Bankless - SotN #13 - SOBERING with Anthony Sassano (SushiSwap Founder DEFECTS, Farming 4 Gitcoin)

Episode Date: September 9, 2020

STATE OF THE NATION #13 - Tuesday, September 8th, 2020 Watch on the Bankless YouTube Channel The State of the Bankless Nation is....SOBERING! No, we haven't rewritten the laws of the universe, things are still the same... Follow Anthony on Twitter! -----  GO BANKLESS WITH THESE SPONSOR TOOLS: 💸 UNSTOPPABLE DOMAINS - HUMAN READABLE NAMES FOR ETHEREUM AND CRYPTO ADDRESSES 🌈 ZAPPER - ULTIMATE HUB FOR DEFI - ZAP INTO DEFI  💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS  💸 AMPLFORTH - MONETARY EXPERIMENT FOR BASE MONEY  ------ STATE OF THE NATION #13 - Tuesday, September 8, 2020 The State of the Bankless Nation is....SOBERING! Special Guest...Anthony Sassano @sassal0x on Twitter TOPICS: 1) SushiSwap Founder dumping all his Sushi; defecting from the protocol 2) The newest wave of ETH 2 killers is here 3) Protocols directing funds to Gitcoin for Gitcoin Grants: BULLISH for ETHEREUM ANNOUNCEMENTS: 1) Aave Founder Stani on the Bankless Pod: https://www.youtube.com/watch?v=b76HL0jFctQ&t=938s 2) AMA with Loopring's Matt Finestone on THURSDAY 3) Tactic coming out on the Bankless Newsletter: How to get Yield SAFELY. Subscribe! https://bankless.substack.com/ We show: 1) Sushi Founder Market-Dumps Sushi 2) Ameen Soleimani post-mortem twitter thread 3) Sushi Founder: "I'm a good guy" 5) Kevin Owocki submits 1% YAM treasury to Gitcoin proposal 6) Andre with the DUNK: 7) David puts the final nail in the coffin 8) BASED now giving Gitcoin 2%! --- ACTION ITEMS: 1) READ: Sushi's Sin of Betrayal: https://bankless.substack.com/p/sushis-sin-of-betrayal-market-monday 2) READ: How to use yEarn to maximize yield https://bankless.substack.com/p/how-to-leverage-yearn-to-maximize 3) Subscribe to Catch SOTN LIVE every Tuesday at 10am EST (2pm UTC) https://www.youtube.com/c/bankless ----- Don't stop at the video! Subscribe to the Bankless newsletter program http://bankless.substack.com/ Visit the official Bankless website for resources http://banklesshq.com/ Follow Bankless on Twitter  Follow Ryan on Twitter  Follow David on Twitter Follow DeFi Dad on Twitter  ----- 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. Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

I welcome everyone to episode 13. Unlucky, but also lucky episode of State of the Nation. Really excited to be here. David, how are you doing today, man? Pretty good. Pretty good. You know, there was a lot of fun times happening in the, in the DeFi world. And so, you know, those, we had to, like, scale back how much fun we were having. And that seems like what happened in the last week. Yeah. I loved your tweet about that. I hope we get into that about the nightclub. All right, we're going to get there, guys. So just for folks who are with us for the first time, or it's a handful of first times here, here's what we do. We talk about what's happening in the bankless nation.

So that's D5. That's crypto. And we relate it to the big picture themes that we speak about on the bankless podcast and talk about on the bankless newsletter. And we hope to drop some insights and action items. And most shows, we have a special guest as well. And this is no exception. So we brought on Anthony Sassiano to talk a little bit about everything that is happening in the DFI space. So that's sushi.

We're going to cover. We're going to cover Gitcoin grants. We're going to cover some other things as well. Really excited to have Anthony on. This comes out every Tuesday. So you can watch it live. Some of you are watching this live on the bankless YouTube channel. Tuesdays at 10 a.m. Eastern time.

