Episode 212: 2021 into 2022 with Co-hosts & Friends

Transcript

welcome to xero knowledge i'm your host anna rose in this podcast we will be exploring the latest in zero knowledge research and the decentralized web as well as new paradigms that promise to change the way we interact and transact online so for this new year's edition of the show i have a group of folks who have either been on the show many times this year or who have co-hosted with me i want to say welcome to josh tyrone guillermo and james hey everyone hello hello i also want to mention that recently we started using a different platform and actually henrik the podcast editor the

long-standing podcast editor is also on the calls with us these days so you might hear him in the new year coming in and out hi henrik maybe people can get a bit familiar with your voice too hello hello last time one year ago today-ish uh we did an episode like this but guillermo you weren't on that one and actually everyone on this show has been on before so i don't think we want i want to do intros this time around i will add everyone's twitter links in the show notes if anyone wants to find out who these these folks are in more depth so what i want to do actually is just jump pretty much right into this episode so this is the first episode of the year the goal being we're going to do a look

back and a look forward classic first episode of the year type stuff um so i have two questions to everyone one where's your head at right now and two can you take a vacation does it count if i am taking a vacation and my head is currently uh at about my second or third margarita is that is that like a reasonable answer or is that like not i think you're in a good state it's a very good state tyrone what about you can i take a vacation what is a vacation again it's where is your head at and can you take a vacation i guess the answer is probably no but uh you know i'm i'm thinking a lot about

why ohm worked but like every other algo stable coin failed okay that's where your head's at today there's something there yeah you said that on a previous episode as well i've been i've been alpha leaking that all the everywhere but i i think i've convinced guillermo when i was in san francisco a couple weeks ago that there is some some actual math there it's not all smoke and mirrors it's not 3-3 though that's a [ __ ] like that ignore the meme the meme is amazing sorry that's might be a dumb question okay okay yeah maybe for this this audience is worth explaining because you've probably seen elon musk and grimes tweet about it but you don't know what it is so there's this idea in ohm which is

sort of it's like a ponzi game uh but it has some sort of extra dynamics for how liquidity persian works where you kind of have actors who can stake the token and like reduce the liquid supply and you have actors who can uh provide liquidity for the coin in like uniswap pool and the idea is that if you if enough people do both actions then you have this sort of positive some game now that part is all [ __ ] like the the logic that's used in their documentation oh is 3-3 the payoff of the matrix the payoff matrix oh my god no yeah yeah um and so uh you know they didn't go for the bdsm

kind of analogies even though like they call everything is like bonding slashing staking they like didn't didn't go the one step further some of the forks did though um but the uh the idea is more that like the protocol is able to optimize how much it's sort of rewarding different participants for acting in each of these different pools and you know it's not a stable coin in spite of the fact that it was started to try to be a stable coin but it's a system that has not it is the third effectively uh the third most forked contract on ethereum uh on ethereum chains in general um after uniswap and synthetics min turn out of course my calculation my query

for that didn't quite include things like safe math and whatever because like obviously those are deployed a million times but then they're also in line by the compiler there's all sorts of other i ignored libraries i just like looked at like raw by code so you know the fact that it's forked so much it's had like tens of billions of dollars in this like barely audited code and it hasn't broken i think last year around this time maybe even this episode we talked about how mark cuban got rug pulled um which you know feels like an infinitude of events ago that's right um and that was such a highlight when it happened and it feels like it it is now under the rug actually it's like exactly unfortunate

yeah so like i guess the main main reason i bring this up is that there was this whole series of failed experiments in algos stable coins and somehow this thing that whose documentation isn't even correct or matching what its code is doing worked and like attracted an insane amount of capital over a small period of time um probably the most capital uh aggregation effect other than layer ones was was oomfork so anyway the the point is i'm trying to understand why that is there i think there's actually some reasonable way of describing also for context he's been done this for like at least three or four months this is not like new or anything um yeah all right james

what about you where is your head at and can you take a vacation uh you know i think i probably could not take a vacation like if you put me on vacation i just could not take it right now why i would not be able to stand being on vacation i would get bored so fast [Laughter] i i mean like my head is basically where it's been for the last three or four years is thinking about cross-chain stuff um it's all i all i really think about for work these days uh with all the kind of things that happen in 2021 there's fun new opportunities for nfts and you know a lot of stuff in the cross chain space that's really

underexplored and josh well my my head is feeling maybe clear for the first time in five or six months because my baby boy is finally starting to sleep through the night so that is that is the big big life achievement um for me and though you could argue because i haven't you know i've been i've been i sit on the mena foundation board and i advise um a few groups that arguably i'm not working full-time i can tell you that it has felt like full-time times 10 with a toddler and an infant so uh i don't know and and the other thing i could say having gone on quote-unquote

vacations with my toddler in the past uh it is those are not vacations those are the opposite of vacations they're harder than work so i i think probably not for a vacation for me i prefer the balance of child care and the advisory work although the other thing that i'm actually the other thing i should mention just as a call back to our last episode i am kind of sad uh my head is currently disappointed in myself because i was supposed to get matt levine rivaling newsletter out this year and it never happened oh yeah in this episode we are going to be

looking at the highlights the surprises and the disappointments and it could always and maybe that would be would be one yeah well it's i mean it's not too late we're also going to see like what can come in the new year yeah who's that guillermo i want to throw back to you because we didn't really hear where your head is at like yes you're on vacation but what are you thinking about maybe not on the vacation front but on the other friends okay there's two things there uh one is supposedly um um i guess i'm graduating the phd quite soon i think in in march uh or february late february i'm really nice and uh santa has me on whatever it's nice list or whatever the other thing is yeah i've been

thinking a lot about uh weird i guess you know in the same venus to ruin maybe terminally academic is that maybe the the right term is yeah just weird math things that turns out they come up a lot when when you when you consider questions about on-chain uh incentives for things like uh replicating options but i mean that one's actually kind of clear now because there's a whole team working on it but there's other things that you can do that are even more complicated like variants swaps and things like that that um have been interesting and i guess maybe not to alpha leak too much but we think it's possible to do kind of a lot of the really traditional financial instruments on chain without oracles um so i have a i have an um to the straggling of literally my

entire family i have a notebook filled with a bunch of equations that i've been working out uh while on the beach so nice if if i'm lucky there might be a there might be a theorem or something you know 2017 birthed the the bankless podcast and i kind of imagine that 2022 will be guillermo starting the oracle list podcast oh no no no no no i could never it sounds like so much work i don't know how you do it actually how do you even start a podcast i don't know how hendrick does it james will james would love to be a guest on the oracle list podcast oh that would be really fun you heard it here folks tyrone that's just another podcast that you can go be on hmm yeah exactly

pod lasciviousness is is is totally fair in this this modern world tyrone is like podcast farming at this point it's not even like i don't know i don't know what the yield is on that exactly but it seems to be non-trivial if he convinces people to do it it's like a like a strict percentage that you know increase every every year year over year um you should compete what that is actually it'd be kind of fun all right i want to move on to the first topic that i want to cover in this episode and that is the highlights of 2021 so taroon you highlighted the own project for you but when i say highlights here it's kind of anything that struck you is cool it doesn't have to be everybody's cup of tea but i'm

curious to hear from the four of you what was your highlight josh so i think my highlight surprise and disappointment can all be summed up in one vertical which is nfts oh my god because i spent like the first half of the year just ceaselessly making fun of them and thinking they were nonsense and then the second half of the year wondering if i was crazy or the world was crazy and i honest i still don't know i i think there's obviously there's like there's still there's something there but just the rapidity and extent to which nfts have

