The Battle of Restaking Platforms & Alt L1s | Roundup

Transcript

be it the team the resources or like the construction of the protocol Unis swap is by far the best shot these are bullish lawsuits in a way the thing that happens you know be at the ETF denial for eth if it comes and the subsequent legal fight or the Unis swap legal fight is like you just get a lot more press coverage eth is in the headlines every day Unis swaps in the headlines every day like I don't think this is the gacha that the federal government thinks it is it's just going to make these things more popular hey everyone wanted to give a quick shout out to the wormhole Foundation if you're a bell curve listener you know that transferring across chains can be a massive pain I certainly do I complain about it on this program all the time that's why we are

super pumped to have partnered with the Wormhole Foundation the stewards of the Wormhole protocol the Wormhole protocol connects over 30 blockchains and six different run times including salana sooie ethereum layer 2os and more and the coolest part about this particular partnership is that they have made custom bell curve nfts which you can get and mint for free you can claim that by just going down into the show notes and clicking on the link all right guys on with the show hey everyone wanted to give a quick shout out to this episode sponsor flood protocol the optimal decks aggregator now if you are a listener of bell curve you know that me is a massive problem which is why we are so pumped to partner up with flood on this season flood is the only gasless and me free aggregator that not only gets you the

best execution but also gives you back all the extra Surplus that you create every single time you swap now this is relevant for both swappers and developers but you're going to be hearing all about about them later in the program so for now thank you flood and back to the show hey everyone this episode is brought to you by Unis swap delivering the best onchain trading experience in crypto period Bar None one thing I want to call out is the Unis swap extension so say goodbye these days of these annoying asort popup wallet extensions you lose your place trading you have to open it back up unop now has a nice Sleek sidebar that prist no matter where you are in the web it's much easier to use if you click the link at the bottom of this episode you can join the waiting list and I'll see what

I can do to get you moved up that waiting list but definitely go click the link check it out all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back to another bell curve round up you got Michaels one and two and Vance B how are we doing doing well doing doing well I think uh we're we're all at full full warp

speed today full warp Dude full warp you boys moving a little slow we had some drinks last night a little slow a little slow this morning it's okay it's okay yeah and we're we're more the uh we're we're in a state of morning this morning uh for got to pour one out I don't know if he pour one out for this guy I don't really know what the public on on OJ uh OJ Simpson is is deceased though pretty wild man if he did it he wrote that b if he did it this is how he would have

done it but I didn't do it yeah rip to him I don't know why people think the government killed him I think they're done with OJ I think they got their their man they did yeah that's just that is such a wild idea to think about that's just sounds like the highest idea of all time it's like well here I could write this book about if I did it this is how I would have done it but it's incredible that that made it to print that's why I mean it's because he had gambling issues and he was like how do I make money oh really oh this sad stra yeah well there's a Feelgood story of the week to uh to uh counter that which is I'm gonna tell my own Feelgood

story which is I have my back you guys know has been so bad for like two years haven't been able to run dude I'm like a 95-year-old you guys know this story but this how pathetic is this story I actually threw my back out for two months like couldn't move off the couch CU I got food poison and I threw up so badly I threw my back out but yesterday I went out a run for the first time so that was a wow I'm a happy as well oh yeah it is dude it made me feel yeah so I'm very that feel well there's there's the guy at the Masters who threw out his shoulder celebrating a birdie putt so really you're you're you're in good company no that's terrible that's you

guys been watching that at all oh yeah Master's week best week of the year is that this week yeah start today I mean it's weather delays we're we're recording this Thursday morning we'll see uh when they officially tee off but begins today yeah I went to Augusta once my college roommate had tickets somehow and yeah it's pretty wild you can get you can get a pimento cheese sandwich there for a150 yeah it's a150 yeah yeah that's what it is it's like the Costco hot dog or whatever just stays stays Pat and it's not fans it's patrons oh yeah patrons it is very it's like real Southern it's almost like antab Bellum

South it's like the last vestage of like antab Bellum Southern Culture I mean they literally got greens Keepers pre pre- tournament out there with scissors clipping grass yeah it's absurd yeah there is you know what it kind of has is a little bit of like Get Out energy you know like if get out was actually happening in any place in the country probably augustas is where that would be yeah they don't they don't have the greatest history with that but uh is what it is I guess the funniest part I think about Augusta is you've got this Oasis of the golf course right there but the nickname for the town is disgusta is it really yeah I guess I didn't spend that

much time yeah it's too bad um all right we should get into we got actually a bunch of stories this week maybe we just start with the one is undeniably the headline here which is that Unis swap has received a Wells notice from the SEC so that typically precedes an enforcement action uh Queen base got a Wells notice a little while ago um and yeah basically Hayden the CEO of Unis swap Labs took to Twitter to announce this and we can get into some of the details the it doesn't seem like the SCC has actually elaborated on or and anyone from the OS swab team has said what exactly the enforcement action is going to be there is speculation that it's going to be operating as an unregistered broker dealer but I've just never seen

the amount of uh like outpouring of support for UNIS Swap and I think there's a bunch of different angles that we could talk about but what was your guys high level take on this so I mean high level I think Paul greywall greywall had uh the best take on it specifically on the broker point which was um related to The Case of the coinbase SEC C case that just um I guess uh the the the motion for dismissal was partially denied but the part that was denied was the definition of coinbase wallet acting as a broker for users and it it very clearly states that if you are not facilitating custody