You can also catch it on our podcast stream. the very next day on Wednesday. So that's where we release it on YouTube and also on the podcast. Just a couple of announcements. David, that podcast episode that we just did with Stani from Avey, like, what did you think about that, man? That was like fire for me. I mean, Stani is a legit crypto native.

He's the type of dude that's not going to exit scam his sushi, right? What do you think about that? I think as like a case study for how founders in this world are different, that episode will stand the test of time. I think that there's going to be a lot of people that are interested in building something over the next two years, three years, five years in Ethereum. And I think they're going to listen to that episode to kind of like get a gist for what Vance said in his podcast. Like, are you about that life? and as Danny as a guy who is about that life and that life being building a crypto economic protocol

he's just an exemplar model for it so a fantastic episode. Absolutely. So that came out yesterday. That came out on Monday so make sure you get caught up on that episode as well. It's a long one. People have criticized our episodes because they're getting a little bit longer, David. You're only getting longer.

I don't know, can't stop, won't stop. It's good content, right? I enjoy them. All right, well, as long as we're enjoying it, David, That's good. That's all we need. All right. We're also doing an AMA on Thursday with Matt Feinstone from Loop Ring. So if you're curious about Lair 2 and Gas Feas, Loop Ring is a fantastic solution for that. So we're going to ask them all about how Ethereum scales. I hope. That's an opportunity for the bankless community to come in with their questions and ask Matt anything.

We've also got the regular program going on in the bankless newsletter, awesome tactic coming out today on how to get yield, but in a safer way. So make sure you're, tuned into banklist.substack.com for the newsletter. David, before we get into the main show, I'm going to ask you the question. We ask at every state of the nation. And that's this. What is the state of the nation this week, my friend? The state of the nation is sobering. In any mania or any like just tulip, tulip fascination, any peak, there's this attitude that like the old laws don't apply. We're in this new paradigm. And that's like a top signal, right?

And so this yield farming craze, the liquidity mining, the whole, like, we found a new way to bootstrap a community. It's going to be great. And this is just going to be the thing that carries us off into success. Like, that's what we thought about without ICOs, too, right? And so this whole sushi drama was a very sobering reality check where we now realize that, no, like human nature still applies. Like, we didn't just recreate the fundamental laws of the universe.

We are still grounded by the laws of economics. So we're sobering up. So a wise man on Twitter said something about like it's like a nightclub when the lights flash on. And like everyone's like sweaty and gross. And you look around and you're like, oh my God, what just happened? What were we doing? Yeah, 2 a.m. in the nightclub. People were sloppy.

People were gross. Yeah. Then the lights turned on. There's just sweat everywhere and like, oh, you still have to get home somehow. Oh, yeah. That's what just happened. I'm getting that visual. All right, awesome. So that's what we're going to talk about. So State of the Nation is sobering this week. And before we get Anthony on, before we dive into everything that's been going on with sushi and what that actually means, let's talk about our sponsors. So the first I want to tell you about is Unstoppable Domains. Your eth address, like we've talked about many times on the show, is a bank account. It's a bankless bank account, a bank account essentially for Internet natives. But one big,

big problem is it doesn't have a human, human readable name. So if I try to send David some eth to his Ethereum address, I have to plug in something like zero X, E3, B, A, blah, blah, blah. We need domain names that are human readable that we can plug in and wrap our eth addresses in. How about a dot crypto domain name? You can get that at unstoppable domains.com. They allow you to search for your blockchain domain name and easily launch web websites on decentralized web technology like IPFS. They also allow you to manage existing domain. So if you have a .eath, ens domain, you can plug that into the unstoppable domains.com manager and actually manage what address it routes to. It gives you some pretty cool options for also

paying for the .eith domain. So websites have dot com. They have dot org. They have the domain name stuff figured out already. The crypto space needs to figure that out. and Unstoppable Domains is helping go pick up a domain name for your bankless bank account at Unstoppable Domains.com and register a domain now. All right. So for those of you guys that went through the 2017 bull market, it was characterized by like you waking at least for me. I rolled off my bed, pulled out my phone and refresh, refresh my blockfolio.

