Bankless - Building A Better Ponzi with Ameen Soleimani | Layer Zero

Episode Date: September 20, 2022

Ameen Soleimani is the Founder and CEO of SpankChain, the co-creator of MolochDAO, and the co-founder of Reflexer Labs, which created RAI. David and Ameen chat about Moloch, coordination, DAOs, and what DAOs can do for both Ethereum and the broader world. Additionally, they get into Ameen’s recent fight against the Federal Reserve. This is a mind-expanding discussion that you won’t want to miss. Enjoy! ------ 📣 Swell | Liquid Staking for the People https://bankless.cc/swelldiscord  ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: 🌱 LENS | WEB3 SOCIAL PROTOCOL https://bankless.cc/Lens  🚀 ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool  ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  🌉 JUNO | BRIDGE FIAT TO LAYER 2 https://bankless.cc/Juno  ⚡️ ZKSYNC | THE LAYER 2 SCALING ENDGAME https://bankless.cc/zkSync  ----- Topics Covered 0:00 Intro 5:25 Ameen’s Crypto Perch 7:22 Ethereum’s Culture 9:55 Ameen’s Activity in the Space 14:03 Moloch Meme’s Origin 22:03 Moloch DAO & PTSD(AO) 31:31 Ability to Freely Exit 35:20 Organizational Change 42:55 Slaying Moloch 50:25 Global Settlement Layer 54:20 Sticks vs. Carrots 59:18 RAI, the Fed, Ponzis, & the Dollar 1:10:32 Thomas Jefferson & Slavery 1:15:34 Dollar Printing Gone Wrong 1:18:00 Invading Iraq 1:19:50 Ignoring, Overreacting & the Dollar 1:27:18 How Ethereum Fixes Things 1:34:11 Closing ------ Resources: Ameen Soleimani https://twitter.com/ameensol  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. 

Welcome to Layer Zero. Layer Zero is a podcast of unscripted conversations with the people that make up the Ethereum community. Crypto is built by code, but is composed by people. And each individual member of the crypto community has their own story to tell. The Cypherpunks understood that the code they write impacts the people that use it. And Layer Zero focuses on the people behind the code because Ethereum is people all the way down and always has been. Today on Layer Zero, I'm talking to Amin Soleimani. And I've said his name on the bankless podcast a number of times before. He's been on the bankless podcast a number of times before. He helped meme Moloch into existence in 2018 and 2019. He's the creator of Moloch Dow, one of the first DOWs to come out of Ethereum after the Dow. And he makes this joke about how he made Moloch Dow with many purposes, one of them being to help the Ethereum community get over what he calls PTSD DAO, as in PTSD over the 2016 Dow that caused the Ethereum Classic hard fork. So we talk about Molo, coordination, Dow's, and what DAOs can do for the landscape of both Ethereum when it comes to coordination, but also for the broader world. And really why Ethereum is just coordination

tools all the way down. But then we get into some broader subjects such as his recent fight against the Federal Reserve and how the Federal Reserve has this relationship with the broader world that is unsavory and how we as a people need to resist what is going on with the Federal Reserve. And Amin has always been a very very... big patterned thinker, a big philosophical person who can see the biggest patterns that the world has put in front of us and sees them for what they are. And he's a pretty controversial guy. He's pretty sharp around the edges. He's definitely not afraid of putting his foot down and making people be very uncomfortable. So I actually do not recommend that you listen to this episode

with kids in the car or, you know, young ones who aren't ready for very mature subjects. But even though, I mean, definitely has his controversies. He's a hero of mine through and through for the way that he thinks and what he thinks about and the lessons that he brings to the table, because they're very emblematic of this particular podcast, why I call it layer zero. It's because he gets down to the bottom of things in a very fast, sometimes crude, but effective way. So I hope you enjoy this episode with Amin Soleimani, and we'll get to that conversation right after we talk to some of these fantastic sponsors that make the show possible. The Brave Prouser is the user-first for the Web 3 internet with over 60 million monthly active users and inside the brave browser

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and they have ZKSink and StarkNet support on their way. You can skip the ACH wait times, you can skip all the gas fees, and go straight from your checking account to an Ethereum layer 2 in seconds. Inside Juneau, you can buy and sell crypto with $0 fees, and your Juno checking account comes with a metal master card that gives you up to 5% cash back on your spending. Juno is also giving you $10 cash back on your first crypto deposit and $100 when you set up a direct deposit. This ad just writes itself. So go sign up at juno.com finance slash bankless. What's up, I mean? How's it going? Great. Thanks for having me. It's quite the eccentric background you've got there. Yeah, I had to fit the unicorn into the

picture. Is that a chair that you're on? Yes, this is a nice little pink throny chair thing. We'll get into all of that and more. But for listeners who came in perhaps in 2021 or beyond, the most recent cohort of crypto listeners, content consumers, they might not be as familiar with you as I once was when I first got into this space. Can you explain your perch in the Ethereum and broader crypto ecosystem? What would you say that you do here? Yeah. So I'm the CEO of Spankchain, which was one of the first attempts to bring the benefits of crypto to

the adult community. So from that perch, I get to sort of, you know, it's like a libertarian viewpoint, how to make things useful for everyday people. You know, not so much like the grander things too, but that stuff's more about like helping sex workers, you know, use Ethereum tools to keep their money safe and so forth,

sell NFTs. But we do some other things too. We made the first L2 Spank Live. So that was a fun opportunity to learn about, you know, putting L2s in production four years ago. A lot of lessons learned that we've been able to use now four years later when it's like finally time for layer twos. I try to focus on the types of things that people aren't and like where the blind spots were too.

So it started mollicked out like back in the day. Ethereum was very utopian. and I was concerned that our utopianism wasn't going to be very scalable or sustainable forever. So, yeah. Yeah, go into that a little bit more. One of the things that brought me into Ethereum is just how optimistic and perhaps utopian is the right word. Everyone is. It's like it's infectious.

Like everyone's really generally happy and accepting. But I think perhaps somewhere to our own like naiveness, naivete. Like when you come into Ethereum and you see like the culture here, what do you see? Yeah, I saw a lot of like well-wishing sort of people, right? It's like we prided ourselves for years about being a very welcoming community, about being very friendly. And it led to the Ethereum community getting hacked in sort of predictable ways by people who were like, oh, you know, upfront, like very friendly, but then had sort of their own intentions and goals that were maybe not. aligned with the Ethereum community. And so a lot of the kumbaya culture isn't very, like, well designed around adversarial

thinking and things like that. And so, you know, the idea of, like, Mollick was very appealing to me because it described these sort of, like, game theoretic traps where you have to make some sacrifice of something you value because everybody else does. And, like, Ethereum doesn't exist in a vacuum. it would be nice if it did, but it's still subject to the competitive forces that drive everything else. And so if we want our values of pro-social and positive sum to expand to the rest of the world, we sort of have to compete to protect them and to advance them against other things that might try to out-compete them

that don't have those values. And I saw a lot of people taking this idea for granted that Ethereum is just like the best, it was going to dominate forever and it was just going to win because we're the good guys and like in my experience that's like not how anything works it's like nice when the good guys win but it's like typically because they're more powerful than the bad guys it's not because they like are nicer than the bad guys I mean I don't know you can make the case that like they could coordinate better but like yeah that's getting sort of deeper into the subject having watched you being a leader for me in the space with just like how you think and your writing,

it seems very appropriate that you are the person to be beating this drum of adversarial thinking of this guy who's like doing this ICO spang chain that really just like throws people off. And we're like supposedly doing this very professional thing of trying to build a platform for payment channels. But what do we do with that thing? Oh, we apply it to like making sex workers lives like easier. And then, like, you have this, like, era about you that's very, like, I kind of find, like, Ethereum aligned in that we're here to move the needle of humanity, but we're not going to take ourselves too seriously while we do it. And so, like, while this started off as, like, you know, what am I going to do with this payment technology? I'm going to go, like, straight into sex work in, like, 2017.

