wBTC Concerns, EigenLayer Ethics, and Kamala's New Advisors | Roundup

At this point, I've lived most of my life in the US, actually.

Why is your English so good if you grew up in Mexico?

Because I'm a fucking savant.

Shut the fuck up.

No, no, no, not really. I'm a loser brain.

This episode is brought to you by Anoma, the universal intent machine, introducing a new era of applications where you define the outcomes you want. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter anoma.net. Special thanks to Anoma for sponsoring today's episode. Real is a permissionless L2 designed for tokenized real-world assets. They've just launched their rewards program, so get started at re.al/rewards and be sure to use the code in the show notes below. Special thanks to Real for sponsoring today's episode. This episode is brought to you by Avalanche. Avalanche is a leading network of blockchains giving some of the world's largest financial institutions new use cases and business models. While leveraging completely customizable infrastructure. Check them out. It's core.app/discover. You can explore Avalanche's subnet ecosystem at core.app/discover. I was playing around earlier today. Really cool. Hey everyone, Jason Yanowitz here. Have you ever wanted to play casino games with your friends right from your couch? I'm excited to tell you about MyPrize, the first multiplayer online casino where you can play, chat, and win together. When you make your first deposit of $10 or more, you'll get $20 for free. Head on over to myprize.com/invite/empire to get started.

What's up? Well, uh, I was promised that it was going to be a slow, slow summer. It's nothing but, nothing but, man.

A lot of time with European companies. We're trying to sell some deals, some European companies right now, man. They're, they're out. They're out all of August. It's insane to me.

I don't have food in my fridge. It's Thursday, it's holiday, there's— the supermarkets are closed.

So I don't know, my chef, my chef left and my backup chef is not coming and the third chef somehow hasn't shown up.

So I'm a simple man, my diet is like, I, um, I don't like having that type of stuff around. I, I like to just go to the fridge.

Speaking of food, I mean, I got roasted for eating lunch last week.

Well, that, I didn't wanna say it, but yes, that was the guy.

So one guy comments, I understand this is a free, I understand this is a free podcast, but can you please not eat your meatballs on the screen? And another guy goes, Jason took literally 20 minutes to eat his lunch. Which by the way, I don't think that's that long of a time to eat food. I'm just gonna put that out there.

But I, I love the, you know what it is? People are paying attention. The guy actually was like to the T, it was like, timestamped it.

Yeah. I was like, it was 20 minutes. Yeah.

I like it.

Shout out to that guy.

You know, you're listening. I appreciate you, whoever you are. I appreciate you.

Someone called you Trump-like.

Yeah, yeah, I saw that. It's like entitled.

Said you have an elite— you got access to an elite education. Where'd you go to college?

Uh, my safety school, BU, Boston University.

By the way, elite education, no offense, but I feel like—

yeah, I was gonna say, like, I— first of all, uh, I graduated early. I got a scholarship from JP Morgan. Called the Launching Leaders Scholarship as a sophomore. So I'm going to say I was the youngest of this entire program that got it. And then I got into the investment bank, which, by the way, if you've been living under a rock, JPMorgan does not recruit at BU. So there's a later time I'll tell you a story how I got in. Actually, you know, but I was an intern as a freshman actually as well. And I was the only— they don't have a program for freshmen. They had to do it bespoke. So I had to crawl my way up to a place where I wanted to work because, you know, JP Morgan is the best investment bank along with Goldman. But I felt in the department that I wanted to be in the investment bank, it was the best. And nothing was, uh, it was a lot of luck. But, uh, to say that it was handed down to me like, you know, these rich kids that their dad calls like, hey Jamie, um, hey Jamie, hey Jamie, uh, could you have my son intern in the investment bank?

I will say though, there is a lot of, not there is some of that, but like I, yeah, I mean, there is just a pipeline and the pipeline—

yeah, yeah, look, I mean, most of the interns, most of the interns come from like these particular schools where the MD comes from Williams or Princeton or whatever. Yeah, it's super like that.

I agree. I remember we're not here, we're not here to talk about investment banks though. This junior year internship, I was trying to get it on the S&T internship at Goldman. I showed up, I was so fucking nervous. I was like so sweaty and so nervous. It's like my first interview at like one of these bulge brackets, and there's like all these like, you know, straight out of Dartmouth, yeah, like Northeast boarding school.

They went to like lacrosse player St.

Paul's and Choate and all these schools. And like, they're like, oh yeah, I've got 7 offers already, you know, I'm just doing this because like my uncle works here and I'd want to do it.

I'm like, that was me, ladies and gentlemen. Um, to be fair, um, my— the last thing I'll say on this point, which is, uh, I— there's a couple things that I care a lot about. Crypto is one. Two, nuclear energy. Three, education. And my biggest frustration was like, I was not allowed to take— there was an investment banking class in the business school at BU called— there was an intro called investment banking. You could only take it as a senior.

And I'm like, uh, that doesn't make sense because all the internships are lined up junior, which is exactly— yeah.

So I had to go to Harvard Extension School across the river, across the Charles, I basically showed up, paid $3K or whatever, $2.5K, and it was a graduate level course. They didn't care if I failed or passed the class, but that allowed me to be really prepped for the technical part of the interview. And then later on, the dean of BU who'd worked at KKR, who's like, what can we do better? I'm like, I don't know. Let me fucking take the investment banking class if I want to. What do you care? It's my GPA. And he's like, oh, well, you need— of course, you know what they do it right. They want you to be there for 4 fucking years, pay $50K a semester. I'm like, I don't have that fucking money. It's a scam. You think crypto is a scam? No, no, no. Actually, the reason—

not to tie it all back to crypto, but the reason I do like crypto is I think there's, um, the— I mean, at some point the industry will get like tech and like Wall Street and stuff, and there'll be feeders and they'll be like, it'll get exclusive and stuff. But like, I mean, here's what you need to do if you want to go get a job in crypto. You create a Twitter account, you write some research and you write Twitter threads once a week with your 2-page research report and you break down a hot topic or hot narrative. Do that for 3 to 6 months and someone will hire you. One of the—

or you make money.

Yeah. Or go— I mean, trade.

I hired Nick.

You make the hire? Did you make that?

No, no. I hired Nick Chong at Parify and he was, I think, in high school or like a senior in high school or just about to go to college. And I discovered him on Twitter.

Yeah.

Yeah.

We, we made, we made, we made hires for our research analysts who are out of college. Like they're, they're, they're in college, not, they haven't even graduated yet.

The beauty of open source systems is the truth of services, like talent surfaces faster. You don't need this high—

Transmission 11 paradigm.

Yeah. That too. I, that, that's honestly one of the more inspiring, motivating things for me in these, in this open source system that is called crypto. That it really kind of transcends this, like, pedigree and all this crap, because I think it's bullshit. Credentials are important. The way we do it currently is not effective. Yeah. And crypto is much different.

Okay, here's a question for you.

Yeah.

If you had kids, let's say you had like an 18-year-old today. That's a scary thought. If you had an 18-year-old today, would you send them to a public school, a private— and they were going to college? Public school, private school, or homeschool? Or maybe the question's more about middle school and high school. I don't like, maybe just take out college, high school, but like, what would you do with your kids' education?

Early on, I would like to homeschool them because I, I think that, um, the current curriculum is very ineffective, meaning it's still memorization-based and, um, it doesn't stimulate, like, if you're really talented in, in math or in lit, in, uh, writing, you should like really, really develop that talent. Why do you need to take all this other shit? Um, whereas I'd rather like have my— like, if I had a rare skill like that, I'd want to be nurtured and, and fast-tracked into like becoming the best at that. Um, I think— and so I had the fortune of going to a liberal arts high school. If anything, like, the liberal arts There's liberal arts type of education and like memorization-based. Liberal arts teaches you how to think, question the scientific method, all that's doing research. Like, it teaches you a process that, by the way, it's the same as investing, right? Um, and so I think the criticism of homeschool, because, you know, my sister has kids and she's like, what do you know, you don't have kids? I'm like, I don't know. She's like, your kids are going to be like, you're socially awkward, your kids are going to be 10 times more socially awkward because they're homeschooled. I'm like, I'd screw that. Like, you can actually like That's what hobbies are for. Like, they could be in a sports league, you know, they could have friends. I appreciate it's on the margin, like, more challenging, it's more work, but, uh, I'd like to do it if they like it. But once they're older, it's up to them, really. I don't know, what would you do?