just permeated way past our normally somewhat insular cottage industry kind of surprised me um and the other thing that i guess i find like a little bit disappointing and just in addition to all the like obvious cash grab ones and the idiot celebrities jumping in on it without understanding what's going on and all that is um the thing about nfts that i that i that i kind of worry about is that you know we ever ever further do we stray from privacy's light and nfts themselves are oftentimes pretty much counter to everything that that would instill

privacy as being valuable on on chain so that that that was sort of sort of disappointing but there's some cool stuff there too i'm not i'm not [ __ ] all over it but i have a question for you though have you lost any money on them well what is have you bought one i have bought i have bought some but my first my first nfl actually was actually one crafted by our very own james prestwich which was the josh's dumb voice magic card series for valentine's day yeah it was the best valentine's gift ever don't tell my wife it was amazing um you're using her laptop i am i am you see your platform

she's very kind um she puts up with a lot of my [ __ ] it's great um but yeah i i uh that was my very first nft and i was gifted that but then i did actually so like there are some like there's a pixel portrait like i had a couple of those commissioned just because i like i like the folks making them i thought that was sort of fun and i got i have some crypto covens crypto dick but i think that one mostly crypto dickbots are are truly one of the funniest things i think that happened this year yeah like amazing one of those things of like life being more strange than fiction like that they they they are like up there for that oh for sure but also for me and

this is this is like a maybe a deeply personal uh crypto dick but story but my uh friend as a gift back in 2014 gave me a 3d printed dick butt atop a bitcoin as a as a joke like you know to make fun of my interest at the time right everyone go look at who the anons and the crypto [ __ ] discord are and figure out which one's drunk no no i didn't break it this is this is just like ridiculously strange serendipity that it became a prominent nft project but i i claim that i have the first one in existence and it's actually a physical object which is also

kind of miraculous yeah to roon like you were in last year's episode i actually listened back to it you were you did mention them of all of us we all didn't you were the one who was like i think there might be maybe you know you know someone should someone should just make a robot version of me and anytime i say something just go buy whatever thing i say instead of like yeah and instead of like um you know uh being doing what i do which is like not do that just make a copy to ruin yeah you should just copy trade anything i say not financial advice but really financial advice i'll just say what um but yeah i think

like it was kind of clear that there was something going on there um and i think uniform v3 forcibly using an nft also changed the game from the perspective of like people realize it's actually useful as a data structure not i mean not obviously not the you know board apes people can't even keep their seed phrases private so explaining you know the idea of nft as a data structure is harder but the idea that it is actually a good distributed data structure i think you know from the developer standpoint it became more clear that hey there's actually something there and then you know of course the marketing standpoint took it to a different universe guillermo what was your highlight of 2021 oh this is so hard the problem is uh josh told my surprise

unfortunately which was indeed nfts uh i mean it was just like i guess it was just shocking just how you know nfts were kind of a very niche thing right like 20 20 and if you were like just a very niche exactly what to ruin said pretty much just like a specific data structure where you're like oh yes i can prove ownership that i have a unique thing or whatever right but like you know it was never expected to be you know all the games within games that people are doing that you know now it's like holy crap like there's like you know the ponzi vacation maybe is the term or maybe that's the wrong term but it's like this very interesting set of games that you can play by like owning specific things and then afterwards renting them out so it's like this weird

ecosystem that is just like i mean of course emerges from some deeply technical like highly specific i guess you know whatever 721 is it was that right erc2721 is that right but like you know whatever like what the hell knows what that thing is other than like now i guess it's just nft land right so it's it's just it's such a funny surprising thing uh at the end of the day that like that actually kind of tended to work i guess i guess maybe i do have a a very shitty answer to uh i guess the positive is that what the highlight the highlight i think the highlight of of 2021 is in some sense there was like a weird stagnation defined in some specific sense but in some other specific sense

there was like a very and again of course i come from like you know this this more specific d5 background but i think in some ways there was like kind of a proliferation of a bunch of like new experiments in d5 like trying to do kind of crazy [ __ ] or things that we would have thought were kind of crazy in 2020 just like doing them but doing them better and on chain which is kind of an interesting uh ordeal i i i mean you know this is true of like everything like people i think really are starting to think of it as like we know we all said it was like money legos at the time but certainly now it's become pretty clear that people are kind of bolting on a bunch of stuff and and like putting it all together and then afterwards getting

protocols that somehow uh students have managed to work uh even though they clearly probably shouldn't maybe that's the wrong term but i think that's that's uh that's mostly and then i guess what is the other one a disappointment or something yeah i guess this appointment is something like uh there's no bear market uh where's the bear market we were all waiting for um maybe i shouldn't say that but i do like that idea sir you just joined this industry yeah well i i didn't just join this industry i just pretended i just joined this industry but i have i have in fact been writing papers with you since uh 2019. this is true but we just say 2019 for fun because it's better it's better well i think it was like 2018 you're right okay so the lack of bear market kind of segues nicely into my highlight

which is that this is the first time we've had projects launching into a bull market in crypto ever this is the first time like a product has come to market in a up market uh and you see this with all these like defy things and these new chains and new bridges and all these like it's the reason we have 30 ohm forks on 10 different chains is because om launched into a bull market we've never actually had people launching tech in into hype before right projects like compound and ave launched into the tail end of the last bear market

so uh we actually get to see a bunch of this play out in different market conditions and it's really fun and interesting that's my 2021 highlight that's pretty good actually i that's that's a very fair point i it definitely drove innovation in things a lot faster but it also compressed returns a lot faster right yep so like that i think that was also that's why the nft boom i feel like was interesting because it was like you know defy in fact tvl went up and everything got way more optimized and the returns went crap crashing down but nfts were like how do we do insider trading but for asshat to stand in line at supreme well i mean that's uh that's probably my

biggest surprise about 2021 is that we found product market fit in a completely unexpected market asshats who stand in line at scream look everyone wants to be nancy pelosi nft is democratizing nancy pelosi's inside information who would have thought that you know pop-up brands were crypto's next big product market fit for for whatever reason people are getting this sense of ownership and community participation just like they would from that shitty supreme sweater it's not the supreme article that you buy it's the standing in line with that or it's like the friends you made along

the way okay so actually for highlights of 221 i did have a few that i wanted to bring up as well one like more zk focused maybe fundraising and zero knowledge projects and l2s like these the amount of zero knowledge stuff happening this year was definitely a highlight and you saw it kind of growing and more and more excitement more people kind of learning about what this thing is that's cool i'd say that's a highlight other highlights would probably be so i mean james you mentioned sort of the like launching of big projects during a bull run but i mean to me it was also like a lot of the l1s of 2017 actually you saw i mean they might have

launched a little bit before the run but like you actually got to see them in action pretty early on in their life in their lifespan or in their life cycle in a bull market and you also get to see like uh ibc come to market totally i mean that was the one i was going to mention actually like ibc osmosis mina moonbeam polkadot like a lot of these like groups that have been around for a while but actually get to see their i mean there's actually more than that i could say like when did solana come out it was before it was 2020 right yeah 20 20. uh if you if you remember they they did have some issues their first week that near fixed for them which i think

in a bear market what happened it would not have maybe happened as much nicely in the bull market true do you remember that james i do remember that it was very funny uh but like that's near was also like pleasantly snarky about it um the the other uh speaking of polkadot though uh crowd loans were a surprise for me uh just the mechanics of the polkadot crowd loan stuff uh was surprising beautiful mechanism beautiful i don't know if you know this tyrone and i think i cut it out of the episode last year but i remember you being quite you were like that is the dumbest name ever crowd loans do you remember that it is a stupid name but the mechanism is great yeah

