L1 Death Race, L2 Summer & Maker’s End Game | Roundup

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like if we're all just investing in picks and shovels nobody's ever going to find gold and I really would like to see the Venture industry specifically move more towards the application layer and I think that's where it's going you know Tom was whoever had the most technical investors would probably be the best Venture firm in crypto that's what drove out performance but I think you're moving in a fundamentally different direction you have to play more at the app layer and you know funding all l1s right now feels like you're kind of fighting the last war which is just going to be increasingly less relevant [Music] all right welcome back everyone to the first official Roundup of bell curve I'm joined by uh mics one and two we'll see who Who's Who by the end of the show uh we got Yano Advanced fellas welcome there's a one big story that we got to

talk about this week right that's the vitalik that's the metallic I mean no I thought you were gonna naturally go speaking of micro microstrategy Michael Saylor oh dude all right I got some good memes saved for the end don't worry um all right but let's actually get into it here because we got limited time so uh Vance and Michael begged to talk about macro this week so that's where we're actually going to start um where the this chart here so we're looking at uh the dxy right which the index of the dollar uh and then we're looking at um the NASDAQ in Bitcoin so basically just I don't want to rehash too much but there was uh you know the FED had their Jackson Hole presser basically last week

on Friday um and that's right around here um so I mean they were they they came out much more hawkish right there was a lot of debate about if he was going to a seed or if he's basically gonna he's gonna be Arthur Burns or volcker uh he kind of went volcker and said hey we're going to raise rates to whatever we need to do so the dollar has basically approached a 20-year high and we've seen Bitcoin and the NASDAQ basically sell off in Tandem and you know we don't need to really opine and like try to read the Tea Leaves of the FED but I would be curious because there was a lot of talk about is the merge in the driver's seat fundamentals the merge based around ethereum or is macro and rates really sitting in the driver's seat here and it would guess I would guess based on just

looking at this chart they're like perfect inverses of each other so I guess anything that jumps out to you guys looking at this chart looking at this chart things don't really jump off the page to me like if you do look at like the larger if you click on all um and look at kind of like the past 20 years like this does become like a really crazy chart that um yeah just click on click on all yeah like go go way back you know it's like it's really not been in this level for almost 20 to 23 years yeah um and I was actually just thinking about this in the gym today like all the inflation people are experiencing especially in Emerging

Markets uh is just so much worse because the dollar is strengthening relative to their local currency and it's so much better in the US as a result of the converse um there's a you know an interesting Theory called dollar milkshake Theory which is basically you know the dollar is this Wrecking Ball and uh when it goes up it tends to break things and when it goes down it's kind of the surprising tide that lifts all boats in the same way that interest rates work and those are both highly correlated but you know the strength in the dollar the strength in the 10-year leads me to believe that macro is is probably still in the driver's seat but you know the stock market today at least you know and this is you know Thursday September 1st is you know seems to be dropping potentially on its way to more weakness

but there's been relative strength in crypto which has been really interesting to see and I think kind of what you're finding out is like at some level there is a crypto native bid for these assets that isn't really that affected or or correlated to macro so you know I don't think I have like a super unique perspective on on macro this is certainly not what I'm kind of best at or everybody to do but it's uh you know it's relevant because a lot of the world is just like one big trade are you evening are you loosening are you tightening are you pausing um so yeah it's uh it's all correlated foreign thing that I'd add is um just to keep in mind that markets move so much faster than policy and then policy moves faster than economics so

policy is going to happen before the the numbers in CPI or GDP come through and markets are going to move way faster than policy will and uh the fed the president of I think it's the Minneapolis fed Neil cachacari uh went on odd Lots earlier this week and said he was happy with the reaction that the markets had to what was announced and what was talked about on Friday um and and that you know type of hawkish perspective um from someone who coined the term inflation is transitory means that you know we're probably going to see more stuff happen with fed policy and they're gonna probably over hike before we actually see you know a real turning of the policy perspective but um and I saw this on Twitter uh last

night but right now the market is predicting that we hit four percent uh interest rates in March 2023 and that's currently priced into the market uh and and so if you think that interest rates are going higher than four percent by March 2023 that would be a change in in policy from what is already expected to happen um and so markets are already pricing this in and I I wouldn't be surprised if basically we see a change in perspective or a change in in policy or even a change in in the way that it's being talked about uh and that actually has positive impact let's zoom in uh like to our little corner of the world here I mean this is we've got basically a chart of major L ones right so we've got uh Cosmos ethereum polka dot Bitcoin uh

Solana and Avalanche um so I mean actually a decently wide dispersion uh I would say um but like the big outliers here are uh Cosmos you know outperforming especially over the course of the last month or so and we've got uh Avalanche we've got Avalanche maybe underperforming a little bit I don't know I don't know where you guys want to start on either one of those two maybe we could start on having valence that's kind of the big news of the week um I mean Michael I'll tee you up for that one there [Laughter] [Applause] definitely we can save a little bit of extra time for Avalanche conversations um I think it's hard to look at individual prices

um and perspectives on what that means but I think the the one thing that is really interesting here is just like eth versus everything else um you know the alt layer one um base layer perspective it seems like kind of across the board other than obviously Adam based on the price chart you're showing um but basically all the other alt layer ones are having a tougher time than ethereum is um price wise but I I think that that you know obviously has some impact from the merge but but also just like generally uh you're starting to see more gravitation towards at least layer twos onto ethereum and and that also has an impact on ethereum the other thing that stands out to me with this chart is um if you think about something like eth

that's been you know it was in Ico I think at like 40 cents and then it went to you know fourteen hundred dollars in 2017. then it went down to 86 dollars and then it went back to forty nine hundred dollars and now back to you know sixteen hundred dollars like there's been so much price Discovery in that asset that you know one of the things that we're willing to pay a premium for um for assets like you know eth that have just more price Discovery it's just the certainty that you know in a bear Market in you know when things get crazy you know what level of conviction do the holders of that asset actually have or are we going to get sold into in these kind of like long drawn out bear markets and if you think about kind of the various assets you know Bitcoin you have

the four sellers of miners when you know the electricity cost produce a Bitcoin is roughly equal to the market price of Bitcoin today but then all these other all ones you have just like the structural selling of people that are unlocking tokens which are a considerable percentage of a lot of their full included valuations so the things that surprise me um like avax on this chart is not super surprising given the the lawsuit and probably people who knew about that before it really dropped but soul is is kind of the one that stands out where you just have this massive unlocking cycle that to me looks a lot like East did in 2017 or 2018 where it's just like everybody's selling it all at once relative weakness on the asset that used to be the strongest um and so it just goes to show you kind

of that velocity um and that acceleration that happens in the bear Market it works both ways yeah I tend to agree with you I mean it's been it's been an interesting last month for Cosmos they've attracted some pretty interesting projects so dydx right is launching their own chain over there uh and then like I know you wanted to chat about um say which is a new layer one that's kind of specialized for defy we can get into that because there's some pretty interesting implications for Central limit order books there but yeah I kind of have the same same thing I mean I do want to get your guys perspective on avax uh so to set the scene um I was trying to load this picture but uh I mean you can see uh we'll we'll Loop it in later but like you know CZ basically tweeted this out but um you