You're like, okay, this is how the Uniswap curve works, this is how a pool works. Um, I would, uh, cool too, by the way. I mean, I say this with no kids. I think the dream, I think the best thing for kids would be, um, homeschooling with a large group of parents who have kids in your, like, actually I think this is best for parents too, is like living near a lot of friends. And like, I think we've totally lost like the element of community. Um, so I think the best model is like living near a bunch of your friends. You guys all share your resources. You hire like, I don't know, nannies together and you hire educators together as well. And maybe there's a group of like 20 or 10 kids who do this together. That's, I think, the best model. The thing that like, I mean, we— I'm sure there's all these parents like listening, being like, go fuck yourself, listening to this. But I mean, I'm sure the amount of work that goes into that, it's like— and by the time you, you know, you have a 5-year-old going to school or however old they are when they go to school, it's like Oh my God, like just, just, just put them in the school next to us because like I just need 3, I need to walk them to work, to school for 3 minutes and then get to the office.

So yeah, I've invested in edtech is one of those areas where I love meeting people that are trying to reinvent it. Yeah. But you know, unfortunately it's challenging, right?

My wife works in edtech. It's a tough business.

It is. Yeah. Like Chegg, it kind of, but it's sort of marginal, like renting books. But yeah, I think—

I read the new book by— yeah, Salman Khan. Oh my God, what's the name of this book? Oh, Brave New Worlds: How AI Will Revolutionize Education. Because my dad's doing some work in that world and it's a whole book about like how the education system will get flipped upside down. Actually, I didn't think it was a very good book, but— well, I thought it was good if you work in the school system and maybe you're not following like ChatGPT or Anthropic or any of that stuff. But it did make you think like, man, the way that our system works today, there's no way that'll work like that.

So I've learned more from— and I had the privilege of traveling— that, that, like, I consider myself incredibly privileged because I was able, I was able to travel a lot, not luxuriously, just travel a lot. My dad had a lot of time, he's self-employed. Um, to me, that is like the thing that, um, has given me the most amount of education. Going out, meeting new people, different cultures from a very early age. To me, that's invaluable, really.

So this is a crypto pod. Should we talk crypto? We've got, we got, we got RapBTC. There's some political stuff this week. And we got some Eigenlayer drama. So let's start with RapBTC. Because that's an easier conversation. Okay, so I think let's do this. I'm going to tee up the story. I'm going to— let me share the history of WBTC and like talk about what it is. Then I'll talk about what happened this week with BitGo and Justin Sun and Tron and all the drama. And then I'd love to hear your take on it because I think you were there in the early days of wrapped Bitcoin and all that kind of stuff. Okay. So for people who don't know what wrapped Bitcoin is, it basically is the W of WBTC is wrapped Bitcoin. And it's a way to get Bitcoin onto Ethereum. It's a way to use Bitcoin in DeFi. So you deposit your Bitcoin, they lock it, BitGo is the custodian, they lock it. It's very transparent and you get WBTC and then you can actually move it onto Ethereum and do stuff with it. So the backstory of wrapped Bitcoin is— and there's this great thread by Loi Luu at Caliber Build, and he's one of the founders of Kyber back in the day. So back in 2018, a few months after they launched Kyber, which was on Ethereum, it was like very early DeFi days. There really weren't many like alts or anything on Ethereum. The DEX ecosystem was like a million a day in trading volume. There was like no—

Kyber was like the first DEX.

Kyber was it. Yeah. So like TVL was super low. I wouldn't be surprised if Aave was still called ETH line. Like it's very early days. Right. And so they needed some liquidity into DeFi. So the best way to get liquidity into DeFi was by bringing Bitcoin liquidity into DeFi. So there were a couple people. It was, um, Miau, who is the founder— people might know Miau because he's one of the founders of Jupiter. And there was Victor Tran, who's one of the other co-founders of, uh, Kyber. And, uh, Yaron Velner, I think, was the fourth guy.

They—

it was like, this was the crew, and they were really excited about this. Um, and so they ended up linking up with, uh, this guy Ben— what's Ben's last name— Benedict Chan, who at the time was the CTO of BitGo. He's now the VP of Engineering at Chainlink. And tell me if I get any of these facts wrong, but they met up, they kind of shared the problem with, with Ben, who was at BitGo, and they basically said, look, let's work with a centralized custodian model to keep this super simple and avoid any hidden technical smart contract risks. And so they ended up creating this thing called wrapped Bitcoin and custodying the Bitcoin with, with BitGo. And I remember when this happened, there's actually a really fun— it kind of flashed me back of like the part of the announcement of this. It was like Gnosis and Compound and Blockfolio, IamToken, OmiseGO, like Dharma, like Maker, all these like AirSwap, if you remember AirSwap, like all these old school DeFi people. Kind of announced this thing. And so the plan was that— so it's between Kyber and BitGo. They didn't call it like Kyber Coin or BitGo BTC or anything like that. They wanted it to be a public good, which was really cool. It was this like neutral brand wrapped Bitcoin. No one owned the project. BitGo, BitGo is going to manage a lot of the off-chain technical and legal work like minting and burning process, integrating it with BitGo custody. And setting up this transparency dashboard, which at the time was basically one of the first like proof of reserves things. And then different members of the team were doing like marketing and all that kind of stuff. So fast forward to today, that was 2018. 6 years later, Wrapped Bitcoin is huge. It has around $9 billion, I think $9, $9.5 billion in TVL. And excuse me, in TVL, it is now the like de facto Bitcoin token on Ethereum and other EVM chains. So I'll pause there. Good summary. Questions? Keep going. All right. Keep going. So today, how it works is BitGo is the custodian. There's all this transparent stuff and it's domiciled in the US. And it's really like it's a BitGo thing. And BitGo, importantly, doesn't do anything with the Bitcoin. When you send the Bitcoin to BitGo, they keep it in a total separate custody trust. Nobody touches it. They don't do like any Genesis-style lending of it. So BitGo manages all this money or Bitcoin, but they don't actually do anything with it. So, so if you think about that from a business model perspective, they're not actually making any money on that, on that Bitcoin. So what happened earlier this week is that BitGo, who is currently the sole custodian and backer of WBTC, published a blog post announcing that in I think October, it's going to form a, quote, strategic partnership with BIT Global. BIT Global is a Justin Sun company. Justin Sun is the founder of Tron that's based in Hong Kong. So if you dig into the details and the reason people freaked out so much is the partnership consists of giving BIT Global access to 2 of the 3 WBTC private keys. So now instead of having the private keys in the US with BitGo, you now have 2 of the 3 keys with, with Justin Sun's company and domiciled in— I think one is in Hong Kong and one is going to be in Singapore. So right after that, people on crypto Twitter freaked out. Then MakerDAO's risk team came out. They wrote a post a day after the announcement proposing that WBTC be delisted as a collateral asset. Belshi jumps in on the forums. He responds. I can talk, I can talk about his responses in a sec because I think there's some good things they said and some bad things. Then there's this Twitter Spaces where Belshi and Justin Sun were both interviewed by Miau, again, the founder of Jupiter, also involved in the creation of WBTC. And I think some quotes were important here. And then I'll shut up because I'm rambling here. But Miau basically pressed Belshi, who I have a ridiculous amount of respect for, just for, for building this crypto company for like 11 years. But he, he pressed, he pressed him on the question of whether BIT Global could mint or move the underlying Bitcoin treasury on a unilateral basis, right? Because now they have 2 of 3 of the keys. So he said, is it possible that there's no one single party that has the capability to mint or move the funds? And Mike responds, I don't want to quite answer the question, but let me give you a couple of points around it. Every security system has a weak point. Just because that exists doesn't mean you have to change it right now. Maybe it can be changed in the future. Okay, so that's one red flag in my mind. The second is, I think he just kind of like his response for the partnership was kind of flimsy. He said it's the reason for it was jurisdictional decentralization as a big reason for that. And actually, on one hand, I'm like, oh yeah, the US is cracking down. But on the other hand, I'm like, I don't know, you're moving it to Hong Kong, who's been like very anti-Bitcoin over the years. Right now is pro, but historically has been kind of anti. I don't really understand how that location improves your jurisdictional decentralization. And then the last thing, and then I'll shut up, is I think it was around like 40, 45 minutes in, Belshi says that WBTC isn't a profit center for BitGo. And then so Miau says, is BitGo receiving any monetary benefits for the partnership with Justin Sun? And Belshi kind of gave this non-answer about securing the space better. And then the call— and then the call ended. So I guess I'll close it by saying, like, I have an insane amount of respect and trust in BitGo and in Mike Belshi and their firm as a whole. But I really don't understand this decision. Um, and I have some concerns, but again, I've been talking for a while. What do you think about this? And then I can share my thoughts.

