B (2:27)

Yeah, no, 100%. And also it feels different. Like.

B (2:32)

I think there's still a lot of things, like big things that get very heavily debated and people really, really, really want and all these things. But it just feels like what's being shipped and, and I guess like the type of debate is different.

A (2:51)

It's much more, more, more commercial, maybe more, more aware of the market. I don't know. Yeah, it's definitely a different vibe. Vibes are different for sure. Like there's no question. So maybe let's, let's talk about it. So I was actually a bit blindsided myself on Monday. I was talking to a couple of our engineers and one of them was like, you know, this is like The SEP curve 1 pass keys natively on chain, which has been on polygon and I think a couple of L2s for a while. But I remember in 2023 we were talking about this because Infinix was looking at would we use pass keys? Would you use passwords? How are we going to do this? And two years later it was one of those ones where I'm like, this is never going to ship. There's no way. This is just going to sit there forever. We're never going to ship poskis on chain. But it seems like it's here, which is pretty exciting because I think from a UX perspective, once we figure out exactly how to dial this in, that's going to be pretty amazing. I think the other thing is.

A (3:57)

Maybe this is something that no one was asking for, but blob space is going to increase by 8x.

A (4:06)

Do we need more blobs? Like what are we doing here? Why do we have so many blobs?

A (4:12)

Yeah, so we can talk about scalability and what's happening with blob space and.

A (4:21)

Dig into that a little bit because I think it's a very interesting market dynamic that we keep producing more block space yet are not consuming enough of it. But.

A (4:34)

Let'S talk about that in a second.

A (4:37)

I think the other thing that's interesting about the blobspace conversation is.

A (4:45)

Ethereum gas hit like 0.3 Gwe. And I rem. I remember in like, I want to say it was like April or May of 2018, we saw Gwei go under one. I don't know what the like all time low of GWEI is, but we're, we've gotta be getting close here.

A (5:06)

So. So you know, this combination of like L2 proliferation. We have so many L2s.

A (5:14)

And we have scaled mainnet like actually to a crate. Like we've ripped out so many transactions off mainnet. 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.

B (5:36)

No, it is. And specifically on the gas one, the gas has always been super interesting because.

B (5:45)

It'S always been treated as a consequence of the block space, which it is to a certain extent. But there's actually a huge number of factors that go into what the gas price is, meaning how extensive transactions are. And I think partially due to just how many L2s there are and partially due to the overall demand of the market, but also partially due to people just being more aware of the gas price. All the wallets and all the interfaces, all the CLI tools have gotten so much better at really driving down the gas price for end users. And I just feel like it's never.

B (6:27)

It'S like when you look at the charts, it's like dropped off. But we haven't seen that. I'm waiting for it to be seen with end users like realizing like what.

A (6:36)

An unlock, how cheap. Yeah, it's pretty great. We must be getting into the vicinity for 21,000 gas, right? Maybe to take a step back for a second. So the entire reason why we went to this L2 scaling roadmap was that the L1 was so congested, right? And why was the L1 congested? The L1 was congested because we had so many different transactions and you know, defi composability basically broke the L1. We had all of these different defi protocols that were all connected to each other and if you touched one of them, you'd get this cascading chain of transactions that would kind of go on to infinity and then curl back on itself and like just start again. Right? So if prices were ever moving, you just had this like insane number of transactions that would kind of cascade through. Because of all the L1s, we moved a lot of that liquidity off to L2s. We, we did a bunch of things that have, you know, scaled, scaled the L1 and we're now in this situation where like for, for an eth transaction it must be down to cents now. I haven't looked at it in a while but like we're in the cents range which uh, you know, when you, when you think about coming out of the bear Market in 2023, Solana's, you know, Ethereum still had scalability issues back then. You know, it's still, transactions were still expensive. And if you go back to Defi summer, it used to be, I swear to you, you will not believe this, but it used to be $500 to claim your SNX staking rewards every week on mainnet.

B (8:18)

It was a real blocker.

A (8:20)

Like, it was asking $500. Like, what are we? Like, it's crazy. Luca, you're very quiet there. I don't know if you're sitting here contemplating your life choices or what's going on, but are you going to. Are you going to move back to mainnet? What's. What's happening? What's going on?

B (8:38)

Do it.

C (8:40)

No, I mean, this is probably not my, like, field of expertise. I'd probably say cheaper transactions. Good. I think a huge reason why we didn't deploy Pangu on Ethereum mainnet at the time was because just didn't make sense. The transactions were too expensive. And even then, you know, it was trending obviously lower, but now it's like getting incredibly low. It's like, to the point of feasibility. So, you know, great moment for Ethereum. The only thing I can speak to about Ethereum is like, you know, eight months ago, six months ago, they started having like a founder success team. And that was like a huge breakthrough to me. So you might be looking at like, the actual chain metrics. I'm looking at the fact that there's like a founder success team.

A (9:20)

Yeah.

C (9:21)

And that's awesome. Like, that's, you know, I spent three years working, you know, basically only on Ethereum and didn't even get an acknowledgement from anybody over there. Now I have like a direct line with somebody who will like, retweet my tweets, like, and that's like, awesome.

