Unchained Podcast – Episode 976

Title: Uneasy Money: Is Jupiter Incompetent or Evil? And Is Hyperliquid's ADL Flawed?
Host: Laura Shin
Co-Hosts: Ken Warwick, Luca Net (CEO of Pudgy Penguins), Taylor Monahan (Security, Metamask)
Date: December 12, 2025

Episode Overview

In this candid and witty roundtable, Ken Warwick convenes with Luca Net and Taylor Monahan to dissect the latest dramas in DeFi, Solana’s ecosystem squabbles, lending protocol risks, and the mechanics (and controversies) behind Hyperliquid’s liquidation system. They zoom out on the current trends in crypto product development—including zero-fee exchange models, the pitfalls of tokenization, and the challenges for decentralized social platforms like Farcaster. The trio brings contagious humor, humility, and relentless candor, offering unvarnished perspectives for builders and onlookers alike.

Key Discussion Points & Insights

1. Solana DeFi Tensions: Kamino vs Jupiter Lend

[Timestamps: 01:19 – 17:51]

a. Background

• Jupiter expands beyond being just a DEX aggregator, moving into lending with Jupiter Lend, stepping on Kamino’s territory—a pure lending protocol.
• A claim of “zero contagion” in Jupiter Lend's isolated lending pools sparks a public safety debate.

b. Isolated Pools, Contagion, and Communication Fiascos

• Ken Warwick skeptically frames the debate: “Anytime anyone in DeFi tells you 0 anything, run, because it’s going to be some kind of psyop.” [03:19]
• Technical misunderstanding or deliberate misrepresentation?
  • Taylor Monahan: “I always go with incompetence because I’m actually, like, eternally optimistic...the alternative is that they’re deliberately screwing you.” [05:15]
  • Luca Net: Suggests org size muddles product communication—marketing misstates, engineering knows, but delineation breaks down: “I expect that guy to actually not know how it works, because...the information...delineated probably through two or three different channels.” [06:41–08:28]

c. Kamino’s PR Confusion

• Taylor and Luca question Kamino’s own communications—was risk mitigation their real reason from the start, or was it rationalized post-hoc?
  • “It’s like a post hoc rationalization...once people started talking about the vaults weren’t as isolated...” [11:24]

d. Economics of Lending Pools

• Lending protocols have razor-thin margins; swaps are much more profitable for protocols like Jupiter.
  • Ken: “They’re gonna make like 50x more on swaps than they will be making on [lending].” [14:28]

e. Big Picture

• Both sides get some grace—the missteps are partly due to the hyper-growth, communication breakdowns, and shifting competitiveness in Solana DeFi.

Notable Quote

“Every single tweet is dangerous.” — Ken Warwick [08:26]

2. Is Hyperliquid’s ADL System Flawed?

[Timestamps: 17:51 – 31:55]

a. The Debate

• Tarun Chitra (Gauntlet/Robot Ventures) criticizes Hyperliquid’s auto deleveraging (ADL) model as outdated and unfair, proposing a “risk-aware” alternative.
• Jeff (Hyperliquid founder) breaks silence, harshly rebuffing the critique.

b. Empiricism vs Models

• Ken: “Models in crypto are often useless...empirical data is far more valuable.” [19:48]
• Still, data costs are high: “...the cost of acquiring that empirical data can be, you are dead.” [20:38]

c. Real Trader Experience

• Luca Net: His personal (initially negative) experience with ADL turned positive after reviewing the math—ADL closed his positions at market bottoms, benefiting him unexpectedly. [21:30–22:29]

d. Social Media Squabbles

• Taylor calls out Jeff’s aggressive Twitter comeback: “Those who can do. Those who can’t, fud.” [27:30]
• The group debates the merits and drawbacks of founder engagement with public criticism.

e. The Crypto Edge

• Ken: “Anyone can come in and say, well, we’ve got a different model and the model works this way...this is so different to TradFi. You cannot just build a new exchange permissionlessly as a 16-year-old engineer.” [30:27]

Notable Moment

“Do they die? True, true or false?” — Taylor Monahan, summarizing the iterative risk of DeFi experiments. [31:55]

3. Zero Fee Exchange Controversy—LIDAR and True Cost

[Timestamps: 32:00 – 43:07]

a. The Latency Trade-off

• LIDAR offers zero fees but with higher latency (200–300 ms). Critics argue this results in worse execution and hidden costs.
• Ken breaks it down: “If something’s free, you’re the product...only retail would trade with this much latency...you are, definitionally, uninformed flow.” [34:02]
• Taylor relates it to ShapeShift’s 2017 “no fees, but really the spread” model. [37:44]

b. The Market Maker Angle

• The design unintentionally “manufactures” retail flow for market makers; only degens accept the worse fills for zero fees.