Uh, I very much the same. I don't want to jump to conclusions, but the two points that you raised are concerning. And I think that given all the precedent in the space, like, you'd rather play it safe. And I think you move fast when there is smoke, because typically when there's smoke, there's fire. And I don't know, the idea of not being very forthcoming with the question around, like, can you mint unilaterally? And I mean, it's the jurisdictional decentralization doesn't matter. It's like there's two parties here that can collude and can, you know, act maliciously. That's it. That's all you need to know. Like, I'm not going to trust— like, I understand, I'll give people the, you know, the benefit of the doubt, but I'm not going to risk my funds there. And I think it's not the right setup. There are— there is a better way to do this. And you're left wondering, like, why wouldn't you do it that way? You mean, like, why, why would you I can't think of an argument of why it would make sense because it degrades all trust in the product that has been working, as you said, for a while. Like it is, it is pretty embedded. It's been used for a long— it has a good track record. Like I just, I just can't understand what they would do, why they would do it this way. And for that reason, I'm just, you know, I understand the, the kind of very— the reaction from Maker. Right.

Yeah.

Like, of course I would do the same.

Hmm.

Like we've had enough bullshit with FTX and other stuff to risk. And WBTC is something that is, you know, pretty embedded. I wouldn't call it like super systemic, right? But it's like 10% of the collateral, right? For Maker, I think. Yeah. Last time I checked.

Yeah. It's 10% of DAI's backing. Yeah.

That's a lot. Yeah. What do you think?

I think a lot of— yeah, I mean, a lot of this comes down to Justin Sun's reputation too. Like, if he were part— I mean, if they were partnering with someone else, I don't know, imagine even partnering with like Circle or something and it's like, oh, we're sharing the keys with Circle. Like, I think they just have a better reputation. I mean, there was some like weird proof of reserve stuff with Remember Justin Sun? They bought Poloniex actually from Circle, from Jeremy. And then they had— I think they tried creating their own tBTC or like wrapped BTC product. And then there was some like really weird proof of reserve stuff going on. So I think there's definitely like a, just a reputation thing. And actually, this is what Belshi said in his response. He said, this seems to be more of a reaction to the Justin Sun name than to the facts. And so I need to go read Balshi's whole, whole post. But I don't know. Here's what I'm looking for is what are they going to just keep the Bitcoin sitting there because there's a shit ton of money to be made if you lend out that Bitcoin, right? There's a crazy— there's $400 million a year to be made if you go lend out that Bitcoin at only 4%. So that's $400 million sitting there where someone can really easily convince someone, hey, there's, there's $400 million sitting here. Let's just go lend it out in a really safe way at 4%.

Trust me, bro, it's going to, it's going to work.

Like everyone's lending out at 8%, 10%. Let's just, let's just do something safe at 4%. And that is what I'm concerned about.

You know, the operating assumption in crypto should always be that The most economic people act in the self-interest, and if there's a sufficiently large economic opportunity, most people will take it, and they will act short, like they will take it. And so you have to, you have to design systems that the default and the correct kind of the, the acting correctly is also the most economically favorable outcome. Yeah, uh, Elon tweeted actually something to this effect, which is— you, um, here, I'll try to find it. Um, don't kill me here. And we can— here's a quote: a society should make the right things easy and the wrong things hard. And I think that's gets to the core of how you design a blockchain or any system for that matter.

Yeah. So I think there's also a bigger technical question here, which is, hey, this is a pretty old school method. This was created 6 years ago. Like we're just sending, like even just holding it at BitGo. Like, I mean, that's not— if something happens to BitGo, that's $10 billion, just poof. Right. And then there's the question of like, okay, what's after that? It's like, well, there's like on-chain bridges, but I think there's like probably the end state of this is like canonical bridges or validating bridges. And like, if you, if you— I haven't really dug into this, but I was reading one research report about like the BitVM and OPCAT unlocking like these trust-minimized wrapping of BTC using validated bridges. I think it was Wei Dai from 1KX, um, was posting about this. Um, and I think, I think he, I think that's a good point, which is like, what we're doing now is just kind of like Band-Aid over like what should exist in long term.

So, well, the, the other point is, uh, you know, Coinbase I think is jumping at this opportunity, right? They are promoting like CBTC.

So they had a brilliant marketing move. I love this. They just tweeted, no blog post, nothing. They just tweeted CBTC. Yeah.

And that's basically the same mechanism, but you're trusting Coinbase.

All right. So what are your predictions with Coinbase? With, with Coinbase Wrapped Bitcoin? So, so Dan Elitzer, actually, let me give you— let's start with an over-under Dan Elitzer thing. So Dan Elitzer goes, where did his tweet just disappear? Oh, boy. Okay. CBDC was CBTC. Was inevitable and super strategic to Coinbase. Frankly, I'm surprised they didn't ship this years ago. My predictions: A, zero fees on mint/redeem. B, zero fees to withdraw to base. Super smart, by the way. And C, it'll pass WBTC in supply within 6 months of launching.

Yes.

You think? Okay, that's interesting.

I agree with that take.

Yeah. I mean, the distribution of, of Coinbase is Would you wrap your Bitcoin and put it on-chain?

Depends on— depends on— I don't know. Like, I don't care.

Here's what it depends on. For me, there's the yield opportunity, I guess.

And you're going to compare that to like other stuff in Bitcoin. I'm going to get ahead of the criticism here, folks, because I've seen in some chats, why would you even move it to a shit network like Ethereum? I'm like, well, you did deposit your money in Celsius and, you know, some other centralized providers, but some of the other, like Babylon and that stuff, arguably has more risk, just has less Lindy, right, than something like Ethereum. Of course, you're trusting the— it all comes down to the nuance.

Wait, wait, wait, wait. Babylon has less risk than putting something more— more—

oh yeah, like if you're going to test all these like experimental like L2s or sidechains that are cropping up in the Bitcoin ecosystem and your argument is I'm not going to move it to Ethereum but I like the yield so I'm going to use it in like a native built camp like a Bitcoin L2, I'm like, uh, I don't know, I would argue that it's safer to do it through Coinbase wrapped Bitcoin and then moving it to, you know, Yeah.

So here's, here's my prediction. This is the start of every single exchange doing this. Everyone's basically just said like, you know what, BitGo kind of has this WBTC, we don't want to do anything. It's the start of every single exchange doing it. Kraken will do it. OKX will do it. Binance will do it. Coinbase will do it.

You need to have a custodian arm, right?

Yeah. So Gemini has a custodian arm. Coinbase has a custodian arm. Kraken made an acquisition of a custodian, didn't they?

Maybe.

Yeah, maybe. I don't know. So anyways, I think, I think that's the start of that. And some of them are going to play it safe and they won't lend out that Bitcoin. And then other people are going to say, hey, to add $10 billion, 4%, that's $400 million. I'm a public company or I'm trying to go public or I'm trying to raise my Series D. That's $400 million we're leaving on the table. I've got my board breathing down my neck, like, turn that on and something like that will end poorly. So that's one prediction. The second thing I'd be looking for is not just the yield opportunities, but I don't know if you can see my screen right now, but like, I can— they've done a phenomenal job at the proof of reserves. Like BitGo has done a great job so you can actually track everything happening. So like if you look at the screen right here, like August 14th, you can see Crypto.com pulling out 100 like, whatever, 100 WBTC. Crypto.com pulling out 150. Crypto.com pulling out 100. Galaxy pulling out 73. Crypto.com doing their 1 BTC test. That's funny. You can see it right here. So you can see everything and you can see it on-chain and you can see the funds sent to the merchant and the burn completed and all of that stuff. Coinbase. So some of the exchanges have done a really good job with proof of exchanges, like actually OKX, I think, has done a great job with proof of Proof of Reserves. Coinbase actually doesn't. Um, yeah, they don't do that today.

