ATOM 2.0: From Meme Coin to Value Capture | Blockworks Research

Transcript

Adam's always been advertised as this base currency of the cosmos ecosystem but up until now like it hasn't really seen how that Vision was going to form we just kind of like could see okay there's definitely the potential for this to exist but these updates are really like lining out exactly what that roadmap is going to look like [Music] all right everyone welcome to another Roundup this week we're doing a little something different I don't think you've met me before my name is Garrett I'm the producer for both Empire and bell curve and the parents are gone so we've had to go with something a little different so instead we have Sam Dan and Matt from the blockworks research team so guys welcome to the show doing great I've been complaining about my complexion in this room so if you're

watching on YouTube I am prettier than this but uh look we want to get started there's a lot of interesting news that's been going on this week I think the biggest thing that's come out is the cosmos or atom 2.0 um update they just had a big Cosmos um conference the other day I think that's really been in the narrative the last few weeks it's been one of the only assets that's really held up so um Sam Dan Matt whoever wants to take off I'm just interested what was this update and what should we pay attention to yeah absolutely and uh you correctly highlighted that recent atom strength we've seen um you know Adams look really good relative to most other L1 assets including eth recently there's been definitely some uh some bid coming in likely in anticipation of this news uh and so yeah uh the biggest

developments here is really the upgraded tokenomics for Adam itself uh and then kind of how that all fits in with the IBC ecosystem so a new white paper got released that was detailed by some of the core devs and some other community members from the cosmos Hub team uh that kind of like was around since the original days and it helped kind of innovate what the IBC ecosystem has has become um and so you know if you kind of like take a step back here and say like where did Cosmos the cosmos of start as well as the cosmos ecosystem and where is it in like where did it kind of trend to you know so step one they kind of built out the original infrastructure which is the tender mint consensus mechanism and the cosmos SDK this made it like really straightforward to build an entire

blockchain from scratch um and then step two is kind of like can now you have a world of uh app specific blockchains but how do they all communicate so they had to build Out The Interchange block uh inner blockchain Communication System the IBC rails to allow the communication and value exchange occur between all these app specific change chains um and then so step three was kind of this uh recent Innovation called interchange accounts and this now kind of like boosts the uh compatibility and composability between these blockchains so with interchange accounts chain a can change the state of uh like a contract on a chain B without the user having to like move funds from chain a to chain B

so this really helps like the ux and flow from a user perspective because I can just have all my assets on one chain and still be communicating with a second chain through these through IBC and interchange accounts so that kind of brings us to where we are today where you know uh yusof amrani put this in a tweet thread he had kind of regarding all the updates but he's kind he called the infrastructure is ready and the IBC is the golden standard for cross messaging so this really kind of just like puts Adam right in the right spot for these the major developments that we've seen with atom 2.0 and then the inclusion of these two new features The Interchange scheduler and the interchain allocator

first I'll hit the kind of the new monetary policy that they've discussed um you know maybe we can put this uh up on the screen here okay how do I put something on the screen it's a good question sure you go for it dude Dan check that out while uh I think I think a good thing to remember is like Adam has been around for a long time and it's supposedly like it's been sold as the asset of the cosmos ecosystem and I think that's it's been a little bit of a problem because you have these other asset chains these app specific chains and they're like no this is the cosmos ecosystem it's not Adam and there's been this confusion and I've actually heard tarun in the past say that Adam is the Dogecoin of the cosmos ecosystem so I think this 2.0 update which you're about to go into is

changing Adam from a meme coin to actually show that there's some type of value accrual sorry I was just going to say there's also like a nomenclature nomenclature issue there right so referring to Cosmos uh like referring to Cosmos Hub or Adam as cosmos is kind of an issue because you know anyone can go deploy their own layer one blockchain with the cosmos SDK so it gets a little confusing like the cosmos ecosystem isn't really like an ethereum ecosystem where all the dapps are actually built on top of the same L1 it's kind of completely different so people are probably betting on Adam thinking oh I'm betting on the cosmos ecosystem but you know that's not necessarily true although uh some of the recent updates probably make it a little more true in my opinion um that's a good point yeah right on Matt definitely agree with

you there and so if you look at this image we have up on the screen for those following Along on YouTube uh this dash line is the old cumulative issuance schedule and then the black line the solid line is the uh the new proposed one so you can see the linear increase uh in in emissions that the old model was using and that you know obviously isn't very sustainable uh going looking out into the future right you're massively diluting the the current holders of the token by printing more and so the new model in short like really aims at lowering that rate so in the long term you're kind of trending towards uh like a one percent inflation with the ability to go uh into a deflationary state if the other two

pieces this interchange scheduler an allocator uh do pick up traction that that is possible so without really getting into the details of what the new monetary policy looks like the the broader long-term goal here is just to cut inflation to a more manageable level level but diving into The Interchange scheduler itself the scheduler is essentially designed to monitor monetize IBC economic activity and align atoms with the cosmos Hub align the value accrual to the atom token with the growth of the broader obviously ecosystem and to Matt's Point earlier like Adam's always been advertised as the space currency of the cosmos ecosystem but up until now like it hasn't really seen how that Vision

