defi.
- [38:09]
Haseeb
Yeah, but I feel like that's still at the collateral level as opposed to the, the borrower level. Right, but, but yeah, I see your point. Yeah, yeah, no, I, I, I, I, I understand your point. Okay, let's switch gears. So Xiao, one of the stories that's getting a lot of attention now is what's happening with Mega Eth. So mega Eth. Full disclosure. So we are investors in Mega E. I believe Robot Ventures and Dragonfly are both investors in Mega. Er, Mega E has launched their chain as of earlier this year. And fairly unique within crypto, you launch your chain without launching your token. Now Mega did an ico, so there are investors, retail investors in the Mega ETH token, but they don't have their tokens yet because you are doing something I don't think I've seen any other project do in crypto called KPI vesting. Okay, explain. What is KPI vesting, why did you do it? And what are the KPIs?
- [39:02]
Sharun
Yeah, we, we came up with the KPI gated TGE largely because we hated the fact that protocol can just launch a token and giving insiders 40% of the whole supply without showing any good work. That's really something that I think the industry must move on. We believe that a protocol needs to earn their tge and in fact protocol the core team needs to earn their token after tge. So what is KPI gated tg. So when we launch our mainnet, we realize that the token does not deserve to exist if there's no economic activity on the chain, period. We do not want to be an empty blockchain. No one wants to be an empty blockchain, even though we're really fast. So we set up three parameters that we think we call them KPI, which sometimes I regret. We call them KPI to be honest. They're a more positive lens. It's. They're more like milestones. KPIs give a lot of people PTSD, but they're like major milestones. So we set up three milestones that we believe kind of signal signify that hey, this token is ready and Mega deserve to exist. And the first KPI is more than 10 mega mafia application go live. So Mega Mafia is our accelerator program. Novel applications, some also, I would say like left curve ones and right curve ones. So you have just a lot of like arcade finance, entertainment finance, but you also have a lot of exogenous yield. We just talk about dexs, et cetera. So that's the first KPI time Mafia apps hit mainnet. Second one is USGM Supply, which is our protocol native stablecoin. We work with Athena to launch it together we set a pretty ambitious one. Like if anyone question our KPI being a bit like wishy washy and too easy, 500 million USDM is a hot KPI and we just put it out there. And then the last one is probably the Hardest to achieve, which is we want our applications to make money. So the last KPI is hey, 3 of our application make like 50k revenue per day. And you know, it took us two months to get to hit the first KPI. I would be lying to say that the road was smooth. The road to TGE was fucking hard. It was hard because we launched the chain, the chain was ready. Most of our apps are very novel. What do I mean by being novel? It's like you have this defi primitive that has not been tested before. These are not copy pasta. Then based on security concern, we basically ask most of our apps to do another round of audit. We basically asked them to insert way more safeguard. We started monitoring our sequencer as well. So that took some time. And then a lot of the apps started testing with their close friends for a bit and it wasn't until last Thursday we officially hit number one KPI. And obviously we're ready to tge. So going back to the original ethos of KPI, right? So we believe that once we have novel applications and once we have usgm, which also for audience who do not know, is our economic engine, we internalize all the USGM yield which makes Mega probably the first blockchain that has really healthy revenue. Day one I would say. And yeah, so I think the apps going live, the stablecoin defi flywheel being in the right place kind of earn us the position to tge.
- [42:42]
Haseeb
So this kind of echoes the old Vitalik proposal of Daicos. I don't know if you guys remember that. Yes. So da ICOs. I think Vitalik initially proposed that you do an ICO, you raise money from retail, but the ICO funds only get released on certain milestones and the team doesn't get all the money up front. And if the team never hits them, the money gets released back to the ICO people. Was that the inspiration for this KPI vesting thing?
- [43:11]
Sharun
That was not, unfortunately. But I think we did exactly what he said and we as a core team, we only took 9% of the entire total pie chart and we will not basically earn our token unless we continue to hit KPI. So folks, if you like, you will continue to see magaeast people just talking about KPI for years to come. Because that's how we make money, how we can as a core team earn more tokens.
- [43:36]
Tarun
I think the interesting thing about the KPI based vesting is all of the historical attempts at doing it have always been people who launched a token and the token launch didn't go well and then they're like, I want to do it afterwards. But it never works if you do it after you launch. So there's this very famous blog post from Uma, the oracle protocol called KPI options from like 2020, 2021. And it's exactly this. They're like, we launch our token, we wish we didn't do it this way. Let's have some KPIs. And it's not just them. This has happened to every ecosystem. Solana had. Some projects have the same thing. I feel like I've seen this trend of people kind of wanting to do it afterwards but then the genie's out of the bottle and tokens just don't work that way. It's very hard to get that to happen. So I think it's good to actually see it live before because I think that's a very crucial thing. You have to kind of launch with this. Otherwise it kind of doesn't seem to work.