know there was a website you know you just can all find this online um but the tweeted out kind of these explosive allegations uh where they had a lawyer on on video uh right Kyle Roche that was basically detailing you know in his words um in his words how Avalanche employed him as an early early employee gave him a whole bunch of equity to basically you know to paraphrase direct the ire of the cftc and the SEC at other projects you know to benefit Avalanche relatively uh to them and I guess the caveats that I would say is you know if you look at some of the other if you look at some of the other reporting that this website did it didn't look super fair and unbiased I would say there's definitely a

perspective kind of a pro uh ICP dfinity uh type perspective but I mean the videos are the videos too so it didn't look great um I don't know if you guys had a specific take but CZ basically tweeted this out and avax dropped like 10 basically uh as soon as he tweeted it but I don't know I don't know if you guys had any specific thoughts or anything that you want to share first thing that comes to mind is like whenever people try to do like the fancy footwork sneaky moves and crypto like it rarely ever pans out in their favor over the long term like you know we have so many different anecdotes of like people trying stuff that they probably shouldn't have for like you know trying to get back at competitors or things like that it always kind of blows up in their face

and this is an area where you know people are experimenting with software engineering with financial engineering the regulations have yet to been to to have to be defined and people can get really hurt if you you know are actively suing them if you're actively directing Regulatory Agencies towards them and so generally it's just not a cool thing to do like we should all be in this as web 3 stewards and stewards of this new movement um and this feels very PVP and you know the things that don't engender you to open source Builders are things like this um where you're the gatekeeper where you're the arbitrator of right versus wrong where you're doing things that are vindictive um and so yeah I mean I I don't think that this will be the last that we hear of this you know Regulators find out

about things in a lot of the same ways that we do they read things on the internet they look at headlines On The Wall Street Journal on various websites um so they're gonna see this and yeah I mean for all of the denials that I mean issued uh the videos are just awful and they point to a pretty black and white case and we'll see what happens with it but yeah I mean we shouldn't be encouraging this type of stuff and we shouldn't just be you know taking these denials at face value one of the things that I kind of want to double click on on and totally agree with what Dan said I mean we we should we should self-regulate our way out of this um but I think that that's kind of the only stance that we can take at this

point and I feel like the industry has actually been doing a pretty good job of this so far like we've gotten rid of you know some some pretty tasty characters over the last few months uh and I think uh it's quite a list but I think you know it really is like the The Hit List is huge and and I think you know why do you think that is I guess is kind of the question that I'm asking and my like my visual reaction to my own question is you're dealing with basically religious perspectives because there's money involved and like if this was just like open source technology and it was like one platform versus another or like one company versus another I feel like it would be less less just

painful or less um yeah less like dogmatic um but because because it is involving money I feel like that's something different and it kind of goes back to the and I know we're going to talk about it later but like runes perspective of like the the door is closed um and like we've done we've like already lost in a lot of ways um and we can debate that later on on in this conversation but he's like yeah you know basically we have Financial incentives here and like we just continue to blow ourselves up because of human greed I I think I take a different approach actually on this whole Avalanche case um this is some this is not specific to crypto like this is something that's been happening since the dawn of time and like you look at I had a bunch of

friends like probably similar to you guys because you guys were like product people in San Francisco back in the day uh who are at Uber and Lyft right and like uber had operation slog where they would literally in like 20 what 14 or 15 or 16 in the early days where they would literally uh have Uber people who would get credit cards funded by Uber and then create fake Lyft accounts as drivers uh excuse me as writers and then they'd order lifts and then they they would basically no show the Lyft drivers so the Lyft drivers would get all pissed off with the lift with Lyft and then they'd go back and start using Uber so like there are these back door things and like even like Rockefeller right like back in the days of like standard oils like so that The Regulators didn't come after him he would basically direct

The Regulators and be like here's something that my that my competitor is doing that's really really slimy and this is like I just I'll it's Shady it's not right but like it is it's not specific to crypto it's something that's been happening uh at these at the like highest levels of business I would say forever I just felt like I was watching dirty laundry get aired I just I just don't think like anyway you just kind of like when you watch like a a boyfriend or girlfriend like get really hammered and then like fight at a party and you're like I don't even know whose side I'm on I just want this to stop like please but I love it I just don't like what I'm seeing here I didn't because like some of it didn't stand up to me like some of it you know this guy like

what I I didn't believe the way he was portraying it was like he's the one you know the marionette like pulling the strings at the SEC and cftc I was like I don't buy that I don't think that's how that works you know so like that wasn't really standing up to me but like I didn't love the response from the it was just it was just so weird also just I mean I just don't trust this whatever I'm just doing suspect I just don't that's very suspect whatever I'm looking at so all right just gotta flag that one of the interesting angles here is uh he's been removed as one of the uh lawyers on a number of different cases that are currently ongoing you know the the the tentacles Run Deep for Kyle

um which is which is kind of funny wow um all right well let's I mean yeah I kind of think it's in a dirty laundry if it is true then yeah it's obviously goes without saying it's a super uncool move and just not becoming because I think I think one of the things that might be different you know like even Mark benioff right like he did all this crazy stuff with the media right when he was building Salesforce but it's a little bit different in crypto we're still so early stage and there's a huge focus on community that there might not have been for other like I didn't get the I don't get the feeling that Rockefeller was like let me build a community around this oil company okay let's use like you said you said Salesforce depending off like at the beginning there was no SAS

industry there used to be no SAS industry until Salesforce Salesforce would literally Salesforce would literally hire protesters like fake protesters and they would go protest outside of uh like like Oracle conferences and stuff and you have to hire hundreds of people and they were protesters but really they were just paid for by benioff like this is just I don't know it's just I don't I'm not I'm not I'm not for it I'm just saying this is like not this is how the sausage gets made so yeah yeah yeah you're getting some direct insight into blockworks his line item uh Opex spent uh I think we I I like you know I I don't think last cycle we did a good job of being self-regulating like we didn't

call out things or at least when people did it was just drowned out in a sea of people just making money and so so I don't know if I'm I'm certainly not in favor of like cancel culture or like you know taking Kyle out of a job forever but we should be trying to keep each other honest at a bare minimum yeah that feels like an okay goal I agree with that um all right I'm gonna start sharing my screen again I actually you know I want to get into this topic of value Crooks we're going to move on to talk about l2s and specifically nitro's launch on arbitrum on some of the activity that's going on there but uh I want you guys to guess if you guys had to guess um some of the D5 Majors like compound Ave uniswap let's say uh last two years of

performance relative to eth how do you think they did see probably down 50 or 60 percent maybe more oh last two years since yeah yeah last year I'd say since October 2022 it's almost two years start October 2020. wait since October 20 20 20 20. yeah I would say down probably 50 percent I think October 2020 is a bad time yeah because that that was post D5 summer uh that would be a tough Benchmark um I'm I'm gonna say uh wow we got pretty big spread so far we got negative 50 and

up up what I'd say even because I think Heath was was pretty high back then if I recall but I could be off you know I think it's right I mean haven't both of them round-tripped since October 2020 essentially no I think I think I think d5's down I think like Avan company near down relative to down relative to youth I think East was at like 300 or 400 or 500 bucks it's at like what 1500 today Ave is probably down all right all right make your guess because I shared my screen too quickly it's down defense down defense down relative to youth these are the numbers here it's like not great it's not it's not great so if you're if you're not