And then, like, that kind of also, I think also relates to how you interface with, like, the broader Ethereum community. It was like, oh, everyone is, you know, and this, like, growing the pie mentality. But I'm going to be, like, the hardliner that enforces, like, adversarial thinking and thinking of everyone as an enemy. Because all of you people aren't doing that. That's kind of how I, like, quickly and roughly summarize your activity in the space. Does that resonate with you? Yeah, absolutely. It was basically a reaction to the prevailing utopianism that drove me to embrace the Mollock meme and feel compelled to share it.

Because it's not, like, to be. clear, like, I like the utopianism, right? I like the aspirational nature of a theorem. I like the optimism. I think it's important to sprinkle it with a dose of realism. And, like, also there's other communities where, like, the slang mulloch meme wouldn't have worked out because they don't care. So, like, you know, maybe in other communities that are less mission oriented and more mercenary, you know, oriented, you know, they don't care about slang moloch. They're like, wait, I can trade my values for competitive advantage? Fuck yeah, that sounds great. Let's worship Mollock and do that. Is there a point to this whole blockchain stuff that beyond getting ourselves rich? I don't know.

But like, who cares? You know, but like that's not what you feel in Ethereum. What you feel is like we are advancing something that matters. Right. And, you know, I also care about that goal. And I wanted to help advance it how I could. And that also, you know, meant acknowledging that like, it's not always going to be, you know, sunshine and roses. Like, sometimes it's, you know, not going to be great. Like, we actually have to make sacrifices. And if we want to, you know, keep advancing these values, then we have to fight for it.

We have to out-compete the rest of the world. And so the paradox of Mollock that I talk about sometimes is that, like, we talk about slang Mollock, but, like, the paradox is that in order to get the power to do so, we, like, sometimes have to worship at his altar, right? Like if we didn't at all strengthen ourselves or become competitive, then, you know, we just auto lose. Right. So there's like some middle ground between, and this is why it's a paradox. It's like it doesn't fit, you know, very cleanly.

You're like, I just want us to be the good guys forever, you know? But it's like, no, it's like if you have this like value thing, you want to preserve, protect advance, you have to like compete for it, fight for it, you know, do all the things that you normally do. You just have to also preserve it because that's the core thing. that you're trying to do. So, yeah. I don't know if all that made sense. We'll have to actually explain this like Moloch meme.

This is a meme that Bankless has been just like, it's the banner that we kind of live under. But again, we haven't really talked about it in 2021, 2021, 2022 nearly as much as we did in earlier times. But maybe we could actually explain the Moloch meme by giving a history of its relationship with Ethereum, which is an intimate part of like your own story with Ethereum. So maybe we can go back to where. the Moloch meme was really just getting incepted into Ethereum culture for the first time, because you were really leading that charge. Could you take us back in time and start the story there? Yeah. Malik means a couple things. So I read the blog post Meditations on Malik by Slate Star Codex,

Scott Alexander. It's his rationalist blog post. And it describes the rationalist god of coordination failure, put a word on an anxiety I've had my whole life, which is like, why can't we all get along? Why can't we have nice things? And it's like, you know, because people and, you know, in these competitive situations, they have something that they can sacrifice that they value in order to get an edge and the end results as everybody does it. And so, like, you end up in these sort of, you know, unfortunate equilibriums where, you know, as a country, we want to spend money on healthcare education and infrastructure, but we end up spending it on guns and bombs and planes because we like can't coordinate with everyone else to disarm at the same time. And even if we did coordinate with everyone else in the planet to disarm, then like, whoever is the last person with all the guns, you know, takes everybody else over. And then the world reflects their values, which is like secretly amass a bunch of weapons. And so like the whole disarmament, like wasn't very effective, right? And Mollock is used as like a shorthand to describe these like coordination failures where like if we could all just work together and had some mechanisms to do that, that would be great.

and maybe we could reach a better equilibrium, but because we don't, we have to, like, compete and fight and we're trapped in this, like, less good equilibrium. And the story of how it relates to Ethereum is that I also discovered Ethereum in, like, the same week, discovered Mollock, and then try to bring these ideas

because I realized that Ethereum was a platform for building coordination technology. So, like, if you're in one of these unfortunate equilibrium, you want to get to the better equilibrium, how do you do it? Well, you need to come up with some game to coordinate with everybody else in order to advance this sort of better coordination station.

So the tools for doing things like that are what Ethereum is all about, in my opinion. And so I was like, how do I get people to feel this thing that I feel right now? I'm going to call this Dow. Hopefully it'll get all these people to read this blog post. And we're like several years downstream from that. And now there's like comic books and like more literature and memetics that are being developed around the Mollock meme. and it's turned into a sort of rallying cry for the Ethereum community to coordinate around like what is, you know, our own mission, what is our goal. And it's helped, you know, crystallize.

It's like, well, what do we do here, right? We build coordination tools. It's not about, you know, like my country, my faith, you know, my whatever. It's like about building things that allow us to like progress past the like coordination systems that we can even imagine today. you know like countries are great but they have borders you know outside of the border like you're not really our friend so it like has a scalability limit to how far it can you know coordinate people same with faith you know faith have heretics and nonbelievers so they run into limits on coordination and so the idea is like what if you know the big idea for things like ethereum is like

well you know how do we do better like what if we took like country and and faith and like other types of coordinate, you know, group, nonprofit, corporation. Like, these are our starting points of coordination technology. And so the way that we, you know, slay Mollock is we improve on coordination technology itself. And that's, that's a powerful thing because I think, you know, we're used to being raised in this like us versus them mentality. Everybody is. And so, like, trying to identify the traps, like, of the us for them, you know, it's like, us for them is kind of a sci up. So, like, trying to figure out, like, what exactly is the, like, why is it us versus them in the specific way?

Like, how do we unlock, you know, more coordination value out of humanity? And when we started making dows, like, there were three dows, right? Mollock Dau's like, like, Dow's, like, Dow number four. So we've had a great opportunity to, like, sound, like, complete, really out there. Heretics or You know Not cases or whatever We're like there's yeah

There's gonna be 10,000 Dows Like when we're on Dow number three This is like stuff that we used to say With like Eva and Peter and James Young And all the people who were like early Mollock Dow Because we could see the coordination potential About to be unlocked We're like people are going to flip when they figure out

Dow's right It's like And this is back in 2018 2018-19 Yeah We're like building it in 20s 18 being like, oh my God, this is going to be so much fun. Like, people are going to be so excited, you know?

And there's like 10 DAWS by the end of the year. Yeah, 2019, it was like me and Peter and Telegram groups, just like starting another DAW every like couple weeks, like marketing DAW. And there was like a, or Rishi Dow, it was like a DAW for drinking, you know, events. It was like the kickback guys made it. There was all sorts of DAWs. We made the Yang Tao just to pay some kids in Colorado to like put up flyers and like pay the, you know, deep fake memes for Andrew Yang.

So between 2019 and now, like, 2020 at Heath Denver, I, like, you know, helped Andrew Yang get inside the event because he was, like, stuck outside the event. I, like, went to, you were talking to him because you were talking to him about DAOs and about his Lobby 3 Dow. It was like a special event. And I was like, this is sweet. I want to go to Andrew Yang's event. I helped start Yang Dow. Let's see where he's gotten in three years. So we just roll up, you know, I'm like stuck outside Heath Denver.

and there's a dude in front of me wearing a suit. Like, who the fuck goes to Eat, Denver wearing a suit? And the event organizers wouldn't let him in. And I look over and it's like Andrew Yang. Like, apparently running for president isn't enough, you know, to get into Eat Denver. Turns out he'd, like, given somebody his badge or something. So I was able to, you know, give him my badge to get him in and give a great talk with you guys on stage. So, yeah, it feels pretty cool to see all of that stuff happen.

and then people like research mollock you know they're like oh look like this doubt it's like cool to have you know put that like medic brick in this like you know immutable wall and see that you know pay dividends in terms of recruiting people to be aligned with the original mission we were trying to help people frame and understand that was a long rant I've had a lot of caffeine thanks for listening to all that just to make it extremely explicit as to the connections being made here. But you said Ethereum is a platform to build coordination tools. And then you went through the history of Ethereum as it goes from 3 to 30,000 DAOs. I mean, we can extrapolate beyond 2020 to where we are today, where everyone, you can spin up a Dow to buy a Constitution if you so choose. But just like, can you just connect the dots on all of these things about Ethereum is coordination tools, DAWS and Molok? Yeah. So, like, Mollick Dow, you know, was one of the first Dows.