was going to form we just kind of like could see okay there's definitely the potential for this to exist but these updates are really like lining out exactly what that roadmap is going to look like and so yeah one quick question for you and why has I think the staking rate in the cosmos ecosystem especially Adam has been so has been really high right but one of the big thing is they haven't had liquids taking yet and I think that's a big part of this as well that they're going to introduce liquid staking but is the reason why the staking percentage is so high in the cosmos ecosystem is that really just because of the air drops mostly like why you know their inflation is higher than other chains and I I think if you staked on Adam a lot of times or on the cosmos Hub you'd receive

air drops from the new app chains in the cosmos ecosystem like is that probably the main driver right so the actual staking rate itself uh isn't tied directly to these airdrop rewards like that's just a total separate category it's like a an actual bonus if you're an atom Staker uh the staking rewards itself is tends to be so high just because the inflation rate uh itself was so high right like if you look at this uh if you remember that dash line from the the visual we had up um you know like the the security budget is is just so high and they're printing so much atom to reward uh the people uh the users defending the networks securing the network for some reason like not a not a huge portion of the atom in existence

it's actually staked so I'm pretty sure the inflation of the network is actually more at like something you know ballpark 11 12 and uh the staking APR is more like 18 19 or 17 18 uh and that's because you know only I believe something like two-thirds of the atom is actually a steak there's a good amount of better people who are just holding it on you know centralized exchange is not staking it or uh somewhere else Dan before you maybe describe just like a high level what the scheduler is and maybe we can get into Mev and how I think that's like the new narrative Sam I'm gonna just label you an ease Maxie even though maybe you're not but I know you're a big East guy and uh you definitely like arbitrum so I'm just curious as a whole with everything going on in Cosmos and Adam right now how do

you feel about that ecosystem like are you intrigued by it is it something you're watching like yeah what do you think yeah I'm really intrigued by it I'm a little bit skeptical of like the adoption of interchange accounts the kind of better marketing of IBC um and the heavy inflation that they're introducing over the next 36 months I mean 36 months in crypto is a very long time so I'm slightly skeptical of that but I'm also not trying to be a naysayer because a lot of the stuff that Cosmos has done to date has like spread new innovation throughout the industry from people copy and pasting their ideas like you have polygon which is one of the most successful chains in crypto and they basically copied tendermint from 2018 2019.

um and then you also have proof of stake pioneered by Cosmos which ethereum just switched to so I'm definitely optimistic about the roadmap I think it's really ambitious um but I mean that's how things are innovated on and improved over time yeah one little last thing on this I think is interesting and I'm a big Cosmos fan myself of the whole ecosystem but a lot of people say you know other app chains Etc they're adopting this Tech stack and part of that you often here binance like binance use Tinder mints consensus mechanism but I'm actually pretty sure Finance has gone through like three changes in their chains and they ended up adopting an Mev based chain and that's actually when they got all their attraction and it's not because like Amy or I said Mev evm it's not because the evm is better or it's more scalable et

cetera but it's just that's where the contracts were coded in with solidity and once they went live with that that's when you had all the funds go from ethereum over to this binance chain so I just think that's important to remember because people talk about like binance tendermint all the time but that's not actually where the traction um was gathered but anyways Dan let's jump back and uh just talk about the scheduler a little bit because I think Mev is a big topic here yeah for sure so The Interchange scheduler again this is kind of the goal of this uh this new module is to monetize the uh interchange IBC economic activity and align out of value accrual with IBC growth uh and so essentially it's a cross-chain block space Futures marketplace where the right to order transactions for uh designated blocks it

will be tokenized and traded and transported over IBC so what this basically is telling us is that you're like paying for Mev um and cross chain Mev is going to be a pretty Dynamic Market uh right because you'll have all these ad specific chains moving assets across different uh different chains and communicating with each other uh all to you know serve the purpose of that specific app chain but there's going to be some definitely some ability to front run some of these transactions as you see on other proof mistakes networks uh just like ethereum yeah yeah it's a good point I think something with Cosmos that's interesting it's like a community of chains even though you know in the future a lot of

those are going to be competitors but you want to have economies of scale and when you're splitting into these like individual city-states that might say in Cosmos you might lose some of the economies of scale that you have in say like ethereum even though I think that's a benefit at time because you also don't have like a clogged chain from like nft men's of like trolls or something um so Matt I'm just curious what's uh what's your vision for Cosmos after these updates so they have this Mev schedule or they also have an allocator where essentially I think they're trying to make Cosmos or Adam be like the reserve currency of the ecosystem by providing funding it's trying to really just connect everything back to admin make it like the reserve currency is the big point but yeah I think we could probably move on after this but Matt I'm

just curious what's your what's your view on this and I guess at the end of the day I am curious do you think most values just all going to be related to Meb like is that is that really the driver here because that's kind of what it sounds like uh with the scheduler so I'm definitely no expert in this but I do think that there is one other pretty big value proposition which is that you know the cosmos Hub so basically in you know in the cosmos ecosystem the way IBC transfers work um is you actually have to have a hub which is a network that multiple chains are connected to and then those chains can communicate through the Hub and there that's kind of the original value proposition to the atom token Cosmos atom Cosmos Hub atom was going to be the main hub for all the different chains