A (9:36)

Yeah, it's much better. I agree with that. I think it's much better. The interesting thing, you know, this is not the first time we've seen this movie, seen this movie before where transactions get cheap and then there is this kind of induced demand. But it has been a while now. Like, what would be a catalyst for Ethereum prices going up? Right. Obviously, more transactions is one thing. What we haven't seen are people building contracts that consume more gas. Like, not necessarily intentionally, but like more complexity. Right. So on Ethereum, the more computation. The whole point of the gas pricing is that it's about computation. This is a scarce. What used to be a scarce resource, now it's an abundant resource. So we have an abundant computational resource. Right. That we're trying to price in real time. And we have too much of It. So I'm surprised that people aren't like doing crazy stuff like putting, I don't know, like putting games on chain on. Like someone's going to do something crazy that's going to like cause gas to spend spike again for sure. But it just hasn't happened yet. So I don't, I don't know. Yeah, I don't know what we do about that.

B (10:49)

Yeah, no, I mean, I think Luca's point is. Is part of it. Right. It's like these L2s are all. And like even all L ones are all competing for the builders as they should be. And so, you know, when you're making choices about where to ship, that plays a big role. I think the other thing is that people pro. It probably hasn't fully set in yet just how cheap L1 is.

C (11:13)

So.

B (11:16)

Like, you know, I think that'll take some time.

B (11:21)

But I do think it's interesting. Like it's not just. It's like there's. There's this whole series of things that have all come together to unlock the current state. Right. Like it also used to be that people would like just spam transactions nonstop because that's how you would like win. And then now with.

B (11:41)

Like flashbots and MEV and like how that whole market has evolved, it's just a completely different game. Right. So you don't have, you just don't have that spam that would drive up the price and increase competition, even though there wasn't actually. I mean there was a competition, but it wasn't like real on chain transactions.

A (12:00)

Right, right. Yeah.

B (12:03)

And so, yeah, it'll be interesting to see what comes next and you know, yeah, if we do get a game, just do we find some other fatal flaw in the mechanism design that we have to go, you know, figure out, don't fix it.

A (12:17)

Yeah, I think so. Like, there's no question in my mind if transactions stay this cheap, someone will turn. There's so much money on Ethereum, someone will turn up and go, okay, I'm going to build this thing and it's going to, you know, have hundreds of thousands of transactions and going to cause some chaos. So moving on to our next topic, which I'm somewhat involved in. So Infinix launched a token sale via Sonar ahead of the INX tg and boy was it interesting. So, you know, historically I have tried whenever there's some big thing that's going on, right. You know, some. Whether it's a synthetics launch or something for Infinix, I try to look at the prior art and say, okay, what are all the things that people are doing? And crypto, you know, prior art doesn't last very long. Like someone was doing something six months ago. Like oftentimes it's completely dead. You can't do it that way anymore. You got to, you got to try something else. But I looked at all the different things that people were doing, the objections people had, what people were looking for, et cetera. Also just trying to optimize the best thing for Infinix as well. And we proposed this, this sale. So we did an NFT sale a year ago and the pricing was 125 million, 300 million and 500 million FDV. 88% of people or something like that chose the 125 million FDV. Funnily enough, back then, the reason why most people told us they chose that, that with the longest lockup, right? So the 125mil FDV had the longest lockup. The reason why they chose that is they were worried that we were going into a bear market. So already people are idiots. They have no idea what's going on, right? So, so that was the first thing then. So we said, okay, we did this sale a year ago. We can't rug people by, you know, offering the same terms a year later for the token. We've got to have some difference. And so we said, okay, we're going to do $300 million FTB, which is below the NFT price, but with a one year lockup. And so like, oftentimes I'll write up a blog post which is like, you know, Bezos has this thing at Amazon where they write the press release first, right? And it's like if the press release doesn't land, then like, get the fuck out. Like get out of the room, right? And, and so, so, you know, I, I still wonder about that press release for the fire phone. You remember the fire phone that had like eight LEDs around the screen. Like, how did that press release get there? They just kept adding more cameras. There were like eight cameras. So it was like some weird, some weird thing. But so we said, okay, 300 mil. But we don't want people to feel like they're locked up and have no choice. So we'll give people a free option and an early exit clause. Now oftentimes early exit clauses, like the prior art here is you get a bunch of tokens for a thing, for doing a thing, yield, farming or, or some incentive, an airdrop or whatever, and they're locked and if you want to leave, you lose some of the tokens. You know, there's like a tax, an exit tax, like 50%, 70%, 80%. There's a lot of people that have, that have done this, and it always struck me as like, very punitive. Like, the last thing I want to do is lose tokens to a project that I, that I want. Right? Like, it just doesn't seem like a viable thing. Like, if you said to me, like, I'll give you some pengu and you know, you can get liquidity after three months, but you got to lose half the pangu, I'd be like, no, that's, that's like, I'm never doing that. It's a terrible idea, right? So what we said is instead of losing tokens, you can just pay a higher price if you want to leave, right? And so we're like, let's just pick kind of an arbitrary price. We'll pick a billion dollars as the, as the exit clause. So if for some reason it's trading over a billion dollars and you want to exit early, you can pay a little bit more and get out. But obviously that is also kind of punitive. That's fairly high price. So we'll have a decay curve which goes from a billion dollars down to 300 million over the course of a year.

A (16:33)

The conclusion on the timeline was you're a monster trying to sell tokens at a billion dollars. What the hell's wrong with you? Why are you pricing this token so expensively? It's like, no, no, no, guys. Like, this is just the game theory. Like, this is what we're trying to do. But it didn't really land on the timeline. So I don't know, Tay, what was your perspective as an outside observer? Like, on. On my feed, it was just heat, chaos. But.