The first one blew up, right? It was called The Dow. And it's why we have Ethereum Classic and Hard Fork and dot-da-da-da. And we had PTSDAO. And so we made Mollock Dow to be very simple and to just, like, fund grants with ETH and do very little else. Malik Dow itself was a whole ordeal. Like, we were onboarding people with EtherScan at ETH Denver. You know, I was like manually typing in zeros.

It was very early in the whole process. Like now there's Dow tools for basically spinning up everything, and there's a lot more flexibility. And it took a lot of people just grinding for years. We made Mollick Dow as a nonprofit just to do the grants with ETH, right? So it didn't have any of the other features. The original design for my investment Dow-Mollick Ventures is closest to what is being released just now with Mollick version 3.

So the version one was like just grants. It just, you know, deposit. You couldn't do any other tokens, didn't have any proposal types, couldn't change the governance, couldn't do anything, right? And that was to help address the security issues, you know, around launching these things because the last one had blown up and stuff. It was what we really needed to get over what you just called our PTSD Dow of just like, okay, let's eliminate all complexity and do one thing and one thing only,

which is agree to coordinate as to where to send ether. That's right. And so all other, all a much. surface area was just like stripped away because we as a community still when you said the word Dow people would flinch because we you know almost blew up Ethereum and had to hard fork away. So we needed this like don't do that. Yeah. Sounds scary.

Why would you do that? Did you see what happened to the other guys who did that? They got blown up, dude. We're like, okay, relax. Like we'll just do it the dumb way, the simple way. We won't do anything complicated. And then people, you know, other people would be like, we got this great feature idea for your Dow and we'd be like, that's a great idea.

We're not going to do it. talk to me in a year. And so we had to like run a grant stow for like just a year. And it turned out to be like the right thing to do to advance, you know, the coordination culture, to have more people who done DAOs. And like I have this mental model of progress. Maybe it's more relevant for like open source stuff. But, you know, I see progress is a series of motivational equilibrium.

Like I don't actually have to solve everything myself. I just have to push the ball, you know, to push the state of affairs to like the next motivational equilibrium where there's like more people. more motivated to solve all the problems. And I feel like that's kind of what we accomplished. With Mollock v1, just grants, you know, ran it for a year. You know, hustled basically like 20 people for 100 ETH early on, raised a couple mill, got EF, consensus, Vitalik, Joe Lubin put in a couple mill, made some grants, tornado, you know,

probably the most important bunch of other grants around ETH2, you know, helped give the first grant to like the thing that is now Protocol Guild back in its inception. You know, did all that, but like also helped meme, doubt. help people recover from PTSD Dow helped educate people about how to Dow. Like, what does it mean? There's proposals. There's, you know, a grace period. You can exit, like, popularize the rage quit as a way of embedding minority protections

into your DAO so that, you know, participants can leave with their share of assets at any time. And, like, it took years for these concepts, like, to proliferate and percolate in the ecosystem until now there's, like, lots of DAWS, you know, there's investment DAWs. There's like protocol DAOs, there's nonprofits, there's social clubs, and they run using, you know, different types of systems. Some are multi-sigs. I'm like a DAB boomer at this point. So I'm like, all right, you know, that's a multi-sig. Get off my lawn.

But yeah, like people started coordinating, right? Like all of these are examples of coordination. With Mullick Dow, we raise money from like, I don't know, 25s, 30-some people in like 10, 12-something different countries with no paperwork. nobody signed anything it would have been a lot harder to do the same type of thing in like your you know meat space i talk about these things is like your jurisdictional stack right so like in order to do the thing which mollick dad did which is like allow you to pool money with a group of people but also like vote on proposals and if you you know at any time don't want to spend your money anymore pull your money out without asking anyone is like impossible to do in meet space because you have to like set up a bank count hire lawyers come up bylaws, and then you have like several people, you know, to do every process. You're like, oh, we would like to collect signatures on a vote on this thing. Okay, you have to like go through some software, carda, you know, like some like management thing to like collect signatures and authenticate people. And you have to do that every time you want to, you know, spend money on anything. And then like,

if somebody wants to leave, they have to like ask for permission. And then like, like, you have to go through their lawyer to go through the banker and like send a wire. And like any of those steps could like fail for whatever reason or get held up or frozen or, you know, censored. And like, the reason that people trusted the Mollick Dow smart contracts was because they knew that they could push a button and the smart contract would release their money. They didn't have to talk to anybody. There's no, like, jurisdictional stack of things that can fail. And that unlocks a lot of value. The overhead that isn't there now makes it so that it's viable to create a group like this to solve a problem that would otherwise have been, you know, not worth making a group.

group like this to solve. And so like when I'm talking about unlocking coordination potential, like that's the kind of stuff I'm talking about. It's like specifically the coordination overhead is a number and it gets smaller, right, across all of the participants, needing to verify that other people have done stuff, that the treasury is accurate. Like these are all, you know, trust things that allow us to trust each other more quickly and allow groups to scale trust more quickly and execute their goals more easily. Yeah, this is like stuff, nothing has changed between 2018, 2019, and now. Like, some more code has been written to make these things easier.

But really what's happening is stories. Like, I remember interviewing a CoinDesk reporter last year at MCon. I just got back from MCon in Denver. So that's the Meta Cartel Conference. So they did MCon 2 this year. Last year, they did MCon 1. And I talked to this journalist, and they asked me like what the limiting factor was of for like growth and you know more people thinking it's a good idea and i said that like the code

is mostly there uh the limiting factor is stories people need to see the narratives develop people need to see the story of somebody doing a dow being successful you know raising money for some cause and then being able to imagine themselves as part of that story in their own way and until that happens you can't recruit people because they don't have any examples of how to work with it you know, the framework, they're like, okay, you have a DAO, like, what do I do? Right. And so it's really important, I think, to push narratives forward. And so with Molek Dow, you know, the story was an ETH dev, didn't feel like going through

the EF for grants, made his own Dow for grants, and, like, started funding things to advance the ecosystem and, like, eventually got other people, you know, including the EF to buy in and, like, operated his nonprofit, you know, using this technology with a community of people that were into it and protected their own, you know, minority rights, you can too, you know. Like, it was basically a non-starter to, like, consider using things like DAOs for, you know, nonprofits and stuff. And so we had an example of us doing that in a successful way. So a lot of times it's, you know, you just got to go first.

Sure. One of the elements of why this works so well, you touched on it, and I want to double down on it, is this, like, free ability to exit as an individual. And it's truly something that only is possible because of private keys, because of, you know, really the invention of being able to custody your own funds and have people ask you for permission rather than you being the person to ask for permission. Can you just, let's double down on that. Why is that such a fundamental part about like why all of this coordination stuff works in the first place? Yeah. Great question.

Custodying funds is great because it means you don't have to ask people for permission to use your money. just very high level like custodying funds is one of the core things that blockchains specifically cryptocurrencies are about right like even if defy and stuff doesn't you know where it's like you don't want to have to like call your bank to send a wire and they're like no right just basically like that you never want that outcome and like the bitcoin network you know so long as it remains censorship resistant will never say no to you The Ethereum Network will never say no to you. And then we can piggyback off of this like custody property to do other cool and useful things.

Right. So like one of the differences between something like Mollick Dow and something like a nonprofit with a bank account is that you have custody of your funds. This is also different if like you use the multi-sig, right? You know, the operators, the signers of the multi-sig are custodians of the funds, right? But Mollick-Dow had this very unique new property. called the rage quit, and that allowed you to maintain custody and sovereignty of your funds, even while you pooled it with other people. And so that's an important thing because it turns your, like, donation to this nonprofit

into more like a pledge, a revocable pledge. And so you can choose to exit. You know, if a proposal isn't going the way you wanted, you voted no. The rest of the, you know, Dow is like, well, we really just do want to spend money on this. And like, if you don't like it, so be it. You can be like, well, okay, fine. You know, I accept that. You guys are still going to fund this.