or like basically making transactions on behalf of your users you are not considered to be a broker and I so I would imagine that the SEC is smarter than trying to go after that exact angle because let's be serious that's basically what udis swap is in a lot of ways it's a it's a front end with a decentralized protocol on the back end users are making actions on their own they custody their own assets it doesn't fit cleanly into the definition of a broker I know the SEC has tried to change this definition but it seems like the courts have yeah if I want to pull it up um seems like the courts have um been been kind of clarifying this uh particular point I I would imagine that

the wells notice and in just this context Wells notice for coinbase I think went out in March of last year and then um in July is when they were officially um sued and so we probably have a few months before we actually know what the lawsuit is or or anybody knows what the lawsuit specifically is um the wells notice will have information in there saying hey can you identify this or that or hey do you have responses to to this point or that point U but we won't know about that until we actually see it um I would imagine that it's probably not going to be broker services or maybe it's a part of it but it's not something that they're going to be there will be other things featured in it as well yeah I mean the only thing I have

to add to that is that this is going to take years and Hayden said that in his post and if you remember the Jay Clayton on the way out you know suing Ripple you probably sued a couple other people like you know those cases were filed in late 2016 and we caught verdicts on them no no no 2020 or the late 2020 we got verdicts on them in 2022 2023 so these things take a long long time and I think if anybody is going to have this fight you know be it the team the resources or like the construction of the protocol Unis swap is by far the best shot you know like Gary gensler's going after either x * y equals K or for you know a designation as a broker dealer that's

already kind of been uh thrown out for what Michael said earlier so I don't think it changes much I think generally like these are bullish lawsuits in a way the thing that happens you know be at the ETF Den for eth if it comes and the subsequent legal fight or the Unis swap legal fight is like you just get a lot more press coverage eth is in the headlines every day Unis swaps in the headlines every day like I don't think this is the gacha that the federal government thinks that it is it's just going to make these things more popular and and ultimately leads to Discovery so this is a you you're going to have to look at all the facts and circumstances they're going to have to put forward internal uh documents internal analysis they're going to have

to represent their perspectives and we're ultimately going to get to Clarity and I think that's probably the best part of all of this whether it's coinbase or Unis swap or or or ETF you know eth ETF denial is we're going to get to a point of clarity and there's not going to be this you know great video that's hanging over our heads yeah you know what's funny is I feel like the sec's suit of xrp changed ripple from this kind of industry Pariah you know you had guys like celus back in 2017 going on podcasts but you know and now now was like those guys are all right actually it unified everyone behind by Ripple and I feel like it's gonna actually be it's gonna be really shitty for UNIS swap to be dealing with this

I'm sure I can't even imagine the headaches you know long conversations with lawyers feels like a distraction from the mission but if there's one team I think that was equipped to fight this on the def5 side of things it is unis swap I I had a question for you guys like obviously none of us are lawyers here but this feels like sort of an interesting strategy a strategic move from the SEC here because I I don't know uh on the one hand it seems like they're going after Unis swap to send a message but also Unis swap is well funded enough to fight them and if they were to lose on this it could ultimately set really damaging precedent for them in the United States I you know what I mean it's it's kind of a heads scratching move honestly it doesn't seem like the

smartest the smartest move I've ever seen from them th this case will be decided in years and there will be multiple appeals if there's a loss on the Unis swap side there will also be significant costs like that's the thing you didn't mention like I think coinbase has probably spent 100 million on on legal fees for their fight against the SEC so they Pi the right team to kind of go after but this is also political calculation like you had the treasury uh asking for numerous things crypto and non-crypto but on the crypto side they want more regulation or or more power to go after overseas stable coin issuers uh they're talking about you know Elizabeth Warren and Wally uh Ado the under

Secretary of the Treasury in Congressional hearings they're talking about like you know KY seeing all validators um so like you know this is a this is a political operation that's like manifesting in many different ways not just the Unis swap case um but these things will all be decided way after Gary gensler's tenure like this is like political theater in some senses so I was literally just about to say this this I thought was one of the best Tweets uh following up and this is the CDO vertu one of the largest Mark maing companies one of the largest Mark maing companies in the world and we're not talking about crypto we're talking about all of the financial assets uh all over the world and you know for those that

are listening um Doug says best of luot to you Deary is a politician not a regulator as the head of enforcement and I think you know really what this message is saying is they're going after the big ones because it's a political move it's not something that they think um or maybe even care as much about winning but to Vance's point because this will be finally adjudicated at years it's about getting the political win of starting the process not necessarily finishing it keep keep in mind like you know I think the betting markets have it right for the presidential election that Trump is the favorite you know we think he will win um but in the case that he doesn't all these people are jockeying

for new appointments new positions new narratives um and so you know the Long Knives are coming out for not just crypto people like Elon Musk you know it's kind of like people are just trying to make a show and get their name out there uh while they can ahead of this potential you know reappointment of you know powerful positions Etc I I I took on the biggest exchange and I took on the biggest decentralized exchange yeah yeah right and and even the Trump stuff you know Alvin Bragg suing him in in New York Laticia James like what do you think their next jobs are going to be and what do you think they're GNA put on their resume you know