Well, now lately I am going to Zapper. And the reason why I like Zapper is because Zapper. Zapper actually looks at my wallets on Ethereum, right? So, Blockfolio doesn't. Blockfolio just reports what you input it into it. So if you ever make a trade on Uniswap, you've got to pull out your blockfolio and make an edit. Zapper doesn't do that because Zapper uses actual real data

from your actual inputted Ethereum wallets to give you a portfolio report of where all your money is. So not just the assets that you hold in your wallet, but also the liquidity that you've provided to Uniswax, to balancer they even update it for the latest yield farm any sort of debt that you have any sort of interest that you're accruing is got it all it's got it all because it goes right for the data and so really fantastic team at Zapper and you can also make transactions through the Zapper portal it's not just a

place to view your portfolio but you can actually interact with defy at the zapper.fI website they also have a fantastic tax plug-in right so if you are just trying to get your taxes done. You can press the tax button and it generates a tax report so you can pay your taxes. So really a one-stop shop for everything that was messy in the last bull run. I'm really excited about this bull run, largely because Zapper is going to make this, watching this bull run go a lot easier. So check them out at zapper.fi.

And you can plug in your Ethereum wallets and get that portfolio report. So check them out. All right. So David, let's bring on our special guest. This is Anthony Sasano. Anthony, it is so awesome to have you on, man. Are you there? We're talking about sobriety in today's state of the nation. So we found the most Ethereum sobered guest we could. We know you are, you're always sober, my friend. Always have some good insights. How's it going, Anthony?

Hey, guys. Thanks for having me on. So, yes, I think I'm with you. It's been very sobering over the past few days, right? We went from the high of $480 on Eath to a low of like $310 or something. We kind of like raised all the gains we had made over like a month's time. And yeah, it wasn't it wasn't fun. But in hindsight, seeing all these crazy gains, these, you know, 10,000% APY on these kind of food ponzies or food games or like all these stuff happening, you kind of, you look and you're like, I should have seen that as a top. Yeah. Yeah. The only thing was missing where it was like the Uber guy asking about like, you know, where he could farm yams or something like that.

That was the only top signal listing. Okay, but like does this mean bull market canceled, Anthony? Like you wrote something really good in the Daily Gway this morning about that. What do you think? No, I actually think we're still on track. I think we're fine. I don't think this is going to lead to another kind of two-year bear market or anything like that. I think that it's just a way to reset the market, right?

people were getting over leveraged, people were getting too greedy. They were throwing money at, as I said, random things like food coins and things like that. So I think we needed this. We needed a reset. We needed a kind of mini-de-leveraging event. Yeah, yes, we probably followed the kind of stock market as well in some way. But yeah, I don't think this is going to put us into another crypto bear market. That's just not what I'm seeing.

Okay. Well, let's talk about some of the greed and some of the de-leveraging here. maybe we could just start with sushi because that's kind of our main I guess our main course for today's state of the nation. Anthony, I think it would be super helpful because all this stuff happens quickly. You know, some people are like they were on vacation last week or, you know, they just haven't been looking at defy every day. But like sushi is what?

I don't know. It's like a week and a half old, not even. So if people missed that, can you talk about like what sushi is and kind of get us up to speed on some of the main events that have gone on and why this is relevant and worth talking about now? Yeah, yeah. I mean, first of all, I think I'm still recovering from a bit of food poisoning from some bad sushi over the weekend. But yeah, you're right. Is that a metaphor? Is that real? Definitely a metaphor, man. I don't look at. But yeah, so basically, you said it, Brian, it's about a week and a half old. Basically, what it is is it's kind of like a clone of Uniswap, but with a with a