the name sounds like patreon but for investors you know like it almost seems this like weird like cognitive dissonance associated with it but yeah so i guess we're on to surprises i think the one thing i will say is surprising so there are two things one is how fast solana grew in terms of uh developer adoption because like in a lot of ways right it's the hardest you know james can can attest this it's the hardest chain to write any code for like period for a lot of reasons um and it was just weird that that took off with developers because like you know usually you expect like shitty javascript developers no offense sorry that to be to be like the first adopters

of things and not like you know low-level level developers so it was like interesting to see that like switch even though like the code had been there for like two years but somehow the marketing changed and the biggest surprise to me is that the phrase web 3 which you know came from if you think about it gavin wood wrote about it in the original ethereum yellow paper and then polka dots called the web3 foundation and they've been shilling the name as like this is the future internet for like two or three years no one gave a [ __ ] about it and all of a sudden like i don't know exactly you know we're on i was on this other podcasters and everyone was like it's all made up andreessen is the one who really pushed like the existence of this thing i i don't know exactly who did but somehow

it got rebranded from polka dot equals web 3 to like nfts equals web 3 and like that to me that like cognitive dissonance that like cognitive transformation that took place there i don't understand what changed like nothing changed like to anyone who's been around this industry for a while that literally nothing has changed the code bases have not changed it's more like the the meme got co-opted yeah web 3 became this like meme that was like silicon valley vcs don't have to feel bad about like bitcoin mining energy usage anymore or something like and that like that somehow that like webbed three impossible staircase the impossible staircase of vcs saying that they're socialists by investing in web 3 things was like

the conjoined triangle of success for this [Laughter] yeah web 3 is a meme that needs to die in like every fire possible it's just i don't care it's not no no it's not going to no i know that's that's the part that gets me with me it's it's past the meme market fit success yeah the meme marketing it's just like when blockchain became an abstract noun and i had to deal with it'll be a blockchain yeah what's your capital b blockchain strategy not using that term that's that's what i would like no a blockchain for keeping track of where everyone writes capital b blockchain were there any surprises specifically in the zk space for anyone here is there

any like standout surprises unexpected slow growth hmm yeah i i just mean like the algorithm the algorithm efficiency improvements right kind of flatlined and now we're like all engineering and like oh we need hardware and whatever right like the the the moore's law that we had that we've talked about on the show many times kind of yes peter and uh chains that have um zk proving systems as a central element are tending to underperform other chains uh so like mina and zcash and all of these are underperforming solana and near and you know similar smart contract chains right now right now but you know slow

growth yeah so that sounds more like a disappointment which we could move on to what were the biggest disappointments for you this year josh you were like nfts we did you have any i think i said bear market so that there was no bear market unfortunately that's my disappointment this year so is that one of your hopes for 2022 maybe honestly it wouldn't be terrible yeah josh do you have any others uh i have so actually my disappointment not to segue us into a another section of the pod but my my disappointment i think kind of relates to a prediction that i made last time that i think actually kind of turned out at least in

the provisional stages like there's there's going to be increased regulatory scrutiny in action um and the thing that i was very disappointed by was the midnight rule making of of what what happened with the infrastructure bill now granted that obviously is stalled for other reasons and that's great and some level for crypto reporting although maybe bad for the infrastructure of the united states of america unclear but in in any case the fact that there was this real slapdash attempt to effectively create giant surveillance regime around crypto in the u.s

that um at least right now we seem to be avoiding but um that was that was a huge disappointment given all the i think positive momentum that we had had i think from a regulatory side for a while yeah i actually i i think also in the like european context there was the mika work which i think is also kind of disappointing especially for the privacy space it didn't seem to understand the benefits of having things like private transfers and has been much much harsher against it than expected what about your own like so i have my own kind of personal disappointment which is i had said that i wanted to explore zk games last year and didn't at

all like zero and that's so dumb i think there's i've actually heard that there's some really cool things popping up and i'm i'm not on the beat sadly but i will be i in the new year that's gonna be something i try to do was that a resolution um not a i would probably have more mango resolutions like uh i'll try to do that i don't know okay it's on my radar uh zk games but what i was a little bit disappointed with was the like i was very much kind of on the lookout for like extreme new zk use cases and i don't have any that like super highlight it still sort of seems to follow a lot of the same kind of topics

which is fine but i i do hope in the new year like some like i was kind of looking for like a left field zk use case something that comes from a completely different industry to to kind of change like i don't know just to to explore and so far like i haven't really found that and actually maybe some of you know them to tell me if you've if you've heard something hmm yeah the only one i was thinking was like bridges or something but those are those are kind of not really that like surprising it was surprising for me but well i guess the the fact that kind of in the same way that no one gives a [ __ ] about privacy no one gives a [ __ ] about a truck actually good bridge uh it was also very true in this year

and that's sad because you know yep worse is better yeah people just wanted to make like these shitty relay bridges that like basically are eoas more or less eoa plus plus which just means like end user account forwarded stuff yeah i remember you know hearing about polynetwork because it had been hacked for 600 million like that's the yeah that's the kind of bridge people want [Laughter] you know new meaning to the phrase bridge to nowhere right did you have any other disappointments or anything to that you felt this year uh i'm kind of

disappointed in slow core protocol progress in bitcoin ethereum uh other places there's a bunch of like low-hanging fruit wins for those protocols that just aren't being like taken is that sort of the predicament and like inevitable future of decentralized networks that they ossify and then stop working well i mean it's sort of scary because those are the two biggest decentral sclerosis uh i think sclerotic is a pretty good description of uh bitcoin protocol developers at least

but you know generally speaking it feels like we should have had the merge this year and we should have had uh more feature forks in you know like ethereum uh we should have had fewer difficulty bomb forks and you know bitcoin should have had multiple soft forks over the last four years not just the one so like uh you know this is a personal disappointment of things are kind of just uh chilling in evm and in bitcoin but one sclerosis is another's opportunity as we've also learned uh protocols that are more willing to uh

mutate themselves to meet developers immediate needs are growing pretty quickly it's just like viruses uh maybe a little too um topical of a comparison there so good is there anything else in about like 2021 that you want to cover on this show or should we move on to the 2022 section of the interview i i will say something well two two things that were i mean huge surprises i think that were kind of still crazy when you think about it the i mean the first one is the fact that and and it's a very mixed surprise but the fact that there was a nation state that just said

yeah we're gonna accept and use bitcoin oh yeah but it seems to be from an autocratic dictator so it's kind of like just yeah it's a disappointing surprise but it's happening right which is kind of amazing but it isn't i don't know it's uh yeah it's a little it's a little iffy yeah um uh i guess yeah another disappointment would be you know a bunch of prominent bitcoiners getting in bed with autocrats right right like that feels like that's pretty like much against what bitcoin stands for but maybe they know better than other bitcoiners i don't know what bitcoin stands for uh has become a

really fuzzy concept i think yeah you know the gbtc premium decaying um has basically changed a lot of bitcoiner's views on bitcoin itself yeah yeah i think uh what these bitcoiners stand for is whatever is you know good for the bitcoin price in the short term we're all just price stands of something if you squint enough that's right price rules everything around me pre unfortunately one other thing i think we didn't cover i guess uh to some extent is that on a more positive note because i you know i i know josh josh used to be the biggest nft hater so

this is already i've already seen the the full cycle has come wow has gone revolved around the the sun once um but the on a more positive note i think the idea of nfts as a form of like weak identity has been kind of interesting because people are starting to play with that a lot more and like for like years in this space you've heard people always talk about social tokens social networks including press switches favorite social network which you're talking about last february uh which you know the year has been so long that we didn't even cover that um and uh yeah can i add like five more disappointments