Republicans do this too by the way like just nature of the Beast uh not to detour us too much here but I I I was I read this thread on Palmer lucky I like know who Palmer lucky is but I haven't you know deeply followed his career or whatever and this this thread the guy who put this thread together uh you know highlighted you know after Oculus got acquired by Facebook it was basic then it got revealed it got reported on by The Daily Beast or something that he he contributed like $10,000 to a Republican cause and there was basically a groundwell riot to get rid of this guy and then they got rid of him and I just that is so ridiculous to me that is that is beyond nuts that is old school like

shame like the the mob that that just blew my mind free free free speech for me but not for thee seriously and I guess he then founded Ander real which is now it's bigger than Oculus was when Facebook I mean valued at nine I think eight or nine I mean andrel is also like going after defense Tech in like a very different Market American dynamism baby listen Palmer Palmer lucky is nothing short of a poly math like he is extremely capable at whatever he chose to do um but yeah it's pretty insane the full Arc of that trajectory at Facebook nice um I didn't mean to deriz too much there any closing words on actually just

one more on the Unis swap thing it feels like to me to my uneducated I know non-legal mind it just feels like the SEC is pursuing all these different tactics for trying to take down crypto company so initially they went after the issuers right in the form of Ripple they're not really doing that anymore then they went after exchanges and they actually tried to expand the definition of what an exchange is even though we were showing on the screen before it clearly for something like a decentralized exchange like Unis swap or a wallet like coinbase it doesn't fit any of the 16 different you know definitions that they have just kind of feels like they're ticking these things off one by one but they just keep walking down these routes and losing so I would I would expect more of these generally um on the different ecosystem

actors but like I remember when the Ripple suit first came out it was like Armageddon because it was the first one um now it now it's just kind of like yep just just part of the job um also keep also keep in mind they didn't Sue but they definitely worked against the ETF issuers like this is a multi-pronged approach to try and Stamp Out an industry through regulation by enforcement I mean I I think the craziest thing is you've got I think it's 13 or 15 uh Assets in the coinbase suit that are listed as Securities that coinbase traded but you have zero of the people who actually created those assets

or issued those assets or or like worked on building those assets that are able to represent themselves in court so now coinbase has to go out there represent all of these different assets on behalf of I mean the tactics are kind of like not altruistic in my mind um you know they they decided like oh we're not going to go after the issues we're going to choke off the point of economic Vitality of these different issuers which is the exchanges and you know we'll see how that goes but I I'm I'm Lance I I think the proof is in the pudding and there has been much sucess so far yeah and that quote says it all that Doug c yeah head of one of the largest market makers in the world it's not because sometimes you know we

live in our own little bubble and is this just a crypto thing but it's not tons of other people feel like this uh large Financial players politicians and policy makers on both sides of the aisle everyone's just looking at they CC and saying what are you doing so I guess yeah I do not wish you good luck sir so there you go um uh all right let's talk about you guys have uh there's a little bit of news coming out of the framework land um you guys go let you guys go let a very big round uh I don't want to steal the spotlight here do you guys want to talk about um the news on your side of the fence maybe some uh semi pseudonymous Founders as a hint drawn there yep I mean yeah we're we're we're co-leading

aund million round into bar chain um thank you thank you thank you uh I mean the first time we met be we were like what what is going on here at these Anonymous cartoon Bears building a blockchain the meme is that the chain was literally not real it was never going to launch um but I think once we dug in more and more a just like how talented and smart these guys are uh you know like they're they're pseudonymous um you can kind of figure out who they are just like Googling if you really want to but extremely extremely talented team from you know from very large tech companies in the traditional world uh a very thoughtful approach to the

actual architecture of the chain and and they're calling it like a like an ethereum adjacent chain with um a proof of liquidity powered staking mechanism and and kind of what proof of liquidity is is um you're obviously staking the tokens to secure the chain but you're also staking them on the different Primitives in the chain um to bootstrap them and keep them liquid and so like you can think of this as like you know bootstrapping the defi ecosystem bootstrapping uh you know probably like meme coins like it's like a continuous grant program that is meant to accelerate the adoption of the actual underlying Primitives and I think that's like one thing that we notic working with folks like op or the grant programs are kind of subject to this like meat space intervention where it becomes this

political thing um and so all of that the construction of the chain the talent of the team the prf liquidity safing mechanism and then just like the Bears too like I think over the over the long long term where our thesis is increasingly going is that basically all underlying Tech and financial Primitives will be commoditized the only thing that will matter in the end for blockchain is branding is the use case of the underlying asset is money um and then community and if if you went to baroa at eth Denver like they blew the thing out like you know packed wall toall like they're doing talks in there like they all have like the the [ __ ] beheads on and then there's like people you know like paying like super close attention

at the front and then there's like people like drinking beers in the back and like talking to each other like it feels like a very just like it's an awesome Community we really like the guys and we're we're proud to be investors very excited I feel like you can feel that Community thing when it feels like organic and real and fun and exciting it's so noticeable when it's there versus when it's not you know and it's hard to create and it's really hard to also maintain yeah and if you've been able to do both it it is a huge defensible mode nice so what uh I don't know if you guys can uh you know talk about talk about any specifics here but what should folks be looking for on the

horizon for be chain related stuff this year or these Trade Secrets there's no no trade secrets there's no trade secrets there's no mnbi here but I mean it's gonna be a big couple quarters for for launches for them um I can't get too far into it just because it's not public but uh you know you think about what are going to be the alt l1s of this cycle and kind of the ones that we're looking at right now like this should be like ongoing gecko like it's like you know Avalanche and salana and like you know uh like maybe fan like who knows like but these are all kind of like older cycle projects like kind of need a fresh face new approach you know new community and

that's kind of what be chain is like I think this will be the all L1 of this cycle and then you know monad I think is the kind of other one that will at some point and you know we have a lot of respect for the monad team and Kon and all the people there but like these feel like the kind of two approaches and what's kind of cool about them is that that they're both you know evm and they play nicely with eth and it's a creative to the overall eth thesis and eth is money um and so yeah like we're just excited about bar chain and I think you know them and monad are going to be the two that have the resources the community and just like one last not of the community I think I passed on be chain at like 4 or 500

