Unchained Podcast – Uneasy Money: Hyperliquid’s Synthetic Equities and the Rise of Protocol Gatekeeping (Ep. 970)

Host: Laura Shin
Guests: Kane (hosting panel), Luca (CEO of Budgie Penguins), Tay (Metamask)
Date: December 4, 2025

Episode Overview

This episode focuses on recent transformative shifts in the Ethereum and broader DeFi landscape. Topics include the acceleration of Ethereum upgrades, Hyperliquid’s move toward protocol-level permissionless equity synthetics, contentious protocol behavior on Solana, and the evolving dynamics between decentralization, gatekeeping, and innovation. The guests explore why low gas costs aren't yet driving expected new use cases, how protocol design can backfire, and why user experience and open competition remain core to “Web3.”

Key Discussion Points & Insights

1. Ethereum’s Rapid Shipping Cadence & the Fusaka Upgrade

• Upgrades now seem to happen “every couple of months," a significant shift from the year-long waits pre-EIP-1559. (01:31)

• Mainnet gas price drops to all-time lows (~0.3 Gwei), making transactions almost “gas free."

  • Quote (Kane, 05:06):
    “We've scaled mainnet simultaneously, we've scaled blob space for L2s and we now have almost gas free transactions on Ethereum mainnet. It's pretty wild."

• Passkeys are going live natively on-chain, a feature long considered far-off.

  • Quote (Kane, 03:13):
    “I remember in 2023... I'm like, this is never going to ship. There’s no way. ...but it seems like it's here, which is pretty exciting..."

Timestamp Key Points:

• [01:31] – Speed of Ethereum upgrades
• [03:13] – On-chain passkeys
• [04:45] – Blob space scaling
• [06:27] – L2 impact on gas prices

2. Low Gas Prices: Effects and Market Dynamics

• Despite huge increases in block and blob space, “we’re not consuming enough.” (04:21)
• Cheap transactions haven’t yet unlocked wild new use cases or induced “gas spike” chaos.

  • DeFi’s shift to L2s reduced mainnet congestion, but the abundant computational resource hasn’t been fully leveraged yet.

  • Quote (Kane, 09:36):
    “What would be a catalyst for Ethereum prices going up? ...We have an abundant computational resource… I’m surprised people aren’t doing crazy stuff...”

3. User and Builder Experience

• Ethereum’s approachability has improved:
  • Introduction of a “founder success team” is improving direct builder interaction.
  • Quote (Luca, 09:21):
    “I spent three years working, you know, basically only on Ethereum and didn't even get an acknowledgement... Now I have like a direct line with somebody who will like, retweet my tweets...”

4. Innovative Token Sale Designs (Infinix Example)

• New token unlock mechanisms: Instead of punitive early-exit taxes (losing tokens), Infinix let users exit by paying a higher price, which decays over a year (from $1B to $300M FDV).

• Community FUD cycles:

  • Token sale received backlash as “greedy” even though the product was well-liked.
    • Quote (B, 17:44):
      “My favorite all time comment... ‘Kane is a scammer... these are the worst terms... But Infinix is a great product and I'll continue to use it.’”
    • Quote (Luca, 21:07):
      “It’s gonna fill here today, gone tomorrow. Once it fills, everyone's gonna be aligned and saying it’s the best thing ever... The peanut gallery, I really like that term... Just a bunch of peanuts, you know, peanut gathering away.”

• Emergent influencer dynamics: Main characters and KOLs (Key Opinion Leaders) can dramatically swing community opinion—often with little connection to actual product quality or knowledge.

Timestamps:

• [16:33] – Infinix Token Sale design
• [17:44] – Community FUD, notable quote

5. Hyperliquid, Synthetic Equities, and Protocol Gatekeeping

• Hyperliquid introduces HIP3, allowing permissionless markets by “staking HYPE” to list assets—moving away from fully centralized listings.

  • Quote (Kane, 25:56):
    “This cycle with Hyperliquid where it's like: come and stake this amount of hype and you can do this thing... feels so much more aligned from a governance and kind of coordination perspective.”

• Synthetic equity perps are now live in a permissionless environment, a legal gray area that was once shut down quickly for other teams.

  • Quote (Kane, 26:49):
    “Now we've got like the largest DEX with like permissionless equity per contracts. It’s pretty wild.”

• Industry and regulatory tension:

  • The crypto industry “gets an inch and then... [keeps] going,” leading to regulatory whiplash and adversarial relationships.
  • Quote (B, 28:25):
    “Gensler must be rolling in his grave... imagine the cope that's going on in that guy's head.”
  • Quote (A, 31:15):
    “A year later, we had dinner again, and we’re like, oh, they're trying to kill us. ... If someone's trying to kill me, I'm gonna kill back. ... That creates this adversarial mindset.”