following so uh Ave is the leader it's down about 52 then it's unit swap at 67 maker down 70 curve 71 comp is down 91.86 it's not great compazone 91 relative to each yeah I mean this is I mean the reason I picked this is it's about I mean it's two years it's about even and this is as far back as it goes on on trading view so it's the easiest way I can do it but if you if you go back and so that's that's my scientific method but if you go back I mean you can look at uh coin Gecko and just look at like charts of uh of like maker denominating if you go all the way back to 2018 or whatever they launch and it's like a straight I mean it's a straight I mean what what the reason this got

flagged is um you know I saw on on Twitter you know maker denominating eth is like the almost the lowest it's ever been um basically uh so basically D5 is a sector is kind of bottomed out I think it kind of raises larger questions about value accrual and also I mean we're going to talk about say as well but why it's still such a good bat to bet on our ones um actually I would be curious I'd be interested to see if this same pattern holds up with uh like Solana and some of the dabs that are built on there I have no idea I don't think I don't think the L1 trade is there anymore actually I know so I think what happened is the L1 trade happened in uh like the last bull cycle was like the L1 cycle kicked it off kicked over it was like D5 summer

and then everything rotated into these l1s like Solana ripped and then Avalanche and I think what's happening now is you have all these like the aptoses and suis like there's going to be like 40 L ones going into the next cycle and I think there's going to be people chasing the L1 trade but the L1 trade is going to get instead of getting spread out over like near Solana Avalanche is going to get spread out over like 40 different l1s and the TR the trade won't be as intense well but I actually I actually disagree to a certain extent because I actually think that if you if you look at anything in crypto right now what where is the most value aggregating and this is to Mike's Point it's aggregating the l1s and if you're raising five million

dollars for probably I don't know let's say like five ten fifteen percent of the tokens you're it's a pretty good bet to make to be able to buy it well this is five million bucks right now he's pretty interesting I don't know maybe we should I'm jumping around a little bit but maybe we should talk about that because I feel like the reason why that might be worth bringing up is it made a pretty interesting trade-off especially when it comes to like there's a big debate right Central limit order book versus amm's um in general but just to give you guys kind of like the rundown for what happened so this is a new L1 um they raised five million dollars it's an L1 blockchain that's optimized for defy so it's not an app specific chain and it's not a generalized L1 blockchain it's kind of this mix in between uh so

raise five million in funding is led by multi-coin with participation you know round robin of you know kind of Blue Chips like coinbase Ventures Delphi digital Hudson River Trading GSR Etc um basically I mean in their in their words here uh so most l1s fall into like a barbell type distribution you've got two extremes so the general purpose chains and that's like Ethan Solana then you've got app specific chains like what dydx is trying to do and you've also got osmosis in the cosmos ecosystem and basically what the way I understand it the limitation is in a general purpose blockchain like Solana even if you have low fees if it's a successful blockchain at all it attracts a whole bunch of other activity outside of just D5 right so maybe on Solano it was like the nfts when you have that congestion in the block space fees go up and that

naturally disrupts some of the uh you know basically the the D5 type purposes um and so then you have kind of like these app specific chains um which is what dydx is trying to do on on Cosmos but then say it takes a little bit of a an in-between where it's actually a not totally general purpose L1 they're they've got like a built-in order matching engine uh but actually they're not they're trying to encourage other they're trying to make it very easy to spin up Central limit order book markets on that chain right so it's not like you go to say exchange they're trying to make it very easy for you to spin up separate markets um I'm sorry why is this not you might have just explained it but middle of the bell curve here why is this not Solana what Solana tried to do they

Michael's like it is baby it is Selena I mean I'm just gonna call it how I see it which is like this feels like multi-coin taking another shot on goal like I for like this was this this was their blog post foreign investment like you can build Central limit order books and like spot and derivatives trading on you can't do all that stuff on chain now but you can do it on chain if you can build something that looks like Solana and now it's two years later and I like I'm down to say I'm down with moral ones I just feel like we should say what it is which is multi-coin taking another shot on goal yeah I mean don't want a dog Kyle or in too sure for it we like those guys um oh I don't think it's a bad thing by

the way I mean like yeah my you know I'm I'm not like for it I'm not against it I'm mostly just like who cares like we've been around long enough and and we see literally like two 3 000 pitches per year most of them are not l1s but like a good chunk of them are um and some of the rail twos and some of them are variations and like we've literally heard everything parachains app chains scales by Hardware scales via l2s scales via subnets it's written in JavaScript whatever like who cares um who's actually going to use this thing how is it going to get distribution and you know the reason why we are so interested in things like eth and and you know Bitcoin to a lesser extent

is because they have not only this technology angle but they have the call option of being money and that is like the fundamentally mispriced option which is you know that's how these assets get to trillions and trillions and trillions of dollars of scale and you know there's this concept of like the window okay you know a year ago a year and a half ago um eth fees were High um the scaling road map was Far Away the all l1s were hot on their tail like the window was wide open Flash Forward to today you know most of the transaction fees on these l2s are are 10 cents and it's you know really easy to build your own L2 side chain that transitions into an L2 like why would you not just do

that all things considered and I think the answer is basically well the incentives are to become your own ll1 because that's like where the the highest market cap could be but that window in our opinion is is basically closed like if if 4844 gets put in and that's basically this Improvement proposal which lowers the cost of putting call data on chain like what's the what's the point of doing this other stuff um and like you know it's not like you know funding ground gets announced three months later the blockchain's out six months later it's in mainnet it's like the funding gets announced a year later it's like ready for Alpha a year later it's got like tools a year later you got the community it's like that's way far in the future

um like if we're all just investing in picks and shovels nobody's ever gonna find gold and I really would like to see the Venture industry specifically move more towards the application layer and I think that's where it's going you know Tom was whoever had the most technical investors would probably be the best Venture firm in crypto that's what drove out of performance but I think you're moving in a fundamentally different direction you have to play more at the app layer and you know funding all l1s right now feels like you're kind of fighting the last war which is just going to be increasingly less relevant it's also just we can't have another cycle where we just fund l1s because we're going to have another cycle where like there's no you know quote-unquote adoption that comes it's it's like it's probably not good for your portfolio but

it's also really not good for the space to just keep funding these other ones the the one caveat that I would give is there is this like intermediate time period right now where a lot of all l1s have been funded you know there there's um all the different modular blockchain examples uh but you're you're literally a race at a in a Race Against Time for the scaling of other major uh blockchains L1 smart contracts with l2s that have scaling to really scale and that's that's what EIP 4844 does I mean Nitro just launched yesterday on arbitrum and I saw or we were talking about it but like Sixth Sense is is the transaction fee with eip4844 yeah that

goes down to subset layer and and once you have that you know it's really going to be hard to compete with the security model of ethereum the community of ethereum and frankly the the apps and development and tooling that has already been happening on ethereum for the last time I know you guys are all in on either can I push you guys to take the other side of the argument sure um the other side of the argument is uh I at least I would start with this I would say um the intervening year that's about to happen doesn't matter you know it's going to be kind of like flat to bearish um there's not going to be any

blockchains that hit like these hyper adoption moments like eats Network effects are not likely to grow um and so you know you would kind of draw a line from that to saying all right the network effects are relatively weak we can easily replicate a defy ecosystem nfts are harder like you can't take it you basically have to like just like that's a function of time effectively building an nft ecosystem and maybe we can peel off like a few games and if those games hit you know instantly we have the biggest blockchain with the most amount of users and you know I think the thing that's most exciting about say you know if I if I were the people who invested in it would probably be the valuation you know it's a cheap call option on all that