I disagree. I don't want to do this anymore. I'm taking my money. I don't want it to go for this cause. And I'm rage quitting. I'm exiting with my pro rata share of the remaining funds. And so, you know, I'm out, right? And I had custody of my money.

I didn't need to ask them for permission to do that. But it does also change this game theory. If you've heard about, you know, the voice and exit, like custodial systems have no exit. Right. You can have a voice. You can complain or ask for help or permission, but at the end of the day, unless you can exit, you're sort of trapped. And then you can be coerced. You can be forced to do things with your money that you do not consent to. And so being able to have custody over your money, even while it's in a Dow, even while you pulled it with other people, even while we can submit proposals and decide how to spend it together, but also retaining that ability to exit whenever you want. super important because it makes it a lot easier to join in the first place. I basically willing to join any mollick Dow because if it has a rage quit, I'm like, well, you know, what's the worst that could happen? They submit a proposal. I don't like it and I leave. So the cost of joining any Dow is as close to zero as basically a gas fee. And so it opens up the landscape. In theory,

there's some social costs, you know, of like, oh, I join, now I had to leave, I had to talk to people. But exactly, it opens up the landscape. And so, like, joining, like, a nonprofit has overhead, right? So how many nonprofits can one person really manage their relationship with in their lives? Probably a single-digit number, probably even on the average person, no more than, like, two. But, like, with DOWs, like, your participation in DOWs is really as many discords as you feel compelled to, like, pay attention to. Basically. Yeah.

Yeah. And how does this change the relationship of, like, the broader org with its individual members? because now, like, this is all about putting power into the hands of the individual, right? Like, individuals always have, well, maybe they don't have the most power, but organizations don't have power over the individual if there is that rage, quit mechanism. So how does that change, like, the nature of the organization when that is the new equilibrium? It makes it much more likely that the decisions of the organization will reflect the values of the individual members. You sort of get this like, all proposals are consensual implicitly. because everybody has the opportunity to leave if they disagree with any proposal.

So the game theory of it works out that the organization is not incentivized to pass any proposals that they think will make a lot of the people leave. Because even if I can make this proposal pass, like if you guys all leave, then I'm stuck paying for it. And I might end up being like paying more for it. right so to the extent that i want to share the costs of things with you it would behoove me to make sure that like we're spending the money on things that like generally benefit everybody and if there's any imbalance even perceived imbalance then the people have the opportunity you know to

rage quit and make that known and that disincentivate you know provides a feedback mechanism for the group. Maybe the group just doubles down because now there's less, you know, outside, like, conflict within the group. But also that's a good outcome for the group. For the remaining members, it's like we can actually build alignment over time by shedding some of the members who might be less aligned as we go. And so I think it's actually a good system for both, you know, the individual goals and the goals of the group. And we can, like, do a quick compare and contrast of like other social systems, right? Where like say there's a Dow, maybe let's like take a Constitution Dow, just because that's kind of the big one that everyone knows about. That's the most

modern. And say like the Constitution Dow leadership voted to pay themselves half the money in the treasury and that's like eight of them. And say this vote actually goes through, well then there's the rage quit mechanism that all these people can rage quit before half their money gets paid to the leadership, right? That's exactly. Which makes this vote not even like feasible in the first place to ever do. But like we can compare this with like, I don't know, maybe a nation state where the leadership of a nation state, since they're the ones that control the military, they can just say, hey, all gold is now illegal. You must pay it to us. And we now own all the gold. It's harder for these individuals to exit because like, you know, it's one thing to exit from a Dow by processing

a transaction on Ethereum to get your money back. But it's another thing to like process the exit from a nation state where you have your home and your family and your life. And, you know, your culture. And so like this thing is... And they just took your goal. Yeah. Right. And so like, I mean, we're, you know, doing an apples to oranges comparison here, but like, this is the difference between what is a systems that are free to exit and systems that have high cost to exit. It's like high cost to exit systems allow for opportunity to, like,

bully you around. That's right. Yeah. The first question, you know, people ask is like, when you try to get them into this type of thing, it's like, how do I leave? And, you know, the concern is like, I don't want to be bullied by the other members. Like, I don't want my funds to go to stuff that I don't want. So I either have to trust the other members or, you know, trust that I can leave, trust the mechanism. And like when you can trust the mechanism, you know, it's a lot easier to spend these things up and start making grants and, you know, see how they go without as much overhead, without as much risk, without as much opportunity for coercion.

There's a line that I go back and forth with Kevin O'Walky, and I believe also you, is that, like, You don't actually kill Molok. You don't actually, like, magically solve all coordination failure. But you can make Molok retreat, right? Can you help us draw this connection between, like, all right, well, we didn't exactly, you know, the state of Dow's in 2020. It's not like we've really solved coordination failure. We kind of just made a bunch of Ponzi's. Now we're in the bear market.

But, uh, oops. But also, like, we have created a new system where Molok retreats, right? Can you just explain, like, going where we have, like, this new coordination platform, which is Ethereum. Now we have this new coordination primitive, which is DOWs. How is Moloch less deadly as a result of this? I think the cool thing, maybe this is like a frustrating thing, but I started saying this more recently is that like,

I think it captures this concept fairly well. Slaying Mollock is an infinite game. And like what that means to me is that like, you know, looming behind the rotting corpse of the most recently slay and Moloch is like a shadowy or deadlier Mollok, you know, waiting to strike. Right. Moloch level two. Molok level three. Yeah.

And so it's like this endless series of boss fights, you know, and like we can just keep going and like see what happens. And it's like still worth playing this game because it still seems worth, you know, advancing coordination because like that's what it means to be human. What the hell else are we going to do? Yeah. Like the opposite of that is just. just like winning some, you know, intermittent zero-sum game.

Right. So, yeah, I mean, we did all this Dow stuff. Now we have to sort of, like, the way I see it now is like we have Dow veterans now, right? So like last year, it was like freshman year activity fair, activity expo. You know, you show up to college. There's booths everywhere. You want to be in every club. You sign up for 10.

You know, you make it to the end of the semester. And like, you're lucky if you're still showing up to like three. or four, you know, maybe, maybe less. And then this year is like sophomore year, right? Everybody's like, okay, we know how last year went. We will sign up for a couple clubs. We will, you know, stick with them and we will like, you know, make sure it's useful and not like too much to handle and blah, blah, blah. And by junior year, you're like leading clubs. You know, you have like a leadership position. And I see everybody going through the same sort of progression that we did, which is like we start out. We have no idea what we're doing.

We hope we're doing useful stuff. And then, like, after a while, we, like, figure it out. It's like, oh, like, you know, flat organizations are kind of hard. Or, like, oh, like, this isn't just, like, a corporation on a blockchain. Like, you know, people who come from both sort of sides are having, you know, sort of trouble and, like, are learning to, like, build structures within the context of DOWs and, like, figure out what processes work, how to do compensation, right? And so there's like cultural knowledge being built up in, you know, a thousand different groups at the same time about how to do all of this stuff. And that is what is going to anchor the next generation of Dow contributors and people, right? So like in the same way that everybody who more or less joined Molek Dal like went on to start some kind of Dow, right?

Peter started a bunch of Tao's. Cooper started a bunch of Tao's. Ryan, you know, started bankless. He was in Long Tao, you know. So a lot of the people who have now come into DAOs as contributors, as tourists, get to learn and figure out what's going on. You know, it's not all just like, these Dow guys haven't figured everything out, right? Like, we haven't just solved coordination. But we have, like, discovered, you know, useful tools at coordinating better. And, like, you know, you can look at the amount of money raised or, you know, number of,

of these groups that have formed and like the excitement around them, all as indicators that, like, we're making progress. We're doing something right. And like the things that will, you know, interest me more is like next generation, right? So like right now we have like plutocracy, like for basically everything, like token vote. Vitalik writes about this, you know, in collusion resistance that we need more, you know, identifiable systems so that we can vote with people, have some amount of democracy in addition. to having all the plutocracy that we have.