B (16:58)

But yeah, I mean, I got, I did get it on my feed. I was like, oh, damn. I was like, main character arc right here, let's go. So it wasn't just your feed, as it sometimes is. I don't think people realize this when you're the main character, like even a little bit of the main character you are. Your entire worldview is shaped by people yelling at you. It is wild. And it's actually not an accurate representation of reality. You're like in your own little, like, bubble of hate and it's really damaging.

B (17:31)

But yeah, so basically what Kane's asking is like, wait, but was it really like that? It was a bit. There was a bit. My favorite all time comment that I've ever seen.

B (17:44)

Was this guy. I'll have to go back and find it. I don't even have the link. But it's so good. He basically was like, kane is a scammer. This is a scam. These are the worst terms I've ever seen in my entire life. It's too much money, blah, blah, blah, blah. But Infinix is a great product and I'll continue to use it.

B (18:03)

And I was like, what?

A (18:05)

My head of product. My head of product, like, printed that out and was like, there you go. Like, my founder is a terrible person, but we're nailing the product, so who cares?

B (18:15)

I was laughing so hard because I think that's possibly the first time I've ever seen that argument on crypto Twitter, ever. Because usually it's the inverse. Right? Usually it's like, you guys don't even have a product, and I hate your terms. And it's almost like the. The lack of the product or the. Or the fact that the product sucks or whatever. It's almost fueling the FUD and, like, triggering the fud. This one, I was like, wow.

A (18:39)

Like, they're like, I really like this, but he's so bad that I have to hate it.

B (18:43)

Yeah, I have to.

A (18:44)

He's such a bad person.

C (18:45)

It's.

A (18:46)

It was really funny.

B (18:47)

So. I don't know, you get, like, a badge or an unlock for that one, because that was just like, an incredible. Yeah, just. Just incredible commentary. In general, though, I think the. My. My sort of overall takeaway, because I, you know, I don't really care that much about the. Any of the exact terms on any of these things. I just don't pay that much attention.

B (19:08)

It's just more of the same, like, larger debate discussion on, like, what are people optimizing for? What are end users expecting? What are the motivations of this? Like, what are people. Why are people yelling?

B (19:24)

And, like, for me, it's.

B (19:28)

Like. I think. I don't know. I think we're in a weird place in the ICO arc. Like, we've been talking about these, like, Monad.

A (19:35)

Yeah.

B (19:35)

And, like, for so long. Right.

A (19:37)

It's been, like, a year. Yeah.

B (19:39)

And I think people are probably, like, a bit apprehensive about the market in general. Like, you know, and then this is.

A (19:46)

The funny thing, like, 2024. Right. Like, we did this NFT sale, and people were like, I'm so worried about this bear market. It's coming in 20 minutes. And I was like, I think you'll be okay, guys. Like, I don't know that we're in a fair market yet. So, yeah, people are always worried. Like, people who haven't been through multiple cycles, I think always over index on. Like, there's two components to it. One is bull markets are tiring as fuck. Like, it is so tiring to go through a bull market that by the time you're like six months in, there is a part of your brain that's like, I'm done. Like, it can be best most fun party ever, but after three days you're like, like, I just want to go home and sleep. Like, please. But there's no getting off. You can't get off the merry. It's like, no, sorry. You're chained to this thing. You're going to keep. You're going to keep going until. Until you pass out. So I think there is an element of like, people are kind of hoping that it's over. Like a pullback of like 20%. They're like, oh, yeah, finally this is over. But then hilariously, when it actually is a bare market 20 minutes after that, they're like, please bring the bull market back. This is. Everything's dying. It's. Yeah, it's pretty funny. It's pretty funny. I don't know, Luca, what was your. Did you. Did that get into the Luca bubble at all this? Infinx.

C (21:07)

It got into the Luca bubble. But the Luca bubble has a different opinion nowadays than he probably might have had in the past. I mean, dude, it's. It's gonna fill here today, gone tomorrow. Once it fills, everyone's gonna be aligned and saying it's the best thing ever. And you could airdrop them all, the entire supply. They'll find a way to fight it. So, you know, somebody, I think guy might have coined this, but the, the peanut gallery, I really like that term of the peanut gallery. Just. Just a bunch of peanuts, you know, peanut gathering away. You know, nobody's serious in the comments, you know, saying anything. It's just not serious people. So it's like a very interesting thing. Just I'm learning this, I've learned this deeply over the last couple of years. But as I get older in this space, month over month, the more that I just realized it's like there's the peanut gallery and then there's the serious people. Like, no serious people were under your post, like saying anything that, like freaking out, like wannu go and like read up on it. You know, just like the peanut gallery just clickety clacking their shells and. And I was just like, all right, Kane will be fine tomorrow.

A (22:17)

Well, you know, so. So that one of the most funny things for me, right, is like, there, there are this new and you know, every single cycle, there's a new cohort of KOLs that emerge, right? So there. There are the. This new cohort of KOLs who have emerged, some of them out of the infi info, Phi, arc, whatever. But one guy was. Was this guy Whale. Whale, Dot Mocha, right? And he was really like, anti the terms, hated the terms, whatever. I don't know that he's ever used Infinix. So he doesn't know what the product is, but just in principle didn't like the term. So I was like, okay, fine. But then I was like, guys, and this is a little bit of a skill issue, and if I could go back, I would do this a different way. I was like, we have, in two days, we have this CT mafia blood money crates drop, where we're dropping crates to all of the CT Mafia. If you guys have just waited like two days, you get paid your blood money and you wouldn't need to fud it. But the hilarious thing is, so two days later, he gets his crates, he opens up a bunch of crates, gets some prizes, and he's like, actually, I changed my mind. This is really good. I like it. I was like, there you go. But it's like, it's like the Mafioso that's like, hey, nice project to be a shame if it burned down. But he's already burned it down. He burned the house down. And then he's like, actually, I'm sorry, I made a mistake. You're actually a good kid. I'm sorry about that. So, yeah, it was quite hilarious to absorb the.