okay after after turns positive joking yeah yeah just just like i i just think there's actually some sense in which we're we are actually going to see more like social network looking things i don't know what they are right now but there's like way more of that even though there's a lot of misguided attention i feel like everyone you know 99 of people saying they're doing this are pets.com but there's like some sense in which that there's there's like actually some type of ish network that will come from having enough people owning nfts and this idea of like airdrops as like bootstrapping and network effect you know i think that portion like you're

able to like share a network effect from somewhere else you know right now it's like filled with mainly [ __ ] bag airdrop collectors but you know i i actually do think there's something there that will land in whatever this future social network looks like the problem with the airdrop thing is exactly that is that it's like kind of capable at the moment uh which is unfortunate for everyone involved but like i do wonder if there's like a mechanism by which you could make it um slightly less gameable that's that's what i'm saying like that we're you're moving in that direction moving in that direction when everyone knows that airdrops are a thing like it's bad because then everyone knows their thing so then you just go and like cyber attack your you know protocol or whatever i mean in the same way that there are there there used to be all

those like ico review sites in 2017 that like oh god be like and show you like all the icos that happen there are airdrop review sites that are like probability of airdrop what action should you do on this thing oh no totally oh no um but where do the social points like it's pretty clear now that discord is the center of crypto like we have moved to a public social platform as our primary means of communicating and organizing in crypto uh maybe we personally haven't made that move but the average crypto user airdrop consumer nft joe

uh is you know primarily on discord and if you're not on discord you're missing out so whatever future of social tokens or social identity is going to be in these loosely formed discord communities and a lot of those are organized around do you own this nft you know like are you one of the landed gentry in this nft based community uh your talk of social networks did bring up another disappointment for me which was the fact that facebook is making the claim on the meta verse and vr and just the fact like it was it's so inevitable it's inevitable since the moment we were kind of locked in our homes that there'd be more of an online

world and there's lots of people exploring that but the fact that they just squatted on the term and the concept bugs me kind of turns me off a bit because it's like i mean i think it's gonna happen but i think it has to happen outside of the realm of uh of a giant corp really makes me wish they had rebranded to web 3. that would have been a lot right but we were done we should have grabbed meta all i'm saying is that anyone who has read cyberpunk novels knows that the metaverse is dominated by evil giant corporations that's right this is literally the future we've been trying to build this whole time that's right

unfortunately but yeah you know one argues against accelerationism but but actually with whether or not we are part of the accelerationism is like apparently not even up to us it's just like an inevitable truth of the earth um so i guess apologies to everyone out there uh because everyone here is involved in it uh whether or not they want to be right even if you're not you're actually enabling it in some other interested way so sorry uh you you just need to read enough fiction books to know that all right shall we rap on 2021 then should we put it to bed should we stick it in the past leave it in the waste bin but it feels like we've only covered like one percent of the nuttiness that was made oh god i mean no we should we

should move on everyone should move on i have this joke that i think someone's gonna make a movie at some point where the year 2021 is gonna be uh specifically of like whatever you know crypto stuff or whatever you want to call it um where everyone's gonna be you know everyone's gonna go to movie theater it's gonna be like wolf of wall street everyone's like wow this is just like such an absurd insane story although there will be flashbacks to 2017 as well in the 2020s right every once in a while there will be like a a small anecdote where someone's like thinking about like wow what what if times were like old times but what's gonna happen it's gonna be some sort of horrible wolf of wall street style movie where we're all gonna watch and then everyone's gonna come out of it and be

like wow this is like obviously insane and like fictionalized and stuff and then you know tyrone james like josh and i are gonna be in the of course anna it's gonna be she's gonna be front center but we're all gonna be like you know yeah you're right that was kind of [ __ ] weird wasn't it it was just kind of like that shouldn't have happened probably but maybe i guess it did happen uh and it was it was pretty damn accurate who plays to roon though because i have a feeling like maybe he features in it there's some tweet that tyrone has of like don't you have a few movie stars that you would want to play you or something like that if i recall correctly what or am i insane i think you're insane that's also probably true i guess independent but oh crap okay i don't think so i don't

know myself she can't she can't do the hair jam okay we're gonna rap on this beat then yes people could do more on 2021 but we're looking forward that's what this is all about if if people want to hear more about 2021 just check out my 12 part podcast series the sun sets on granada an investigative look at justin's traveled how did we forget to mention justin's son his excellency his excellency everything about this year is ridiculous i'm sorry anna i'm sorry i derailed it again way crazier than 2017 by the way like i don't even think the movie would have 2017 in it because the scale magnitude of capital and

2017 would be much more human-oriented stories yeah right yeah there were some absolutely crazy personal experiences in 2017 but 2021 is playing out at scale it's just bonkers at this rate something is going to happen tomorrow and we will have to re-record this podcast right totally yeah because we're recording this on the 30th for anyone hearing this a week later when it actually airs um if we missed anything of 2021 that happened in that last day we're sorry okay 20 okay 2022. okay wrong answers only uh predictions are stupid and we're all

wrong last time so what is the most likely outcome for 2022 no no we were not all wrong four of you were wrong i was perfectly correct and vacuously correct because i wasn't even here you didn't yeah you said nothing wrong [Laughter] okay um but yes so most most likely outcomes is in the coming year what could you imagine happening and you wouldn't be that shocked if it happened you kind of expect this josh what do you think is going to happen this year oh man i mean this is more hope than anything else and it actually is like something that i think we talked about before but like i really really want private d phi to exist at scale

and to be widely used at scale but i don't know i mean i i think there are lots of interesting efforts to that end um that are that are more underway than used to be but i don't know i don't know if it's gonna happen this year i hope so my my hot take associated to that is individuals don't give a [ __ ] uh for better or worse but dows do because they get front run all the time like constitution dao great example of adverse elections that 19 year olds learning what adverse selection is that was constitutional oh my god how did we not mention constitution down right in 2021 i forgot about that too

oh my god okay adverse selection but no that's but that's a good point to earn that it is something about it isn't that individuals will care but but that large organizations or taos might i do think that this might be the year that dao's rediscover corporate governance exists for a reason uh are we just slowly rebuilding traditional finance getting the dark pools we're rapidly we're rapidly rebuilding traditional finance yeah but but but again again with a little more optimism than you guys one positive thing is that we're [ __ ] automating a ton of boring-ass bureaucrats like for instance if you do if a company does a share buyback

the people who own shares vote then the board has to go tell the [ __ ] ceo yo you got to like go buy a bunch of our stock on the open market the ceo is like ah hire a broker okay then they go to go hire a broker and then the broker goes and [ __ ] executes the thing and it takes like two months it's super manual whereas here it's literally like oh governance contract you vote on it and then the buyback happens instantly like that's true come on that's just getting rid of tons of [ __ ] useless jobs and you get horribly front run the front front is also automated yes exactly but i'm but that's a good reason for why dallas will care about privacy much earlier than any individuals like

individuals are just like useless sacks of [ __ ] usually they just want their lives to ruin on the human conditions they want some [ __ ] ape in their profile picture because they think it makes them look cool even though like a million other people have the same beep incredible i have to go change my profile picture but i i i do think this idea of dao's a dao is buying crazy or [ __ ] like you know the fact that that you know the wu-tang thing is just like a corollary thanks to like constitution doubt is like insane right like i i do think people are gonna start

buying crazy [ __ ] next year like a sports team or like something crazy like really weird but sports teams are interestingly they used to be dows like the green bay packers is actually a dow in some weird sense right because they have shares that are owned by people who live in green bay and only people in green bay can buy them it's a co-op right it's it's a co yeah exactly so you know i i saw this funny this funny tweet today that was like daos are just libertarian co-ops and it's not incorrect yeah that's right yeah i don't mean to i don't mean to like you're right i'm being unnecessarily pessimistic about a lot of this stuff because i think you're there there are these great silver linings and there are lots of like amazing things that can happen from this too i just i guess i just you see the