token that claims to be community governed. So this kind of trend of community governed platforms has exploded since the YFI launch, the native token of the EURN protocol. And you know, everyone's trying to jump on this train and say, okay, we're like a fair launch protocol. You can come here, you can farm our token, and the community will govern everything. So obviously, Sushi Swap took advantage of this. They managed to get over $1 billion worth of TVL in their in their protocol. The funny thing is, though, is that the TVL was actually just uniswap liquidity provider tokens. So their value lock was still in uniswap, but what they were going to do and what they are still doing is what I like to call a vampire attack on uniswap, where they're going to

basically take the liquidity and force migrate everyone who's staking their uniswop LP tokens on sushi swap and kind of change it to the sushi swap exchange, which is very sneaky. We haven't seen this done before and not at this scale either. But I think as well, it's worth mentioning that it's funny that we saw this play out over the first few days. There was a guy called Chef Naomi, an anonymous person who set this up and everything. And everyone was like, oh, you know, this is great. This is awesome.

Like this is something that can actually challenge Uniswap. And it was really weird because it's like, hey, this person's completely anonymous. Like had no rep before this. Like, why are we trusting them? And of course, they decided to quote-unquote exit scam on the weekend. So, you know, the farming that was going on what ended up happening is like 10% of the sushi tokens that were being farmed went to a dev fund, which was solely controlled by this chef no-mey person. And then over the weekend, they decided, well, I think I've built up enough capital here. I'm just going to sell this sushi on the market, which equated to about $15 million worth of eat.

And then, yeah, since then they've transferred control of the protocol over to SBF or Sam Bankman fried from FTX, the founder of FTX in Alameda research. And he hasn't tweeted, you know, since that happened, like two or three days now. Or he or Shia, I don't know who it is. I mean, he, if you believe, the chef hasn't. The chef hasn't tweeted since transferring this ownership over. So, you know, I've been tweeting about it and alluding to it. There's so much like, quote, unquote, sciops going on here.

Like, I don't know if this was a grand plan between all these different parties, but there's just so much, so many coincidences that happen and so many things that happen in succession. It kind of feels like this is an attack on uniswap, right? An attack on Ethereum and Defi. And it could be a very successful one as well, because we've never seen a vampire attack on uniswap, as I explained. So, I mean, it still has over a billion dollars of value lock. The migration is going ahead in, I think, less than 40 hours. where literally everyone will be forced to migrate if they're still staking their liquidity provider tokens. So you have a choice.

Obviously, you can remove the tokens. But, you know, why would they if they're still farming sushi? Sorry, if they're still farming sushi. And on top of that, Sam from FTX said that he's going to actually pay millions in sushi to people who stick through with the migration. So this is, yeah, this is crazy. Like, this is the craziest thing I've seen in Defi probably ever. I think the biggest indicator that this was going to happen was the combination of like the 10% dev fund with the anonymous founder, right? And I don't want to harp on anonymous founders because

this whole industry was born on anonymous founders, right? Like Satoshi was anonymous for a reason. And in this spirit of what yield farming is, is trying to get a protocol out into the community, having an anonymous founder is really helpful in that regard because then it, it can just be transferred to the community. But then that 10% dev fund came in, and I feel like, I mean, me included, I just overlooked it. It's like, yeah, you know, a dev fund. Like, in Ethereum, we want to fund our devs.

And so that's aligned with the Ethereum native too, or the Ethereum, like, ethos as well. But, like, it just becomes really delicate and precarious. Like, there's this narrative around, like, we can just yield farm our way through VCs and we don't need VCs anymore. But then we ultimately, like, are gambling with, like, the altruism of these individuals or whether they are in it in it for the right reasons or not and

and that's kind of where like it all comes down to like human nature like i don't know the personal wealth of this sushi individual prior to farming sushi i'm assuming he had a decent amount because he farmed a decent amount of sushi but like he made 15 million dollars in seven days like good luck not convincing someone to like dump right like 15 million dollars is hard to argue with yeah and it's funny though because like I agree with you. I don't have anything against like anonymous founders or stuff like that. But the fact that the 10% dev fund had no vesting at all. And, you know, it was an anonymous founder that came out of nowhere and we basically had to trust that they wouldn't sell. And I pretty much called it from like day one. I said this dev fund kills this project for me.