The argument's always been some of those security— for security reasons, right?

But I would hope that actually for a product like this they would do it. I doubt they will because people trust Coinbase enough and they have a trustworthy enough brand, and I just don't think they'll do it. But I would really, as a user, like to see them do it.

Yeah, yeah, yeah. But anyways, notwithstanding, I agree with your prediction. Every exchange probably that has a custodian arm will do this.

Yeah. All right. Should we talk politics? Yeah. Well, we don't have to. We don't. We don't have to.

But what do you want to talk about? The odds just flipping? The great flipping.

Actually, I wasn't even thinking about that. It has been funny seeing everyone say Prediction markets are the next big great thing. They're the greatest innovation in society since blah, blah, blah, since sliced bread. And then now that, you know, Kamala is beating Trump on Polymarket, or I don't know if that's still the case because I haven't checked this week, but people are like, prediction markets are rigged. They're a completely shit mechanism for predicting.

Yeah. So it is possible, right? I mean, I simply ask the question, what is possible that if you, if you've raised you know, hundreds of millions of dollars for your campaign. Um, it doesn't take much to move the market.

Oh, you think that they're putting— you think that they're putting their foot on the lever here?

I mean, it's— I don't think it's a 0% probability, but is it greater than 50? Probably not. But my argument, it's reflexive, right? There's this dynamic that if you're a voter and you see the odds skew really in favor of a particular candidate, then there's like this apathy component. Like, say, I'm not gonna vote because it's already a done deal, right? And so if you're a Trump supporter and you see that the odds are now really flipped, marginally I think it influences certain people. Like, this dynamic around like voter apathy or just voters not, not voting for this reason, I think is real. And so it becomes this reflexive dynamic, right? If you're in the campaign, you put money in Polymarket, you bet on Kamala, that moves the odds from 40 to 70 or something. It doesn't take much money to do that, by the way, in the grand scheme of things. People are looking at that and be like, it matters. It's driving a conversation. And the criticism that I heard on my tweet was like, you're an idiot, bro. Polls have been a thing for a while. I'm like, I'm not talking fucking polls, you know? It is a prediction market. So there's money on the line and that carries more weight. And I think it's far more influential than a poll. There's more signal there, arguably. So that was my point. I mean, I think it— and to say that like Polymarket is only like, you know, is not visible and only people in crypto Twitter are paying attention is also not correct. I mean, the Wall Street Journal just is referencing this data. Major news publications are referencing this data on the daily. So whoever— like, I just want to push back on that criticism. Um, so there is some possibility. I still think prediction markets are good.

I mean, I'm just saying it's funny that people thought it was the best thing since sliced bread. No one—

it still is though. Like, it's better than media, it's better than polls.

I think it serves a purpose. It's really good at quantifying outcomes. At a large, at a large enough size. The problem is all these markets are too small. Like, if you're saying that they're not that small, yeah, but if you're saying the campaign can just like move the market by like, you know, throwing a million bucks into it, like, that's a, that's too small of a market.

The, the counterargument to this is like a sophisticated financial player might look at that and say, okay, this is clearly made, this is clearly a big actor trying to play like this, that it has a non-economic incentive, right? They're willing to like burn this money. So if you're a savvy financial player, you'd be like, I see that, and the odds has become juicier, right? And so you're going to bet on Trump now, and the payoff is greater. So that the market equilibrium should—

oh, I see.

I mean, like, there is— that's the nuance here. There is a party that might look at prediction markets and have a non-economic incentive like a state actor that is willing to burn that money, so to speak, and influence the odds because it may drive— for, for non-monetary reasons, for driving the conversation. And that becomes reflexive and has second-order effects.

Yeah.

But the— in theory, you should have financial people that look at that and say, okay, the odds are clearly skewed here.

Yeah.

And we'll balance it out. I would like to see more analysis on the transactions. Yeah. The size of the transaction, the origin of the transaction.

Here's the thing. There's no way that the— if the Harris campaign or the Trump campaign is there, there's no way they're sophisticated enough on-chain to be able to hide, hide that it was them. So like, so we got to call up Chainalysis here to figure this one out. Yeah.

Yeah. In theory.

Here's a weird societal question for you. Um, do you think it should be legal to bet on yourself in a prediction market?

I was thinking about that, actually. People do it, right? Boxers do it. They bet against themselves, or they bet—

No, that's illegal.

Is it?

I think that's— I mean, that's why Pete Rose got kicked out of the game. Of baseball?

Boxing?

Oh, not boxing though. I don't follow boxing.

I think in boxing, like, I remember, like, I think you can.

Oh, in baseball you certainly can't. Shoeless Joe Jackson, RIP.

I, I think it depends on, on the type of, on the thing you're betting on, right? Uh, it doesn't feel right.

So because it technically gets to a more efficient market faster It technically gets the truth out into the public faster if you do that. But it, but it feels really wrong.

You would have to disclose it maybe.

But like, like Biden before he stepped down. Well, now, is it a fair thing? This would have gotten—

let—

like, this would have— is it fair for Biden to basically just put down a big old bet on himself that Biden was going to drop out? Because the fair market people would argue that, like, deregulation and fair market people would argue that, yes, it's totally fine for him to do that because it brings truth out into the light. But then the— you see the problem with it.

Okay. Yeah, I think there's a nuance here. Like, I'm looking at boxing allows it. You can bet on yourself, you can bet against yourself to hedge your winning, your purse. On a binary outcome. You either— you win or you lose. You're not allowed to bet on more discrete things, like, uh, for instance, uh, the number of rounds. You know, you could— you could still win, and then you could— you know, you're gonna win, but if you bet you're— there is going to be more than 4 rounds, then you're gonna drag it out. And so that feels more easily manipula— like, easy to manipulate. Um, The thing about like Biden in that extreme scenario, he might like bet against himself, for instance, or for instance, uh, is the airdrop gonna— no different than like you work at a company, there's these markets on is the airdrop gonna happen before X date. I don't think you should be able to do that because you can influence that. Or if you're betting, then you have to excuse yourself from that. But if you're a decision maker, you shouldn't be allowed to do that. Right. I, I— it's a gray area for sure. Yeah, I think it's something, something for me in the scenario of a boxer, win or lose doesn't feel as— I have less issue with that. Unless, of course, like, you'd be like, do you care about your reputation? Do you care about your standing?

Do you—

right, uh, that would be the counter-argument. It was like if this is the last fight of the guy and he bet against himself, you know what I mean? Like, it might be— I don't know, uh, if it's a repeatable game, in theory, like, people should, uh, should be able to do it, but not on more discrete, um, not more discrete things. Binary, yes, not discrete. But I don't know, it gets to the heart of like insider information and manipulation markets and all that stuff.