million and then Michael picked it back up at you know whatever evaluation we did it at and I was like you know why should we take another look at this and he's like the community is just absolutely Bonkers like they've got like Community podcasts they've got like Community websites like it is the closest thing to the chain link community that I've seen in you know almost eight years so it's uh it's pretty interesting I I think people should go hang out in their Discord it's pretty uh pretty funny what what they're doing there it's it's a wild Place dude we should do um an episode with one of the bear chain guys in ke that'd be that be a really good one um also shout out to Mona they did they announced their raise as well 225 million led by Paradigm um as a disclosure I am a very

small bag bag holder mon Al so uh happy to see that that all but yeah I I I agree like the you know the modad team is great i' would love to get to know the bear chain guys also I just don't know them particularly well but should get them on the Pod yep it's uh sometimes it feels like it's like uh bear chain against the world cuz like you know you like many other K's have have moad bags that's totally fine like we think it's going to do well but uh the communities are are kind of like you know top down versus bottom up that's one way to think about it would if we got the bear chain guys would they come in their bear suits for the podcast I would I would assume so I mean like it it does kind of seem like a

joke when they wear the the heads but like if you have seen a picture of them on stage it looks really cyber punk you know it looks really kind of like this is what crypto the Sci-Fi Vision used to be about and they're definitely bringing that wild and crazy you know part of the Persona back with it yeah I got to dig a little bit into the uh proof of liquidity thing that sounds super interesting it's it's something that I'm starting to think a little bit about with um like reaking uh you if if you look over at Cosmos land how they do shared security there's like hey you can use our Val our validator set from The Hub will um will validate your consumer chain but there's also an

element of protocol on liquidity that sometimes the Hub will dish out and that second element is pretty interesting so the idea of kind of you know as a value prop it's almost like liquidity as a service protocol and liquidity whatever it is I think that's a super interesting area might pop up more around reaking so it it it fits with the thesis of like at the end of the day like I guess fees do matter like you know underlying fees occurring to the blockchain but the most important thing is that people actually use the assets it's that they use them as money it's that they're transacting with them like the Buy and Hold thing that probably only works for Bitcoin everyone else they're going to need to figure out their own angle to make these things money that's the by far the biggest

Market um and so that's kind of part of the thesis as well you know it's funny you say that one of the so we have been like experimenting with a bunch of different metrics to look at for l1's as something critical and it's really it's it's just difficult to measure this but we were looking at the um like the depth of different like eth trading pairs basically as a as a critical metric for eth because we had the same thought as you it's just like people just need to use eth as money and if they're using if it's that's the most liquid cross then that's like super bullish eth basically so I don't know it's hard to meure that though that was the challenge for this probably dovetails into like like you know you can use it as a DEX pair you

can use it as a borrow pair and you can use it in reaking which yeah actually the other kind of thing that we had this week yeah that's a big that's a big week for framework should we all right let's talk about a t let before we talk about it so sometimes when you announce projects nothing happens people are like that's cool interesting uh less frequently is like the knives come out and Michael I don't know if you I don't know if you saw this but but uh one of the uh I I assume Ian Lair investors Evans added us to a list of people that would sell their mothers for 12 Bas 12 basis points yeah I saw that like and people are just coming coming after us yeah like you

know it's uh the knives are out I challenge Evan to show me your bags I I think that's a little silly there were there was obviously going to be other reaking platforms all always listen I can name I won't but I can name at least two others hey everyone wanted to give a quick shout out to the title sponsor of this season of bellur The Wormhole Foundation now if you are an onchain user which I bet you are if you're listening to bellur you know that the cross chain experience in crypto still sucks let's just call it spade a spade we talk about it in this program all the time interop is still a big problem which is why we specifically wanted to team up with the Wormhole Foundation they are a decentralized

interop platform that powers multi-chain applications and bridges so that could be anything from defi to nfts governance oracles and more so if you are a developer and you're building uh cross-chain assets apps or data or anything like that I highly recommend that you click the link at the bottom of this episode and go check out to see what you can build on Wormhole and Wormhole first of all this is a fun team they did something really cool with us you can actually go and click the link at the bottom of the screen which is going to send you to a landing page where you can claim your own unique Wormhole nft so we're doing this with me and we're doing this with Jason my co-founder so help a brother out it's a super cool nft I promise go click the link at the bottom of this episode and

fill out your PO app get your free nft and if you're a Dev head over to Wormhole and check out to see what cool cross chain stuff you can build hey everyone want to give a quick shout out to this episode sponsor flood protocol the optimal decks aggregator now flood is the perfect partner for this episode on the multi-chain future because blood is solving so many of the issues that we're going to be talking about this season and this is relevant for both Traders and devs so if you are a Trader you should definitely head over to flood Swap and start trading because they solve three massive problems one gasless trading no more pesky trading fees two you don't have to worry about getting front run me free and then three they have excellent order routing so that you know that you are getting the best price

so head over to flood Swap and click the link in the bottom of the show notes we're going to send you right there for the devs out there you can leverage floods flexible hooks allowing you to make swapping a first class primitive by adding custom order types like t- wops or if you're a wallet Builder or something like that you can actually build your own orderflow auction in and start recapturing a bunch of that me if you want to reach out to them go to devs flood. bbid or just jump right in the Discord all right guys thanks very much appreciate you flood hey everyone this episode is brought to you by Unis swop delivering the best onchain trading experience period Bar None in all of crypto here's how I would divide the protocol today there's a web part A mobile part and an extension part you