c. Robinhood Analogy

• Luca: “Anybody who’s offended by the LIDAR stuff, download Robinhood and buy an options contract...that’s what rape looks like...they're really paying the bid and then I filled on the ask.” [39:10]

d. Cautionary Note

• Taylor: “I optimistically hope that the business models...are not rapey ones...” [41:23]
• Race to zero neither transparent nor efficient for retail: “The way that people are making money is more opaque...and it’s less clear who is losing.” [42:04]

4. Web3 Social Pivots: Farcaster’s New Direction

[Timestamps: 44:49 – 66:09]

a. Farcaster’s Wallet Pivot

• Farcaster shifts focus from decentralized social network to wallet product after years of lackluster social traction.
• Ken: “Network effects are the most powerful forces in the universe...Farcaster, after 4.5 years, is like, actually, what about a wallet?” [44:49]

b. Reflections on Building Social in Crypto

• Luca lauds the guts to pivot, but questions why large funding rounds went to projects with little PMF: "If you give me 100 million bucks...it'd be insane and be the nail in the coffin...I'd place the IPO two years from now, guaranteed." [47:20–50:53]

c. The Limits of Decentralization

• Simple decentralization isn’t enough; why would users care about censorship resistance?
• Taylor: “What is the actual value that decentralization offers?...To the end user, it means like, oh, so Elon’s not going to ban your Twitter account...?” [53:13]

d. The Tokenization Dilemma

• Ken, surprisingly, questions token launches: “If I could go back, I might not have an Infinix token...delaying tokenization until you know that the thing has worked is probably my default at this point.” [58:17–62:28]
• Taylor: “Once you have a token...it shifts basically everything and especially, like, priorities and product and value.” [62:40]

e. Too Much VC Money—A Double-Edged Sword

• Overfunding can insulate teams from reality.
  • "If you just picked 100 random founders and gave them $100 million...outcome would be far worse than if you gave them a million dollars." [64:46]

f. Building Teams in Crypto

• Discussion on hiring expensive, experienced talent, and the difference between junior and senior engineers—senior engineers quietly fix rather than complain. [66:09]

Notable Quotes

• “Every single tweet is dangerous.” — Ken Warwick [08:26]
• “Do they die? True, true or false?” — Taylor Monahan [31:55]
• “If something’s free, you’re the product.” — Ken Warwick [34:02]
• “I optimistically hope that the business models...are not rapey ones.” — Taylor Monahan [41:23]
• “Once you have a token, price becomes like the only signal of success...” — Ken Warwick [63:52]
• "Network effects are the most powerful forces in the universe..." — Ken Warwick [44:49]

Important Timestamps

| Timestamp | Topic | |-----------|-------| | 01:19 | Jupiter vs Kamino lending drama kicks off | | 05:15 | Is it incompetence or malice? The spectrum of DeFi failure | | 08:26 | On the dangers of public protocol communication | | 17:51 | Hyperliquid’s ADL system—history and criticisms | | 21:30 | Luca’s personal experience with ADL | | 27:30 | Founders clapping back on Twitter—help or hazard? | | 30:27 | The unique permissionless crypto experimentation culture | | 32:00 | The LIDAR zero-fee/hidden latency exchange model | | 39:10 | Retail gets rekt: Robinhood, spreads, and disingenuous “no fee” claims | | 44:49 | Farcaster’s pivot from social to wallet | | 58:17 | The high-stakes game of token launches—regrets and lessons | | 64:46 | The curse of overfunding in crypto companies | | 66:09 | The real value of senior engineering talent in the space |

Tone & Key Takeaways

• Direct, irreverent, and brutally honest about the inner workings of crypto teams, economics, and incentives.
• Emerging themes: Miscommunication is fatal (sometimes literally, in DeFi), VC funding can be more curse than blessing, and the balance of transparency/opacity in business models continues to challenge crypto’s ideals.
• Tokenization is a double-edged sword—it drives hype but often misaligns team focus and user expectations.
• Founders are still searching for “Web3 native” product-market fit, but network effects and user inertia are proving harder to shift than expected.

This episode provides a rare, unfiltered view of how DeFi sausage is made—warts, successes, and existential anxieties fully on display. Even for newcomers, it’s a sharp, entertaining education in crypto’s culture, incentives, and ever-evolving challenges.