failure case right of all of these of you oh you mean apes yeah well yeah yeah but also a degenerate case the degenerate case that's very it's a very good double entendre james tj um thank you but yeah i i i i like you any anytime someone claims like a new kind of ownership model that's going to i guess it's mainly when people hype up the fact that they are organizing people in some novel way that is going to like disrupt traditional organizations which i don't think is going to happen i think they're just going to reform a lot of what traditional organizations do with

much greater efficiency and hopefully yeah hopefully josh i think the word disrupt though like i mean disrupt could also just be reshuffle which does offer new opportunities that's true you know it's like it lets new people come in so it's not just the same people like going through their systems right you always need someone to buy your ape in the future that's right that's right okay what other likely outcomes or pot like things you think might happen maybe around adoption usage community like do we think that this do we think that it's gonna continue that there's more and more people joining or do we think there's gonna be a little lull i think i think kind of like 2017 there

was like the investor slash [ __ ] bags joining during the market bull market and then um then there was like the developers slash researchers joining during the bear market and i think we're kind of seeing that like there's just like way more people from like fang who are like web 3 is great and like i'm gonna quit my job at facebook meta cause like i hate the new name and i've never i you know for some reason web 3 has been a key enabler of this type of transition um from a labor perspective i actually don't think it has i think it's just been the the the thing with web3 to me is i think it's been correlated just by sheer luck of the timing but i think it's actually like just

awful like it's just like awful like it's like a strict negative all around but like for some reason we all pretend it isn't it just happens to be a term that happened when like bull market was hitting people are joining and then everyone's started kind of using the term because it's a web 3 web three awful term awful term no one knows what it means fundamentally the problem is like i think there was like a whole tweet thread on it and like still no one could answer like a reasonable question something about data ownership being your own or whatever it's like what the [ __ ] are you talking about like this doesn't make any sense but it is an amazing labor marketing tool like it really is like it's something that like you know kind of risk-averse person who works at like megacorp can go back on

christmas and tell mom like hey i'm working on the future of the internet web 3. it also feels like a state change web 2 to web 3. like you leave i've i've felt it you leave startup land you go to something else yeah i guess maybe i i don't know i just like if you work at adult daycare like at the end of the day the name isn't going to matter to you like i don't like hear his face google soft right no now that that was the true zinger adult daycare for manga what is it called now instead of paying i keep saying thing but who the hell knows at the end of the day right like it's this funny thing right like i don't i actually think it was strictly worse but it just happened to hit just at the right time and everyone started using it

and now it's like this awful term that like nobody knows what it means but it's provocative it is uh calculatedly inoffensive yeah perhaps perhaps that's what it is perhaps that's what it is maybe uh i'm gonna still hold that judgment on that one too really good for regulatory stuff i think like it really is like you think these dumbass 80 year old senators are gonna understand like what what a private key is no but you think they're gonna first of all they they give away their seed phrases on their apes so like obviously they don't um but the being able to be like look there's a new internet like branding it that way was is like way easier to tell lobbyists to like go shovel paper [ __ ] at senators getting

back to the previous point before we started just [ __ ] on web 3 for 10 minutes all right i haven't paid a lot of attention to this but have we seen the same uh kind of fund explosion that we did in 2017 2018 a hundred percent 100 yeah there's 8 000 new crypto only funds do they have a recognizable pattern on naming it felt like you know in 2017 it was like meta coin block yeah x block block y yeah yeah uh that's right no we aren't at that stage but one thing i have noticed in terms of new funds they all have one of

the solana monkeys and they say like investing in the solana ecosystem and beyond and that's usually the tagline like whereas like i feel like in the ico boom it was like investing in the cross-chain future or something right like you know like the twitter bio so it has specialized a little bit like like i do think that that that's true but it's like very much focused on like solana and near i feel like those two have like an insane amount of these new funds like focused on them whereas a cosmos i i always feel bad for cosmos because they invented a lot of the [ __ ] ideas that everyone else implement like they might be very slow at implementing things but they [ __ ] the provenance is theirs and yet they

still cannot be able to attract anyone outside of osmosis osmosis of course is a you know shining success story but it is kind of interesting that like solana where it's actually very hard to develop things somehow has attracted the most investor capital mindshare right like the fact that that that you can go to an lp conference and then a large endowment asset manager who has money uh like they they buy coins directly will tell you btc ethol that already means that the narrative has shifted so far in that favor and that's related to this funding a lot of the new funds i think are downstream of that where they like tell lps like okay you're gonna buy seoul well like we're gonna invest in seoul

companies so like you know pay us four percent management views the management fees have gone up though like that's the crazy thing to me is the management fees this cycle are higher than they were at the like end of 2017. in fact so much more that they're like higher than tradfi which is that by a lot like um do you think that's going to continue in 2022 no i mean like last time right we saw these crazy amounts of fun closures so one question which i don't know the answer to last time um was like what people's benchmark was like i know for the big funds it was just like bitcoin like oh okay like how what's your performance related to the bitcoin but like it are people really indexing on like seoul are they are they indexing on the solunavax uh index like

equal basket like i don't know what they're actually like what the yeah lunavax is like the the layer ones that made it yeah yeah near probably should be added but you can't make a portmanteau when you add in yours here it's like absolutely near really it doesn't work yeah it's like it's not it's just like for some reason solutive acts memed quite hard yeah yeah like dev wise it's great but like i don't know if mira has made it like i don't really know anyone talking about it i i strongly suspect uh that in the next three to six months near will be the the new capital outflow layer one maybe i i i just benchmark everything against my mom right my mom is like

she like randomly invests in like like a bunch of the stuff i don't ask me why i have no idea why she doesn't like does buy weird polka dot stuff that's the funny thing about your mom she like knows random really crazy polka dot projects i've never heard of it's [ __ ] crazy it's insane but like i literally know nothing about the [ __ ] she buys like she just like buys like like truly like random [ __ ] coin which is great but like anyways my point is like if my mom hasn't heard of it the answer is it probably hasn't made it yet and i don't think she's heard of near so at least she hasn't mentioned it to me as far as i know has she mentioned aurora or trisolaris trisolaris is their uniswap i haven't heard of this either that

that's straight out of uh three-body problem isn't it throughout a problem yeah yeah yeah but also why would they isn't it a two asset exchange [Laughter] no no they're they have an evm bridge so people are just redeploying all the erc20s why would you name it try solaris if you're only trading two assets in the market assets well they should use uh you know whatever uh we have we have several generalizations to end assets i should use that instead somewhere in some horrible papers like sitting in some corner of a dusty room and solaris doesn't sound as good that's right that's right i think so too buy solaris or die solaris doesn't sound good either yeah

okay fine they can take but but yeah i guess my prediction definitely is i think near near is due for the solana bump but what happens if that happens during a bear market because what we just heard with the vc kind of piling in that's actually a bit of a scary sign uh is anyone willing to predict a bear market in 2022 the only condition i'll i'll do it conditional on interest rates going up that's it yeah yeah i'm with tarot on that that's a good that's a good hedge when money stops being free when money stops being free the money stops flowing into insane risk on it my point is if you have an empty set you can't just make

predictions and be like yeah conditional on the empty set i'll make the prediction right it's like it's not that useful uh you know that tyrone so i know you're cheating right that's not empty set we don't know that event still has non-zero probability don't tell me that's an uh measure zero event it's non-zero probability just because like almost any event has volunteer probability i don't know we'll see that i i i disagree i think the rate thing is very clearly like the fed is [ __ ] up and like this transitory inflation meme that they created they realize is very toxic and now they're trying to be like no it's not it's real inflation this is fair this is fair this is fair fine fine i'll let you have it another thing i wanted to check in on so we have sort of like likelihoods but what about