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list thank you very much Unis swap let's talk a little bit about I'm I'm curious about car's decision to so uh reaking platform it seems like the Strategic differentiation you guys would know much better than me but is to be more asset agnostic so it's not just restake eth uh they're going to accept all different types of assets I actually thought people were what one that didn't get enough interest was usdc like that is a pretty interesting restak aset especially in a bare Market um so you know so yeah what do you like uh I don't know anything that you could speak to like the strategy like pros and cons of doing like all assets versus being specific to eth or salana or Tia or something like that I mean I think

that's exactly it it each asset will number one Garner interest from that Community number two provide a different security model depending on what the asset is and how it trades and if you're eth based I I think that there is a lot of just like concentration rest um where you're not going to be able to have the the connections to other communities or the potential risk of let's say you know eth goes down whatever 20 30% does that mean your entire security model for everything that's built on top of you goes down 20 to 30% you need to have the the diversity be able to to be able to have that security model I mean I I do think that that is an important variable here I think the other one is just like how much security is actually needed like how much economic value is needed

to provide the right amount of security for these ecosystems it seems like we've kind of blown the lid off in terms of where you know that 14 billion dollar amount is trending relative to what will actually be needed when these things launch and so you know the other approach here is starting smaller um and and frankly like limiting on the way up and find you know reasonable growth vectors versus just Unlimited No Cap TBL growth the the other thing that is important to understand about carck is that um you know the igler approach is to draw all the liquidity on to eth L1 and that does work for eth based assets

um for all the other chains in the world the car proposition is like we're going to bring liquidity to you like we are going to bring a robust LRT based defi ecosystem to you um versus trying to suck the liquidity away from your chain and you know this is still eth aligned like this is still going to be predominantly e focused but this is just like a different approach to the problem and I think you know no matter what uh you know nasty stuff is said about like us like you know I think the selling our mother for 12 basis points is like a little offensive but like it's like mostly funny um but like you know you had that for the Carrick team too and and like we're just not going to St to that level like we still really like air we're large depositors like you can't

make us hate you even though you know it might be the not the same vice versa but you know we should be allowing competition in this space like if there is no product alive and frankly even if there is like there is no rules that say that there can only be one approach and so I think Carrick is the Dark Horse right now and that's kind of the position that you want to be in in these fights like you definitely don't want to be Goliath you want to be David um and the last thing I'll say is like when you when you activate the imuno response which doesn't happen frequently when you just have like you know the host sees on the uh the illness or whatever they deem it to be it's like you've done something right so yeah I think Carrick is just

going to keep winning and we support those guys and they're HED your high quality Founders and despite what's being put on the timeline they're not they're not scammers that's like understand that well they were the this is the founding team behind risk Harbor right is that yep yeah yeah I don't I understand I feel like they're getting some shade right now they're getting some shade because I think there's some uh sleuths that are uh maybe aligned uh with IG that are trying to figure out you know the trajectory of events the trajectory of events is really simple they pivoted from risk Harbor realizing that collateral pools as risk models aren't as strong as building security models with restating assets which basically is

you know what car is and I I think risk Harbor as a brand is not aligned it's more on the insurance collateral pool uh branding whereas Carrick is something that's brand new it's not like this big you know crazy roundabout anything it's it's really a simple pivot last thing I'll say on this and then we can move on because we don't want to just like talk about our bags the entire time but um number one the two Founders are killers if you write them off I mean like they were at the epicenter of the US explosion like don't don't write them off is is the first one and the second one is uh the Caps were hit there's more

demand than there is supply for their services at the moment and they're going to be raising the caps in the near term so you definitely uh check it out yeah definitely check it out I have um as a non- bag holder in any of these things Ian l or carck or whatever I the thing that was interesting to me uh is so I've been a a supporter of the idea that I think there's going to be reaking on other ecosystems like there's going to be restake Tia and soul and some other l1s maybe and one thing that I think Carrick might be because there although I I know that there are a couple protocols launching soon if they if Carrick is the first one that sort of launches and like has they could weirdly end up like winning the market for a salon or Tia or something like that and

I was actually thinking about so magic Eden I don't know if you saw so they've been crushing it over on bitcoin ordinal land but they're actually starting to win back salana market share as well and the reason I think that that's happening is because so many people are trading wal they're like ah I might as well trade my Sal nfts here as well um although I am biased shout out to tenser those guys did their air drop this week love that team uh they're great um but uh but yeah I think so I could see Carrick winning that like that that being a massive uh you know it's like oh if I'm gonna stake restake my soul hereo then I might as well do my eth as well just a convenience sort of play but uh one one thing that's been challenging for some of these infrastructure

protocols is to do the cross chain thing like Lio tried to expand onto salana onto polka dot and it just didn't really work because a they just didn't have the there's a focus thing but then there's like a squishy cultural alignment sort of thing um and actually incentives ended up we did an interview with uh some of the guys from salana talk or uh course one talking about this and they said it was just very difficult basically Lio spent all of its early incentives winning the eth market and then they couldn't compete with marinade who was like entirely focused on salana so what do you guys think about some of the challenges of like the cross ecosystem squishy alignment strategic stuff I don't know that's the I guess those are the pros and cons so I I think

if you wind back the clock Li was actually very successful on Sala just the price of Sala was so low that it didn't make sense to keep the services going and and that was like a strategic misstep on their part but that opened up the window for jto to to really become the dominant LST on there and I think the bridges and Bridge security has improved by a factor of 10x since basically all this stuff was tried in the bare Market um and then again I think it comes down to like can the top 1% of Founders pull this stuff off and like Carrick is an evm based L2 if they succeed in winning the multi-asset staking landscape that's a win for eth as well um and they have an incredibly secure method to to to basically take in

different assets on different protocols um and that's just cuz they're talented like if you have the best people the rules don't really apply to you in the same way that the middle 80% of the field has them apply to them and and the way to measure that is speed of execution that that's the thing with Carrick like look for them to like push the pace like kind of like blur push the pace that's like kind of what we think is going to happen it's like they're just going to move fast uh and they don't have Tech debt that matters so much and Founders that are just like push push push the ball up the up the hill and I I think it was one of the oldin guys that said this it's like even more so than the quality of decision- making it's the frequency