• Move toward “commissionless Nasdaq” model:

  • Quote (A, 34:56):
    “Commissionless NASDAQ, like that's wild. Like imagine if you just turn up to the NASDAQ and like stake some NASDAQ equity and get to… like list your own thing. Right?”

Timestamps:

• [24:27] – HIP3 and permissionless listings
• [26:49] – Synthetic equity perps
• [31:15] – Regulator relationships

6. Solana Gatekeeping Drama: Kamino vs. Jupiter

• Protocol-initiated “exit blocking”:

  • Kamino “hardcoded” block on users migrating to Jupiter’s new lending protocol, sparking a massive, heated Telegram debate.

• Panel consensus: Blocking user exits is “anti-Web3,” anti-permissionless, and reminiscent of legacy finance (TradFi) buyer lock-in strategies.

  • Quote (B, 42:44):
    “It just feels completely anti web3 and everything that we stand for, like users having the right to exit and... that is a huge part of what permissionlessness is.”
  • Quote (C, 45:50):
    “Just be a high integrity entrepreneur... like, super lame. That's like if ChatGPT didn't let you use Facebook.”

• Solana’s commercial mentality:

  • More aggressive, business-first tactics may be normalized, unlike Ethereum’s culture of open-competition and composability.
    • Quote (A, 44:43):
      “Solana is a much more commercial ecosystem… the Overton Window is like a bit different on Solana.”

Timestamps:

• [40:08] – Kamino–Jupiter context
• [42:44] – Critique of exit blocking
• [44:43] – Ethos differences

7. DeFi Security & AI Red Teaming

• Anthropic’s red team is actively probing smart contracts for vulnerabilities.

• Recent exploits on OG protocols (like Yearn, Balancer) show even “battle-tested” contracts can be surprisingly brittle.

  • Quote (B, 53:33):
    “If you can find the right set of conditions and invariants, then those assumptions break and then you can hack the thing. ... It is not a simple answer.”

• AI not yet “hacking everything,” but is accelerating vulnerability discovery and defensive standards.

  • Quote (B, 55:46):
    “A whole demographic of builders... just don't actually take security... seriously... if AI can just go out there and look for these things, there's a potential that you save people's money.”

• Audits remain imperfect, “more eyes” is still the best approach for discovering rare edge-case bugs.

Timestamps:

• [51:31] – AI and smart contract security
• [54:20] – Exploits are non-trivial; security culture
• [55:46] – AI’s pros/cons for protocol security

Notable Quotes & Memorable Moments

• Kane (05:06): “We now have almost gas free transactions on Ethereum mainnet. It's pretty wild.”
• B (17:44): “Kane is a scammer... But Infinix is a great product and I'll continue to use it.”
• Luca (21:07): “It's gonna fill here today, gone tomorrow. ...The peanut gallery, I really like that term...”
• Kane (26:49): “Now we've got the largest DEX with like permissionless equity per contracts. It’s pretty wild.”
• B (28:25): “Gensler must be rolling in his grave right now...”
• B (42:44): “It just feels completely anti web3 and everything that we stand for, like users having the right to exit...”
• C (45:50): “Super lame. That's like if Chad GBT didn't let you use Facebook.”
• B (55:46): “A whole demographic of builders... just don't actually take security... seriously... if AI can just go out and look for these things, you save people's money.”

Conclusion

This episode pulls back the curtain on the rapidly evolving state of blockchain protocols, demonstrating that technical progress (like cheap transactions or advanced governance) also brings new questions about markets, competition, and user rights. The panel’s lively debate underscores a tension: as Web3 matures, will it ossify into Web2-style gatekeeping, or will permissionless composability and community-driven standards continue to win out? Bold experiments like Hyperliquid hint at both huge potential and new, unpredictable risks.

Timestamps for Key Segments

• Ethereum’s Shipping Cadence & Blob Space Dynamics — 01:31–06:27
• User Experience Changes, Gas Price History — 08:38–11:41
• Innovative Token Sale Structures & Community Reaction — 16:33–22:17
• Hyperliquid HIP3 & Synthetic Equities — 24:27–34:56
• Regulatory Tensions & Industry Attitude — 28:25–34:14
• Solana Drama: Kamino vs. Jupiter Exit Blocking — 38:48–51:26
• Defi Security & AI Red Teaming — 51:31–57:57

For listeners: This summary includes all crucial themes, revealing both the real-time debates in DeFi/crypto and the human (and sometimes hilarious) elements behind protocol politics.