Hey everyone, Jason here. I wanted to talk about something that's been on my mind a lot recently, and that is, where are all of crypto's killer apps? We often ask this question on this show, so I'm excited to tell you about Empire's latest partner, Anoma, the universal intent machine. Intents are a new way to build dApps, enabling users to say what they want without needing to specify how it's done. Let's say you have an NFT on on one chain, but you want to swap it for a token on another chain. To make things even worse, you also don't know which bridge to trust or how to navigate different DEXs on each chain. Disaster, right? But here's the good news. Thanks to intents, you can just tell the app what you want to do, and Anoma's solver network takes care of all the complexity in the background. We're excited to see what cool dApps Anoma's architecture will unlock. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at Anoma.net. Special thanks to Anoma for sponsoring today's episode. Hey everyone, I wanted to take a second to talk about Real, a permissionless L2 for tokenized real-world assets on Arbitrum Orbit. What's really cool about Real is that it uses the off-chain yields from RWAs as a sustainable solution for native liquidity incentives. Real is also the first L2 where 100% of profits from transaction fees and fees from protocols accrue back to the L2's governance token, RWA. Real has just launched their rewards program where 10% of the RWA supply is being given away to early users of the chain. Users can provide concentrated liquidity, trade, borrow, and leverage tokenized real-world assets including T-bills, real estate, and tokenized basis trades. Just as a quick disclaimer, this is not investment advice or product solicitation and not aimed at US persons. Find out more at re.al/rewards. Special thanks to Real for sponsoring today's episode. This episode is brought to you by Avalanche. Avalanche is a leading network of blockchains, giving some of the world's largest financial institutions the design space to explore new use cases and business models while leveraging completely customizable infrastructure. Everything that Avalanche has been building the last few years has culminated in this moment where today you have institutions and developers able to essentially have limitless possibilities with the chain. They've enabled developers to build cross-chain swaps or create gaming environments where one subnet can unlock features in another or can use USDC as a native gas token. Onyx, for example, by JPMorgan or Citi or DTCC's digital assets or the Australian New Zealand Banking Group. They're all building on Avalanche evergreen subnets. Really cool stuff. Big thanks to Avalanche for sponsoring this episode of Empire. Go explore Avalanche subnet ecosystem at core.app/discover. That's core, C-O-R-E,.app/discover. Thanks again, Avalanche. Hey everyone, wanted to take a second to talk about MyPrize, the first multiplayer casino where you can watch, chat, and play together with your friends and favorite creators. Getting started is super easy. Use a credit card card, PayPal, or even crypto to play over 500 games from classic slots to live table games. Join the MyPrize community now and use referral code EMPIRE to get $20 for free when you make your first deposit or purchase of $10 or more. Head on over to myprize.com/invite/empire. Link will be in the description of today's episode. All right. Let's get into the, uh, politics stuff. So Alex Thorn posted, uh, Alex Thorn, shout out, legend, head of research at Galaxy. New evidence that Kamala Harris will continue crypto crackdown. Her advisor choices suggest that she will keep Biden's hostile attitude to crypto. Harris is working with Brian Deese and Bharat Ramamurthy, who are two key anti-crypto officials from the Biden admin. And he posted this, this thread about it and Shout out Bloomberg, I think had done this reporting. For those who don't know, so what's the guy's first name? Brian Deese and Bharat are kind of two architects of the Biden administration's anti-crypto crusade. And specifically, I think Bharat was the, like, one of the main guys between behind Chokepoint 2.0. So there was a lot of I mean, like, you know, we've tried to stay out of this, but like, you know, Mike posted— what did Mike post? I thought Mike said something pretty well. I should have pulled this up beforehand. This is really disappointing to see. I don't care about political theater, but appointments like this will have very real consequences to our industry. I still can't— I still believe the best out for— I still believe the best outcome for crypto is to be neutral, but I can't ignore what's right in front of me. Um, Ryan John Adams, um, said, uh, Bharat was an architect of Chokepoint 2.0. If Kamala Harris populates her administration with anti-crypto people like Bharat, her administration will be anti-crypto. It's that simple. Extremely disappointing, but also a very clear message. Uh, Nick Carter said Harris appears to be Warren 2.0. Bharat equals it's over, over. Um, and then Austin Campbell, who I think has had very clear summaries of a lot of what's going on. He said, this is rather unfortunate, but I'm forced to agree with Alex here. If the Harris administration is going to continue Operation Chokepoint 2.0, it's impossible to support them from an ethical standpoint. And I say that as a Democrat. Unless you believe administrations should be able to pick winners and losers to get banking access depending on their preferences, this is a nonstarter for me. And if you do believe that, you'll believe it's okay for a future Trump administration to designate things like green energy producers and public sector unions as high-risk industries that should be debanked, right? I will say I personally don't believe this is okay, just like I don't believe it's okay to be doing this to crypto. At some point, it's my hope that the U.S. political scene returns to a belief in civic norms rather than unrestricted warfare at all costs through the system that are hollowing out the rule of law and core rights of Americans. And I mean that about all sides. So This is— I mean, you know, I've been very optimistic that the Democratic administration, Harris or whatever you call it, would come out and whether it's Novogratz or Cuban or Scaramucci or someone would have the sway to kind of show her that this is like, why are you staying anti-crypto? And I really was very optimistic that they would turn their stance and go pro-crypto. But yeah, I mean, this was, this is pretty disappointing to see.

I'll say, looks like a duck, swims like a duck, quacks like a duck, probably is a duck.

It's a frog. It's a frog. It's a frog.

Yeah. I don't know what else to say. I mean, I think I've been surprised by the the odds in polymarket and predicted it, and even Nate Silver. I've had a lot of conversations around it. I think the market is responding in real time to that. And, you know, you read Arthur Hayes' latest post, you know, the sentiment is, hey, probably sit it out for a bit until the election kind of unfolds. And then there's some relief rally, mostly driven by monetary policy. Nothing more than that, uh, less so around the stance of a particular administration towards the industry. We've been in the current environment for a while, and so, you know, I, I go back to what I said in the last pod, which is I think I've looked past whoever will win, and I'm just more optimistic for the Chevron case, uh, that peels back administrative power to some extent. I go back to court findings and rulings for particular crypto cases, the ETF approvals that didn't happen and weren't easy. It was a long road. Shout out to everyone that was involved, but you basically had to sue to get this product out. And I think that for that particular reason, I think that the train sort of has left the station. This has become a, a, a big industry. It's become an asset class in its own right. You have Larry Finks of the world supporting it, believing in it. And I think, is it perfect? No. Do we need to get— we need rulemaking. Whoever comes into power, we just need, um, the administra—

the—

we, we need, uh, the legislative branch to put forth rulemaking for this industry that is sensible. Um, I hope that with the Chevron case now in effect, that the people within the agencies that actually do the work, actually draft these things, that you can— that there isn't enough of a roadblock simply because it's just time to have rules for an industry that is this big. That has been around for such a long time. And I think time is on our side. So if you were to, let me ask you a question. How would you, if you were to plot the degree of hostility towards crypto on a chart, how would you, how would you describe that graph?

What's the X axis? What's the Y?

Uh, the, the, the, the X axis is time. Since inception. The y-axis is hostility. The greater you go, there's more hostility, uh, from 0 to 100 index. So 0 to 100 being, you know, this is—

no, so where are we and how will it go?

Exactly.

Um, I think we're probably at like a 70. I, I think there will be a— I think for crypto to win and for Bitcoin to win, there will probably be a Actually, I think a lot of it depends on the selection. There could be— I think there could be a massive global, like, government-level crackdown that we've never seen before. Like, like the— like, you know who didn't come after us this past cycle was the Treasury, right? Treasury can basically shut down self-custody. And so I think there's— yeah, I don't think it's— I think it's very possible that it gets much worse.

So you're saying we're at 70? Where have we been before? How does that line just— what does a progression look like? And I'm pressing on the progression of this line over time.

Like, what could it— what could it be? What could it look like? Um, I mean, at one point in the United States, they banned citizens from holding gold. But 100 years ago, they made all the citizens— what was it, Act 60112, whatever it was called? I think it was FDR or some— someone around that time forced every single U.S. citizen to walk over to the banks and or to the government agencies and to the credit unions or wherever it was and turn it— turn in their gold. And they came and they tried to figure out if you were holding gold and you had— you had to turn it all in, right? Um, and at some point, if Bitcoin becomes a threat to— let's say Bitcoin becomes a threat to the US dollar, um, I mean, you better believe they're— they're banning Bitcoin. They're— they're— they're making it illegal for US citizens to hold Bitcoin. I think that's a I think I'm not saying this administration, I'm just saying at some point I think, I think that's a possibility.

That is, by the way, that has always been a risk. That's why I care about the progression over time. It's the marginal change that I care about and what drives markets. It's not the point in time, it's a, it's a mark, it's a derivative. And what I'm saying is I think we've peaked. And the more time— I've always felt that the more time that we have for this industry to grow, naturally that comes down. The, the, this is not like the hostility. The hostility could still be very high. The repercussion of that hostility, I think the, the more time we've had for this industry to grow, that particular systemic risk that you described, which is probably one of the biggest ones, has come down, I think. This is too big. You can do it, but it's too big and it's decentralized. And, you know, China's tried to do this and India's tried to do this. The US is a different animal. I get it. But, um, it would be a big unwinding. Uh, and I can't understand the incentive to do that with all the kind of repercussion. Uh, and so I would say the graph for me looks like hostility varying low 20, 30 percolating, this industry grows. And then, and then in the last couple of years, like much higher, right? Uh, choke point being the peak. And I think that was the peak. I think the, the particular moments of ETF, um, the Ripple case, um, the, uh, the Bitwise— not the Bitwise, the Grayscale case— all of those were kind of the peak. And now, irrespective of the administration, The graphs going forward might look very different, and that slope of decline might look very different. But even if it remains constant, I, I just think it doesn't remain constant. I think we've peaked and we're going down.