of making decisions that's a really big predictor of success in startups I totally see that so there there are really good people who are operators who should not be Founders but are founders they're the ones that need to get to like 70 80 90% resolution before they make decisions whereas the best Founders can make res can make decisions with 51% resolution that's a really good way of framing it yeah and that I mean you need both right you need like the sort of visionary I make the call executive decision but you also need like a good operator to support those people because uh usually those people aren't yeah the the type the time for operators is when you've you know solidified and aifi yes

like like car's 12 people and you meet these two the two Founders and it's like uh oh match up nightmare love it all right well we'll be rude for you guys um and I think there's going to be a bunch of uh other reaking platforms that announce totally we welcome competition yeah we take many approaches are better than just one Vance maybe switching switching topics here a great tweet about uh hedging alts I just had some questions for you on but this Dynamic of so basically we've talked a little bit about the sort of lockup Dynamics and Supply Dynamics for especially some of these early stage tokens but basically

it seems like the game from my understanding is you make an investment you get some extremely discounted tokens and then when those are about to go live and you actually have a price or there's some sort ofe Market or whatever then you hedge out that exposure via pers the challenge for that sometimes is that the funding rate goes up an enormous amount and you can get squeezed on that right and I think we probably saw that a little bit this week with Athena as an example so I but could you maybe for folks who aren't as involved in that market or don't understand those that Dynamic like you just shed some light on how that actually works in practice and what people are doing sure so the first thing I'll say is that there's a rule called Rule 144

right Michael y um and Rule 144 basically says that people who buy tokens are not allowed to sell them for a year if they're if they're locked up in part of like a you know an offering of tokens the the one point of clarification is that if you sell them within 366 days or if you're basically like buying these things to resell them or if that's sort of you know the intention and that's how it looks like you're trying to transact in this deal you could be considered What's called the statutory underwriter which means that you have be a broker dealer which no one in crypto is huh is this a secur this is a US Securities Law so like this doesn't apply to people

overseas but like even the hedging I'm assuming that that would be not Kosher with this Rule and so I think kind of what you see is like the less sophisticated overseas Market participants hedge their their bags or or maybe us people who just don't think this rule applies to them um and what that means mechanically is like you buy tokens you get like a Saft or a safe plus a warrant you don't actually get the tokens um and then an OTC desk will say you know they've set up to like you know we can Hedge for six months ahead of time so say you're in month six of your unlock and you decide that you know either this rule doesn't apply to you or you don't care um you you enter into this agreement with this OTC desk or it

used to be like with FTX directly in their trading desk and what they do is they say well you've got $100 this Al you want to get out of it um we need $100 of collateral to put a 1x short on the book on the P's book um and so you've got $100 of the alt you put $100 of of cash on the exchange and you short the the per um when you short the per uh you have to pay a funding rate and the funding rate can range from you know if it gets really froy like this week Athena was 287 per apy but it's usually more benign than that it's maybe like 30 40 50% um and like just for context the the cost to to Long Bitcoin at the

moment is about 177% so like that that's kind of like the Baseline funding rate and then you add just like a bunch based on the supply dynamics of of the all and the demand to short um the problem with this is that if it goes up instead of down uh you're required to post more collateral so like you can literally get blown out on this to the point where you know say the alt goes up 10x you know you need 10x more collateral to keep that short on and if you don't add enough collateral in time it will blow past your collateral level your price level and liquidate you and so there's this five wheeel where like back in the dayf really popularized this where it was like you know uh you can you can get out of your alts as soon as you buy them

just give us some cash to put on our exchange oh the price is going up we need more cash oh the price like you squeeze them you blow them out you keep the cash and then you start the polycule inevitably um and this is like The Virtuous cycle that these are the real friends that we made along the way the PO that we started and the cash that we kept so it's just dumb I would say like don't do this it's all it's obviously like in some ways depending on where you're based ilal um but also like it's completely obvious like the other way to do this is options and when people like I'm not going to name any alts but like when they try to start selling you like options on alts it's like what's what are we doing here like these options don't trade on any real

exchange so like there's clearly some sort of hedging flow behind this um but that's kind of the explanation yeah don't don't try to hedge long Venture positions is is kind of the The Narrative here the the other thing that I'll say is um we're now back in the in the phase of the cycle where uh you know portfolio companies that we have that are raising uh secondary or second you know like basically later stage rounds are talking with uh in particular Asian funds who are requiring uh obviously these deals aren't going through uh in the way that I'm describing but that these Asian funds are requiring a uh 10 to 25% allocation of the tokens unlocked at token Genesis

event to invest in this round it's you know in typical for format you know it's a three or a four-year vest for or unlocking for anyone who invest in a private token you get you know onethird or one quarter of it at the end of one year and then it invests literally after that just as context but you know Asian funds uh in particular I've heard this three times now um are asking for unlock tokens at the start so you know essentially they can dump we're getting now to the point where liquidity is what people are really thinking about and how they're getting out of these positions is what we're thinking it it it's it's um it's nefarious and it's definitely um anti

itical to uh the entire premise of a venture investment and so if anybody's out there thinking about raising money uh don't have these conversations don't entertain these deals um don't don't give additional liquidity because you know if if it goes if it turns the wrong way against you or if you allow these things to happen um you could look like ICP and definity just like it's done at the bottom of the ocean those are brutal charts those are brutal charts yeah a thousand screams crying out all at once it's just bad practice also you just don't I mean you also when someone's on your cap table it's like more than marriage right at least in