um when Terra Luna launched it actually was proven that Cosmos Hub wasn't necessarily going to be the main Hub and it maybe wasn't even necessary so it kind of poked a big hole in that original value proposition so this kind of brings us into like usdc which I guess I'll put on the back burner for one second but um there there are some things happening right now that make me believe that Cosmos could return to this main value proposition of being the Hub to all the spokes that are other chains built with the cosmos SDK so that's like a lot of value outside of Mev I do think that Meb will likely be the main value of driver for the atom token though especially as usdc launches their own chain that will most likely be secured with interchange security by the atom validators um this basically means that people

looking to do Arbitrage or Arbitrage uh like incorrect pricing on osmosis which is a decentralized exchange built with the cosmos SDK but it's its own chain you know if you're looking to print usdc to go take advantage of Arbitrage or redeem usdc to go take advantage of Arbitrage you're actually going to have to do that through the Hub as your uh you know where where that data where that IBC transfer is going through so I think there's actually a lot of value there outside of Meb as well um I do think everyone's kind of sleeping on all of these updates like fading them whatever you want to call it but you know for the last 100 days or so Adam has had extremely uh strong price action it's performed really well against Bitcoin against Ethan pretty

much everything else this has slowed down extremely since the announcement of atom 2.0 on Monday yesterday on Wednesday usdc announced that they're going to launch their own Cosmos SDK based chain secured by Adam validators so this is going to make a native usdc to the cosmos ecosystem this is super cool for a lot of reasons like some of them I kind of just went over but like another really cool thing that's going to come with a native ufdc and Cosmos is most likely Stargate which is a bridge an interoperability layer that's built by layer zero actually I'm not gonna get too far into it but anyways now that usdc is native to Cosmos it is likely that Stargate will be able to connect Cosmos to you know all these other layer ones uh although Cosmos isn't

necessarily really a layer one but anyways like you'll be able to transfer usdc or pretty much any asset from the entirety of the cosmos ecosystem to let's say a different asset on ethereum amp so you can basically in one click for you know maybe through Sushi swaps Omni chain exchange which uses Target or through Stargate itself and usdc you'll probably be able to one click transfer your ethereum to the atom token I think that's ridiculously cool and um you know very valuable for Adam and the cosmos ecosystem and it's mostly just being ignored when this news came out I think Adam actually went down two or three percent in the following hours which didn't really make any sense to me likewise without him 2.0 news it was down five to ten percent in the days

following after a very strong price action leading up into it so in my head um there will be a lot of value that's now coming back to Adam and it's kind of being slept on additionally I think that the cosmos ecosystem is going to see a lot more a lot more Builders come and join the ecosystem like following dydx so so far we've like the successful chains that we've seen built on Cosmos have been Cosmos native meaning developers are starting a new dap or that's not the right word but they're starting a new project in the cosmos ecosystem with dydx they saw a ton of value on their current layer 2 roll-up built with starkware and they're actually moving to their own app specific chain built with the cosmos SDK there's a lot of reasons

for this but one of the main ones is that they will now capture all of the value to their token holders who'll be the validators of the network this is something that is impossible with uh building on another chain whether it be a layer one or Layer Two because uh if you've ever heard like the fat the fat protocol thesis a lot of value for dapps built on other layers then get sent back to the layer itself as opposed to accruent to the DAP hey Matt on that real quick but if dydx is a layer two do they and they're the only app on there so it's like as specific do they not realize all of the Meb that would be on there like right now they were using starkware with that sequencer which there was no maybe just like being a fair market but in the

future when you have l2s that are have specific couldn't they do the same thing wouldn't they be able to realize all the Mev of their chain so you're saying once layer twos have their own validator sets uh yeah exactly yeah well I guess that's a big that's a big question in itself right yeah there's pretty much every Layer Two is working towards getting rid of their Central centralized sequencers um just for you know a little bit of background what that means is there's single parties on optimism arbitrum starkware um whether it be Stark net or starkax app specific app specific layer twos specific Roll-Ups but no matter what they all have centralized sequencer meaning one person or one entity who's ordering blocks so they can extract all the Mev for themselves they can extract

all the Mev and give it back to you know token holders or whatever that layer 2 token might be uh or they can just not attract Mev at all which was the case with DUI DX on its own Layer Two roll up through Stark ax but so like you know whether or not they actually are able to move out of that and have an entire validator set is like a question in itself but if they do if they do manage to do that then yeah I do think that you know this this dydx might end up actually moving back um it's not impossible but that's a that's a big it's a big if yeah definitely okay cool I think we've probably covered that pretty well I I mean I just want to retouch on the fact that Circle basically came out this week saying they're going to launch um uscc

on in Cosmos I think it's its own chain it's going to Leverage The hubs like interchange security ICS and they also said they plan to launch on polkadot Arbitron 1 near and optimism networks in the future so basically sounds like they're going everywhere um I for one have no idea why they need the hubs security considering it's a centralized stablecoin that can just literally run one validator on AWS but um does anyone have anything they want to kind of say on that or what do you guys want to move on uh from how I understand it I mean it seems like Adam is the only asset that it makes sense for interchange security for for usdc just because they issue a stable coin so they like logically pick the most the highest market cap coin in the cosmos ecosystem and borrow security