Yeah, interesting.

Then the second chart is the potential impact of said hostility. I think irrespective of the— what makes, what makes the US such a great democracy, and the probab— the best political system in the world is that the system works and it transcends a particular figure. That is not the case in other places where a particular government official— like, the, the three branches of government actually are very balanced. And, and that, I think, makes the U.S. the most sound democratic system in the world where rule of law stands, right? And I don't think that's going away anytime soon. Yeah.

Yeah. I mean, you see it even when the SEC comes down on someone. Yeah. You have to spend a lot in legal bills, but the courts challenge—

like, how many times have we said it in this podcast? Have faith in the courts. If you, if you've lost faith in the courts, then you got a bigger—

then you got a big problem.

Forget about crypto. We got a bigger problem on our hands.

Yeah. So that's—

I don't want to— I want to— as I said before, I think we spend too much time thinking about government. I think it's incredibly important. I do agree with you. I think this administration this particular election result is going to be very critical as to how that line progresses, because it could be a very big decline, as it sounds, with one administration, and it could be probably more of the same, uh, with another. And it would be nice to have the former, not the latter.

Yeah. Okay, Egan, game time. We had to do the 50-minute warm-up.

We saved the best for last.

Well, we could also talk about shared sequencers, but we can skip that. But I am led, um, uh, okay, great reporting by Sam Kessler and Danny Nelson. Um, CoinDesk does it again. Yeah, um, top crypto startup drove other projects' airdrops to its employees. So I'm just going to read some of the stories, some of the highlights. I can Eigen Labs circulated— Eigen Labs circulated a list of team members' wallet addresses to EigenLayer ecosystem projects that were preparing to issue tokens. Some teams asked for it. At least one didn't. So let me just read. They have 4 bullets is like the highlights of the story. Eigen Labs, the developer of restaking juggernaut EigenLayer, distributed a list of employee wallet addresses to ecosystem projects preparing to launch crypto tokens. Some teams said they asked Eigen Labs for the list, but one said it didn't and felt pressured by the company to send its employees tokens. Experts and insiders say the payouts, worth nearly $5 million at peak prices, raise conflict of interest concerns. By the way, at peak prices, it's like, you know, way, way, way down from that. Just to, just to flag that, Eigen Labs and the nonprofit Eigen Foundation have since banned such payouts to employees. So on one side of the spectrum, and I'm going to ask you where you fall on this. On one side of the spectrum is this is insane behavior, completely disgusting. Shriram should be out. I'm like, I'm going as far to the left on this side of the spectrum. Shriram should be out as CEO. This is the second kind of like ridiculous ethical thing that they've done. They've had some shady internal behavior. The operations are a mess, like they botched the airdrop. Like EigenLayer, like, wow, really blowing it. On the other side, I've seen people say, I'd go so far as to go a step further and say AVS builders should actually 100% give people who spend all day thinking about EigenLayer financial stake in the protocol to get their attention, brainpower. It's not so they shill your project or corrupted it, so they have an incentive to meaningfully contribute, even if that contribution is shitting on a design decision you made, which makes you rethink how you're going about it. So that's the other set.

Is it Mike?

No, I'm not going to call out who said this on— it was someone on Twitter. Um, no, Mike is— I would say Mike is as far to the former as you can. Mike is extreme, and I'm on Mike's side. I— well, to not— without ruining the conversation, like, I— Mike is extremely disgusted by this is how described it.

Amen.

Yeah. What do you think about this?

It's disgusting.

Why? So can you explain this as you see it? Yeah. Just give me, give me your overview.

I— there's a couple of issues that I have with it. It presents a clear conflict of interest. When we had— I want to go back to that interview we had with Sri Ram and Calvin in January of 2022, I believe. And one of the things that I pressed them the most on is how they would preserve security and make decisions, uh, when you have all these AVSs. Because naturally people chase yield and they don't look at that, and they could create some issues. That was kind of the gist of the question. And they said, well, we're going to have some sort of security council. And most of it, you know, people within Eigen and then potentially other people outside the organization, presumably, hopefully. And I— that was the first thing that I thought when I saw this. I'm like, okay, well, that's an issue. Um, more so for Eigen than perhaps any other, other protocol. An example would be, imagine, uh, imagine, um, an investment bank. They're gonna take, uh, Facebook public. JP Morgan, whatever. Uh, and you now, all of a sudden, Facebook grants all these options, not to the investment bankers that are running the deal. They clearly want this to be a huge success because their bonus depends on it. But to the equity research analysts that are going to publish their price targets on the stock. You think that's allowed? I mean, no. Exactly. I think it's Glass-Steagall or something. So it's not. Why? Because otherwise the analyst would say, oh, you know, they would be heavily influenced to be biased. Aave, imagine, has a risk team internally that determines what collateral gets onboarded and what are the parameters and maybe some of the incentives that get allocated to that. Do you think it would be fair to have these particular team members get a huge airdrop of emerging protocols that carry way more risk? Do you think that's not going to influence your decision?

Yeah, I mean, it will if you're an individual employee. Yeah. Okay.

Two examples, and this is the exact same thing for this Security Council thing. That's the thing I care most about. These decisions around how you treat an AVS is problematic, to say the least. And particularly because Eigen, I think, carries a lot of some more systemic— it's a protocol that carries more systemic risk than others. I'm not saying that it would be equally or less— sorry, I'm not saying that if other protocols did it, it would be less wrong to do so. I just, I just find it, um, yeah, I just think it's— it— anyways, that was my biggest concern when I first saw this, if that makes sense.

Yeah, it does. Should any, like, action be taken? Should any— like, what's the— what happens next in your mind?

Well, Any individual that received an airdrop should probably return it. They don't want to return it, then they should make it very clear and disclose it. And they should not be— they should excuse themselves from any type of decision-making that involves a particular treatment, or of a, of that particular AVS, or just AVS in general, or whoever, right? If there's going to be a decision around a particular proposal program or whatever, you should excuse yourself from that, I think, personally.

Yeah.

I don't know if I'm, um, yeah, it doesn't, it doesn't sit well. Um, I could see a lot of counterarguments and I'm trying to play those out of what people might say. It's like, oh, you know, like investors that might have an, like an investor in Eigen and then this other company that did the airdrop, well, they're going to vote on-chain and they can, they have a clear interest in these two protocols and they can drive some of that decision. And it's a fair point. Like, I don't think we figured out governance all that well, but when you have these incentives, I think it starts getting complicated, or especially when it's not properly disclosed.

Yeah.

And I think that's probably the solution and the answer to all of this is just, just the disclosure around it.

Yeah. That's my recommendation. I think more so like Blockworks has a, you can like, you can Google Blockworks financial disclosures and anyone who writes content or creates content, like our entire research team, me, Mike, any podcast host, any of our writers, there's financial disclosures. So anything that we own that's over $5,000 is on that sheet. NFTs that we own, liquid assets, public equities related to crypto, Bitcoin, ETH, etc. It's actually all on that. And that's historically always been a media company thing. But just because there's so much like angel investing and cross-like things and there's tokens. Like, I, I don't know. I really actually do think that like it doesn't need to be mandatory, but it wouldn't be the worst idea to have more, more disclosures than other industries is what I'd say.

Here's what's going to be the sign for all this, the response and how they respond, I think is going to tell you, you know, sometimes when you do things The operating assumption should be, if this were to surface and everyone would know about this particular deal, would I feel comfortable? And I think that has always served as a moral compass to any decision that you make. And I think you might be wondering what a particular employee that was on that list and how they're feeling right now in the wake of this surfacing to light. And maybe they don't have any problem with that. Maybe they can come up with a very rational solution. We're doing a lot of work and maybe that is the answer and that's fine for them. But I think that is the question that I think you should be, you should ask yourself, right? If you're in that position, how would you feel if it came public of a particular offer that you get? And it goes back to, I think in crypto oftentimes I mean, why do I guess the counter would be, why does it matter that it was to particular individuals? What if the company got it? Maybe we arguably wouldn't have gotten as much of a blowback, right? Or outcry. I mean, there are countless examples of protocols being incentivized to deploy in a different chain. Right.

Right.

Do we have a problem with that? Well, you know, it's an incentive, right? It's a— it's—

but it seems more clear. I think the issue is that it's more clear. It's very out in the open. It's like, hey, CRV is bribing with this. Oh, let's see what happens. Yes, it's very open. I think that's the issue.