happening and at a certain price you know it is priced right to happen um but you know you have to think probabilistically as an investor and that's why you know this this does make sense in some contexts but yeah I I'd also add uh that the major difference between something that you're constructing from the ground up now versus something that's been around since 2015 is frankly just tacked at the amount of time and energy spent actually like trying to pull off a major change like the merge that you know is supposedly going to happen in the next two weeks is just orders of attitude harder based on the the stuff that you have to go through to get it to the

point that it is now with it also being live and at the scale that it is today and it has been for the last few years so there isn't there is a really strong argument to be made around like just being able to move faster because you don't have that uh and and so yeah I mean that that is a thing is not available to people who make this argument anymore that used to be was like when Solana came out it was like there's new types of applications that can be built on Solana that cannot be built on ethereum and that was like you know as some as people who hold you like that was like oh like this this could run away from us pretty quickly um but again it comes back to that concept of the window and the window for that type of differentiation is

basically over and so what is it now um that's a little bit harder a question to answer now versus a year ago I I guess my because the Jason go back all the way to what you said like is this is say just another Salon I mean the difference there is that Salon is a completely permissionless general purpose blockchain so you have other applications that aren't necessarily defy whereas say is optimized for its optimized for defy applications right so you don't get a lot of that clogging they also have I mean they've done they've they've built some pretty interesting stuff in there like they've they've kind of solved the front running issue of Meb like the transactions per second that they have it's something like 7 300 uh transactions per second versus dydx is 500. so they've done I mean they've made some you know I I

think the I if I had to strongly in the argument for that as well I'd say like a lot of the unlocks like you know how they come in cost reductions you know in in other Industries like biotech like the cost of sequencing a genome went from like I forget some enormous amount it took like multiple years and now you can do it for like 500 bucks that's a huge unlock I think I think the you know if you optimize entirely for Speed and you make some trade-offs but you optimize for Speed then you get a whole bunch of unlocks that are hard to understand now like that's the whole business model behind high frequency trading is you have to order like sorry Michael you look at can I say something what's going on well I was going to ask the question though like yeah it's interesting the

genome is sequencing The genome and if you have the ability to do that at an orders of magnitude lower cost it's hugely valuable the implicit in the question though in this context is the question does a central limit order book maintain its position as the most preferred way of trading or is it something like an amm or frankly something new that hasn't existed yet but is now enabled by a blockchain that is the dominant way that we trade for crypto and I mean look at the historic the traditional financial industry the dominant trading pattern is options but think of options relative to perps when it comes to crypto and we do have new models new trading uh methodologies that are just different for this industry so

one of the questions that I I kind of maybe post the entire group is like is the central limit order book Something That We're going to continue to have at the same volume that we've we've had in traditional markets I it's hard for me to answer apparently the volume of uh like high frequency Traders versus you know regular organic flow is something like 25 times to one or something like that so the business model of exchange is basically exists around you know it's a central limit order book they cater to and they allow those high frequency Traders like to basically trade more cheaply in exchange for providing liquidity I don't know if that's the only model but I think you need to come up with something like liquidity is good for markets in general so I think if you're going to say all right we don't

need to do it with a central limit order book anymore instead it's going to be and maybe concentrated liquidity on the amm space like uni V3 is pretty interesting frankly but I I mean I think you need to come up with something that replaces that is the only thing I say but I'm not you know bell curve guy I'm not I'm not sure what that is exactly the two questions that I I like ask when you ask that question to me are basically um like what's the differentiated functionality of an amm versus an order book and I think like amms have a great product Market fit for the long tail of assets like you can spin it up especially uni V2 provide liquidity you know Bob's your uncle like it's trading it's live it's whatever like that's a great use case that literally is not

available for Central limit order books um and for the things that have a little bit more scale like unib3 um it's challenging to be an LP there we've done a lot of analysis which suggests like you're basically break even in permanent loss versus fees if not negative but like that's a great way that you can do sizable block trades in the same way as a central limit order book and get about the same execution um and then I think about like okay is it better on price and amms are you know probably not quite as good on price but looking back at the historicals like everything that we know about crypto and Retail interacting with crypto would suggest that they are very fee insensitive that is not the thing that matters the most to them they're willing to pay two percent for nfts so

you know at the highest level of scale at like the binance level where you're doing like tens or you know hundreds of billions of dollars of volume you know per day per month whatever um You probably do need a central limit order book as that anchor but like for the rest of the ecosystem it to me it's like who cares like Serum is great but like who cares like who uses it you know do people want to use the Orca decks instead like all of the stepping people do you know yes if I had to yeah if I do why do they use orca it's a good question I don't know because they're stepping people and they rebranded the right oh yeah I think they might have started their own decks too so so maybe maybe that's no longer the case

uh if I know I was kind of ragging on saying we can move on from saying a second but like if I if this was a non-crypto company I actually probably might like it because I'm just I'm gonna try to play Devil's Advocate to what I'm saying which is um and try to take the other side of the argument if there was like a cloud provider that came into the market and they were like all right we're gonna go head to head with Google Amazon and Microsoft I was like great who's your who are your early customers are going to Target who are you going after and they're like oh everyone SAS companies gaming Finance I'd be like all right well there's no way you're winning there's you have no chance and I think what say is doing is they're like all that other stuff like other people can

go win it but like and like nfts like go do that somewhere else and and honestly like it's probably pretty smart like a poorly designed nft mint uh can consume all the block space and kind of Ruin D5 for a couple of days on a blockchain and so yeah that's probably the counter argument is like hyper Focus companies and Founders usually do win that's true I'm also very bullish on poorly designed nft mints because they just burn a lot so I had this uh up here and we weren't even looking at but I want to get your guys uh take on arbitrum maybe in in relation to optimism as well so Nitro got rolled out which is basically an

enormous Improvement I guess actually we should start with Odyssey which was Odyssey I think it was a pretty interesting uh initiative that was rolled out by arbitrim it was basically like to paraphrase it was essentially a scavenger hunt that arbitrum was basically it was trying to put its users through say hey like uh they're gonna be these 56 you know the top apps that are going to be grouped in this thing and if you you like you should go like use all of these different things right like decentralized exchanges and whatever um and you you essentially have the ability to earn these nfts um so this was rolled out in June it was live for about a week uh then they had to pause it because the fees that opt like to transact on optimism or on arbitrim were actually higher than ethereum so they

basically they had this big announcement we're gonna pause um you can actually see it I'll share my screen again in the spikes on this chart um but they paused Odyssey and uh what they they just rolled out Nitro which is an enormous increase in terms of transaction throughput so it's like six to ten times increased it by almost a full order of magnitude um and what they're it looks like I mean they've kind of moved in lockstep here but uh it looks like they're starting to to win right so transactions per day is flipped uh transacting addresses per day uh split between arbitrary and optimism I'm curious if you guys have and some of the projects as well like GMX is kind of the standout right on on arbitrim I'm curious if you guys have any thoughts on just arbitrim versus Optimus in general