marriage you can divorce it's like you're with that person better or worse so but but that's not true if you have an unlock schedule that happens a token Genesis EV yeah 25% of you can uh can leave the relationship immediately that's crazy yeah that just that's not well I guess lots of stupid deals end up getting done uh around this time so yeah Founders don't do that that's not good um actually so one thing that uh just happened today so I'm I'm not even sure if we got it on the notes but it was uh pretty interesting is there's a USD Circle and black rock um are uniting for a usdc smart contract so Circle in collaboration with black Ro Black Rock

has introduced new smart contract functionality that enables holders of uh Biddle uh black Ro's USD institutional digital liquidity fund uh to transfer their shares to Circle for usdc so yeah it's I mean this is kind of just more of Black Rock actually leaning in I know I think black rock is an investor in circle and it feels like they're strengthening their ties it improves the value proposition for Biddle it's also probably good for Circle it's also it's a little uh some of our analysts were saying it's a little uh a little usdc is you know this arm of the forth the state right uh so I don't know what do you guys think about this news I mean is

powerful um to be honest I I'm not I guess it just adds some amount of functionality for Biddle I've I I haven't actually tried to hold any of these assets or do anything with them so honestly I'm not a user I'm not 100% sure I mean imagine the J position of you've got the SEC coming out and you know trying to eviscerate this industry um Defi and CI r large with the batop of Larry think coming out saying tokenization is you know one of the biggest imperatives for our industry for this company uh launching the biggest Bitcoin spot ETF having applications in for E spot ETF and doing the tokenized fund on chain

like it's pretty interesting you know the biggest asset manager in the world is basically like okay I understand what you're saying I'm going to go over here do my own thing yeah it's also interesting you can only sell uh build for usdc you can't go into build for usdc which makes sense given the kyc AML requirements yeah I'm I'm not even saying like this is the way that this whole thing will work this is how tokenization is going to be it's just another step in the process of a tokenized asset that can live on chain in a regulatory compliant way but massive massive uh narrative violation for what Regulators are saying listeners

correct me if I'm wrong on this but it seems like what this what this does fance to your question before is it facilitates near instant uh you know 247 offramp for Biddle for people who are trying to get out I guess that's the that's the value proposition yeah I mean it's it's super cool to see this starting to take shape like I love build and like the the fact that they're like getting inflows to yield products on chain is there's always the question of like okay we're going to tokenize the assets but like who's actually going to tokenize them who who actually gives a [ __ ] enough to like put assets on Chaine and drive yield like unironically we are one of those people because we transact on Chan a lot uh but like having these big people

doing it it's just it's a it's a vision that's literally been like 10 years in the making so cool to see who who do you guys think that natural customers are of uh Bond holder like onchain Bond holders like who who in an onchain setting is like could be Dow treasuries I suppose but yeah who do you think the natural customer is for this type of stuff so I I had dinner with a guy who runs a very very large credit fund this this week and he was telling me all this crazy stuff that they do to get like you know 8% yield like if you if you look at the uh the the corporate credit ETF I think it's like a 7% yield at the moment and so you got to go pretty far out the RIS

curve to get to like eight or nine and he was like you know we uh we buy these ships and we lease them out and we earn interest on that and then we take you know the the collateral of the ship we we borrow more we like we lend that out and like we can get like 9% yield and then you look at the DSR and it's like 14% over collateralized loans that can be liquidated at an instant if it goes sideways and like I think the answer to who is going to consume these products are people who even in a 5 and a half% fed funds rate world are looking for more yield and it's like great that the FED funds rate is up to that level but it's also like the NASDAQ was up 50%

last year so like what's the what's the real inflation rate when it comes to all the things that people want to buy it's probably higher than the FED funds rate but like the DSR is probably an example of something that beats it so I think the you know there's just still a structural shortage of dollars and as long as that persists you're going to see inflows to products like these H that makes a lot of sense to me yeah I I mean I think there'll be some people that are I I get the I get the sort of allergic reaction some people have to black rocks like oh is this crypto this feels kind of centralized but I just think that we at the end of the day we want people actually using these protocols for things and this feels like you know part of the compromise that

comes along with actual real institutional adoption so I'm supportive about all this type of stuff it's going to start somewhere and it's going to have to start in the most like minute way possible and this is that then totally welcome it totally Pro totally Pro um all right next thing I wanted to get your guys read on I almost I'm hesitant to almost bring this up because it almost feels like dirty laundry but there's a pretty spectacular implosion over at uh margin fi this week which is just yeah it's tough because they they had a huge they've got a huge market right their borrow lend on salana they were there throughout all the tough times it seems like all they had to do is Ride This Out but I guess the maybe

to set the context here is margin F has been taking a little bit of heat recently because they were one of the early adopters of points as an ecosystem but they kind of dangled the points uh we don't know when there's going to be a token and I think one of the founders kind of like hit back at people on Twitter being like hey stop asking basically and just wasn't super friendly to the community someone did this little I think this was someone we were talking about from I can't remember there was another protocol that did this recently just don't openly mock your community that's a pretty good rule of thumb but there was a there was an exchange between this guy tyy MAA uh because Edgar from margin fi called sat start a dirt sack for asking for the token and it just it really spiraled a lot and it

led to Edgar posting yeah I resigned from margin today uh from working on margin fight the research arm all of it world class team but I don't agree with the way things have been done internally or externally it's a really long post but yeah it feels a little bit like a good oldfashioned Rage Quit honestly uh I don't know wait wait so so a Community member called the CEO a dirt sack and he resigned the CEO the one of the founders Edgar called satar a dirt sack for pressuring him about when the token was going to be live and that kick The Hornet's Nest yeah got it yeah I mean first of all if you got thin skin might not be the industry for you