from it so that the only choice there is Adam so I believe that's why they went with that decision and then also potential Revenue opportunities down the down the line I mean if they have their own app specific chain there really is a lot more things they could do and services they could provide on that chain if they so choose to do so so I think it's just uh kind of a new Revenue stream and kind of embarking into the more crypto native territory it's interesting gotcha yeah definitely definitely agree with that number two and I think on number one it gets me a little bit in that like they could just have one battle there like in the future with l2s for example you don't have to have a decentralized validator set you could have a centralized sequencer um only if you want to get out of this

are we security or not is probably where that's going to end up mattering because if someone does censor you and you're in L2 you can always just jump off and go to another one as long as there's that like actual back door which don't exist yet with roll ups right like they still have the training wheels on Sam do you want to touch on this GMX Mev strategy it's it's too uh too big for my lizard Brian but I'd love to kind of hear what what happened here yeah absolutely it's honestly not a huge deal just a little bit of money was extracted from the strategy but basically you can stake GMX tokens and earn escrow GMX and then uh eth uh trading fees you get 30 of the platform trading fees but then you also get multiplier points and they're always paid out at a fixed 100 APR so basically

if I would stake 100 GMX let's say I'd be making eth and I'd be making escrow GMX tokens but then I'd also at the end of the year have 200 GMX worth of stake weight so like you wouldn't actually get 100 extra GMX tokens this is just like improving your stake weight and therefore your APR um so it's a way to boost your APR over time and basically the problem that this created was um it kind of disincentivized unsaking Because if you think about it logically if you're a large holder of GMX that's staked and you unstake it then you're not looking to restake it because then your multiplier points are gone so your your APR starts back back at the base APR amount so they're obviously not

going to restake and then you could say well maybe they just want to hold it there and have the the very free liquidity but that doesn't really make sense because then you're sacrificing a really hard high APR um so basically someone made a bot because they assumed that the longer you hold your GMX State as soon as you unstake it you're likely going to sell and basically the bot would like a scan um the the basically transactions look for whales who are unstaking their GMX and then immediately sell GMX tokens and wait for that whale to sell their unstaked GMX and then buy back right after them and this profit or this strategy was really profitable for the

last month and a half I think it was polar ply on Twitter said that the uh The Entity that made the bot had made 2300 bucks over the last month and a half so not like a groundbreaking amount but had a whale who uh found this strategy picked it up sooner it could have been a lot more catastrophic um but he uh reported it to the GMX team they're looking into it it's really a pretty easy fix you just let people unstake their GMX and sell it in one transaction uh and yeah he got awarded with uh 500 for reporting the Bounty so I feel like maybe they should have given him a little bit more money considering that could have been uh yeah exactly uh but yeah that's kind of the tldr on that situation okay very cool sounds like they need to start teaching maybe you'll

have classes in high school now where you get to run Mev Bots because it sounds like you know we're talking about like all these jobs are being automated away well maybe we need to learn how to write any V Bots because it looks like and also audit code um I forget last week it was Spencer saying he needs to like what is the one thing he wish he learned from the situation is just like learn how to like read contracts so I can find these little you know codes and and get paid the bounties so um very cool man uh Mev is just so interesting because this is kind of that kind of links into it so all right we need my macro mic for this who is gone but we're gonna touch on Jerome Powell and uh Christine Lagarde a little bit so uh there's a conference this week uh in

France they're both on TV and there's a few other people that talks as well kind of went into Jerome talked a little bit about how defy needs more regulation there's not a lot of transparency and they also got into cbdc's so um I don't know damn Sam Matt anybody want to just give your thoughts on on what they said and I don't know biggest takeaways looking at you down yeah I can take a stab at this one I think all of us hear the word macro and are like oh over my head right but uh no I think this was pretty interesting right I mean essentially you have politicians in Central Bank figureheads coming out and saying you know we need to regulate which to me like that's not really a surprise right their job is to regulate so like when they say that's what they

want to do I'm not like blown away and shocked um you know some were some comments were more interesting than others right like the uh Singapore monetary authorities said I don't see any redeeming value in cryptocurrencies and their time for Reckoning has come like okay there's clear values instant settlements just truly undeniably valuable um so it's it's hard to say like what the goal of that is right like essentially like in my view they're all part of a political game that they need to play right so they're saying things for a reason I don't necessarily think they're saying things that are inherently exactly what they believe um but I think uh Christine lagarde's

comments around you know saying that uh regulation used to come in to you know essentially protect investors from things like terrorist collapse like I think there's no understanding the damage that uh the loss of Terra did to defy like that's going to be used as the Anchor Point for increased regulation and D5 when in reality like there's probably a simple fix to that if like you did want to regulate something away okay algorithmic stable coins that are purely backed by you know an asset that the same protocol is making okay that system clearly doesn't work and we've seen that time and time again and Tara really put the nail in the coffin on that one yeah I was just gonna say like to the lack of