or just I guess the arbitrum ecosystem I will just say like Vance and Michael are gonna have much better takes on this than I do but like I think when you look at these charts today in two years when you look like you're saying like oh the transaction's flipped when you look at these charts in two years these are gonna be like the smallest little blips on the chart so like I actually don't it's gonna optimism will probably flip back and overtake arbitrary at some point then it'll flip back then I'll flip back and these will just be like we're at 0.0001 of the transactions that will end up happening on L2 so like yeah yes uh that was literally gonna be my first reaction is it feels like we zoomed into like the 2013 bubble and crash on the

price chart and it'd be nice to zoom out a couple years and be able to see where we actually are I mean we were talking about it earlier but eip144844 is gonna be something that 10 to 100 x is the amount of cost or decreases the amount of cost for call data on L1 assuming that goes in assuming it works the way that it is supposed to work uh I mean this this stuff here is is kind of moot but I also agree I think this is just going to be a dogfight and you know you you can literally see it in the transaction fees or the transacting addresses it's just going to bounce back and forth the thing that will be the Difference Maker though is where applications aggregate so you've got you know certain applications that are optimism only you've got others

that are art room only do you have the ability to have cross arbitrum optimism and have that be a seamless experience if that's the case it's going to be really you know who's who um the other angle that I think is really interesting as well is is there going to be a centralized uh bridge to be able to get from L1 to L2 right now if you pull your assets off of uh and I don't know arbitration we I've done it personally recently on optimism still takes seven days you're waiting seven days to be able to pull assets off of optimism if you can have that be something that is you know a centralized bridge and there's just market makers that can ARB that away and get you assets immediately or you can trust the process that is a great thing but for seven days you're basically waiting for

things to disappear and then come back that's a it's a it's a weird feeling for blockchain so you guys like when we were looking at gem versus Genie back in the day I remember like all the the Twitter peanut gallery was like oh man it's over like gem is like way in the lead like they're blowing them out and like you know it looked that way if you you know hold up Dune but then if you dug into the amount of users it was like you know gem had like 60 more users than Genie and they have like 100 total combined um and so like yeah I mean CT to your point Jason kind of like tries to call everything early um I think my unique perspectives on this are the seven day withdrawal window makes these things kind of like one-way Bridges like getting your stuff off of these These

Chains is very hard and we've done it but um it kind of makes the nature of them one directional and you know it's just gonna be this thing that sucks in a ton of users and they and they don't really leave and the way I think about ethyl one and the continuing value accrual there is like number one um like defy and nfts are extraordinarily sticky for ethyl one Wales and that's kind of like where you know the the three to four k e fees per day are going to come from in the next six or 12 months that's like that's what we're guessing um but number two you know now that we understand you know at some sort of scale what the cost Dynamics for these you know blockchains are um we can understand like what's valuable about this emerging kind of thesis of like the modular blockchain

stack and so if you look at you know say arbitrum transactions that are a dollar each I'm I'm paraphrasing uh Paulina who's a great Twitter follower if you don't follow him um about 30 or about 55 are just like you know paying for arbitrum fees of that dollar so 55 cents about 40 cents are for uh paying for data availability and posting call data to L1 and then one percent is just paying for or like a very small percentage of that dollars is actually for paying for settlement on L1 and so like you're actually starting to understand like what is valuable what are people willing to pay for is it the settlement layer is it the data availability like what is it exactly and that's very interesting to me because I

think like eventually we're going to have to come to some sort of consensus as to like all right what is the minimum that these l2s can pay these l1s and still claim like to be affiliated with the ethereum community to have this credible decentralization because you're always going to have this push and pull between fuel holding you know arbitrary or optimism tokens who wants the value of accrual to flow to that versus the people who want to you know continue paying relatively high amounts for for settlement and data availability on the L1 so it's interesting to get this early kind of feedback on on exactly what that value accrual Dynamic is and could potentially be I think it's kind of interesting to look I mean the big difference I got I point taken we are zooming in on a really small period of time but the big

difference I would say right now in between it's just like their acquisition strategy because optimism actually has a token and they're Doling out incentives like left right and Center which is why you see those like enormous spikes whereas arbitrim has kind of a different strategy where they're I mean I guess the nfts are an incentive as well but really I mean the the real reason why Odyssey was so popular was this there was the idea of incentives in the future like potential air drops right of the arbitrum token everyone's basically taking it as a given so I do think it's I mean it's kind of interesting just looking at I mean people are trying out new strategies you know like go to market for like how to migrate users from eth to this L2 versus the other L2 that's kind of interesting I I don't know why but I just got really

uh uh strong Rob hanneman Vibes free Revenue Pure Play Never Never yeah never get right there we go [Laughter] it's a dream value of having a token you can get 90 of that by just telling people like you're gonna have one in the in the future or we'll airdrop it's like you don't know to actually use it you just need to tell people you have it so basically you're like dangling the meat in front of the dog basically yeah hoping that the dog jumps yeah honestly yeah I have I've heard that it's like uh subscribers of Belk could get a token so if you're listening nice nice

I I mean I I think the biggest like token aside I think the biggest thing that we're gonna see in you know like summing up this whole L2 discussion or frankly even just like execution discussion where people are transacting or choosing to use the applications it all comes down to price and if you have lower prices not only is it just uh easier to use like obviously less expensive but it opens the aperture lens of what applications actually can be built on these chains and one of the interesting things that Vance and I talked about a lot in I think it was like 2020 2021 was basically you know if if you have a 10 inch decrease in fees what do you think happens to the revenue that's flowing through you know like

price times quantity it actually increases because you have more transactions at lower cost than you would you know if you had higher costs and and so I think as we see these decreases of you know 10x like I think we saw with Nitro or whatever it is 6X uh you're going to see more activity aggregate there just because the other thing I would say going back to the say discussion like what would be the counter argument to you know being uh bearish so you'd be bullish on say in this this instance I think one of them would be yeah cool you fixed the scaling problem for the 20 000 users that are on arbitrum and optimism today but like the second that you have a popular game with 10 million users you're gonna be right back in the bucket

of like okay you didn't actually scale this um and like that's kind of to Michael's point of like you know when if fees decrease will people fill up that block space like the people were filling the people were opening up block space for are like game developers and like people who have millions and millions of users and frankly like we still have not tested that level of usage on any blockchain consistently I would say eth is around 500k daily active users per day most of the major blockchains are you know half that of two-thirds of that um um all right I want to move on to uh maker I think this is going to be kind of a meaty discussion frankly uh so rune's been publishing like multiple

different I guess iterations of his version of End Game um and he just came out with a pretty recent post but I guess to sum everything up I mean there's a lot of attention that got paid to the ofac sanctions the treasury sanctions um a different smart contract addresses uh so tornado cash kind of got shot down and then roon in the Discord for for maker said something to the effect of maybe we should just YOLO into eth and you know disregard the peg which he which he kind of walked back but now is like kind of addressing more seriously and like laying out a very specific vision for what he thinks the end game is for for maker so we'll link the whole thing in the show notes here but basically to some you know to sum everything up from the tldr that he posted the you know the

title of the proposal is the path of compliance and path of decentralization one maker has no choice but to abandon the peg um you know he kind of describes it in like three different phases right so Financial regulation has trended towards a post-911 paradigm I'm either of you're with us or you're against us with eventual zero tolerance for anything that doesn't give full you know surveillance power essentially over um you know any sort of financial infrastructure in general defy has kind of failed to prove real value and demonstrate real value to let's say the masses right so obviously we got some sort of negative PR to put it lightly with massive crashes around Terra and Celsius even though Celsius wasn't wasn't defy um and I think you know and actually Jason and we just did an interview with