sort of stretch dreams or maybe wishes what would be cool to have happen in the coming year that would actually make you happy but it's kind of unlikely i have an answer to this uh although a lot of people will hate me for this answer like an incredible amount of people will hate me for this answer and there might be 4chan posts about it um and that is my crazy dream that with probability zero will be achieved is that uh d5 will go mostly oracle less in the future oh yes this coming year in 2020 so so this coming year this coming year that's that that's the dream okay and in fact actually it also has some weird implications for privacy as terena is well aware of uh and i guess so that plays to josh's point as well but but yeah that's that's

the true dream is that uh you know we won't have like 50 million hacks because someone [ __ ] up and misreported a price somewhere and sorry that was just what happened and that's just how it is okay on that topic a stretch dream could be uh that the zk d5 that you wished for josh last year actually happens enough i mean there are lots of experiments and and you know minimal viable products out there and and and actual products they're just not getting used that much so maybe that's the stretch stream that they actually one like really starts to take off alio has the incentivized test net now it hasn't said that although i heard i heard i heard chinese miners wrecked it

no no no isn't it the kazakhstanis now or something but oh yeah yeah yeah actually it's somewhere some you're right you're right somewhere else in central asia but whatever there's an international war fought over forking like alio to like hundred block forks nice yeah really yeah yeah that's funny yeah oh yeah i think henry's doing something like this too uh in terms of uh like i could d5 technically so it's cool stuff it's kind of it's kind of crazy but it it at least like in in theory seems to work unlike you know a lot of things that happened previously which in theory did not work and practice certainly won't work um so it's kind of another interesting one yeah the number is really cool yeah i do think one thing that's important to

remember though is that like a lot of the growth of these things the inorganic growth um comes from in paying out incentives but paying out incentives lowers the amount of privacy in these systems right um so there is this actually interesting trade-off of like bootstrapping liquidity to a private pool actually has a much harder problem than to a fully transparent pool yeah it's not something people talk about because i'm not trying to be negative nancy but like i i do think it's worth thinking about uh so also sorry to the person nancy whoever who that person is it kind of sucks that they got like you know it's like it's like josh also that name right like people have the phrase joshing that original josh [ __ ] over all future

jobs no i i i think it is not yeah i josh around all the time now thanks to that joke i've embraced it okay okay part of me maybe nancy maybe nancy [ __ ] over you know yeah debbie downer yeah debbie that feels bad yeah damn it debbie one debbie messed it up for all the debbies to to roone's point um there's kind of this fundamental tension between concealing information about the users in the state of the app and revealing enough information that people want to use the app i'm not going to go use unit swap if i have no idea what price i'm going to get and i'm not going to lp it if i have no

idea like what my revenues are going to be so you you have to reveal information about it which has tension with privacy i mean i think what the interesting idea is at the end of the day is you give the user you make protocols such as you can give the user a sliding scale of how much privacy they want to achieve versus how much economic efficiency they want to achieve now now now who's showing our papers yeah now we're surely our favorite sorry i didn't mean to do that i promise i'm leaving i'm leaving but it's good to show you your papers are great i love reading and understanding half of them but i mean honestly same i also really understand half of them so it's okay don't worry too much about it we try to write them in a way that makes

sense every once in a while it happens not always but that does it does actually it makes me think of another point which i'm still frankly like uh maybe a little bit worried about is that the the growth of uh what's i don't know what the proper terminology now is for for not you know for like tethered stable coins stable coins that have yes got back yeah usb-c pack you see's a real stable coin yeah they've lowered that which i was sort of surprised by um but or that that's happened but i am i am like more

and more concerned as like new constructs emerge on you know that enable privacy where people are using these fiat backed stable coins that have some kind of that require you know command and control uh and the stoppage of control of funds there there is this plausible case where there will be a privacy rug pull in order to claw back funds for one of those uh one of those protocols uh potentially so i'm i'm a little worried that like the over over reliance on fiat based stable coins and lots of defy applications could result in that uh even for people that have an

expectation of privacy uh use on various protocols okay on that note uh what's the black swan event that could happen but you really don't want to have happen but could happen what's your worst case scenario for the coming year for our industry the luna vax greater than one billion dollar hack i was actually gonna go with something similar but i mean there's just so many unaudited smart contracts with a billion dollars on those chains like you're telling me that and and there's a lot of security by obscurity because it to be fair it's extremely hard to audit these things yeah right there's a new virtual machine plus a new programming language like

that there is but it's not purposeful security via obscurity right it's like actually just because it's a new [ __ ] technology but you know i i expect the dow hack to be a footnote relative to one of the future ones well i agree it'll be interesting just because it's historically relevant you know much like many historical references but that's about it that's about as far as it's going to go i think at the end of the day i think it's going to be like very small relative to some of the crazy [ __ ] we're going to see in the future if there is a billion dollar hack do you think we're going to see a repeat of the dao hard fork is uh you know like ilya or emin gonna call up all the exchanges and tell them to stop trading

and uh run a hard fork to revert goon to your head no no no well where's that do you know that cms meme of like em and guns here and it like [Music] that's actually what inspired that comment i think in the back of my body um i i i think like the can you stop trading days are starting to be over with bridges though like you really need to go call up every validator you're like stop processing synapse transactions but um you have to kind of make a decision whether to cut off you know like bridged users and disavow that bridge and then

go try to clean it up again later rough decision any other black swans there's always a regulatory one always yeah josh's josh's are clearly our regulator of this podcast so he should be telling us yeah josh come on well uh i don't well i like i i you know this year just don't give anyone any ideas that's really the only thing you're a black swan this year i mean this year felt like a black swan because because i think actually i don't know if y'all remember but when you know gary gensler was announced people were actually reasonably excited about it because they thought oh here's someone who knows the industry he knows what's going on he's optimistic about it and then he really committed the greatest rug pull

of all [Music] and and showing rake pull yeah regpul oh my god james yes amazing yeah it was that um and then you combine that with you know what the treasury department was doing up in that infrastructure bill and it's just like i don't know i don't know if it'll be that bad this year because it seems like uh cards were put on the table and the the amount of influence that at least crypto folks have i'm sorry web 3 folks guillermo's favorite yes it's much more acceptable in inside the beltway

um so so yeah but that that those that those folks actually have a degree of influence because i mean lo and behold con their constituents are embracing some of this i mean maybe not not like uh on mass but there is you know there's all that data about the number of americans that have some crypto exposure and it is like higher than i would have expected i think i i don't know the exact number off the top of my head but it's definitely like like more than like 10 20 30 million or something right which is which is kind of i mean it's kind of remarkable you know so it's not like it's not a small share of people that have some

vested interest in the outcome of this industry now so i think that that is potentially a positive thing for the regulatory environment this year maybe i don't know because i was i was all negative about it last year so this year maybe maybe i can manifest positivity into the regulatory universe regulatory vipassana i mean i had i'm gonna repeat i think i said this last year but the black swan for me is zk hits the mainstream but for all the wrong reasons um because of some like bad actor using it in a big way that would be very very like what

like what can we can we go through some of those scenarios yeah like north korea or something or yeah i mean it could be it could be a project that ends up being really just used by bad people or it could be do you remember do you remember when people were trying to get defy regulated by saying like north korea is the biggest una swap lp in the make or die cool i don't know i remember that [ __ ] and i was like what the [ __ ] it was over 20 million dollars like wow that was like some like centralized exchange thing trying to be like hey like we have to do kyc like i'll bet you that that north korea was the biggest lp in this newsletter no way really someone yeah actually yes this was around the