A (23:49)

Pivot to maybe vague tolerance from hatred.

A (23:56)

But, yeah, we'll get there. We'll get there. So next thing that I think we wanted to Talk about was HIP3, this upgrade to HyperLiquid. So this has been a thing that's been rolling out now for a little while, was proposed maybe like six months ago or something like that, and has been slowly rolling out. I think it's very interesting.

A (24:27)

To see how hyperliquid has been going about moving from this very centralized listing process and control from the team to opening up to the community. And I think one thing that they've been doing really well is saying, okay, if you want to do stuff on hyperliquid, if you want to come in and participate in the ecosystem, build things in the hyperliquid ecosystem, we're going to have a Very clear requirement of just staking hype, which is a bit different to like ogdefi days. OGDEFI days, you might have to stake the token to vote, but you were just like one person voting, right? So, you know, you go and get a bunch of aave and you're like, you've got 3% of the vote. You can't actually sway a vote, right. So almost nothing would happen. This is a bit different where they're saying, like, just stake, you know, 50 bips of the supplier or what not. Maybe not even that. Maybe like five bips of the supply, right? Like a few million dollars worth of tokens and it's an open playing field. You can go and do whatever you want. Which to me, like, from a permissionlessness standpoint, feels like much more aligned. I think it's a much smarter. I'm sure there's been examples of this have happened historically, but this, to me, this cycle with hyperliquid where it's like, come and stake this amount of hype and you can do this thing. Come and stake this amount of hype. You can do this thing. Just from a governance and kind of coordination perspective, feels so much more aligned.

A (25:56)

In how that they've done this. So the most interesting thing though, for me, I think, is that we now have like YOLO equity herbs, which I didn't think was going to happen this quickly. Like, I know it's crime season, but I, I, you know, going back to like OG synthetics days, mirror protocol, we did, we did equity. Not even perps, right? Just tokenized equities. We did it for like 30 minutes. And every single, like, not even my lawyers, just like any lawyer that I came across was like, bro, you need to shut this down immediately. Like, this is, this is a terrible idea. And now we've got like the largest decks with like permissionless equity per contracts. It's. It's pretty wild.

B (26:49)

Yeah, I'm looking, I'm looking at the numbers right now. This is, I don't know, I feel like this is a huge unlock.

C (27:03)

Explain how this works though. Kane. Technically, if you don't mind, or tay, if either of you know how this works, technically, yeah. So, I mean, it's not like a debt receipt.

A (27:12)

Unlike the old perps are like how, like, you know, they have an Oracle price action and just looks at the price of gold or whatever and says, okay, gold's 4,000 an ounce. And then they have a mechanism that kind of keeps the traders in line, whether it's a funding rate or something. So you Know there's an external source of pricing data that's pulled in and then it lets people trade contracts with leverage on that pricing data. Right? So, you know, if you think gold's going to $5,000 an ounce, you can go long. If you think it's going back to 3,000 an ounce, you go short. You're not trading gold. No one's moving gold around in like buckets, right? It's, it's purely a paper trading system. And this is the same thing with equities, right? If you're trading, you know, 30x leverage Nvidia contracts, like there's no Nvidia being armed in, in this process, but trading securities and, and derivatives of securities. Like, I don't know, bro. Like, I don't know what happened to the sec, but I remember those guys used to be pretty, pretty aggressive. And yet again, like, here we are.

B (28:25)

Yeah, I mean that's. I don't know. I do feel like this industry is, is really good at. Like we get an inch and then.

A (28:33)

We just, just kind of like so hard. Gensler must be rolling in his grave right now. Like what? Like, I mean, imagine the see than cope that's going on in that guy's head. I mean we saw, we saw that lady, I can't remember her name, like on the timeline for like two weeks. Mary or something like that Karen. That was like losing her mind. The Karen. The Karen from the sec? Yeah. Was like losing her mind. Like losing her mind. She was like, you people are so. You just like if you come out and say Hayden is effectively a criminal, right? Like the most like friendly law abiding, like, you know, like flowers and rainbows, guy in crypto and you're like, this guy is the devil. It's like, bro, you don't even, you're not even close. Like.

B (29:27)

Yeah.

A (29:27)

Anyway, so.

B (29:28)

Yeah, no, any. I mean that was the problem with the sec, right? Like that era of the SEC was just one, everything is crime. Two, actually not everything is crime. Only like the legit players that are like within our orbit are the, are the. And meanwhile, every, every actual user, every actual person, there is actual harm in this industry. And that CC is like, no, no, it's. It's Hayden.

A (29:55)

They're the ones are bad. Right?

B (29:57)

Like, you know, so that's. Yeah. And I think that this is.

B (30:03)

If you look at like how does this industry get to a point where we're not.

B (30:10)

Like, if the goal is not necessarily like whatever the sec, right. Just ignore the sec. If the goal is like, let's have better markets, let's have.