Kane and he did say that a lot of the even like the founder class in D5 was like kind of taken aback uh they didn't really expect this this severe of a Crackdown at this period of time so I think the whole community's sort of reeling with what to do um and the big the big challenge for maker is that die it can't become blacklistable uh so they basically basically maker doesn't even have the option of being compliant so you know the the solution that that roon is outlining here is to limit the attack service by limiting the amount of rwa which is real world asset exposure that they have um and he's kind of freely admitting that the likely outcome of this would be you know in his exact words to cause dye to free float away from USD at stable predictable rate that feels like

negative interest rates and basically this end game plan that he's outlined has two effective tools to deal with this meta Dallas and protocol owned fault which is crypto speak for balance sheet I um it was like so much unpack here I actually tried to read the full thing and I felt like I was reading Chinese uh you know like 45 minutes in I was like dude is this is this the same language what what are your I have I have opinions on this um especially because I think there's a fundamental misalignment at the top of what maker even really is but like what what's up guys that's what I was gonna say Mike I think when you talk about the end this is the second interview or like honestly like there are there have been many iterations of the end game the end game didn't like now it's all about real

world assets and like censorship and like free-floating die but really the end game plan started as just a conversation about like how to structure what maker Dow really is and like you could use the word governance as like the all-encompassing word but it's really not that like right now like maker is just this hodgepodge of like core units that are just like it's so it's like very messy what he if you look at the end game plan like he uses this image of Google or really alphabet right where it's like okay you have you have these like what he's trying to in his words he's like I want to transform maker from this like unclear structure into something where every aspect of maker is very well documented where people have like kpis and goals and like if you look at Google it's like alphabet owns like Google X sidewalk Labs Google

Ventures fiber Google Google Capital Nest uh inside one of those is Google and Google owns Android and maps and ads and search and YouTube and then within YouTube you have like YouTube kids and then you have like the main YouTube and like each each team has very strong kpis and they have like a budget and that's I think where all this came from uh which makes sense like if you again like trying to not think about this in crypto speak can like rwas and psms and die in like d3ms like if you just think about this is about this is a Founder being like holy my startup just went from 10 people to like 200 people uh it's so chaotic I'm trying to like Wrangle this in that's what I'm seeing is a Founder who's like whoa my my startup just got

really big I need to think about organizational structure that's it it's an interesting take I mean my my like reading of the tea leaves and I don't disagree with that because I don't think that they're mutually exclusive but my my take here is um just let let's roll back the tape of what maker is which is the first D5 protocol and die is the first decentralized decentralized stable coin to hit scale let's say it may not be the first but it's the one first one to hit scale and where you got to real world assets which felt like an about face for the entire direction of the protocol was what happened following March 2020 crash

where you needed to find stability you needed to find new asset collateral to be able to add to the to the ecosystem and so that's where where you had the first vote to add usdc as one of these collateral types that you could put into into maker because you had to be able to have that to be able to stabilize die following the crash in the outage and everything that happened you know during that period of time and now you you have a continuation of that strategy where you have you know 100 million dollar uh off chain loan uh to the bank and I can't remember the name but you know that that's another real world asset that is the first of its kind but also that happened very recently and it's not like that you know was something that happened a year ago and now you have a

complete additional about phase back to the original thesis of let's be fully decentralized fully on chain I think you know as he described in the post his hands are tied in a lot of ways so it does make sense to move in this direction at this point but it's been a lot of whipsawing back and forth that I think you know maybe maybe it's a realization of like this startup this company that we're running this organization is massive and need to have more structure to it but it's also it also just feels very um like planned you know back in the day uh maker owned a exchange called Oasis that owned a pro for dealer license um you know roon was going on CNBC is the CEO of maker

um you know in a collared shirt I remember that Devcon Osaka speech Michael he gave uh when he was like you know like we're going to Trad file all this stuff um and so it is like a really different perspective and um I think Beyond like the direction of the dye goes just for the record like I I very much disagree with roon about like D5 providing no value the window being closed for these things to be regulated institutions um you know basically all of that stuff like we've only started engaging with regulators and legislators over the past year and for the most part you know there's been definitely some people who push back there's a lot of people who are in our corner and I think we're just waiting for a time where you know the stars are aligned with the right

Administration with the right you know balance of Congress to actually get something done and and you know Michael and I spent a lot of time helping push that forward and so like I don't think it's time to just like roll over and die and just be like okay it's only gonna be you know decentralized protocols from here on out and like we're all going to be a non-devs like that's very much not the feature that I see for this asset class and Michael shares that as well um in terms of you know the the paths that these D5 protocols take forward like call it the ogs or whatever um I think one path is you know going into the window that roon says is now closed or or at least waiting for that open that window to reopen and I think it's more of like a reopening concept

where like we're certainly not in the window where that can happen today like if you if maker walked into the SEC and wanted to register with them I just don't know how that would happen but in the future I think there is the potential for a legislative framework for that to very much be a possibility but that's probably two or three years away and so like if you're playing for that regulated window to open you're playing for some date that's a little bit further in the future and you need to be aligned with that and you know places like uniswap you know places that are also in the US that are in D5 like they're very much going down that path and I think that will be a fruitful one for the people who don't want to do that um who are probably more International

in terms of their basis uh you know in the countries that are located in maybe there is maybe there isn't a way to register maybe it doesn't even matter particularly um but I think a lot of the past that they take these International D5 OG protocols will be kind of like this fully crypto native version of what they're doing uh that's just reliant on the endogenous growth of crypto like if maker gets a bunch of usdc in their vaults and they really own it and they start paying down the debt of the Vault owners and eth starts mooning like that's going to be a very very powerful protocol and they have the potential to draw on a lot of eth and so like you're just betting on the endogenous growth of eth and the desire for truly permissionless systems which you know is Lumpy but it's very important

um yeah the last kind of unique perspective I think I have on this is like if you really dig into the economics and the mechanisms of how this proposal works it's kind of like a defy summer style Playbook it's like yep we're gonna depeg we're gonna like get a bunch of money in the vaults we're gonna go off and yield farm with it we're gonna go pay off people's debts with that it's like okay like this is kind of like almost like alcamex in a way and uh I think that's cool and I think it's definitely a departure from like the maker that we know where it's like ruined in a collared shirt on CNBC maker kind of just like not doing anything for like a year two years uh like it like if you play back the tape on D5 summer last time they missed that

like they were not a part of that cohort and so yeah I mean at the end of the day it comes down to what does your team want to do and what are they good at and for a Loosely Affiliated group of contributors that are not based in the US that want to run this like crypto Anarchist Playbook it seems like kind of only the the only Direction you can go in time like ruin at the at the beginning of his post says that like the earliest this could happen is three years so this is them getting kind of you know in their you know Ready set go stance um but yeah I think it's an awesome discussion and it leaves a lot for other D5 Founders to consider I I I I agree with parts of that I think um I think the one thing that I would

say is like the product in my vision of maker is a is something that is supposed to be a dollar right you're supposed to look at this and be like everything that maker is is doing is in service of creating something that is a dollar and it is at least of stable value so it kind of like as me if if let me because I I do think it's cool to experiment with New Economic models and like hey could we like yield Farm some of this and give rewards back but the way that I think about it if I had to denominate my entire life in maker all these assets that I have all my wealth is denominated in in in die now instead of US dollars I would kind of have the perspective of like yeah back that up with something real you know like uh you know