That's the nuance.

Okay. So I thought about this so much because SBF, the SBF, and so SBF funded The Block with $40 million. Do you remember that? He'd given—

give a loan to one of the acting CEO, to the CEO, Mike McCaffrey.

And actually, and people might give me shit for this, that in and of itself is not like illegal or wrong. Like, I mean, it's wrong, but it's not the worst thing in the world. There's a lot of media companies that are kind of funded by billionaires. Marc Benioff in Time, Bezos in Washington Post. Henry and Boston Globe. It's that you didn't share it publicly. That's the problem. I mean, and SBF was a scammer and all that kind of stuff and they got— no, no, but like, just disclose it. Just say it. And if you're— and, and like, this is what Mike and I always talk about. If you're worried about disclosing it, it probably means you're doing something wrong.

Uh, it's just what I said, but a better way, a clear way to say it. Just, yeah, I think in the abundance of caution, it's, uh, You just disclose it.

Yeah.

Like, hey, there's all these projects that are building in Eigen. We, by the way, received some airdrops.

You know, actually thinking about this, I think we're going to add— we should add— not, not we in the you and me. We as in Blockwork should add people's private angel investments to this disclosures doc because that's not on there too. I don't know. I think I'd like to. For sure.

I mean, you have research components, so absolutely. Yeah.

Yeah.

Um, look, every time this has been, and I hope we do this right way here, like, you know, when we have teams on, when we talk about a particular project, you know, first of all, nothing is financial advice. Second of all, there is clear bias. So you disclose it, right? I'm like, I'm an investor in, we just had MegaETH. I'm an investor in MegaETH. It's one of the first things you say, right? I'm an investor in Skydraid. I'm an investor in So many different— now you could look at that and say, I don't want to listen to this guy because he's clearly biased, he's shilling his bag. I'm like, I mean, but then what's your argument? You can't have them on the pod? Well, I want to share because I think they're building interesting things, real use cases and whatever. If you want to— if you— I think there's— you're never going to convince that those people, but that's not going to stop me from bringing really good founders that I've had the, you know, that you and I or whoever invested in because they're going to come on and I think it's worthwhile for them to share their story or whatever. So, but I think you, you always disclose it, I think.

Yeah.

So yeah, it will be interesting.

If you're an investor in Eigen, how do you handle something like this?

I'd like to really understand the decision-making process. Of who signed off and, you know, what was the reason not to disclose it.

Yeah.

And because I— you have to pass from checkpoints, right? If you're going to get an airdrop in particular, like if you're going to get some sort of compensation outside of your work compensation, you have to disclose it in most contractual employment agreements. And so someone up the chain should have, uh, knew about it. And I think if you come from a traditional background of like, you know, HR and legal, like, this would have had to be disclosed. So they probably knew about it. And then I think it would have been probably wise, whoever that person was, to Um, maybe think about publicly, you know, making certain disclosures. That, yeah, if, and if, uh, whoever that person that probably has some gray hair on them, I think it's on them and they're on the chopping block. If I'm an investor, if I'm on the board, I'd be like, yeah, that person needs to probably go. I don't know, maybe I'm being too harsh, but I don't, I don't think so.

No, no, I think this is a very serious situation. I, I don't think— and I think there's more teams who have done this who are now really getting things under wraps probably right now.

Um, again, these are some things that we need to bring more, um, transparency and just comp— there are certain rules in the traditional world that are really good and they're there for a reason. And they apply here too. And there's no reason why you think they shouldn't because you're creating some novel piece of technology. Like that has nothing to do with that.

Yeah.

So it's always worth to, uh, hire good counsel. I know sometimes it's expensive and whatnot, but, uh, you know, it's, it's really important.

Cool. Yeah.

And like transparency and I think like sometimes these, The problem at times is like, if you go back to FTX, like it was a club deal, there was no lead. And so no one's really negotiating terms and information disclosures are really important.

Yeah.

Someone board composition is very important and not for the reason you want to be nagging the founder, but for the reason that you want to be there to support him because sometimes like investors act as a sounding board. So who's on the board of Eigen? You know, like I think That is something that should be like that. These are some of the things that like investors can really help you in that, um, as a, as a sounding board for some of these things.

Yeah. You want to discuss Shared Sequencers, or do we call it—

oh man, what about him? I saw your tweet. That was pretty savage, man. I was, I was proud. I was like, that's my boy. I was like fist pumping.

I didn't even think I was roasting. I got some messages being like, what the fuck, man? Like, why you got to come at us with that? I was like, I promise you, I was not thinking of you. She's another one.

As the saying goes, Yana woke up that day and he chose violence.

So I'll give people the TL;DR. The TL;DR is that Rushi, who's the founder of Movement Labs, tweeted all sequencer companies are going to zero. TL;DR is that shared sequencing, base sequencing, etc. Are all going to zero as focused value props. As a B2B model, these ideas make no sense. One, there are only 5 to 6 rollups worth attracting, and if there are 5 to 6 shared sequencing groups— again, this is all Roush's, not what I'm saying— there are only 5 to 6 shared sequencing groups. There's simply no market to justify venture-scalable companies. Two, those 5 to 6 rollups are all working on their own sequencing implementation for their respective networks. Orbit, Superchain, Move Collective, etc. And 3, 99.99% of the population does not understand nor does not care, nor care. So they said the sequencing debacle boils down to this: everyone wants their own chain. Everyone believes they'll be the L1, L2, L3, L4, L5 to rule them all. It makes no sense to design architecture around a singular chain because the endgame is just multichain. Not in a corny way, but it is. Base will coexist with Solana, which will coexist with Arbitrum, whether you like it or not. Teams are incentivized to launch their own chains, to build their own ecosystems for better financial outcomes. Deal with it. That's just the truth. I think this is net healthy as competition over time will weed out the top 4 to 5 chains, just like in Web2 for websites during dot-com bubble. Now that we— okay, I mean, this is a very long post. I'm not going to read it all. We can link it, but that's the gist. So What do you think?

Well, first of all, we had Rushi and I'm an investor in Movement Labs.

So did you not disclose that at the beginning of the episode? Slumty.

I'm disclosing it now. I'll disclose it in that episode, by the way. But I agree with that. I think people should go and listen to the pod with Anil from Rome Protocol and with Astria and Espresso from like a year ago, actually. Right. Yeah. So Josh, I think the vision for something like Roam, which I'm also an investor, uh, is, is, is great in that, like he actually says, and I talked to him when I saw that post, he said, this is exactly why we've gone and our vision is just more than shared sequencing. And I think what he's getting at there is the point that Rushi is making, which is the size of the market. It's not like venture scale. Um, and for instance, Roam is using Solana and leveraging that network and security. For the sequencing, um, whereas the other implementations are creating their own network from scratch and bootstrapping, bootstrapping that, um, and that's more complex. Um, and yeah, I think the, the, the biggest point that I think Rushi made in there was it might work, it's just the, um, is it a venture-scale type of outcome? Yeah, and you might say, hey, listen, the— for context, the sequencing is incredibly valuable. They capture MEV, and so, you know, as these things continue to grow, then that could be pretty lucrative. But it depends, right, if you're sharing that and who— what's the network look like. And, you know, it depends.

Yeah, so I would take that has nothing to do with sequencers, which is that if you meet the founders of a lot of these shared sequencer companies and the teams, they're actually some of the best teams in all of crypto. So whether that's Anil at Rome, or Josh at Astria, or Jill at Espresso, and Ben Fish from Espresso, like, I just, you know, I know all three of those teams very well.

Ben was like a gigabrain from Stanford. Jill was at a venture fund before that. What's the other guy's name from Josh from Australia.

Josh was like, Josh Bowen. Yeah, Josh was at Celeste before that. And I just think like shared sequencer or not, like I think people are— I think all first of all of them understand what Ruchi is saying. Like I don't think any of them read Ruchi's post was like, oh my God, like that's the truth of shared sequencers. Like, oh crap, we don't have a business model. Like they understood this a year and a half ago. And I just think a lot of their thesis is like there's a lot— shared sequencing is about coordinating block production, block coordinate— excuse me, block coordinate— block. Yeah, block construction across chains. There's like the role of coordinating block construction. There's a lot more that you can do with it that's not being done right now. And I think a lot of them will end up doing things around it, whether that's building a marketplace around it or selling temporary sequencer rights or whatever. Whatever it is, like, they're some of the best founders out there right now.