B (30:20)

Less harm, let's have more understanding. Right. How do we get there? To a certain extent, the answer has to come from within this industry in order to have that buy in and legitimacy. On the other hand, it also has to be.

B (30:37)

Like, I don't know, the second that you go too hard on any one end, you just risk this rebellious blowback. That's super unproductive. This industry is so good at just taking anything and then just running with it. And then the second that you are like, okay, maybe that wasn't the best idea in the world, they like just 180 and just go the other direction. And like, I don't know. I think we will eventually have to get to a place where everything is just more.

B (31:08)

Yeah. Is like these smaller iterations in reaction to, like, real issues and harm and like, go from there.

A (31:15)

You know, the interesting thing to me is like, I. I had dinner with Hayden and Robert Leshner from compound in like 2022. Right. And we were still in this mindset of, like, the SEC is just like a little bit confused about what's going on. And if we can just educate them and explain to them why this is going to create more official markets. And then a year later, we had dinner again, and we're like, oh, they're trying to kill us. Okay. Like that. It's totally. We were just so naive and, and oblivious to, like, what was actually going on. But the problem is, and I've said this many times, like, if someone's trying to kill me, I'm gonna kill back. Like, I'm not just gonna sit, like, once. It's very clear that this is not like a friendly. Let's educate the person. It's like, no, no. If you're gonna, like, start firing, you know, nukes at us, we're gonna fire back. And that's the problem is like, that then creates this mindset in the industry of like, okay, now it's adversarial and you can't be educated. You don't care about what we're trying to do. And if you can, like, if you can kind of weaponize someone like Hayden, like, you've done something horribly wrong so bad, like, if Hayden gets radicalized, like, you're in a bad place.

B (32:31)

Yeah. And. And the end effect of it, right, is that the whole industry and the best builders in this industry, right, the best legal minds, the smartest people who, like, actually knew what was up and actually were potentially in a place to improve the ecosystem, spent all their Time and energy fighting the sec, like that was it. And the goal was not necessarily to like their focus was just primarily on survival and not being destroyed. Now it's like, okay, it's a free for all, but nobody's really taken the time to ask and understand and dive into like what's the best possible path for us? Because everyone's been so busy fighting like just like trying to, to not die.

A (33:18)

I mean, look at like, like all of goal of governance. Like there's so much goal of governance.

B (33:23)

This is what I mean.

A (33:24)

I know this is triggering for you, right? Like it was like, okay, actually no one's in charge, guys. There's like a computer somewhere. It's maybe in charge. We don't really know. We can't do anything. We've got no idea. And it was all this like smokescreen because again, like, you know, and this is, this is my point, right? If you're like, oh, there, there are people trying to break into my house and kill my family, it's like, well, I'm like, I've got a couple of shotguns now, right. Like I'm going to defend myself. So, um, you know, and like having a bunch of shotguns in your house is net negative for everyone. Like bad stuff's gonna happen, right? Like, but it's like you don't have a choice. There's people coming in and going to break the door down and try and you know, carry off to the gulag anyway.

B (34:14)

That's okay. So with regards to, I mean it's everything, it's literally every, every product decision, every company decision right now. Governments, like product priorities, right? When we look at like hyper liquid, right. I think this is a huge unlock for them, right? They're basically like layering, like layering leveling up in a way where they've unlocked other people's ability to create basically markets. Right? And it's not, it's not just assets. It's like entire sort of little markets and then there's assets on these individual markets. Right?

B (34:52)

That's great. That's, that's. I think that there's like a huge amount of value to unlock here.

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.

B (35:05)

Yeah.

A (35:05)

Like list your own thing. Right. Like good stuff will happen and bad stuff will happen there. Right?

B (35:10)

And this and huge unlock, like full solvent, massive unlock. Okay. Also.

B (35:19)

Probably a lot of different risks and like. Yeah, a lot of different risks. Over a huge area.

A (35:25)

But, you know, it's funny, right? Okay, a bunch of risks and yeah, people will lose some money. But the, the end result is like, the market progresses, we learn some things. And it's not like you can prevent bad things from happening just because you're a regulated market. Look at SPACs. SPACs just like, was scorched earth. And like, this is not happening in defi. It's happening in the middle of tradfi. The middle of tradfi, while the craziest SEC in history is running amok. And like the SPAC boom happens, right? So it's not like there's some magic wand of like, oh, let's just regulate and that will solve all the problems, right? Regulators are not magicians.

B (36:06)

No, they're really bad, actually, because they, they actually are quite.

B (36:14)

Like.

B (36:17)

They're, they're mostly oriented towards things that are not necessarily, like, getting the best outcomes. Like, they have all their other motivations. So that, like, always makes things messy. Obviously they're very slow and inefficient, which is sometimes a good thing. But obviously when you have an ecosystem that's rapidly evolving, like, the faster that you can respond to like, live issues and live risks and like, you know, help, help steer or like, oh, it's, it's literally they're, they're running headlong into the rocks and continuously crashing.

B (36:54)

Like, you have to be able to, like, with a more iterative, gentle hand. Like, you know.

C (37:04)

But I think that.

A (37:05)

Is like fundamentally a problem, right? If, you know, if you're like, I mean, you know, imagine you're sitting there at the SEC and you're like, okay, I am so slow. It takes me a year to do anything, right? Like, there's going to be so much harm that will come from all of these things. I can see how you could get yourself to the point where like, shut it down, right? And that's like SEC Karen was like, we gave you guidance in 2019 on like this one thing. What is your problem? Like, just don't do anything else. It's like, well, that's not going to work. So.