time uh around the time what's his name went to got very rested virgil yeah that's that's one back when we called it kim jong-un swapped that was that was really good that might be that one that one should be in your twitter bike the creator [Laughter] um but yeah no seriously like what what are actually i actually haven't really thought through what that would mean so i'm kind of curious like who what's like

a example i mean it is it is something like a state player that would be able to garner enough like negative press using it for something it could be a terrorist org i mean all the things that everybody's like always worried about when it comes to like privacy tech is like the bad people get a hold of it and what i'm scared of is that yeah i guess what i'm scared is that the narrative only all the drug money in zika [Music] and my fear is always this is that the larger narrative is purely that that negative one and it's not uh all the cool benefits it could also bring yeah uh for context on that um uh drug money in z cash has been this

like boogeyman for so long that no one's ever found any evidence for people keep bringing it up but there's never been any like actual substance to it and the shielded pool is still so small it's not like it would constitute that much direct money to begin with i was in the pool [Laughter] but no i feel like i'm hearing like rolling in the deep but like swimming in the pool like if someone's gonna make some like kind of like song version of this oh no but what actually so what do you think do you think would it be like tornado cash that is likely to be like i'm just wondering what what y'all think the most likely

protocol attack vector yeah yeah well like like attack or you know meme attack vector i guess of like evidence shows some big whatever slight slight difference but i have this thesis that the tornado model is kind of hard to do multi-chain because you have to bootstrap liquidity on each chain individually and like the cross-train bridges are not private so like you're kind of [ __ ] yourself if you want to tap liquidity externally so i actually my hot zk take for 2022 is i think aztec is actually on the right [ __ ] business model because a layer two that's separate that can be bridged to that's private is a better aggregator for these types of like zk usdc

transactions than like the tornado like tornadoes great but it does have this problem it just like can't it doesn't work in a multi-chain world whereas like a dedicated layer two to private transactions that everyone bridges to is just like way better and which is also the penumbra kind of thinking as well this idea of like a certain standalone yeah yeah no it's the same it's the same all right the the aztec model is for everyone not on cosmos right like that's effectively the difference but like i said cosmos always provenance for every [ __ ] good idea in this industry but like never you know they just take a while to implement them always the bridesmaid oh it's the bride's name

i just parsed that too zaki i hope you're listening to this amazing james i have a good black swan do we all think that the the merge is a hundred percent likely to be successful oh whoa what's the uh it's possible that people want to continue using their ether asics registered copyright by they called it docking for about six weeks before someone explained what that

meant um yeah urban dictionary should be part of your due diligence for any naming but to be fair i used to work in a field where the term of art and guillermo knows this because he he he worked there was docking for like molecular docking for finding new yeah so that's nice it's not the first time it's been done so you know there's technical risk to the merge there's also social risk of you know people have got all these eth hash asics they got to do something with them that what is the something going wrong with the merge is a big black swan for this year that's a big one that's a really good

one one one thing i would add is that the merge is going to be more interesting from a like financial risk standpoint now because of like how many different derivatives there are that are not really fungible like the set of staking derivatives is quite large now and you know yep i don't remember if i made that prediction that's taking versus what happened this year but i feel like i did actually say that on this at some point but they did like crazy right like that they they really did take off but it does make the merge technically a lot more risky for like exchanges to support on right at the moment it happens because they have they'll have synthetic exposure they already have synthetic exposure to as

preschools likes to call it beth but that's a very controversial thing in the ethereum community the beth is not equal to f but they are they are disjoint technically what is beth what's the b i don't get it beacon chain ethereum beth the beacon ethan you thought the beacon chain is not fungible with ether like they're just but the merge is the moment that that's supposed to happen well actually no uh tyrone the merge is no longer the moment when beacon ether becomes unlocked that's why oh really that's not part of the emerge spec anymore i believe what uh so okay then we're definitely withdrawals with charles will be enabled at a future date oh can i say another

black swan i i mean i definitely hope this doesn't happen it's a little bit of a like lesser black swan than the one you said but related what if the merge doesn't happen next year [Music] heresy do you think that's possible do you think that's possible or do you think it will for sure happen like they are going to brute force this or the difficulty bombs coming up so never delay that somebody brought up the idea of you know continuing the difficulty bomb after the merge and i just wanted to slap them [Laughter] but uh i i think that

um the emerge is extremely likely to happen this year i was shaky on it for 2021 but for 2022 like i think we're past the point of no return and it's sometime in the first half of the year there i'm making a prediction merge by july oh [ __ ] wow putting oh that's my that's the one prediction i'm gonna like firmly commit to but withdrawals at a later date withdrawals at a later date and will they merge with the eth or are they going to be somehow separated or different or uh when withdrawals are enabled you know everything will be fungible again

but you know right now there's two different ethers there's ether on eth1 and ether on eth2 that are separate assets with separate properties and then there's you know a bunch of staking derivatives yeah so the the the risk part here right is right now the staking derivatives can be redeemed for eath right like you can unstake your steak teeth so when you you the way you make a steak eat derivative is you take eth you lock it up into this contract and that contract pulls together all that eath and then validators go and uh validate on each too and then the rewards are distributed to the pool with some percentage going to the people who are actually running the

hardware um now that pool like right now you can redeem the stake teeth for well i some of them are one way some are not so first of all that's a big difference that you can redeem backwards like sell your safeties get your rewards ahead of time and get back east some of them are like you're you're locked in but the weird part is like at the moment that east 2 is supposed to be equal to eth all of these things in theory should be worth the same amount but i guarantee they'll be they'll be quite divergent and exchanges will be taking holding a lot of that risk of like validating which transactions get are are valid and which derivatives are correct but the exchanges make a [ __ ] ton of money from the staking derivatives because they charge a fee on staking for you and so they are kind of

going to be very adversarial with each other because they each have their own sort of staking derivative of choice because it's a big source of these again this might be a dumb question um but is it possible on another l1 that has some you know even if it's a rudimentary or terrible bridge to eth to like set up an eth to beth poole on a different l1 that then trades right bef you know that opens before the merge well that's essentially what's going on on finance right now with the ethan beth markets right oh oh it's okay okay finance has centralized trading of this eth2 you know best asset

they're not synchronized they the the the volatility of the that implied price pair can go up to like five percent which is a lot when you're considering it's the [ __ ] east market cap uh yes but also you know like they shouldn't be synchronized uh and uh until as we approach the merge the price of beth should rise to hit the price of eth as we approach the merge but you know the volatility should represent people's confidence that the merge is coming should should right anyway that's the key looking forward

uh are there any last kind of predictions thoughts anything you want to share before we sign off uh nft finance will happen this year like all these people who are bag holding [ __ ] will need leverage on their on their nfts because they want to go buy a lambo so uh a physical lambo not a jpeg i'm going to collateralize my lambo jpeg to bite a lambo in the motherboard did you even own a lambo that's right that's right that's right one one is i think it might be more expensive than the other and i don't think you want to know which way that goes uh cool oh i have a i have a fun prediction or um i think in 2022 we're likely to see a

major um solana fork i think we're likely to see someone else using the salon a code base under a new brand to make a lot of money oh wow you're saying the bsc strategy yeah or the polygon strategy i don't think it'll be solana's code base though no one wants to maintain like i i do feel like it it might be like uh easier to develop with chain uh solana has the most uh hype like personally you know i'm i would choose solana because it has the most hype because it has the largest developer

community outside of the you know core team outside of ethereum but uh i would be open to the idea that this could happen to nir or avalanche but you know essentially a co-option of co-opting a major non-evm uh chain wow who would do it uh i don't know finance maybe oh an extra press switch chain coming to a store that's a great idea bring james dow to life james dow has a new project yeah it's more than just hair like uh you know that is interesting i think the one i just like find it hard