transparency comment from pal it's just like kind of silly to me it's like I would bet that more people can track a transaction on etherscan than that same number of people who can actually thoroughly explain the way our financial system works so I'm with Dan I think they just kind of got to talk about regulation and honestly like we want regulation like I don't think anyone in crypto does not want any regulation like we want to protect retail investors we want to get the institutions involved so it's like let's just do it and get on with it and stop talking about it but let's let's be fair let's be logical let's get people who actually know what they're talking about in on these policy discussions um but yeah that's just going to take time this is going to be something we talk about for the next three four years

probably yeah I agree there's there's been a little bit of a narrative too on like permissioned defy um and how institutions might play in that and also how you might have applications like Ave which they already have I think it's Ave Arc but you might start seeing that from different applications and I think it's gonna be really interesting we had Ben Forman on here who is creator of parify um and he's a big bull on that but he's also a bullet saying that you can have these decentralized permissionless applications that we have today but these permissioned sources are gonna probably end up being a lot bigger because that's where the money's gonna largely come from so anyways I think it's really interesting if I was uscc in the scenario I'm feeling pretty good because you're like look everyone's using my stable coin uh I can actually

be regulated but it's by far it's one of those zero to one things with a stable coin uh like uscc that you can actually point to when somebody says like what's a use case in crypto like to me that's just an obvious one so anyways there's a clear reason like if you just say crypto doesn't have any value or digital payments Etc like it I think you're just you're missing out you you're in the dark you're in the dark um and one thing on this the circle note like so there's really no dominant stable coin in the cosmos ecosystem at this time like if you pull up osmosis and look at the assets listed um you know there's only 30 million of exceller wrapped which actually actually has a bridge that partnered with osmosis to bring assets into uh the osmosis ecosystem and so they will wrap usdc

from ethereum and Port that into osmosis and so you're taking Bridge risk when you're holding this asset right you have to trust that axler will not be compromised and that your one dollar on you is of osmosis usdc will be redeemable for one true uh usdc which obviously with the app chain coming into the IBC ecosystem that's not going to be a problem anymore but it like so right now there's only 30 million actually wrapped usdc and about 9 million uh axle wraps die so it's like there's just no dominant stable coin and if you look at something like ethereum or any of the other ones that kind of had some defy uh traction and get get gain some traction and uh gain some users like you see the relevance and

importance of stable coins right like users need a stable coin to store value um and so yeah like I think usdc is making great play here and this is really just going to expand their market cap in a high interest rate environment they're just absolutely crushing it right so right now they have their last attestation uh they had 43 and a half billion dollars of short-term U.S treasure treasuries ranging from about one to four months and so let's just call that an interest rate of like three percent uh in the given environment then that's like well over you know 1.2 billion dollars of Revenue just from their treasuries so expanding that by any capacity is a great move for them and it'll be interesting to see like you know if they are using the cosmos hub

for any trained security like how are they going to be incentivizing that or is like Adam validator is going to be like doing a favor for that chain in order to bring in Med opportunities I don't know but they certainly have the revenue stream to be to be paying for security yeah one last thing I'll say on that is it's been Foreman again who's coming on bell curve he's going to be our episode this Tuesday um he talks about and you've seen this before on Twitter but with uscc they can almost have like cusdc and it's a rebasing token that actually some of those profits it's almost like securitizing U.S treasuries and some of that interest actually goes towards the token which would be pretty cool and it almost seems like in the long run that might be inevitable and you can kind of see that with

um maker Dao with the PSM is basically talking to coinbase about essentially moving some of their uscc out of there to actually earn some Revenue his maker just earns nothing on that right it's all going to uh Center so um see what's next guys I think we ought to touch on uh reversible transactions I think it's pretty interesting so I think this was either this week or this last weekend it's like a group of Stanford blockchain researchers uh they posted an article on a Twitter thread explaining their work on bringing reversible transactions to crypto which to me just that kind of catches your eye because you're like no no it's uh you can't change anything that's on the blockchain essentially um they kind of point to all the major hacks that we've had I don't remember the number but we've had over like one or two billion dollars in hacks already

in 2022 and they're saying like this is strong evidence that we need to have something where you can have reversible transactions I've got to admit like this is embarrassing to say I shouldn't say it on the podcast but block Works people won't get permians when you uh come to the company and I've made some transactions in my life and you always do that little test transaction well I somehow entered the wrong address for my permi and my permit is sitting there in an untouched contract so it was a sad uh sad day for me and my I'm on two way two weeks into the company and I haven't told Jason that yet so he'll find this out but um guys I just want to get like dude seriously yeah it's our EIP 1559 Garrett um yeah uh let's just go I don't know

Sam you wanna just like what do you think on this what's your first thought when you hear reversible transactions yeah my first thought was like this is a terrible idea but then I like started thinking about it and it seems to kind of makes sense for stable coins I guess because they can already be blacklisted already um but I was talking with Dan and Matt earlier about this and it's like okay well what happens if you put reversible assets into an amm and then they're in a pool it's like how does like if it's against a volatile acid then that could really wreck everyone who's LP in that pool if all of a sudden a bunch of stable coins get ripped out of it so I don't really know but I also know from personal experience if I have a very large amount of stable coins like I am

very scared to put all of those stable coins to work in one single pool because then you're just obviously subject to more risk than putting it in maybe eight different buckets but if I knew that the transaction could be reversed then maybe I'd feel more comfortable going into that really Rogue like 500 APR like usdc usdt pool on like some Rogue chain that no one even knows about so I I see the idea behind it but then there's a question around like basically their proposed um method is to select like a judge like a committee of Judges but it's like how do you select that like that's pretty opaque and against the crypto ethos like blockchains are supposed to be immutable like we just talked about all this um flashbot stuff with the relayer and