A (37:39)

We'Re going to continue discussing defi, but defi on Solana and some Solana Defi drama after a message from our sponsor.

D (37:49)

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A (38:48)

All right, it wouldn't be an uneasy money episode if we didn't mention Kyle's money at some point. So.

A (38:55)

We got a little bit of drama in the Solana Defi ecosystem. So I woke up, I think maybe yesterday and I'm in the Solana Defi Telegram chat and usually it's fairly sleepy. There's like you know, 30, 50 messages a day or something like that. I woke up and there were like 1500 unread messages and I was like, either it's some giant hack or like some crazy drama is going on. And it turns out it was drama. So there was a dispute, I guess between Kamino and I'll put my hand up and say I'm an investor in Kamino, which is the lending protocol and Jupiter, which is now an everything protocol. They started as a Dex, but they do everything now, which is I think part of what's going on here. I think Jupiter is the biggest defi project in the Solana ecosystem and they're just stepping on everyone's toes. Like every single thing that anyone is doing well in Salana Defi, Jupiter is like, yeah, yeah, we'll do that too. Like getting into Perss, getting into lending, getting into everything. They want to be this kind of everything financial app within, within Solana. So Kamino was like, well.

A (40:08)

How about we just stop people from leaving? Kamina will just block people from being able to go to Jupyter Lens new.

A (40:18)

Address which, yeah, I don't know and I don't know where we got to. I think this is like on Chain. So I think we know that this happened. They hard coded it and then Casamani was like, no, no, guys, you don't understand. Kamino users are just choosing Kamino.

A (40:37)

This is just a choice thing, right? Like they're just choosing to do it. And also if they happen to not be choosing it, really it's Kamino just protecting themselves from the risk of Jupiter 2, very classic Carl Simani takes on the world. So, yeah, what do we think about blocking people from going to other defi protocols?

C (41:04)

I'm, I'm team Jupiter on this one.

C (41:09)

I'm team Jupiter on this one. I mean, look, I, I, it's, it's not defy if you do that, right? Like, frankly, unless, like you're preventing some sort of systemic risk which like, maybe, at least I, in the beginning I thought was like, well, maybe they're like trying to like stop like some elaborate looping scheme and like the two commingling are like creating the scheme.

A (41:29)

But at the end of the day.

C (41:30)

Like, that's, that's defi.

A (41:31)

Right.

C (41:32)

Like, even if that was the case, doesn't seem like it is necessarily. But I'm, I'm team Jupiter. And at the end of the day, like, if Jupiter is just going to go and take everyone's lunch, like that's and everybody else's problem. That's not a Jupiter problem. And it seems like the consumer is losing because Jupiter is doing great work and their competitors are upset. So I think Kamino and I like the Camino guys to those guys. A lot of the Solana guys are over in Miami. And so, you know, huge drift, Drift Camino, the whole, you know, margin. Phi love all those guys. But I mean, to be frank, like, Jupiter's in the right here. Camino's in the wrong. I'd fix it if I was them. Like, optimized for the user experience and the user above all else. And Jupiter has an amazing team. I mean, like I'm, I'm in Jupland, I'm everywhere. Over in Jupiter lands, the only thing I used to. I've said this for a while. I think Solana is not Solana without the Jupiter team. I really believe that.

A (42:33)

I thought, yeah, I think that's fair.

C (42:37)

So I thought it changed everything for them.

B (42:41)

Yeah, I mean, ultimately.

B (42:44)

It just feels super shady. It just feels completely anti web3 and everything that we stand for, like users having the right to exit and like actually having the right is a huge part of what permissionlessness is.

B (43:02)

I think that Kyle's argument is like, well, they can still technically leave. And.

B (43:09)

That'S a similar argument that like a wallet could make, right? Like a wallet could say, like they can still technically send all of their money somewhere else and not use our product if we start to screw them over. But that's like a huge barrier. And you know that it's a huge barrier, right?

B (43:27)

It's not super.

B (43:30)

It'S not super genuine to like stand on that position, especially if they have the ability to do that and you're actually removing their ability to do that. It's different if there's other.

B (43:42)

If there's like other considerations. And that was the best practice decision for other reasons and it had that like, as a downstream consequence. I'm not seeing that here though. Right? Like, no, they. Users have the ability to.

A (43:56)

Right, they have the ability to do this thing and then, I mean, Jup lend didn't exist. Right. So there's no. It wasn't like Kamino was like, let's hard code this thing to stop people from being able to leave until they started leaving. And then they're like, what if we could stop them? What if we had the technology to stop them from leaving?

B (44:13)

That's.

B (44:15)

And from a purely selfish financial business thing.

A (44:21)

So business. It's an interesting. So this is my hot take on this though, right? Solana is a much more commercial ecosystem and I'm sure that some crazy defi project has tried to do something like this before. So I don't want to pretend like Ethereum is, you know, somehow completely above all of this.

B (44:43)

Okay, wait, but hold on, hold on, hold on. You did sushi swap. Literally came out of nowhere and literally vampire all of Uniswap.

C (44:50)

Yeah.

B (44:50)

Right. And what did Uniswap do? They did not block. Right, right. They were like, all right, we're gonna have to drop a token too then.