- [44:35]
Haseeb
Tarun, do you want to see more projects doing KPI vesting or not yet?
- [44:40]
Tarun
I guess it depends on the project because if you're a project where you expect kind of revenue relatively quickly, like you're a DEFI protocol and there's immediate fees or something, maybe it doesn't totally make sense unless it's liquidity based. There are some reasons to do it, but if you're building an ecosystem it makes a lot more sense because that's sort of like company management or like if you were a. Imagine you're a centralized company, you're an AI company who has to build an ecosystem. You're not building ecosystem on day one. And it's not like oh, it's not like a target. I can touch a threshold of and then everyone quits and we leave. And there's sort of a sense in which you need to also like have that be a very long term minded KPI. And so like I think it's like if you have something that's like long term enough, it makes sense. If it's like too short term, like integrate 100 protocols using our Oracle, it's probably not that useful. So I don't know, there's shades of gray. I can see kind of reasons not to as well.
- [45:41]
Sharun
But yeah, I would say it's actually the opposite of how we are thinking about the KPI has very little to do with company management. It's more of finding out the diamond hands among the investor community. So going forward, right, people who, let's say buy Mega Token are able to stake their Mega against certain KPI, the longer they stake and when we hit the KPI they will get more tokens. So I think the idea is even sometimes we're internally, we're even thinking we should have a prediction market on which KPI will get hit when, which basically is what happening on polymarket talking about when we hit our KPI. But really the goal is okay, these are the KPIs we think are super important. By the way, the KPI going forward will really be on, you know, USDM which is our economic engine, applications, health, sustainability. There's even one KPI on Ethereum decentralization because that's important for Mega eth. So I want to be able to understand who's staking behind which KPI, how much do they care about it. That will actually help us allocate resource and kind of push the core team to do more. I fundamentally believe token is the most beautiful instrument that crypto has ever come up with. I think whoever said equity is superior than token is fucking out of their mind. I think they just lack imagination. Token is strictly superior because you can just do way more than equity. And I think what Mega wants to do is we want to set an example via this KPI. We have a product for our investing which I guess I can't disclose right now why are designed to kind of engage with the wider community but at this time it's not performative anymore. Right. If we look back on the tokens, I think most previous tokens are performative. When you talk about their governance token or I don't know, some sort of vague buyback, they don't solve coordination issue. I think what we're trying to do is we provide granularity to people, to community. Like you can use your token to signal this preference and the core team is aligned with you because we also believe this is good for us and this is how we get paid. So it's a long run. But I'm very passionate about token. I think KPI is the best thing, the most innovative thing the industry has seen. There's a lot of risk by the way. I think it requires a lot of courage for us to do this. We didn't have to do it, but we think that this sets a good example to other team. I think it also push us to do things that's uncomfortable. Right? Like, you know, we could have waited to have like three of the apps and then with TGE we picked 10 and I have a thousand telegram chats. I have to like chase every app, be like, dude, just Go online anyway.
- [48:32]
Tom
Yeah, I was like, I mean, I guess, I think incentive alignment, classic recurring story in crypto. I mean, I guess, like how do you guys think about choosing the right KPIs and the levels? I mean, kind of like, I guess you were getting at. I feel like this is kind of like the old story with liquidity incentives, right? It was just like, oh, if you do it too much then you get this crazy looping behavior. Then too little, not great. And feels like people try to eventually kind of calibrate and we kind of got a point. What do you think the kind of, I don't know, equivalent kind of learnings or sort of progress are going to be in KPI vesting?
- [49:05]
Sharun
Yeah, I think don't do it too much or don't rely on fake metrics has been our day one ethos. Because whatever. I mean, fake metrics also is extremely damaging in a bear market, to be very honest. Bear market, you just have to be really honest. So I think we are looking for productive assets on our chain. We have applications that enable the looping, the healthy looping of productive assets. I don't want to turn this into a mega application shield, but we have a bunch of them.
- [49:37]
Tarun
You're just trying to maximize your KPIs.