Nobody has really done that well. Like optimism is trying. They have their two-tiered governance system. That's pretty cool to see. I think we'll see more structures form. Some might even be like more centralized and like have explicit like CEO type or like hegeman type. And I think that like if you zoom out,

like all of the things that we're building DAOs for right now are like toys and prototypes. the cool things is like when you know when is the united nation on chain right it's like that's like our sort of like terminal you know like when are like international agreements on chain like i started reading for fun about the ancient dows like the greek city-state agreements that they made the peloponnesian league and the like delian league these are the athenian and spartan-led Daos that they used to coordinate ancient Greece. And they have like interesting policies.

Like Sparta ran theirs differently than how Athens ran theirs. Like Sparta is like, we're the hedgeman. We're going to have a deal with every city-state. And like, you sign a deal with us. We might not even like really tell anybody else the terms. But like you agree to have the same enemies and allies that we do is the sort of foundation of all of these. And then the Athenian version, there's a little bit more democratic.

They have like a council, you know, within Athens that they like vote on proposals for it. And then like if those proposals pass, they like go to like the greater council with all the other city states. And then, you know, they try to pass them there and like Athens would often abstain. And like, it's interesting things about how they manage them. And I think that's like where this is going. Right. Like we don't like, like maybe we aren't paying attention to it as much. But like if it's not going there, like I'll be really surprised because this stuff is so useful that it will naturally find a home in like the most high stakes, you know, environments. eventually. Once we've built these narratives and once we've done this infrastructure work and all that. Rocket Pool is your decentralized Ethereum staking protocol. You can stake your eth in Rocket Pool and get our ETH in return, allowing you to stake your ETH and use it in Defi at the same time. You can get 4% on your ETH by staking it with Rocket Pool, but you can get even more by running a node. Rocket Pool is the only staking provider that allows anyone to permissionlessly join their network of validating Ethereum nodes. Setting up your Rocket Pool node is easier than running a node solo,

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And access all of Arbitrum's apps at portal.arbitrum. In order to experience defy and NFTs, the way it was always meant to be, fast, cheap, secure, and friction-free. And really what you're talking about is, like, Ethereum as, like, this neutral middle ground between nation states or between like the largest coordinating entities in the world. Is that the image that should be in listeners heads? Yeah. Global settlement layer, coordination platform for humanity, you know, these kinds of things. Like when we say that, you know, we kind of mean, yeah, it'll like also settle your crypto punks, you know, and like that stuff.

But like the goal, you know, why do we care about censorship resistant, right? It's like why do we care about neutrality? Like the reason we care about these things is because we're trying to. to build a system that doesn't give specific advantages to one nation state or, you know, religious group or whatever, right? And it, you know, just sort of runs on math and does math things and, like, can operate, you know, virtual machine and settle contracts, but, like, doesn't care too much about contents of those contracts and so forth, right? And that's sort of what you need to allow for like i don't know if i talked about this with you but like i watched vikings

and like the ancient game theory between kings is like they just have these hostage trades with their children right it's like you know ancient like coordination in that era was like i will make you you know the way to make our behavior more mutually predictable to each other is to deposit our children into a two of two multi-sig such that we both need to work together to unlock the children and if we fail, they die. It's like, what? Like, everyone just went along with that because that was like the best system

that had ever existed to that point. It's like savage, right? But it worked. And it's like, you know, you're just talking about like, all right, like you've got a daughter, I've got a son, we're going to put them in the same room, they're going to have babies,

and we're going to stop hating each other. Right. Is that what you're talking about? I'm talking about like, you know, I give you my son to raise and like you give me your daughter to raise. But like a lot of times they did also do like marriage contracts was like down the road. And it was like, we'll raise your daughter for a time. You'll raise, you know, or they'll both be in our place for three years and your place for three. You know, it doesn't serve as much for the two of two. Just a brute force coordination with each time.

Yes. And like if you could coordinate better, like you might survive better. because, like, you would out-coordinate the other guys who, like, couldn't put their sons in a multi-sig and, therefore, had a smaller army. Right? It, like, sounds dumb to say like that, but, like, that's, like, how things worked, right? And that was, like, people were like, yeah, right, like, you know, whatever. And, like, if you didn't put your kids in a multi-sig, you're like, bro, this alliance is suspect. Like...

Our kids are not in multi-sigs together. There's nothing aligned here. Yeah. Yeah, basically. And so, like, the question for things like Ethereum is, like, can we do this without being savages? Like, can we put ETH into a two-of-two multi-sig? But can we make ETH neutral enough, you know, that, like, people trust it enough to work as this, like, bearer bond, like, neutrally enforced by, like, the system based on some, you know, contract? So like in the future, maybe peace treaties or alliances or non-aggression

Pacts would be seen as suspect if they don't have an on-chain bond in a neutral currency. Right, right, right, right. And so, like, my head has gone to, like, sweet. We are definitely beyond the barbaric era of, like, using children as collateral. So, like, we're now in democracies. But actually, we have, like, nuclear missiles pointed at every single corner of the globe. And, like, people forget about that when they just are going about their, like, day-to-day basis. Yeah.

But, like, you know, using children as collateral, definitely barbaric. But if that's barbaric, and we're using that as, like, a facetious example of, like, how to force coordination upon warring tribes, what the hell is this, like, push-button nuclear Armageddon that we have? Like, how is that not just barbarism to the nth degree? And that's because, like, this physical nation-state world is based on, like, physical rules of who's more powerful than the neighbor. And you already gave the example of just like, you know, we can't really just globally demilitarized because that just leaves the most brutal military as the one that's left standing. But that's because that's the physical world, right? Like an Ethereum and Bitcoin, there is no stick. There are only carrots to incentivize coordination.

Because Bitcoin incentivizes coordination by paying you Bitcoins to mine it, right? Ethereum incentivizes security by, like, locking up your ether. And then it will punish you if you, like, try and. attack the blockchain. And then DAOs, as we've said, Dow's are like, so long as there's a rage quit mechanism built into them, and that's kind of like table stakes for DAOs, that like, there's no stick in the system. There's only opt-in incentives. And so like, I don't know how we get all global like tribes to coordinate with Ethereum, but whatever it is, it has to be by definition, like an opt-in carrot-based system because they don't have sticks. So the Ethereum doesn't give you a

stick because it's stuck inside of the internet. Yeah, at the protocol level, Ethereum doesn't have sticks. It only gives out carrots. You can think of like a stick as like slashing, but like that's a, you know, a carrot that turns into a stick. But you can opt out of that. You don't have to stake. Yeah, yeah. You opt into the slashing. You don't have to opt out of the slashing. If there was like a war treasury as part of the protocol fund, you know, then maybe Ethereum could have a stick. The United States started without a stick too. in some sense because it started not collecting taxes, like at the federal level, didn't have a federal tax.

It only added that later on. I don't think it's likely that Ethereum adds protocol, you know, level funding. I think it's even less likely that if we have it, it goes towards funding sticks. But, yeah, that's what you would need to do. So, yeah, it doesn't seem likely. The U.S. dollar is a protocol with a stick. really big stick, you know. It doesn't even really speak softly anymore.

Right. The whole like dollar demand, you know, propping it up, petro dollar thing is kind of weird. Right. I went on a bunch of rants about this after the tornado stuff because I was angry. And people were like talking about how tornado was like the bad guys and how like, you know, crimes are bad. And it's like, I agree that crimes are bad.

There's just like nuance there. because like a lot of things that were crimes like aren't crimes anymore or we like look back at them and we're like really ashamed of them being crimes and you know we like don't do the thing where we like reward the entrepreneurs for their like taking on the risk of like breaking those crimes or laws or whatever and in order to like normalize and make progress for the rest of it like I order marijuana in a store I pay taxes it's FDA approved to make sure it's like very high concentration and there's like people still in jail for you know having small amounts of it like years ago a lot of times in the dollar bubble we're like we're the good guys

because like we you know we're america but like we also do questionable things to enforce dollar demand like blow up a rock to enforce the petra dollar you know steal everybody's gold stop you know doing dollar redemptions and then i'm getting the chronology a little out of order here. Sure. And it's just a long list. Yeah, it's a long list. You hop around, pick a century.