A (44:59)

Yeah. Which was great for everyone. So, so, but this is my, this is my, this is my sort of question or point, I guess on this. Right. It's like Solana is a much more commercial ecosystem. It has much more commercially minded people, it has attracted more commercially minded people. I think that there is. And this is kind of weird when you think about it that like the Ethereum, you know, pure decentralized ethos somehow that the vibes of that prevented any large scale protocols from playing these kinds of games, whereas that doesn't really exist in the Solana ecosystem. So it's sort of like gloves off. Your. Your. Your business is being attacked by another business. You need to do what you can to prevent it. And, and the Overton Window is like a bit different on Solana. It seems like.

C (45:49)

No, this is, this is just.

A (45:50)

This is.

C (45:51)

I wouldn't even look at it through that lens. I'd look at it through the lens of entrepreneurship. And if you were to look through that lens like Solana's tagline is ship or die, I can tell you I'm a Solana power user and Defi Power user actually only use Solana Defi instead of. I don't use any Ethereum Defi with the exception of a little bit of size on Athena and aave. Juplen is the better product. Like, I just hate to break it. It's easier, it's simpler, the yield feels better. So at that point, just be a high integrity entrepreneur and instead of just trying to both of an entrepreneurship perspective, like super lame. That's like if Chad GBT didn't let you use like Facebook, you know, or Dude.

A (46:32)

Okay, hang on. But ask ChatGPT about Claude and it pretends like it doesn't know that Anthropic exists. It's actually hilarious if you go like, I've had weird issues with, with Anthropic and Claude and cursor, right? And if you go to ChatGPT and you say, hey, I'm using cursor and I'm trying to figure out this setting or whatever, it's like, do you mean the thing that shows up on the screen when you're about to type and it's like, what? No, I obviously don't mean that. And like, I mean the AI platform, you know what I'm talking about? It's like, no, no, I've never heard of this product before. So like Web2 does this into one.

C (47:12)

Another and like integrate. Like, I could still steel man that though a little bit and just be like, okay, like Camino doesn't need to like hop into this pool or you know, you would know the terminology better. But like, they're, they cannot be commingled in any way. And like, obviously that would hurt both of their, like, you know, TVL or like, maybe some like yield parameters, but like completely saying like, my users can't, you know, go over there.

A (47:35)

Great.

C (47:35)

Like, Jupling's the better product. I don't have this problem because I actually just moved two weeks ago my money off Camino to Juplen because I was like, why am I diverse?

A (47:43)

You front ran the exit.

C (47:44)

Yeah.

B (47:47)

This is your fault.

A (47:48)

They saw literally Camino saw Lucas Wallet leaving and they're like, we got to stop this mass exodus. Luca, we're drawing a line. Once Luca leaves, it's over for us. So. All right, moving on to.

C (48:01)

Wait, wait, hold on.

B (48:02)

I. Sorry, I. I have one last question. Okay.

A (48:04)

Okay.

B (48:05)

Here's the difference between the, the. The Web three and Defi way of thinking about things and the TRADFI way. And it's actually really important to like, remember this because it's not actually that web3 is like.

B (48:20)

Less valuable, right? Like the moat exists if you block in your users and you keep them, that there's value there, right. The whole point and the whole thing that Web3 and DeFi especially has proven is that with more interoperability, with more people doing more things and having more freedom, there's more value on the table. Right? And so when I look at a decision like this, it feels very like, tradify Web two, lock everyone in, try to keep it for yourself, et cetera, et cetera. I think it's a completely wrong mentality. Not because it's not like a moat. It is a moat. There is value there. You can count that value. But it's not as valuable as if you were to.

B (49:04)

Prioritize on leveling everyone up, because that's what's going to really get those. Again, just look at the stuff in even just 20, 19, 2020, like early DeFi, like that would have never been possible. And nobody.

A (49:19)

People are locking things down. Yeah, for sure. Yeah.

B (49:22)

The interoperability is what. And like, is what creates more value. And it's like, only if you're really in this very old way of thinking that you don't see that. And so, like, I would argue this is a bad business decision for them. Not because of the blowback, not because of the, you know, the moat. Like, it's a bad business decision because you're clearly not like, you clearly have not realized the true value and the potential value of what you could access and what you could get for your users. And that's going to end. Like, that's why you're leaving value on the table ultimately, right?

A (49:58)

You can lock everyone up all you want, but does the, does the organism reject this sort of thing? Right? Like, you know, given that people have choice, given that people, you know, is this something where people go, no, hang on. Like, we have, you know, we can move and go somewhere else. And if you guys are going to play these kinds of games, then we're gonna, we're gonna, you know, just exit. We're gonna hit, hit the escape hatch.

B (50:23)

I mean, one, I think people will exit. Not to a degree that makes a huge, I mean, maybe, but probably not to a degree that makes a huge amount of difference. I think what ultimately, like, if I was an investor in Camino, I would be saying, guys, you need to understand where the value unlocks are and how to.

B (50:47)

How to like, empower people and get in on.

B (50:51)

These unlocks, right? And the interoperability, because if you do that successfully Then like, the sky's the limit. But if you continue down this mindset of like, our value is only what we can capture and therefore lock everything in and try to keep people and count the users, like, I would just worry about long term, like what their product looks like, what choices they make, how they expand their product. And I think it's self defeating in this industry. Not because people will yell at you on Twitter, but because there's actually just less value on the table.

A (51:26)

Yeah, fair. I'll clip that and send it to him.

B (51:29)

Big thing.