Mev boost and yeah I don't know it's a hairy situation Matt or Dan maybe you can kind of give some more light on like the process that's being proposed because I'm not like super caught up on it and I think Dan proved me wrong here but Apple's gonna have an update where you could like edit text you've already sent and to me that sound like complete nightmare because you know you could send a text someone responds and then you change what you actually asked and then you like send a screenshot of that to somebody so like sometimes reversibility like if you book the wrong you know ticket on a flight like you want to be able to reverse that right you just kind of be pissed off but there's other cases where I can see like you want finality and it's like the best and worst thing of crypto is that

everything is final so yeah Matt like give us your thoughts yeah so like you said um immutability is kind of in my head a good thing when I first saw it The Cypher punk in me definitely came out and I was just like what this is this is ridiculous awful you know anti the ethos of crypto um but then I got to thinking about for a second and completely had the same flip-flop that Sam had where I was like okay you know what I could see a few scenarios where this could actually make sense um you know reversibility in what's like cd5 protocols like protocols that aren't completely decentralized um where like complete censorship resistance isn't really an expectation so like usdc and things of that nature I think that you know it could make sense but as Sam was alluding to it's like

you dump like let's say like you know you hack uh you hack uh 30 board apes or something like that you sell those 30 board apps immediately across you know into a couple pseudo swap pools on openc on luxray air you know you get you get rid of them quickly they're gone within 24 hours you sell them to the highest Global bids so they're just immediately gone in reality what you're doing when you like reverse transactions these susdc or sorry these board Apes so if you take these board Apes back because they're ACR um you take these board days back really what you're doing is you're you're hurting the npn buyer and that person wasn't the nefarious actor they weren't malicious they weren't a bad person the hacker is still getting out getting away with all their ether usdc or whatever they turned it into

um so it's like really most of the time you're actually only going to hurt uh people that were not acting maliciously so in my head it's it's kind of really uh I guess maybe kind of stupid the Stanford researchers who published it say well we know that that's the case but that's how the law works you know the way the law works it doesn't matter if it's a stolen asset and someone buys the stolen asset it uh you know it sucks for them but you know maybe that's something that's nice about crypto that shouldn't be changed um I don't think it's a great idea to implement reversible transactions also like immutability is a hundred percent a value proposition of crypto sure as a buyer it's not always the best thing but as a seller it is like unbelievable if you look at

um you know PayPal right like there's this big large PayPal scam I have no idea the exact value of it is but uh basically someone buys something on eBay or on Amazon or whatever but through PayPal and they call PayPal and they say that as an unauthorized transaction and PayPal is 95 like the far majority of the time they're going to give the person their money back and the salary is going to get screwed and sellers actually have to price this in if you own a retail store you know you're doing the same thing with credit card fraud if you own an online business you're doing it with PayPal and with credit card fraud as well but you're pricing that in so assets actually cost more because businesses know that they're going to lose money due to these scams so as a seller you know like crypto's finality

cryptos immutability is 100 of value proposition yes that does lead to but the buyers have you know like there's more power in the side of the seller than the buyer um that's 100 true and then also you know if you're not careful with your crypto you're going to end up with a permit that's just completely lost in the a bit but um but I guess like what I think that uh that's more about education and you know creating better user interfaces to deal with the space than it is about than it is about like creating reversible transactions that are really just gonna screw over the end user and still let hackers get away with their get away with their funds yeah Dan I mean those are all great points and I'm curious just do you have any additional

thoughts on that I know one thing when we were talking back and forth you know a lot of this permission D5 et cetera then you a lot of people think in the future we're going to be interacting with like C5 front ends that connect to crypto in the back end so like my one thought is maybe like you have a soft finality on the C5 front end so if I would have sent my permi somewhere I would have had 24 hours or something to hopefully get it back and then at times they actually do like a final settlement on El Etho one I think that's a little futuristic to talk about and just do you have any other takeaways down yeah it's like tough to you know you fast forward 10 years from now and like say hypothetically the Global Financial system runs on and settles on a

blockchains right like what does the ux look for like the for the individual person and while like people really in the weeds of crypto like as Matt so eloquently just described like we love the finality behind it like it's that's why we're here and like we like building on that and watching The Innovation happen um but for like the average person is that the best thing for them like I can definitely see why the answer is no there like I feel like I don't have to like people like make mistakes you know that happens all the time and uh people aren't necessarily like equipped to be holding like their own like you know their net worth in a metamask wallet or a ledger like that there's a lot of complications that can come with that uh so yeah like I I kind