point back that up probably don't do any of that stuff actually um probably just put dollars in there and I'm not and I'm not I'm not saying that because I I see the problem with the real world asset as well um actually Jason maybe to carry your analogy of being a Founder a little bit further if I I was roon I think I'm not rude obviously but I guess if I was sitting in his seat and I like deeply believed in the ethos that I believe that he has right which is trying to create a decentralized stable coin that's separate from Real World assets but then you're also like he ran up against the limits of where he was in time right which was that there wasn't enough demand to Mint die against eth so he had to in order to grow the protocol and have it survive he needed to find

other collateral another source of collateral and it's like this is where my ideology and what I want to build runs up the rubber meets the road in terms of what options I have as a founder and what I have to do and I kind of think that he made the only choice that he could at that moment in time and this is like where like a butterfly flaps its wings and maybe if he had been doing it five years later and there was more solid collateral like eth was an order of magnitude larger even Bitcoin or other crypto assets he had more options than he could have taken a different path but I I don't think that he wants to de-pag I don't think that he wants to I think he is trying to like if you go in the maker Discord and you spend like

a lot of time to make her Discord and you're on the forums like there is a core the core group of people who hang out in there are very like maker needs to be self-sustaining maker can't have real world assets makers like cannot get censored and so you have to appeal to that group so what he did I think what he just did in this thing earlier this week was very smart he said for three years basically do get basically we want to accumulate like Max E he called it and we can do that by getting unlimited real world asset exposure then he said we can keep the peg for three years but we can go longer if there's no authoritarian threat uh and then he said we can delay the free float of collateral if it were at least 75 decentralized he's putting in all these

things that are like yeah we're gonna free flow but like we won't free-float if this and like definitely the plan becomes censorship resistant but like we don't need to if they're not coming after us so like I don't think he wants you never want to take the harder path you as a Founder like building a company is hard enough like you want to take the easier route so like I think he's trying to appeal to the Core group of hit of like basically employees uh who are one you know want something but he's like I I don't know I just I don't think he's actually I think that he wants this to be I think he wants real world assets and I also think that he's smart enough to know that if you get a ton of real world assets maker is not like tornado cash like they censored tornado

cash because like 30 or 40 percent of transactions were from like North Korea or some like that like if you get if your real world if your collateral is from like Huntington Valley Valley bank and then maybe in two years from like BlackRock The Regulators aren't coming after you they're working with you uh if BlackRock has put their stamp of approval on you and I would assume root is smart enough to understand that so then this based the question where does the rest of OG D5 go does it move in the direction of permissionless or does it move more permissioned or do you have to kind of float between the two to get to this end state of maybe both it goes offshore with vpns I I think that

I don't know I think that's one possibility I think like the broader thing that maker is trying to figure out is like what is it self-sustaining economic model and you know unless you have that at scale um with the product that you're currently offering which like maker frankly like it has some but it doesn't have a ton of cash flow from just the interest rates they charge um you need something else and like that's basically what he's saying it's like we got this thing it's like generating some cash like not enough to cover everyone's expenses and like we also have this thread of like the US government nuking us um if we just got a bunch of Youth and we yield farmed with it and we like did all this stuff and like made the system more economically self-sustaining because then we'd have assets we could

earn yield on like that's what makes a full business that really can't be taken down and can pay expenses every year and you know if you look at maker they're the most advantaged at The Lending platforms because they have their own stable coin their cost of capital is the lowest they can give people loans at a moment's notice unlike Ave or compound which actually needs to Source the usdc and then lend it out and so for me this kind of begs the question to the other other lending protocols it's like what are you guys going to do um and always moving in this direction you know they're issuing their own stable coin um that'll lower their cost of capital but like is that enough to build a large self-sustaining business that can not only cover costs but like produce a 10 or 20 to 30 billion dollar market cap

outcome which is that the founder what the founders are shooting for and so if I'm Ave I'm thinking about all right do I need to staple something else on my business model where I own the assets and I lend them out and I give that assets back to the Ave token holders um compound same thing uh and so like for me this is like a very lending specific question around the business models for things like derivatives um and just you know spot amms in general I think it's more like derivatives you only need like 30 large customers to make your exchange really work and profitable at scale for amms it's more of a question of like what your penetration rate is of the market but you swap if the fee switch was turned on that token would be probably much larger um and so like it's more of a question

of the business models of these places than it is any like you know to be honest Point like is this really about the US government trying to Nuke them or is this about their business model not being quite as attractive as people thought and I think it might be the latter I have a question for you guys uh based like when we're looking at those relative evaluations like compound versus Ave so ave's done you know relatively better than compound over the course last let's say two years do you think do you attribute any percentage of that to Ave being based internationally and probably in the US yeah absolutely I I think you know what this comes down to and what we're kind of implicitly saying here is your your hands are are somewhat tied if you're based in the U.S

and working within the confines of Regulation you just can't move as fast you know it's either an approval basis where you have to ask for permission to do a lot of different things or you just know that things are going to be out of bounds if you're based in the U.S whereas in other jurisdictions the rules are different and that's just a fact of life and you know Tiana's point about this whole thing D5 moving out of the country and using vpns I think that that's one path I think that there will be a lot of that I I also think that there will be a lot of defy that looks like public permission defy where some of these things will move in the direction of Regulation whatever the time period is what to to enable that I don't know you know we as van said

earlier we started engaging Regulators basically in the last 12 months but over over the course of let's say years which is the development cycle for a lot of these things it will happen where you'll you'll have you know broker dealers that are on chain you'll have you know the ability to invoice Factor uh accounts receivable in you know non-d5 non-crypto uh invoices like that that stuff will live on chain eventually and so I think we're going to see two diversion paths and that's kind of what roon is getting at here I think is that he's basically calling like we're at the fork I also agree I don't think we're at the fork yet it's not it's not a binary right now I think you're going to have some that move in One Direction and others that move in the in the opposite direction but you can also kind of live

in both worlds still and and the window is definitely not close I think um yeah I'll just say like I said oh it moves off towards VPN like I don't actually think all of it does that I think uh I really do think that hopefully the regulators and policy makers start to understand this stuff and like The Innovation I'm hopeful and capital and the founders can stay in the US but I think a lot of it that is why the regulation is important so go ahead you know you're going to be a father in five months would you advocate for your child to VPN and if he was a Founder I was waiting for you to bring up some kid joke on this it was like Anna's getting married in three weeks while taking over and unders on when the

first kid is going to be here I've got five months uh all right we've got moving on All Right Moving On Moving on um I got one more thing that I want to get your guys opinion on uh before we move on to memes um which is this Ave proposal which is temporary uh pause on eth borrowing so simple summary again we'll link this in the show notes but it's a proposal to pause eth barring in the period leading up to the youth merge uh in addition the uh basically ahead of the merge Ave protocol faces the risk of high utilization in the youth Market temporarily pausing youth barring will mitigate the risk of high utilization um and basically so basically it that it you know when you have an enormous