You're saying if you, if you sit at the heart of that sequence, you will figure out a good business model? Well, it's, it's a big moat and then you can capture a lot of value in the same way that if you're running a shared, a single sequencer, like we're gonna publish the episode with the MegaETH team and we talk about this too. Like it's, uh, we've, uh, go listen to the episodes with Steven from Arbitrum as well. The single sequencer, like there, there's a lot of value there that that's like, captures the MEV. And so, yeah, I would agree with that last statement you just said, which is if you can create that network, you can build other stuff on top of it. And I would actually argue if we had Rushi and, you know, Ben and Jill and Anil, they would probably kind of all agree on that. Maybe, maybe not.

Yeah, I think they would end up agreeing more than people think.

Exactly. That's the point. Yeah. And I think that's a good way to end it.

Yeah. I started watching Industry and it is not the right show to watch before bed. It's like, so actually, so this guy I know who worked, who was a trader at Goldman for a while, said it's the most reflect— it's the show that most reflects what it was actually like to be a trader at, you know, at Goldman, you know, 15, 20, 25, even, yeah, like 15, 20 years ago. It's, I think, set in like 2007 or 2008. So what is that, 15 years ago? So it's not like a Wall Street in the '80s show. It's like, well, it's like a Goldman, whatever, in 2007, 2008, 2009, 2010. And so I started watching it. I watched episode 1. It's too stressful to watch before bed. I was like, I was like, I was very much like worked up trying, like kind of remembering like my trying to get this internship at Goldman and trading. Yeah, I know one of the guys in the first episode— I'm just going to ruin it for people— he dies from taking too much Adderall and drinking too much Red Bull because he's trying to turn a deck for a client who doesn't even show up for the meeting.

That's based on a true story, right?

Yeah, Bank of America analyst, unfortunately.

And that was, uh, I was, I was a first-year analyst at the time, and then that's why they created this protected policy where— protected weekend policy. I think once a month you had a weekend protected. You couldn't be emailed from the time you left the office Friday. I think you had to leave at 7 or 8 PM, and you couldn't be emailed until it's like Sunday at noon.

Oh, but that is not, that does not exist at most places.

No, no, it does. Protected weekend. Yeah. It was a thing because of this. Problem was, so I tried to like, of course, like I'm like, well, fuck this. Y'all have had like the, we were working out 100-hour weeks plus, like, but it was good. Like, you know, it was just whatever. I think it was like the last class of like true investment banking, I guess. Um, so towards the end of it, we had like this protected weekend. We're like, oh, this new class is going to get so much better. The problem with this policy is fine. You leave Friday. You're like, am I getting an email? You enjoy Saturday, but you just know when that Sunday comes raw. Oh yeah. You just get raw. That BlackBerry, you know, that BlackBerry. Yeah. That shit's going to go off like a Christmas tree.

Yeah. I mean, when I lived in, when we moved to New York. How many guys we put? So Mike and I both went to Emory together and we put 5 people. You know, the, the Ivy of the South.

Am I mistaken? What is this? The Ivy of the South.

Oh, the Ivy of the South. Exactly. Exactly. Yeah, that's Emory, baby. That's Emory. Football team that's never been defeated because it never played. Because it never played. Um, BU doesn't have football team either. So I grew up in outside of San Francisco, and I was like, yeah, I'm going to Emory. Nobody had heard of it. Nobody. So I like being on the East Coast where people actually know what Emory is. So we— yeah, we— Mike and I were the only two of our friends who didn't go into IB. And just because that was like what you did coming out of Emory. So we— yeah, we lived with one guy at Evercore, one guy at Guggenheim, and one guy at JPMorgan. And they were just never home. They were just— it was amazing. Mike and I just had the place to ourselves. Yeah, just played ourselves. It was great.

So industry, no kid. I, I watched, uh, I started watching House of— rewatching House of Cards. Great show.

Great show. Just, this feels right. It's— I mean, you remember it was the first show ever to drop it all at once.

Yeah, yeah, it was so good. And they looked straight in the camera, created just this new genre. You're like, whoa, wait a minute, look at me. Yeah, it's awkward, but then it was amazing.

I don't want Kevin Spacey to talk to me.

Yeah, I know, certainly not now.

I did watch the Kevin Spacey documentary. Oh really?

Putting that aside, great show. Come at me, great show, cancel me all.

It's like listening to Michael Jackson. I'm like, I still listen to Michael Jackson.

It's still a great show. And so, you know, I'm watching— I watched that. I watched the, uh, what was another one? Oh, it was, uh, Cartel Cowboys. On Netflix. It's, uh, let me see. I think Cowboy Cartels or Cowboy Cartels. That's really good.

You ever watch about like Narcos?

Well, it's, it's, I think it's by the same producer Narcos. And it's basically like how they dismantled, uh, this one of the deadliest, uh, drug, uh, organizations, which actually was very prominent in my, where I grew up, which was actually really bad. Um, and, uh, because they were buying all these horses in the US and like the one of the brothers of the cartel guys was living in Texas and like Like, where did you grow up? Uh, Monterrey, Mexico, and Mexico City, but most of it this north, northeast city in Mexico. Like, I spent a large part of my childhood there.

Did you go to high school in Mexico?

Yeah, in there, American school. But it was, um, at this point I've lived most of my life in the US actually.

Why is your English so good if you grew up in Mexico?

No, because I'm a fucking savant. No, no, no, not really. I'm a loser brain. Funny enough. No, no, no, no. Funny, funny enough.

We gotta make the intro like, Jason, I'm a fucking savant.

Oh God, that's gonna come bite me in the ass so hard. Yeah, um, I made it a point to, to not have an accent, actually, consciously. Really? Uh, yeah, yeah, of course. I mean, I, I spent so much time in the US, but like when I went to college, I probably still have marginal accent. I mean, I went to an American school in high school, like middle school and high school, most of the classes, 9 out of 10, are English, and then you have 1 hour of Spanish. But most of my friends, uh, they went to school like, you know, Harvard MBA, Stanford, they still have an accent. I'm like, guys, why do you have an accent? Like, you've been living here, like, like, what do you mean? I'm like, you know you have an accent, like fucking use your iPhone, like listen. And for me it was just really important to perfect the language. You know what I mean? Like you can perfect something, like get rid of the accent, you know? Yeah. Not neutralize it, like, you know, I still have an accent. Maybe it's Northeastern, maybe it's, I don't know, some hodgepodge or whatever, but—

So it's elite. It's elite. Nouveau riche elite. Oh my God.

Yeah, come at me, come at this. Oh, I, I, I, I'm gonna be reading these.

Um, you're about to get shredded this weekend.

You'll see me Sunday night crawled up in my bed reading the comments. Uh, I haven't tried learning a new language. I think it might be too late in life, but I don't see the incentive now that I with you.

Like, I don't want to learn French, but I just think with AI is going to get so freaking good that like you're— it's no, no need.

I just don't see the point. Plus like there are languages that you can learn. I think if you date, if your significant other speaks another language, I think that's the strongest incentive to learn it. Yeah, but, uh, haven't been the case yet.

All right, good pod. Good pod, sir. Good pod.

Well, uh, Is that it for the week? No, you have tomorrow. We're recording another. Yeah, we're doing Dawn, guys.

We have some good apps coming out. MegaETH. We've got Keone and Smokey come out this Tuesday. Uh, Keone, founder of Monad. Smokey, founder of BearChain, come out on Tuesday. We had a really good episode with Jeremy Allaire, one of my favorites, favorites we've recorded in months. Um, great episode with Jeremy Allaire. So stay tuned.

When are we gonna have, uh, Brian Armstrong from Coinbase?

Is that happening next week? I think, I think the condition that he put to us is once one of us goes bald and, uh, I'm not doing it.

So next week, right?

Yeah, next week. Awesome. All right, folks, thanks for listening. Appreciate you.

Yeah, thanks everyone for listening. Enjoy the rest of the summer, I guess.

Cool. See ya. Thanks for watching today's episode. Just wanted to quickly mention that the wait for crypto's killer app wave is nearly over thanks to today's sponsor, Anoma, the universal intent machine. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at anoma.net. Thanks again to Anoma for sponsoring today's episode.