- [49:39]
Sharun
I was just maximizing KPI maxing, KPI max, KPI max milestone maxing. And we, I mean for us internally, it's the, what's the real metrics for an ecosystem is do you have retail order flow and do you have them coming out in a sticky way? Which is why if you look at mega ecosystem, we have a bunch of left, I call them the left curve apps. They're addictive, they're fun. I would say they are the dream of market makers. They are very uninformed order flows. And then on the right curve, right, you have the sophisticated DEXs and et cetera. But what we want to do is we want to bring healthy order flow, we want to bring exogenous yield. We don't believe, you know, a simple like big fat TVL sitting somewhere can actually help with the ecosystem. And that's not what we incentivize. Now on the other hand, the part I struggle every day is maybe there's something that's really good. I just need to light a bit of fire. It just need a little bit of push. And I'm debating every single day, where do I put my incentive, right? Where do I put the KPI toward? And I don't think that we're always successful if we look at our TGE based KPIs. I mean the last one was just overly aggressive. If I could take away, I would love to take away but we stand on business as a company.
- [51:02]
Haseeb
So yeah, a lot of KPI died by the KPI.
- [51:04]
Sharun
By the KPI, yeah. So yeah, a lot of trial and error. I think we wanted to go after real metrics.
- [51:12]
Haseeb
Well, I think a lot of people will be looking at how this goes as an indication of whether this is something they'll want to emulate. Because I think as Saroon said, I've never seen a project do this beforehand, I've seen projects do it afterwards. And I've also seen projects try to retcon their TGE say okay, lockups is being extended, we're burning some tokens. We just saw World Liberty Finance do that a couple times. So I've seen all sorts of shit but have not seen it pre tge. So I think everyone is going to be watching closely to see what this experiment in governance of a different kind of pre token launch governance, how this is going to play out and what to learn from it. Now one more story I wanted to get through. This is not about. This is about another thing that we're invested into which is polymarket. There was a big story, front page news in a bunch of venues I saw, which is that there was the first major insider trading case based on somebody, a soldier who was involved in the Venezuela invasion, the nabbing of Maduro. There was a US army soldier who was part of the planning for the Maduro Capture. He bet $33,000 on Polymarket, made 400,000 and there was cooperation between Polymarket, the DOJ and the CFTC in order to nab this guy. So he is now facing trial or whatever, has been arraigned and will be facing trial. And the big question I guess as a result of this is many people have said, well part of the point of prediction markets is insider trading and of course insider trading being people who know something about the market are giving information to the market by trading. But then there's also this view that, well, somebody trading on secret information that they are required to, especially by law. In the case of your soldier in the military, you know that that is also known as treason. Giving information that you're not supposed to, that can be potentially given by the enemy. So people had kind of different, I mean most people were like okay, that seems right. Probably a soldier who's trading on their knowledge that they're going to commit and be part of an invasion that, that probably is. That person's probably going to jail. But the question is, okay, does this change how we think about this part of what prediction markets do? Is it supposed to be, you know, do. Do we hold on to this thing of like, oh, yeah, insider trading is good, or does this kind of show that, well, when push comes to shove, we kind of know you're not supposed to be insider prediction markets.
- [53:33]
Tarun
Before, prediction markets didn't exist in practice, but people were talking about them theoretically. This was always brought up. Right. Everyone always goes to the assassination market is.
- [53:44]
Tom
Nope, there he goes.
- [53:47]
Haseeb
Oh, let's wait a second.
- [53:49]
Sharun
Assassinated.
- [53:53]
Haseeb
Oh, there we go. He's back.
- [53:54]
Tarun
Okay, my browser just.
- [53:56]
Haseeb
You just get assassinated.
- [53:57]
Tarun
Died. Yeah, I got assassinated. While talking about the assassination.
- [54:00]
Haseeb
Okay, all right, start over. Start over with your answer, because that's not going to go.
- [54:04]
Tarun
Yeah, this has been true since the beginning of the theoretical kind of stuff for prediction markets. There's some stuff in the 70s, some stuff in the 90s, and then, of course, Robin Hanson, who kind of first really wrote about it. And then since then, I think this notion of, like, hey, there's some boundaries that legal. Will always have some legal issues like assassination markets and stuff like that. But I think fundamentally the point of a prediction market is to allow people to build these markets and then figure out where that boundary is. If you don't actually try to build these markets and see how people want to trade them, which things people view as informative, morally, ethically, and financially, you're not going to know. And I think restricting that list to everyone who can figure out how to IPO or everyone who can meet certain economic standards is probably just too restrictive. Right. I think we kind of start with the system too restrictive. I think fundamentally there's an innovation aspect that exists here where you're always going to have some part of the wild west that you retrench from. But I do think the interesting thing about this case in particular, as well as some of the other ones, like the sort of hyperstician aspects of things where people. The other case that was in the news recently was there's this Paris weather market and the oracle for the market was the sensor in Paris somewhere, I think near the airport or something. And this guy just went to the sensor, took a hairdryer and heated it up and then made some money off that. And that where you're changing the outcome to get the thing that I think is actually kind of where. That's where I think the more market structure think, hey, is that going to work in this Case we had the soldier leaking information potentially to adversaries or whatever, that this is going to happen. But you could also imagine someone, market manipulating a market to make it look like that was going to happen and then cause something different than what ends up happening or what would have happened without the market. So the conditional on the market existing and conditional on someone manipulating it, you change the outcome. That part I think is more like the hairdryer thing.