Like not just that, but I mean, the dev fund, the the attack on uniswap as well. It's like, you know, it always looked like a direct attack. And then even the, the iron. of it too was that the chef was on Twitter calling out Hayden Adams, the founder of Uniswops, saying that he had everything, he had VC money, he had a nice salary, and the chef had nothing. Well, now the chef has actually made more money from Uniswap, basically, than Hayden has made in, and Hayden created the damn thing. So it's, it's just, I mean, it's gross. And I really think that we need to kind of, as you said, it's a sobering event, right? But we really need to reflect on this and reflect on how fast we are to trust people in this industry. Right. So I want to share

this. I want to share this now famous tweet that Scott shared, and it was a statement that the chef made in Discord, right? Do you guys see that? This is a tweet. I think it's loading again, but basically chef says, I'm a good guy. I'm not going to, oh, having the tweet, he's basically, I'm not going to dump on you. I'm a good guy, right? Like basically saying, no vesting commitment for me, but I'm not dumping. I'm a good guy. Trust me. This was on August 28th at the very beginning of the sushi saga. Right. And we just trusted it. And I think, like, Anthony makes up, it makes a good point because, like, it was a quote unquote attack on uniswap. Like, this wasn't a yield farm like other yield farms were, right? Like, it wasn't yams. It wasn't

wify. It didn't create something. It forks something. And it also forged something that was already like basically community owned at its core right like there's no like sure there's vc ownership over over uniswap but there's no VC tax on uniswap users right and so it was a very opportunistic like yield farm that just used the labor of the uniswop team which weren't taking a cut or fee of any sort and then forking in a token to generate this yield farm and then adding a dev fund right so it actually is way worse than whatever VC components added to uniswiswark Well, I want to ask David, so you said, you said you made the same, we just trusted it. I personally didn't just trust it.

Like I was like, so there was, I feel like there was a division of the, the defy community before the chef turned out to exit scan, everyone. And then there was a further division of the community kind of after. But I felt like before the division of the community, I'm going to maybe just like try to break it down into a few different components. it parts, but you guys add kind of parse here, like this is just the pulse in the community. There were those that thought it was a direct attack on uniswap and thought that that was bad, right, including Hayden Adams. He's like, look, guys, we've spent, you know, the last two years building this thing and here comes this 10-day-old Twitter account. He's forking. You guys are just falling all over yourselves thinking that this is the greatest thing ever, right? So there's

So people, there was a group that was super speculative, didn't like the experiment from day one. I personally was not in that group, okay? But I understood the point. I understood the perspective. There was another group that was like, okay, well, this could be, and I think you used the phrase, David, before, this could be like a Shredderner's cat thing, right? Like, this could totally be, and probably is given the incentive play of the 10% dev fund, an exit scam in process, right? or the chef could turn out to be altruistic and be like, okay, I made a faulty design decision with this 10% and I'm allocating the 10% not to me, but to do this, you know, group of governors.

Yeah. And restore the credible neutrality. And, you know, and I thought, well, either there's a 10, 15, 20% chance of that happening, but 80% chance that it wouldn't. But okay, the experiment is fine. The experiment is okay, right? Because we want to have experiments. and that's how Uniswap sharpens its sword and gets better.

That was probably the camp I was in where I was like super skeptical, but also respected the experiment. And then there was another camp, a third camp that was just like, oh my God, like we're worshipping Chef Nami. This is the second coming. This is everything that Uniswap should have been. There's no chance he would scam us. He is a good guy.

He's saying he's a good guy and we believe he's a good guy. Farm, farm, farm, farm, farm, farm. Farm, farm, farm. And that's a group in Defi I did not identify with at all. And I was kind of annoyed about because it's just like, guys, we talk about why are you here in crypto? Why are you here in Defi to build trustless systems? And the very first thing you're doing is you're trusting a 10-day-old Twitter account and all the SciOps, as Anthony mentioned, that could be going into that. Like we have no idea, you know, who's behind, who's actually behind this project.