amount of people that want to borrow eath right utilization goes up and then there's difficulty in terms of managing collateral and liquidations um so I guess my you know when I'm looking at this reading is I think it's like a very fair move and it's an order of magnitude better like that this is being done out in the open and people are voting on it but I also do remember like when Robin Hood kind of like changed the rules um on everything there was like this whole uproar of like you guys are changing rules on things everything like that but maybe maybe the difference is just that this is done in a super transparent way and you know with with good rationale I don't know what you guys think and obviously this is this is one of the one of the core advantages of D5 the

transparency but isn't this just an eth proof of work you know thing isn't this just like a mitigation of people trying to borrow a bunch of e so they can have it on chain to be able to test the snapshot I I mean that's that that's my read on this which I think is fair and and like we should be pausing that I I also know that there are other protocols at at least synthetics I know uh as well as coinbase who are going to be pausing if uh and erc20 transactions um and movements ahead of the like a couple hours before in a couple hour hours after I think that has to do more with like let's just batten down the hatches and and ride this merge out uh but I think this one in particular borrowing eighth is is a move against e w yeah

most likely um all right guys um I know we're winding down here anyone have any suggestions for tweet of the week meal of the week because I've got a couple and wait we didn't talk about Santa at all actually yeah I was about to say we're missing we're missing one topic is that the lead into sailor vitalik's uh he's back in a weapon what did L week for Bitcoin we got hero sailor downtown uh what a win for each but like what I mean I don't really know what there is on the tax evasion thing I mean it seems like he wasn't paying the taxes income tax in DC even though he was supposedly

living there but he also had these videos being like I'll never pay my taxes like I'll fake a boating accident like cool let's see how that works I mean yeah just like all the super cyclers have been you know basically taken out and shot and it's not surprising to see that Sailors not only been kind of like I don't know if he was forced out of microstrategy but like certainly his role has become diminished um and then this stuff basically all those insane podcasts that he did over the past two years like side note my favorite up only episode is uh Michael Saylor talking to Kobe because it's like sailor interviewing sailor on Sailor it's like so like he's in his own head and crazy and I I think

like when you say crazy stuff on podcasts like you know it's gonna get around and it's not surprising and juxtaposing that with like vitalik and like how uh he's just like the best possible unelected leader of ethereum that you could possibly ever get like one of our LPS who's super into the Grateful Dead thinks he's a lot like Jerry Garcia where he's kind of like this guy who was this average dude and like not really ever wanted to lead but was just Chosen and placed atop a throne and like it's like he's walking through every day as if it was like his first day on the planet it's like incredible like great meme content obviously the picture from this week is like very demonstrative of like my last point where like some things like just don't seem to register but that's like the best part of it you

know you just know that he doesn't really have a mean bone in his body um and he's just uniquely well qualified for a number of reasons that you know uh he has one of uh one of our Founders who is is not vitalik but you know I would say up there in terms of stature in a lot of ways uh once asked me and who is memed more than about any other founder we we could possibly think of he asked me one time he he goes why am I such a meme and like to this day it like still stitched in the back of my head it's just like do you think that you know people who are getting maimed actually know it and like think about it and react to it like I wonder if I wonder what Vitale's reaction was to this this

week because I remember the sharding episode when we were all making those jokes on Twitter and like being like ah sharding sharding it's like okay and he was like I'm gonna quit if you keep doing this and one of the first tweets I saw after that picture got out was that this guy named State Lair who works at pseudo swab being like I'm not here for the vitalik jokes we're not making them this time like if he leaves I'm gonna kill all of you it's like yes protect metallic at all costs that's very much my mindset at the moment whatever he says goes you know you could be accused of worse things is what I will say foreign week you guys have any have any suggestions any thoughts play of the week take the week

my my first one was gonna be what we just talked about it all the time uh see if I can find this one I've got one too while you're finding that right I gotta share my screen here actually I'll just read it to you this is the this is the tweet white smoke has emerged from the chimney atop North Hollywood High School signaling that Leonardo DiCaprio has chosen a new girlfriend I was I was literally about to say the one that I liked was uh uh Kate Winslet versus uh old version of Kate Winslet 25 versus 26.

this is this is my favorite yes I saw that one the guy sweating the guy's sweating but choosing between two two buttons right it's Europe on the bottom I'm just telling I know you guys can see it but I'm telling folks who are listening uh starve but be woke turn on nuclear power plants can't make the decision between yeah yeah that was a little dark because that was playing out in real time I know but it's real what I liked yeah and this flew a little bit under the radar I'm gonna put this in the chat so we can share it um Fubar is a great follow on Twitter uh there's this guy Gabriel Laden who came from machine Zone he was the CEO he's

now starting in web three he's just been like terrorizing crypto Twitter all week and and like you know people have strong opinions about him I can't leave it at that but I thought fubar's tweet captured it perfectly where he said it's been a while since we had a cult founder Out For Blood this time is different when you become the main character of crypto Twitter there really is only one preordained outcome that we know of today and that is basically you know things get crazy at some point and you get nuked and so it's crazy to see someone kind of step onto the scene because a lot of the loudest voices in the room were like Sue and Kyle and uh doe and people like that and so yeah I mean it appears that we have you know a

potential new at least side character maybe not main character um and uh hopefully this time is different thank you keep in mind machine Zone raised at four and a half billion I think and then sold for 250 million so did you guys invest in this company that's that's a loss I do not think this guy's a good uh good new face of crypto Twitter I'm just gonna say that uh well he didn't he did just raise 200 million dollars for marketing okay I've got a question do you guys think if Elon Musk successfully like rides off into the sunset that he will flip this Rule and that like trolling people on Twitter actually will end in a good result like

if Elon Musk like flies off to Mars like being valued at a trillion dollars personally and was like yep I told the SEC to go suck elon's you know whatever like he just like he can like he might personally flip the rule of the universe and then that behavior will be acceptable I think it's already acceptable the inter integral Galactic SEC though that's true I think it's already acceptable I was talking to the partner one of the biggest like one of the I would argue the top five crypto funds they are now encouraging their Founders to be louder and like more as he described it he said more doe like on Twitter he goes he goes we don't tell anyone to go full dough but like we we think it's a smart strategy to be a be a little louder I was like yeah I did smart smart to be

a little louder telling people to be doe like I said a little more don't like me so there's a there's better examples I would say yeah there's better examples um but having a loud Fender Is Not a Bad Thing who's your favorite founder right now like in your in your report code founder yeah and then if you have children who are two Founders who I'll ask in a PC way like very impressive who have impressed you this year or something I don't know that's so much labor I think the the Kane comeback Arc and like just you know taking the beatings during the bear Market or the bull

market from Sue about like you know the houses he bought and like turning synthetics around and like kind of telling the haters to go themselves that's been pretty impressive um I'm trying to think of who else it's been pretty quiet on Twitter you know as you would probably expect after the industry getting nuked how about uh how about Stardust Canada is a is a giga brain I like you that's a uh that's a great new nickname um the uh so tanan was uh you know lesser known than Kane for instance but

uh I think they have really come out and um Stardust is is centralized no token so you're probably not going to hear about it as much it's also infrastructure so it's going to be underneath the surface but I I'd say Kanan would be uh my choice as well um the the Groundswell of of talent that they have is uh is growing there's also a lot of Young Bucks that are just getting started you know so uh let those let those plants grow we'll we'll come back in six months all right let's rap I think finger guns is a good place to wrap it so this is fun fellas I'll see you at the same time next week foreign [Music]