of see why this would happen and you know to me like maybe this makes something for something like usdc like they already have a blacklist function it's already like essentially tokenized treasuries they're not trying to be decentralized so maybe like this reversible transaction kind of makes sense for it like something like usdc this is kind of just like a blacklist function with improved ux like instead of like I know tether if someone steals a tether uh and they can like map it out and like tether the company itself can say okay like this actually happened you got your funds stolen uh we will Blacklist the stolen funds and then print you new tether so that's like essential really the same thing they're just reversing the transaction instead

of blacklisting so you know in situations like that maybe this does make sense um but I think as it was already mentioned like if you steal funds and then just throw them into an amm o I don't see how you can really reverse a transaction out of that yeah yeah I agree it really like breaks composability but Dan I want to say you uh so far have the word of the podcast with eloquent sounded great always trying to look for those so see if anybody can top them off um let's let's move on we have this Apple nft announcement which to be honest I couldn't actually find an announcement just all people talking about this on Twitter um so high level it's basically just saying that I think Apple officially came out saying that you can now have games and like sell your nfts through

the App Store so if you have a game on there now the problem is a lot of people got like oh that's great they're kind of mad because Apple charges 30 fees even if you're like a Marketplace so if openc had an app on there they're trying to charge 30 on every single say nft that's sold it's 15 if you're under 1 million and you see this paying everywhere I was at a company actually my last company we didn't want to go in the app store for a long time because 15 is a lot right um but I kind of want to skip that unless you guys have strong thoughts on it I'm more just curious if nfts come back again well what do you what are your thoughts on nfts besides this like pfp do you think gaming is going to be this next sector where like nfts that's

really like going to be its moment or does anybody have thoughts on what's next for nfts Beyond just Twitter pfps because I feel like to degree that's that might come back but it's kind of died out for a little bit and I feel like if we want to cattle it needs to be something new yeah I would say gaming is a big area of interest for me like I just think it takes one AAA game that's just as fun as Call of Duty or fortnite or something else on console that really connects people and they're able to like talk and catch up with their friends and actually own the assets and move them around into different ecosystems I think we're a ways away from there I'm sure we have a lot more axi Infinity types like boom and busts from now until we get there

but I do think it will be what on board's like 100 million people to crypto more so than D5 like I can't even hardly get my friends interested in D5 I'm like look I just took out a loan in like two seconds no credit check and they're just like I I don't care like what do you do with that internet money so I just see gaming as kind of like a gateway drug and nfts are like the back of that and then just to touch real quick on the Apple point I think it's a good thing overall like I think they'll realize wow like like maybe it's next Bull Run or the bull run after that but maybe they'll realize wow we're losing out on a lot of Revenue we're not letting people pay in crypto we're taking way too much of a fee but maybe

they'll be like wow Open Seas making a billion dollars a year now like maybe we should tap into that and since they already laid the groundwork like they can kind of plug and play from there so I'm happy about it not how the implementation is being done but overall it's good news Sam can you give this like a two second update on why unicorns are your favorite nfts and what you do with your unicorns yeah all right I can plug my favorite nft projects called crypto unicorns it's like a Farmville simulation for like anyone who played uh Facebook Farmville back when they were younger but they're introducing like little Mario Party game Loop type stuff and they're doing a lot of interesting things by combining like on-chain actions and off-chain actions so like it's a smooth experience because like you don't have to click like a like a

transaction every single time in your metamask like with D5 kingdoms that was pretty annoying for me so uh yeah I just and then also they're like really experienced game developers in uh free to play so that's kind of what I've been looking for for a while is just like a game developer who has experience who's made a lot of games and kind of crosses the chasm over to over to crypto and he's super crypto uh Native so like he understands liquidity pools super well and like totally d5d gen honestly and uh that's kind of like what exactly what I was looking for so now I gotta hope that we get back to highs and uh get returned from like down 90 95 yeah Sam did tell me he paid me a little bit to let him pump his bags but uh it is it is

hilarious seeing him with his unicorns uh Matt and Dan I think the Unicorn uh app is actually on polygon and we haven't like talked about this before but polygon just is absolutely killing it on the PD game like I I can't even name all the partners I think they've done something with Disney they had Starbucks the other day I think they even had another announcement what do you guys think about honestly I feel like what do you guys think about polygon obviously the BD's team is killing it do you think the technology is interesting are you do you think they're like spray and pray technique with all these ZK like different Technologies they're working on I'm just curious what's your what's your idea of that because you don't hear a lot of people talking about their Tech at the moment but their BD team is incredible

so one thing about polygon that annoys me a little bit is that they sell themselves sell themselves as a layer tube in reality they're a sneakier inside chain um they're pretty much their own complete layer one they have their own risk assumptions they have their own validators yet so you know they're not relying on the security of ethereum besides in a very minuscule way um anyways like that that's always like annoyed me a little bit it kind of confuses the masses but like you said their business development team is just you know killing it all over the place their their Partnerships their Integrations their funding you know project after project everyone wants to integrate with them and I think that in reality in crypto pump and mentals sometimes at least historically have

been more valuable than fundamentals so at the end of the day I think that you know polygon could be a real competitor also Sam wrote this amazing 10-page report going in through all the like they're testing out so many different Technologies and you know are they all going to succeed probably not but if they even manage to have one or two of these new technology do their testing out succeed with mostly ZK zkevm would be the one that I'm most interested in um I think that they are well set to have both the fundamentals and the fundamentals to be a good project I definitely don't own anymatic myself I'm not really interested in purchasing any but it's definitely a token I'm going to keep an eye on and also I just wanted to add real quick like side note for the