You're so ready to give them trust. That's not what the space is about. be ultra speculative. Like be skeptical. Put on your Bitcoin or hat again, right? Like, verify. So that was a group I did not identify with at all and ended up being kind of frustrated with. I don't know. What do you guys think? Do you think those were the groups and like which group did you most identify with? Those are definitely the groups. And I definitely fall into the second group. It was extremely skeptical of it from day one. I didn't actually know about the 10% dev fund until like the second day or something. And that's the second day. And that's,

that's when my skepticism went like really like high. I was like, okay, there's a dev fund. There's no vesting. You know, I've been in the space since early 2017. I know what that looks like with the ICO saga, right? You're just going to get like people, I mean, why wouldn't you, right? Why wouldn't you dump if you made $15 million in a week off the, off a fork, right? Like, come on. I mean, and you know, I was thinking about it from a legal perspective. What, how can someone actually go after this person? Like, for one, we don't know who it is, right? Two, they didn't actually actually do anything except a few comments about saying they weren't going to dump, right? But there was, you know, they didn't take any money from anyone, right?

It was just, it was coming out of the, the funds that were being distributed via the, the smart contracts. So I don't know what legal leg you would have to stand on going after this person. So they probably thought, well, why wouldn't I do this? Fifty million dollars. Like what? Yeah, no skin in the year. Yeah, exactly, exactly. And it's just, it's, it's insane. And it was insane to me. The most insane thing is that third camp, that group of people that, I mean, I can respect the profit maximalists, right? The ones who just farm these things don't care about any of the technology or whatever. I just want to make money. Yeah. You can do you, right? I made money off sushi swap as well. Like, I'm not innocent here from a kind of farming perspective.

But for people to say things like, oh, it should kill Unisob because Unisop is B.C. owned. And, you know, it should do this. It should do that. Was gross to me. And I'm all for healthy competition and pushing innovation forward and, you know, not turning something like Unisop into a quote-unquote monopoly. But I just think that, you know, these things that are basically attacked should be called out and should be, you know, there should be a light shown on it, especially when there's a central party benefiting from it to the tune of millions of dollars off of someone else's work. Like, and that's just going to happen because that's the space marine. It's open source. Everything's out there. I mean, most things are open source. Some things are actually,

you know, proprietary and if you kind of fork it, there could be legal risk there. But for the most part, it's open source, right? We saw, I mean, Tron is literally built off of Ethereum, right? The original Ethereum J-client was forked to create Tron. We can't stop it, but we can call it out and we can be honest with ourselves about it. Yeah. I wrote about this in the Market Monday piece, and a little snippet of what you just mentioned, Anthony,

where like the sushi guy didn't actually do break anything. Like the protocol wasn't exploited. There wasn't a bug. Like it debatably wasn't an exit scam. And so like the real crime was that like the sushi founder defected from the community, right? Like he created this incentivization and this narrative that we're going to like do this community owned Uniswap. And you're going to get rewarded for yield farming. Same playbook as all the other farms. And then you're also going to get rewarding for supplying liquidity to the token.

same playbook as all the other farms. And then once there was a ton of liquidity, the guy dumped because he created the liquidity to dump on them, right? And so it was a massive defection from the community because like, and like I think it's also worth having a conversation. Maybe not, maybe today is not the right spot. But like Bitcoin was the original yield farm, right? Like Bitcoin mining was the biggest community growth operation ever.

And it discovered yield farming before we named it yield farming, right? And the whole idea, the reason why Bitcoin is so successful is that created a community that, like, signals their, uh, their lack of defection, their cooperation with everyone else. And that's why you see Bitcoiners taking screenshots of their cash app purchases and like signaling it on Twitter. It's like, yo, just bought like 500,000 sats, never selling. And then that's their deal. That's their like in, that's their in group like, uh, signal. And, and that was what all yield, that is what all yield farms aspire to become, right? And like, and it's really fragile in the early days. In the first like seven days is the most fragile times of any community ever. So like imagine if like Bitcoin went to, I don't know what the market cap of sushi was, but like if Bitcoin went to like a billion and a half dollars or whatever in the first like 10 days. And then Satoshi was like press the sell button. Like that universe doesn't exist because it couldn't have been.