- [56:28]
Haseeb
Hold on, hold on. Yeah, so the hairdryer thing is not manipulating the market, but manipulating the outcome itself. Right. It's like throwing a fight. That is
- [56:39]
Tarun
war in the wartime scenarios, I could imagine you manipulate the market, right?
- [56:43]
Haseeb
So that would be okay. You manipulate the market to convince people an invasion is coming. Invasion never comes. We have not seen that. That's purely theoretical. And I think that's actually less of a compelling argument to my mind. I think the equilibrium that this is driving towards is that, look, the prediction markets are not going away. I think that's pretty clear, at least for now. Who knows, if the political heat turns up by threefold, maybe that changes. But right now I think the right answer is, look, there's a symmetry here, which is that there's a market also on, you know, will the head of Iran be replaced by the end of the year? Right. And if that market shoots up, it's probably not because Americans are betting on. It's probably because Iranians are betting on it because they know something is going to happen. And that is information that leaks to us. And so the right equilibrium is that your government, if your government is capable, your government stops your people from leaking information in the markets, but it listens to all the other information that exists in the market that's being leaked to you. You want that? There's way more information about the rest of the world than there is of yourself because you're a small part of the world, right? So I think it's a little bit shortsighted to look at this event and say, oh well, clearly this proves that prediction markets are terrible. If you talk to people at the
- [57:56]
Tarun
fda, hey, for the record, I didn't say that.
- [58:00]
Haseeb
I don't want to ever be accused of saying I'm making an argument. No, no, no, I'm not making an argument to you. I'm making an argument to the people who probably read this in the news and are like, oh my God, this proves this. Prediction markets are terrible. I bet people at intelligence agencies are like, predictables are fucking awesome. This is so what it does remind
- [58:15]
Tarun
me of the early Days of crypto, right, where people are like, oh, it's just like, only drug dealers. And then intelligence agencies are like, this is great.
- [58:23]
Haseeb
Right? And the fact that, the fact that they got this guy probably means that, okay, the next soldier from the US Military is going to be way more afraid of trying this. But, you know, somebody in the Iranian military. How the fuck is Iran going to figure out that people are betting on polymarkets?
- [58:38]
Tom
Yeah, I don't think they're going to cooperate with Iranian intelligence when they come with a subpoena. I agree. I think people, again, love to sort of extrapolate from single points. But the real answer also is that national security is basically special cased in the law. Right. The things you kind of think about around common law just don't apply when it comes to national security. The government can make you do things. They can suspend your rights. They can limit what you can do in the name of national security. And so. So that seems to be what this is more about versus someone trading on proprietary info about the price of a commodity or the outcome of something else. That I agree. You want people with edge in the market to reveal their information, and that is the benefit that we all enjoy. This feels like, okay, well, you could have put people and American interest at risk, and that's kind of why they're coming down.
- [59:28]
Haseeb
All right, so, yeah, we got to wrap it. I'll give you the last word thoughts on polymarket and search trading. Anything you want to let us know, Xiao, about your upcoming token launch.
- [59:38]
Sharun
You know, my. My ending word would be I always think that they're somewhere over there manipulating a prediction market to get the opposite outcome. I feel like there's like 5D chats being played in prediction market. I think all of us talking here just like, is not into the dimension enough. You know, we have to deploy some inception thinking.
- [59:58]
Haseeb
Yeah. Somebody somewhere out there is manipulating a prediction market right now. And we just. We just don't know. All right, Shia, where can people find you?
- [60:09]
Sharun
They can find me on Twitter.
- [60:13]
Haseeb
They can find you on Twitter.
- [60:14]
Tom
Okay, what's your handle?
- [60:17]
Haseeb
Do you want to give them. Yeah, do you want to give them a handle? Hot pot Dao at Hotpot Underscore Dao. And you wonder why I introduced you that way. Thank you, brother Bing, for joining us. Appreciate your service. Thank you guys, everybody. We'll be back next weekend.