It's not just the U.S. It's like every country sort of does this thing. So this is maybe a segue into Rye. Like my other project, Rye is a fork of maker-Dow. You know, try to see if we can make stable coins without explicit pegs to the dollar. And so it is pegged to like a dollar-denominated number,

but it's allowed to float. And Rye has been great so far because of what it's been able to teach us. we want to believe that like the systems that we're building are like improvements over the status quo right Bitcoin gets to say that like because of 21 million you know they're transparent and you know it's not inflationary and the inflation doesn't like benefit as specific cartel right Ethereum gets to make similar statements not quite as hard on the currency side but like you know we take some liberties because we have the utility of the smart contract platform and so we optimize for making that as useful as possible. But we haven't like solved money. And money is like the scam that like every country runs on its citizens. And we have like the privilege in the United States

of like not having it be as bad as most countries where the inflation is like pretty bad and like often you know increases unexpectedly. And like you can't like ask central bankers how to operate a central bank like right now because the way that they do it is so like bastardized from like how it in theory should be done because they just have to like manage their like most of them didn't come up with the scheme they're just like inherited some Ponzi that they're trying to keep alive for as long as possible

and that's like what they're judged you know on their job and so like with Ethereum with things like die the original idea is that it was like... That's such an awesomely like reductive way of explaining what the Fed does is just like prop up a Ponzi and good feds promote the longevity

of the Ponzi. Yeah. Yeah. I'll come back to that point. But yeah, we haven't like gotten past the dollar, right? Like we have our USDC. We're like, yeah, we're defy. You know, we had our die. It was backed by ETH at first.

We're like, yeah, you know, we've decentralized finance. But like, it's still mostly dollars, right? And so we want to look at it and we want to be like, well, how do we get away from dollars? And there's a couple ways, right? There's one which is like, well, back it with something else, right? You can have dollar denominated instrument, but that doesn't come with, you know, the like, USC block lists, for example, if, like, you use dye or something, you know, or even, like, fracks. But with die, it was like, originally it was like, well, let's back it by ether, and then,

you know, the collateral can't be frozen. But then they back it with USC and then you're like, okay, well, shit. Now what? And so that's why with Rye, it's backed only with ETH, but it's still, like, dollar denominated, you know, so it's still somewhat subject to the esoteric policies of the, you know, federal reserve. It just, like, can float, you know, around it and, like, have its own. You mean it's dollar denominated in the sense that, like, if I ask you the price of ride. Yeah, it's a dollar. It will. And the interest rate is expressed in dollar terms.

Like, you know, it started at 3.14. It's like floated down. I think it's like 2.85 now. And so it has a negative interest rate fairly consistently since the crash to incentivize people the deposit ETH to help bribe borrowers get out if they need to. That's what the elevated ride signal on the market tells the system to do automatically. We don't have to have meetings about this. We just let the controller run, sets the rates automatically.

So this kind of thing is nice because what Rye is, it's like sort of a central bank in a box, you know, and like you can like operate your little thing on the blockchain, your toy first principles developed, you know, central bank thing. And then you can use it and then look at theirs and be like, how the fuck did you get there? Like what, what series of, you know, like what monstrosity have you wrought? Like you guys, like if you try to explain, you know, how you get to the Fed and like MakerDout, you know, like starting from something like MakerDow, you're like, Okay, so first you have to rugpole the collateral. Right. You know, Nixon wants to drop bombs on Vietnam. You told everybody that the dollars were pegged to gold, including all the foreign countries, that you promised that you would redeem.

So we'd lie to everybody. We really want to bomb Vietnam. So we print a bunch of dollars bomb Vietnam, but now there's more dollars, same amount of gold. You know, France comes calling with their battleship. Maybe someone else, but they were like, hello, Fort France. Yeah, Fort Knox. Like, give us the gold. And then Nixon's like, public announcement.

in order to defend the integrity of the U.S. dollar, we are ending redemptions. He did that because he heard that Charles Dugall, the third or somebody, sent the battleship to go get the gold. And so the battleship was on the way to go get the gold. And Nixon was like, I'm closing the window. So you guys didn't make it in time. Sorry. We're closed. We're close for business.

Right. And then basically everybody scrambled. People started selling their dollars. And then the U.S. came up with the petrodollars scheme. And so this was like the, let's like pump the Ponzi on the demand side. You know, let's find our like pool two. And so their pool two is in Saudi Arabia. And they made deals with the Saudis and, you know, the other oil producing nations to sell oil exclusively for dollars.

And they give, you know, discounts to allow the Saudis to reinvest in bonds and stocks and whatever. And they get, you know, military bases. and F-15s, you know, and so forth. And so we did this to prop up the dollar in the face of, you know, and so then it's like, the reason I bring all of this up is because, like, you need all this context in order to have a moral conversation about the dollar. Because without all that, it's just like dollar good, you know, alternatives to dollar bad. You know, and it's just like, oh my God.

Like, let's go down the list. And, like, you know, the reason I like to bring this up with Americans is because there's sort of like two places that you get to, you know, when you start thinking this through, you're like, okay, either we're like full real politic. Like, fuck yeah, America, you know, World War I, World War II, back to back champs, right? Like, Dollar Ponzi forever, right? Like, it's the best Ponzi ever. Like, we're winning, right? Like, that's the mentality, you know, like imperialism. We're the best at it, right? Versus the other, which is like acknowledging the dollar as like a cost and your like moral balance sheet because you have to like occasionally go blow up

Iraq because Saddam is selling, you know, oil for euros and we don't like that. We want to set an example. And, you know, like maybe the U.S. empire is like a good thing, you know, good thing. Like generally for the world. Like in terms of our ability to combat China, our ability to thwart Russia, like if the U.S. wasn't as powerful, Ukraine would have a much harder time, possibly also be Russia right now. Right. And so, like, it's a good thing that the U.S. has the strength to fight off these, like, despotic invaders and authoritarian communists and, you know, these types of things. Then, like, at least you've put the, like, Dollar Ponzi thing into, like, a moral, you know, you're like, ah, the cost of doing this is, like, we have to do this stuff in order to, you know, be able to. And then, like, you know, at least that's, like, a more reasonable conversation you can have out of that. Because then you can be like, well, what happens when the U.S. stops being like a good policeman internationally or something, right?

Like maybe this isn't, you know, able to be propped up. Like, you know, it's not morally worth it or something. What you're saying is that at least you are having to consider the worth of it. Yes. As in at least we are not just dumbly saying dollar good. We are actually doing like a cost benefit analysis on this thing. Yeah. And like there's other things, you know, around this too where it's like the dollar being

strong in the sense that like post-1970s petro dollar dollar as the world reserve currency hollowed out a lot of American manufacturing and like middle class jobs and ship them overseas because the currency valuations was more favorable for that. And so like the US became a net exporter of dollars. And so the entire financier class made a killing and everybody else doesn't. Right. And the manufacturing class took the L. And I actually remember explicitly asking Lynn Alden if the Triffin dilemma, what we're talking about here, the fact that the dollar is the global reserve currency, was that the main reason why Donald Trump got elected? And she was like, yes, I do believe that that's why that happened. Because Donald Trump ran on that platform of

manufacturing in Pennsylvania, like all these high manufacturing states that flipped red and elected Donald Trump. They lost all their manufacturing jobs because we just started exporting dollars for free because we were printing them. And then, you know, it's like that domino meme, you know, down the line because we have to export our dollars because of the petro dollar. Like, we lose all of our internal manufacturing drops. And then we elect Donald Trump because we're aggrieved. Yes.