nfts we had like a not like an argument but a little bit of controversy in the research analyst group chat yesterday surrounding music nfts and just like that's something I'm interested in I think it's a cool space uh specifically like Royal uh where you get the royalties by owning you know you own a portion of the song from this nft and then you get royalties based on it I think it's really cool space I think there's a lot of regulatory concerns and you know most of my co-workers completely disagreed with me and maybe I was going left curve which is not always a bad idea but anyways yeah I just thought I'd throw that in there yeah send it to zero you know what Cooper Taylor Lee came on if I'm if I said your name right Koopa Troopa came on Empire the other day and honestly I thought it

was really convincing too I mean I I do love physical records and I don't know how this can like play up with that but if everything is going digital I don't even think there has to be some type of utility attached besides you just love that artist so anyways I think it's interesting also uh I do like polygon as well but none of this is financial advice of course um Dan do you have anything to add on that or what else are you thinking no I think I think Matt uh really covered it all there I think uh the spray and pray method as you called it is is interesting and like you know why not if you got the resources to do it uh you know I kind of like I like their approach it's it's kind of unique to what we've seen other uh platforms

trying to do uh so yeah you know I'm not a medical I uh I'm not a hater either I just it's kind of neutral on it like you know I spend most of my time in D5 so I'm basically sitting in ethereum main net of aspiratory at the time yeah now it makes sense the one thing I would add on the polygon thing where Matt says like yeah like they Market themselves as an L2 so I don't really love that if there was an evm compatible chain that would have launched in 2017 in marketed as well as polygon and like completely gone away like imagine if Avalanche launched in 2017 with their C chain like they totally could have just stolen a ton of market share a ton of developer activity a ton of users like fees Etc and really made a robust competitor to

ethereum but like polygon and their team decided to stick by the ethos of ethereum and they continue to try and scale it today so I feel like yes I do understand the hate for the marketing but at the same time like it could have been a worse outcome for ethereum definitely yeah and at the end of the day I feel like there's no other ecosystem that has that great of PD and business development and that's going to be such a huge deal I mean Tech you always say Tech Comforts right it comes first especially in crypto but then the day like you have to grab capture and like keep attention and they look like they're doing a pretty good job at it so honestly you probably I'm expecting to see even Dao's come out that like their specialty is like hey we help out other

protocols with their business development marketing because and in real life in traditional businesses that's huge but that's not something you see in crypto yet that I would expect um let's let's move on I think we can pretty much wrap up unless you guys have anything I just say dokwan seems to be on the Run um there's been issued a red notice but he says he's like sitting in his room in Singapore so not really sure what's going on there I don't think there's a lot of to take away we've kind of already talked about what Tara has done to the ecosystem to some degree um any of you guys want to talk about anything else before we close up I think we're good I appreciate you having us on Garrett yeah I gotta get one I mean you got to plug something what's uh what's like either a report or

something we should be looking at and why why should I care about blockworks research um so like blockworks research as blockworks research analysts we provide investable insights that you're not going to find elsewhere so basically we spend a lot of time in Discord governance forums um really on change it's like trying to get data and tracking transactions tracking wallets and our goal is to basically be crypto Twitter to narratives token updates governance updates and get them to our subscribers before anyone else would basically all the information we're providing its goal is to be investable so whether or not it's something that'd be good for a token bad for a token good for an ecosystem bad for an ecosystem maybe potentially a narrative that's going to form or seems to be forming so like me and Sam just did a whole series on uh

decentralized perpetuals where we covered dydx and GMX we call the incumbents and mycelium and a couple other and you know we have more reports coming out too but anyways like blockworks research really is like a required a required tool if you're constantly investing in crypto assets not only do we streamline the information for you but we're going to probably provide information that you wouldn't see elsewhere like you would not see on crypto Twitter and your Discord group or whatever um right now we're really revamping our data so we're going to have some of the best data like some of the coolest charts in space that you really wouldn't find elsewhere again um and yeah definitely subscribe to our newsletter we just made the blockworks research the newsletter free it's a daily newsletter that comes out at noon

Eastern Standard Time every day and we pretty much just cover anything interesting that went over that like that happened over the last 24 hours cool stuff funny stuff and best of all stuff that might be able to make you some money or you might be able to help in use in your investing even though of course not Financial advice yeah man I feel like I'm in high school and you have like a note card like you know like in your sock or something that you just read from but you just killed it thank you I'm just I'm just bullish block Works research uh I like talking about it love it well I'll include all the links in the show notes definitely check that out follow them on Twitter honestly their tweet threads are really great too they're always just like six eight tweets but it really captures and

makes everything easy anyways I'm gonna stop pumping their bags um obviously hit subscribe whether you're on Empire bell curve if you're on Empire and you haven't listened to bell curve or vice versa uh give it a listen and yeah this is a lot of fun guys yeah I appreciate it really enjoyed it Garrett thanks for having us sweet see you next time foreign [Music]