A (51:31)

So, two more kind of interrelated topics to round it out for today. The first one is anthropic is attacking our protocols. It turns out they've got a red team that's I guess, trying to figure out crypto exploits. And then coincidentally, at the exact same time, year end finance was exploited and we've had now some. It just feels weird that my spidey senses are tingling. I mean, Tay, you must have some thoughts on this. Like, why do these old vaults keep getting exploited? Is this just like people see it happening and then they go, actually, maybe there's more, more kind of exploits available here and they go back to this old stuff. I would have thought people were pouring over this old stuff all the time anyway. Like anything that's got like, you know, ape 8, 9 figures of money that's been just sitting there for a while, like, what, what's going on here?

B (52:30)

Yeah, I mean, you're in. Definitely feels very similar to Balancer. It's not. And not necessarily because of the technicals or attribution or any of that. It just feels similar that you have these sort of like these OG protocols that are perceived to be robust and then all of a sudden this thing happens that nobody thought was possible. I do suspect that yearn.

B (52:55)

Well, I suspect the Balancer probably has influenced a lot of people to go back and look more carefully about at the old contracts and be like, maybe these things aren't as robust as everyone assumes. I think the other thing though is that.

B (53:10)

If you really sort of understand deeply the Balancer exploit, there's like another takeaway here, which is that.

B (53:18)

There'S a lot of assumptions that builders and even auditors and even like red teamers just have about smart contracts and how they operate and like what's a flaw and a weakness and what's not.

B (53:33)

And if you can find the right set of conditions and invariants, then those assumptions break and then you can hack the thing. And I think that in both these cases, like both these cases. It took a long time for the, the best experts in the space to deeply understand the root cause and all of the contributing factors. Like it was, it's not everyone that was tweeting by the way, in both incidents instantly like, here's the root cause. They were wrong.

A (54:04)

Okay.

B (54:04)

They were really, really wrong. These things were complex. There was a lot of different things that happened. Part of it is understanding exactly what the attack did, but then also understanding like the true root cause in both cases. It is not a simple answer.

A (54:20)

This is non trivial. Right?

B (54:22)

Yeah. And so I think that.

B (54:26)

Yeah. And I don't know, people keep asking me if it's AI. It's not AI and the anthropic thing, which we'll talk about in a second, proves it's not AI. Right. These are the best guys who are going deepest on the best data sets.

A (54:40)

However, what's your take on the anthropic Red Team stuff? I think a lot of people are like, ah, AI is going to kill us all. Which it will. But like not through defi exploits is our take, I guess.

B (54:52)

Yeah. So one, this, the research is really good. It's really like, it's robust research. It's like actual research. It's not, it's not like as exciting Twitter wise because it's not like we hacked everything. It levels everything up. It defines standards for these sorts of things which other people will then be judged against and things will progress. I think it's super interesting.

B (55:18)

That they were able to actually find kind of a lot of exploits. And even though these exploits weren't necessarily like these $100 million things, there were still kind of a lot of them, including some active ones that were live and had been live.

B (55:37)

And so I think it, one of my takeaways was this, this is super cool because there is a whole.

B (55:46)

A whole demographic of builders and smart contract people that just like don't actually take security and testing and bug bounty seriously whatsoever. And they just exist on chain, they just exist on jade and there's money in them. And so the issue historically is that like if there's no incentive to hunt for it except to hack it, then you're only going to hack it if you can lower that barrier to entry. Meaning if AI can just go out there and like look for these things, there's a potential that you save people's money because it's the cost of like finding these things.

A (56:20)

I mean, audits are expensive. Right? Like, and not, you know, not fault free.

C (56:25)

Right.

A (56:26)

Like every, all, every one of these things like, balancer had, like, some crazy number of orders, right? Yeah.

A (56:35)

So, you know. Yeah. Like. And I mean, as someone who's done a lot of audits, I'm sure. I'm sure, you know, all three of us have been through the audit process many, many times. Like, you know, like, you can do an audit and then you can send it to another auditor, and they're like, ah, here's the high sev thing. It's like, oh, wow. We went through three rounds of audits with the other guys, and it's just like, different set of eyes, different perspective, different, you know, different priors about how things hook together. And all of a sudden, someone goes, wait. And then as soon as you show it to the other team, they're like, oh, wow. Yeah, we really missed this. Like, wow. Like, holy shit. Yeah, it's like. It's not like they're like, no, we don't think that's real. Right. They're like. It's always like, oh, yeah, that was a thing that we didn't think through. So I guess in theory, you throw, like, AGI at all of our contracts, and it takes all the money finds ways.

B (57:27)

Yeah. And that was. I mean, that's what this anthropic research is pushing forward is definitely not, like, 100% there yet in terms of, like, finding a balancer, but you can definitely imagine that it's like, again, it's another tool in the tool chest. It's another thing with different incentives and different motivations that can go out and find things and that ultimately will help protect people, right? Ultimately. Well, and it can also be used by bad guys to hack more things. But, you know, we'll. We'll.

A (57:57)

Hopefully we'll get. If you lower the cost, it becomes. It becomes better. Yeah. All right, guys, I better. I better run so I don't miss my flight. I'm. I'm about to head on plane, so. Yeah, this has been. This has been fun. That's it for this episode of Easy Uneasy Money. Thanks for tuning in. If you like this episode, follow us on the Unchained feed on X, YouTube or wherever you get your podcasts, and I'll see you guys next week. Later.

B (58:24)

Awesome.