100%. Yeah. These are like the things that are like downstream of the like, you know, currency like scams and discontents of the currency manipulation. Like that's a decision that the U.S. made as an empire was like, We're going to switch to being like a financial thing. You know, we're going to just export dollars and play with money. And then it becomes really important to prop up demand for the dollar, right?

Right. And like the only real collateral we have because there's so much dollars is dollar-denominated debt. Which is real bad. Yeah. Right, right. There's a story that I like to tell. And this is about Thomas Jefferson and slavery. And like the reason I tell this story is because like when we think about this, we like,

we think about this as like a problem that like, you know, it's almost intractable, right? Like you couldn't go protest this, right? A lot of times when I talk to people, they seem to think that like working inside the system is like the best option for making change. Right. And that like almost every problem you can like, you know, solve eventually by working inside the system. And I like to bring up like the American South and slavery and civil war. Thomas Jefferson, the guy who wrote, like, all men are created equal, he also came up with this like really fascinating financial instrument. Slave collateralized debt.

He basically made makerd out for your slaves. So he rolled up to a bank and was like, yo, I've got all these slaves. I need money. Can I use the slaves as collateral and get cash? And the bank was like, huh, interesting idea. We're down. And like fast forward 50, 60 years, the entire South was like using huge amounts of loans like backed by slave collateral. And so like this was basically a slave Ponzi that went out of control.

Like they were yield farming. Right. Like literally, you know, yield farming. Right. And that you'd like leverage up. Right. Right. Oh, I got some money.

Let me buy more slaves. Let me get more debt. You know. Use the yield of the slaves to get more money to get more slaves to put more slaves as collateral and like cycle to back up. Sweet. The slave population of West Virginia, I think, was like 60%. And maybe it was like South Carolina was 60%. And like Virginia was like 40%.

So the slave populations had grown a lot. And like every founding father, like the banks were trading these contracts like fast forward 56 years as if they're like mortgage back securities today. And so it's basically this like bank enforced Ponzi at that point, right? Because it's not like the banks are going to let you off the hook, right? The banks aren't just going to allow you to jubilee. right so this is one of those cases where it's like even if the political will existed even if the moral will existed within that context within the south it didn't matter because the economic reality was that you couldn't get everybody to pay back their debt at the same time in order to like release their slaves and not only that they were like terrified of their slaves like because of how poorly they'd been treating them they're like this is why they made the clan and stuff after is to continue terrorizing them you know as like a first strike but But every founding father died knowing that this war, the civil war was inevitable.

Because there is no way within the system to get out of that slave debt Ponzi. Right. If you're a person in the South and you're like, hey guys, I think this is a bad idea. We should stop doing this. You don't get very far. Right. Everybody sort of has to be opposed to you. Even if they agree with you, they can't help you. Like, Mollick has gone too far, right?

Right. And so, like, my mental model... The only path out is a financial crisis. The only path out is a financial crisis where the collateral, the slaves, are liberated at gunpoint. Uh-huh. You know? Like, that's the only way out of that system. Right.

Like, it can't stop itself. Right. And so, like, the mental model, you know, that comes out of that is, like, like sometimes wars have to be fought to end Ponzi's. Right. Oh shit. You know? I think I see where this is going. Yeah.

You might see where this is going because then it's like, huh, do we as Americans have the political and moral will to end the dollar Ponzi within the United States? Because if we don't, then like, we should expect that people will try to end it for us. and that's going to look like war and we probably deserve that war you know because it's not like we were going to do it ourselves right

that's like an awkward conclusion to come to as a good guy you know okay so what is this metaphor here so like there's a ton of debt out there and we have been printing dollars to pay for like you know cheap Chinese goods and paying for cheap Philippine labor, if we've been printing this dollar and

who are the people that really want the system to end? So everybody that isn't the United States that has to use the dollars, like doesn't benefit from their own seniorage as much as they could, right? Like to the extent that like we go, you know, blow up Iraq or something, we sort of like, to the extent that the dollar is a dominant reserve currency, like we have exorbitant privilege with our senior age, our printing has a much larger market to absorb, you know, our printing. And so we're sort of taking that value from every other country that would otherwise be benefiting from their own senior age in an increased capacity. But of course, it also, you know,

it's more about the strategic rivals, right, like Russia and China want to, you know, they're promoting, transacting using the RIN maybe and the Russian currencies. So, yeah, yeah. Yeah. People also say, like, there's no alternative. Like, what else would you do? Right. Right. And I think that's, like, the other thing you would do is, like, not invade a rock to prop up the dollar. You know, like, you would just allow the dollar to, like, not.

Lose value. Yeah. You would just, like, be okay with some, you know, probably serious loss in purchasing power, which would look like, you know, high inflation for a while. Right. But at the end of it, you know, like a fair system has America. extracting as much value from the global market as it has actually earned with, you know, its contribution to the market, not over and above its contribution to the market because it's

extracting, you know, a rent for basically the rest of the world using dollars as the currency and the American, you know, financial system. So like allowing the dollar to inflate if we hadn't invaded Iraq sounds like, okay, we'll throw up the flag and just we won't let this Ponzi perpetuate. but instead we chose the path where we kick the can down the road because we want the Ponzi to perpetrate it. So this is the thing that's weird, right? It's like why did we invade Iraq? You know, like this is what we were saying about voting and coercion and like democracy.

And it's like, you know, I didn't vote to invade Iraq. Everybody who was in favor of invading Iraq lied about it. They said there were weapons of mass destruction. They printed it in the New York Times. We believed it. They said, like I remember I was 10. I listened to this on the news every day. weapons of mass destruction for years and years and nothing happened.

Right. So like who, it's like maybe, right, the Russian people didn't vote to invade Ukraine. Putin decided to, you know, invade Ukraine. Maybe the American people didn't vote to invade Iraq. But like the pattern of maintaining the dollar dominance, you know, as managed by the Federal Reserve is why we invaded Iraq. How is that different than me as a U.S. citizen being controlled by the Federal Reserve dictatorship? You know, like, if that is the pattern of war in this country, then, like, you know, like, it's not like, you know, somebody actually threatened America. Like, that was all lies.

It was like they threatened the dollar Ponzi. And so we blew them up. Right. Right. So, like, that makes me feel like I'm living in a Fed dictatorship. Right. And this has been the question I've been kind of like circling around like Jerry Brito unrelated to all this conversation. Jerry Brito and I talked to him about like the tornado cash thing, which was one department out of the larger United States government.

One department, the treasury banned tornado cash. Like it had nothing to do with the FDA. It had nothing to do with like Congress. It was just like one part of this broader machine. And so he said the United States is not a monolith. is just this one and part of this broader system that did this one thing. But then if you like zoom all the way out and kind of get a little bit more, you know, satellite view of like the whole entire incentive structure of the broader American system,

yes, the U.S. government is not a monolith. It is a modular set of interwoven agencies and representatives. But at an incentive level, you can talk about the nation state, both the United States, nation states, other nation states as a holistic system, and it works out, like, most of the time, as in if you assume agency by a nation state, you can kind of predict what it's going to do as a whole. And that is weird to me that you can do that, but it works pretty damn well a lot of the time. One of my favorite models for this is, like, democratic processes I model by being like, they react too late and then they overreact.

If that's like all you knew about the United States, you could like model our COVID response pretty well. You know, we're just going to pretend like it's not a problem, and then we're going to shut everything down. Right. Right. Right. It's like you can often do that. And that's like typically our control system as like humans. Like when we think of like, oh, Mollock, you know, like global warming, right?

Right. Sick. We're going to ignore it. and then we're going to overreact and then it's going to be like austerity measures for everyone right so it's like it's pretty common

like this like it's a like you can model things using just get like what kind of control system is this like what is the feedback you know response to

things that come up and like yeah that helps you predict it so holistically like tribes organizations governments they're not a monolith they're independent parts, but they kind of have, like, agency, right?

Like, there's the Leviathan, Thomas Hobbes Leviathan, where, like, it's actually, like, all the interdependent parts are part of this, like, larger creature. And it's like the United States has agency because it has its own wants and desires and, like, desire to live. And it's really the dollar that, I think, is, like, one of the main things that needs to have value. Because as soon as the dollar goes to zero, the United States falls apart. And so it's like the dollar that's keeping things together.