to imagine exchanges doing that yet maybe in another like year i feel like there's still so much like the client is so annoying to run it still just doesn't feel like guess where okay everyone their mom can make a guest fork but that's just you know maybe i'm not thinking big enough like you galaxy brain here actually here's another here's another fun maybe won't actually happen prediction but i'd love to see it i would love a dow to buy a systemically important traditional financial institution and then you're so good and then cause a real financial crisis that would be

bank down so [ __ ] funny rebanking the already banked yes that's right yeah rebanking already rebanked the already banked on the bank list [Laughter] bank on it i love it yeah i would love to see that see that happen like a dow buying chase yeah yeah like uh like a basically a hostile a hostile takeover from from crypto to some i mean i mean obviously like maybe systemically important is that's too big of a target but i do think that a hostile takeover from some crypto entity into a traditional

equity market would be amazing buying a shell brokerage yeah yeah that would be pretty cool what i want to say is that there there's um i've had a name for this i don't think anyone's bought it yet but i was thinking uh the the perfect name for the style is called bear hug dao and uh bear hug dot has not yet taken i think the the guillermo why are you leaking so much i'm just here you're saying this is gonna own that by the end of this podcast i should no i don't think so like i said i i say a lot of things and if i took my own financial advice that would be i would be you know someone should do that not financial advice not

financially if i took my own financial advice not financial advice that's right that's right turn is saying take my financial advice this is not financial advice it's not not financial advice wink wink wink yeah i just i just love the idea of like literally a dow existing to just like bear hug just like known corporations i just like buy them out and that's just that's it sorry game over like you just oh this is this like one random dow that's like owned by like absolutely mostly d gens like have have y'all um read damon before by daniel suarez no what is this

it's a book that was written in 2009 and actually this is reading for dow bros absolutely 100 because it's like it's it's describes i mean it's it's it's you know you know for fanciful dystopian fiction of sorts but it it describes like a much more advanced version of this happening playing out [ __ ] incredible ways it's really cool like it actually i mean it's it's it's a fun it's a fun read the writing is not like top top-notch but it's a it's an interesting concept i like it what what is the name again maybe it may so damon d-a-e-m-o-n okay and then the sequel is freedom freedom tm daemon book by daniel there you go this the sequel the sequel wasn't

uh you know linux colonel yeah i mean damon damon cut down it wasn't system d restart surprisingly i don't know yes [Laughter] exactly amazing this hostile solana fork thing is now sounding way more real damn i like i initially was like this is a little crazy but like you're kind of right so it's like what exchange is big but desperate enough that they need like some hype and it might maybe it's like wobby because kobe's been trying to do like kobe chain in five different ways right they're initially with nervous then they bagged nervous and started doing their own and then like that thing is

seemingly like stuck right now so like i could you're kind of right i could see holano uh i'm here's just what anatoly will think of this is really like all that's running through my head right now it would be very very interesting i feel like if i were tolly i would actually be kind of excited about that idea that's fair all these evm forks were good for ethereum yeah yeah that's true yeah i mean it's just like it certainly generated more hype and everyone's like but it's kind of a weird thing right because it's like not immediately obvious why it's good for ethereum at least it wasn't to me like i don't know what the dynamics are of like why someone forking because everyone it's the same way that

like if you look at all these new d5 protocols everyone is like letting you uh farm with wrapped luna or b luna right that's because there's a huge capital base to bootstrap your network with right but then then eventually that capital base does go back to the base to where it started and that's generating fees uh look mainstream mainframe manufacturing was good for cobalt i i yeah i mean like i believe that right that now that that that's a great slogan for bank tower this is good for cobalt [Laughter] finally a solidity to cobol conversion layer there you go just abstract it a few times just throw up in my mouth a

little bit let people have what they want all right i think we've reached the end of our prediction episode um yeah what are your predictions oh we had like no zk prediction yeah we did it what um zk hits the mainstream in a really amazing way and it sort of is already like on the cusp i think so that's a prediction it's gonna happen this year just throw it out there all right listen uh actually i i do have one last question but we should be quick because we were way over time um what are you planning for this coming year like what are you

doing and there i have some things i want to share josh what are you doing this year uh gonna i'm gonna keep keep advising keep the board stuff going and i am gonna get the stupid satire newsletter do it off the ground i just because my biggest my honest biggest personal you know highlight last year was having our second child so that was that was a bit all-encompassing but um i am excited to to get back into the game a bit this year cool i don't know maybe and maybe something else we'll see nice guillermo uh i guess i am joining or fund uh as like uh whatever like head of research or research partner or

something like that whatever the hell the name is i'm still not really sure what my title is yeah something like that anyways um supposedly essentially so i conned someone into paying me to do more math for for d5 so that's mostly what i'm looking forward to right is uh continually conning people to to pay me to do the long con everything's the ponzi fuse squint enough true it's just it's everything's a ponzi on different time skills to roon what's what's your coming year i don't know if i'm going we're going to be able to get 12 papers in 12 months again i don't i don't think so but maybe we could try we try that's what you want i don't know that he has a job [Laughter] [Music] but his job is to do that that's literally [ __ ] marketing for his job

that's right that's right you're forgetting this is everything's a ponzi you have to like squint and choose the right value function that's correct but then it's upon it's perfect um i don't know just continuing the stuff i'm already doing just you know what what was the phrase that that san diego tv guy said keep [ __ ] that chicken [Laughter] i think i have heard that i know what you're talking about yeah i'll send you the video i mean it's like it's like a it's a it's an old it's a meme for olds like me wait you just put

the link in chat do you have this on like bookmarks yeah just google keep [ __ ] that chicken i mean okay james let's keep going james what are you planning uh i don't know like more of the same work on cross-chain things do a product launch uh try to make 2022 a user-focused year very cool all right and i have a couple things on this front uh as you know we did zk hack last fall this past fall and we are going to be coming back with a zk hack mini already quite firmly planned for march so it's gonna be a shorter version but i want

people to look out for it there's actually just a ton of events that i'm gonna be working on hackathon zk hackathon i really really want that to happen this year zk summit i want to do a zk summit again and bring back that event that i'd been doing for like many years and then kind of paused because i was tired of doing them online uh i will finally mint the zk nft deck the deck of cards that i've been teasing so there's a full deck of cards so i that's how far i've fallen josh i'm making them now gross i started the year like you too you know i'm i'm gonna be there with you hell yeah but yeah there's a deck of pl

it's playing cards and uh i have them almost ready so they should be there in the new year i've been saying this for a while i want to do zk merch that's like a thing it's kind of half planned not quite executed on yet um yeah that's my my coming year so far mostly a lot of events it's kind of stressing me out but i'm gonna get some help so i think it's gonna go good you got this nice i hope i hope to see all you guys in person this year too yeah yeah i i just i haven't gone anywhere for now like two years and i miss seeing people so i hope that'll happen i think some of us have seen each other this year

but i've never met guillermo in person so that would be yeah that's right you've never met but i would be really great unfortunately all of you it would be really fun to hang out as a as a gang somewhere yeah yeah yeah you see k-pop retreat yeah yes please yeah virginia for john funded by nft sales yeah hi my vk card okay cool all right i want to say thanks to everybody here thank you for coming on doing this uh prediction show prediction episode i think there's some there's tons of ideas that people are gonna hopefully ignore but uh maybe not maybe they'll be great i don't know uh yeah

but i really do appreciate a lot of these ideas and i think it was very cool i want to say thank you to the podcast producer tanya the podcast editor henrik hey henrik thank you you are welcome we love you god for her dealing with henrik's just doing the weird voices now announce her voice and to our listeners thanks for listening [Music]