uh I do understand that people asking you for when token 100 times and when Moon gets annoying but uh you know as Will Farrell said in Old School everybody's got to keep their composure well there might have been also this is where I I am speculating here and I don't know but there were some pretty wild tweets that preceded this as well you know maybe a little bit uh little bit of a TMI personal stuff about like uh sexual preferences and orientation I don't know if you saw any of this yeah we don't need to any details not all right we don't need to get into it then I don't want to blow anyone's spot up but yeah I think suffice to say there was like a little bit of personal

stress maybe bubbling over here but yeah and I I I know some of the guys from margin fi and my I don't really know Ed Edgar but yeah I always wish everyone well in these scenarios and like there there is a great team there so I hope they can pull it out but I've never I've never I can't really remember seeing a early stage founder like this just resign so publicly so it just red is pretty bizarre to me it it happens I mean like remember the whole Sam mman thing like [ __ ] happens right yeah that's a point founder stories early stage startups late St Shard ups are [ __ ] brutal like there's no there's

no denying it but it is tough when you're doing it literally from like the trien show where everybody is watching you and it's happening in real time and it's happening over social media like I I get that that's that's brutal I I think you know one of the interesting things here is how everyone particularly Soul end literally just vampire attacked everything afterwards they saw this happening they're like here's our opportunity anyone who moves from Argin F to Soul land gets double points dude I was I was reading R Rutter's tweets their CEO and I was just dying laughing last night yeah I mean KN knives are out across the board right

now like everywhere everyone just like has a knife in in behind their backs and they are ready to step you know what reminded me of a little bit those rooster tweets is when you know Dave pornoy gets a win over someone on Business Insider or something he's not like the opposite of gracious he like pops a champagne and his like n Tucket house and stuff and it is pretty funny to to see so yeah I think there was some of that energy going on for sure I mean just like if you feel things starting to Domino accidentally just like stop you know it feels like the margin five stuff could have been avoided and that's probably the teachable moment here there there's a there's oh I got to find this there's a

a great um tweet from Nikita uh he's got some Banger tweets Nikita FIV is it yeah let's see how I can find this might have to but anyways I mean the gist of it is basically like in times of PR crisis there's a couple of options one of them is to like hire a full-fledged PR team like do some analysis put out like a a press releas the other one is and that will cost you like I don't know $50,000 and it'll take two years for this whole thing to settle down because people will write about it it will create a PR cycle and then

there'll be this like this remaining thing that hangs over your head and you'll have to do it and it basically gets like the other option is to say nothing and just keep working and it'll go away in 48 hours and it will cost you $ Zar yeah it's very true it is true I remember listening to one of the like bar to I my one of my guilty pleasure podcasts is KFC radio I just like when I need to just turn my brain off I listen to that I've listen to these guys for years I think they're funny but the he was described like he's like I don't know he's a celebrity in the sense he's got like 400,000 followers on Twitter and like people know what barol is but he was describing when he went through his divorce what what the comms PR experts were advising him and it's just

like absolutely not dude like join Instagram post like oh get me away from you know just anything but that so I'm with you if you respond you give it oxgen yeah you know Yan's Yo's wife is a crisis comms expert actually she's got her own for yeah God she's helped us over years yeah we get can we get her contact information maybe yeah yeah honestly I think she's done some work in crypto actually there's people making fun of me on the internet I need I need immediate I need a immediate assistance what do I do please sir help also also let me just bring it back to Cara Gan Lair for a second so I retweeted this

but someone someone tweeted out a picture of Sydney Sweeney and Caroline Ellison and said you know on the Sydney Sweeney is is Igan Lair Caroline Ellison is KAC and I was like this is not the gotcha that you think it is one is a multi-billion dollar grippy uh spoke truth to power took down one of the world's most powerful men MIT grad the other is Sydney Sweeney and she's kind of mid so it's a hot take on Sydney Sweeney but I hear I mean that's just a ridiculous thing to tweet in if I never saw Sydney Sweeney again I think that would be fine with me yeah that'd be fine with me too I'm not a I'm not a stand well I think those are all the big things for the

week were you guys Eclipse enjoy yours this week or no no if if you were staring at the sun and you work work [Laughter] fired it it reminded me of like the dodo birds that stick their heads in the sand it's everyone in New York City is just like staring at the sun looking up there I mean if you're so I saw that at 7-Eleven some of the you know those little cardboard things that you do with the cutout apparently they were defective and if you had looked at the eclipse through those you could have [ __ ] your eyes bad risk reward imagine how salty you'd

be it's like oh hope you enjoyed that 30 seconds of also like what what's the difference between just like looking at it directly behind one of those UV Shields versus just looking at a photo of it and be like oh cool that was interesting it's the same thing I think it's the same thing too lot a lot of people got photos in the eclipse the best part is like people would look at it and then they would have their FS out I hope you use photos and give them to someone same I also feel I know that this isn't actually how it works but didn't we just get an eclipse and that was supposed to be the last eclipse in 40 years or something now we're in 2017 yeah so I'm I'm good on the eclipse but

I hope enjoyers out there had fun but all right fellas I think we can leave it here um good up see you next later it's hey everyone Mike here if you're a bell curve listener you know that transferring assets across chains can be a massive pain I certainly do I complain about it on this program all the time that is why we are incredibly excited to have teamed up with the Wormhole Foundation the stewards of the Wormhole protocol and the coolest part about this particular partnership is that they have made custom bell curve nfts which you can get and mint for free click the link at the bottom of this episode take you get your free [Music] nft