So it's like the dollar has its own, like, demand. to live, desire to live. And it creates this incentive structure out of that demand. That's right. So how does that relate to the democracy ignores it and then overreacts? How do those things relate? Sure. So let me try to apply that theory, right? It's like maybe we don't see the like egregiousness of the U.S. dollar right now, like as citizens within the country. So we ignore it, right? In the same way that like it takes a while for us to decide that slavery is worth fighting a war over, right? It has to, like, grow big enough and oppressive enough. And so, like, maybe one day, you know, we realize that, like, the way we're managing the dollar is, like, not great. Also, I just want to, like, pull apart

a couple things, right? Not liking the dollar and, like, not liking America are somewhat different. Like, you could be a dollar, Ponzi minimalist, right? And be like, we should not, you know, have this reserve currency that we, like, try to prop up demand for artificially. And, like, still like America and be a U.S. citizen and be a patriot even. In fact, I think it's patriotic to want a future for the U.S. that is separate from the dollar Ponzi that we're fighting wars to maintain. I think a better use of America's people, you know, armed force, like, is like not throwing, you know, to help prop up the dollar Ponzi. But what do I know, right? But like, in the future, it could be that we like overreact, right? And then we, or we,

Or like, no country can operate the reserve currency, you know, and we go all in on neutral reserve currencies or something and, like, we start propping up Bitcoin or Ethereum as, like, collateral. That's, like, one. Or it's like, you know, we ignore BTC and ETH for so long, and then we overreact by, like, banning them completely, right? They're both, like, outcomes that I think are, you know, possible for the government. The idea is to try. and come up with systems that anticipate, you know, problems and, like, can work to overcome them. The problem is that it's hard to get people to coordinate around doing that when it's, like, not immediately apparent that that's a problem, right?

So the hope for things like Ethereum is that they can actually solve these global coordination problems. Like, why are we fighting over? Like, the world is on fire, you know, like, we have a global climate crisis, right? Like, things are only going to get more scarce. supply chains are only going to break down on their own. We could spend our effort to try to solve some of these problems, put our heads together, figure out how to clean water, clean air, restore things, but instead we're fighting over Ukraine, right?

It's like maybe one day there's like a radicalist environmentalist league or something, and they like have their own. proposals to boycott things or like protest things or you know there's a bunch of people like sitting in the forest in Germany and they like wouldn't get down from the trees so like they couldn't cut them down that was pretty cool you know things like that or you know throwing wrenches in the way of people destroying the environment although that's not great either because now you know everybody's dependent on Russian gas and the reality is that like that's you know fueling the war in Ukraine now it's like so even sometimes when you try to get away from these

things they still come back. To tie a bow on this conversation, how does Ethereum fix all this? Ethereum fixes all this by inspiring people to try and think about how Ethereum fixes all this. Step one, obviously. Motivational equilibrium. But I mean that like half jokingly. And I actually mean that seriously too. Like there is now like things like Vita Dow that's doing like longevity research on the blockchain where they have like NFTs as like IP and you can invest in that. and help fun, you know, longevity things that you want. Okay. This is going to sound weird.

So, like, every empire is basically a join-or-die-ponsie. Yes. Like, one of the funny contracts that, like, Athens, you know, as part of the Delian League made, I think it was an Isle of Lesbos, and this is pretty funny. Maybe it was another one, but, like, like, the reason Lesbos, like, lesbian, it's, like, they basically, like, showed up to this island and we're like, you guys can join the league or we'll kill you all. and they were like, we will not join the league.

And they were like, fuck it. You know, we're going to climb the walls, kill all the men, sell all the women to slavery. And, like, Lesbos has no more men. That's why it's Lesbos. But, like, you know, what happens when somebody puts a join or die Ponzi on chain? Like, what if the join or die Ponzi on chain is, like, more efficient than the way empires work? like the thing that citizenship sells you like in the maslow's hierarchy of needs of citizenship the base level is deterrence right like i agree to be a citizen of the united states because like if i go somewhere and somebody hurts me like you know they'll maybe get hurt worse right like it means something to me i feel safe and protected you know domestically and abroad right and so like your main like service your main offer as a nation state

is deterrence. So, like, when I think of Coca-Cola, you know, I see, like, sugar water. When I think of a nation-state, I think of, like, an assassination guild with a public goods department. Right? You're like, like, imagine trying to operate a nation-state without an assassination guild, you know? Like, you're going to have a really hard time doing any deterrence.

You mean a monopoly on violence? That's another way of describing it. Yeah. Yeah. That's how we've described it on bank lists before. Yeah, yeah. violence. So yeah, it's just like one of those things. Like I could see, you know, citizenship being disrupted, for example, if somebody can offer deterrence as a service more cheaply, right?

If I join some thing and like now I know that, you know, I'm protected in this way, like, yeah, I'll maybe pay for it a little extra or something, but, you know, like, that's the number one reason. And it's like, maybe you don't need to operate this like massive expensive infrastructure in order to like operate a, you know, deterrent in 2022. Like, maybe it's a lot cheaper. Now, I don't think we're going to see any of that anytime soon. I don't think we're going to see like joiner to I Ponzi's where people are like, you know, you have a softshed.

But like, I'm kind of afraid of it. Right. Because like when we talk about beating mallet, we talk about like these coordination systems. Like what if we unleash, you know, an even better coordination system, right? Something like, you know, religion, which I'm like sort of dynamic. geometrically opposed to, given my upbringing, you know, sort of had Islamic Fundamental's father, fought a lot. But it's like, religion's like what you get when you solve Mollock for your system. Right. Right. Like, I want the males to not infight over the women. And so we're going to make a bunch of

rules to, like, manage our conflict internally. And now, like, we're a really, you know, highly coordinated and, like, more trusting society. And that gives us the opportunity to, like, go take everyone else over and impose our, you know, God Ponzi on them and, like, the way we do things on them. And so it's like, you know, from the inside looking in, you're like, oh, man, how do I solve this problem of, like, these monkeys just, like, fighting over, you know, reading rights and, like, resources and shit. Yeah, and, like, fucking killing each other over this shit, like, the fucking animals, you know, and then you make some, like, crazy rulebook and you kill everybody who doesn't enforce it. And then you end up with this, like, God Ponzi that lasts 2,000 years.

And so I think maybe there's like positive Ponzi's that like we should be optimistic for. That it's like, you know, join and thrive or something like. Right, right, right, right. Live and let live Ponzi. Right. And like that's that's what we should be trying to help promote is like I agree to, like, I don't know, like I agree to not pay taxes would be funny. Like as a commitment device, you know. I'm not advocating for that.

I think paying tax is important. I just think like if you end up at the point that you're like, okay, the government's just blowing shit up and like not saving the world. Like we need to be saving the world. Government. Like I'm now boycott, you know,

like being able to coordinate, you know, activism, boycotts, movements to try and make our systems more accurately reflect our values instead of like our systems just being Ponzi's that sustain themselves indefinitely. even when they are opposed to our values is like the idea

maybe more things need a rage quit you know it's like every system it like starts out useful and it like ends up scam everything it's like exists on a spectrum of like useful and scam right at like the beginning of its life it's like useful the end of its life is scam that's why that we need the destructive creativity to burn down some of these like scams that have outlived their usefulness in 2022 certainly anyway Well, I mean, I hope people's imaginations have been expanded to what it is we're actually doing here, why things are Ponzi's all the way down, and how it's also just coordination. So thank you for helping me tell this very creative story. Thanks for having me. We've always come up with something new when we do this. It's always fun talking to you, David. Appreciate your contributions to the space and helping educate everybody and raising the army to slay Mollock. Forms by heart. Well, as the lead general of that army, I've been following you for a while. And I'll continue to. to follow you into this very weird world

that eventually people always seem to catch up to you on. I've been inspired by how much I've been able to learn from the people that I helped inspire. So it's two-way street. Cheers to me. Thanks, David. Peace. Have we're going.