But that's basically what happened. And Bitcoin probably wouldn't have worked out if Satoshi had done that. Right. And so every single farm that ever comes up ever, is about a game of trying to gather enough community stewards, and community stakeholders to all agree to the social contract of not defecting. And that's what the sushi swap founder, that was his sin. Like, he didn't break any laws.

He didn't commit any fraud. He sinned by defection. He defected from his community. And, like, it's also a fucking point. Like, he could have not done that. And it would put, his life would be largely the same, if not better, because that was a cool community. Like, again, it was Shroding,

year's cat of a farm like it could have been like one of the coolest things ever and he decided to go for for 15 million dollars in each and that's why i kind of like think there's a i guess i say the word a lot now these days but like a sci-ops angle here where things just played out in such a weird kind of like timeline like that i just can't help but think that there was like this this kind of loose plan from the beginning right and maybe they had this plan and it got a way ahead of what they thought it would. Maybe they didn't think, oh, we're going to get over a billion dollars of TVL in our protocol within a week.

Like, they probably didn't, right? That's actually unheard of for projects until the farming stuff came along, right? So maybe they had this loose plan where they're like, okay, this is how we attack Unisop. This is how we get liquidity. So, Anthony, can we go into detail on that? Because I think that Psiops angle is super interesting. And Ethereum DeFi community, like, we have to be wise, right? Like we have to be like serpents about this.

We have to like be like Bitcoiners who are, you know, ready for someone to screw them over at every single opportunity. That doesn't mean be completely close-minded, but we cannot be naive because I think the aftermath of this is even more interesting. Like the events that and the information that kind of came out after the club lights went on and everyone looked sweaty and gross, as David said, right? So not a huge surprise to many of us that the anonymous founder with zero skin in the game decided to take $15 million and leave the community high and dry, no reputational risk,

not a huge surprise. But what was somewhat interesting is the way it played out after that. So Anthony, can you talk about like kind of some of the events, right? So just recap us. So chef Nami takes his, her, money leaves, right? And then it seemed like this other figure, SBF gets involved from FTX exchange and he kind of like becomes the hero of sushi and there's that whole angle. And then there's some evidence possibly that the identity of the sushi chef is actually somebody who

is maybe closely associated with Sam. Like tell us about this craziness because that to me lends credence to this whole notion, this whole possibility, again, it's all possibilities, probabilities, that this whole sushi thing could have been an attack, a Psiops attack against defied, Enoswap, and Ethereum from the very beginning. So tell us those events and that angle things. Yeah, yeah. So I think, just want to kind of like, before I jump into it, I do want to say that I think a lot of people, when they hear these things and they hear these theories, they think that they're just conspiracies, right? Because they're so hard to believe sometimes

or they don't believe that someone can be this kind of like scheming, right? And they don't believe that someone could do this. But if you spend enough time in the community and you watch things very closely and you pay attention to people's motivations and what actually drives them to do certain things, then you can spot these things pretty easily. So with the sushi swap thing, my grand theory is that this was all pretty much planned, as I said, but it got out of control.

and and you know, it got way bigger than what they thought it would be. So I guess basically with the chef being anonymous, he could do whatever he want. So during the week he built up this really fierce community because that's the first thing you'd want to do, right? You'd want to build up this army of people to defend your protocol against anything. So they went out onto Twitter straight away and they started attacking Uniswap, right? And maybe not attacking directly, but started saying things like, you know, this is going to beat Uniswap because one, they're part of a new community and two, they're getting money from

it too. Like they're incentivized to get their sushi price, the sushi price to go up, right, for this thing to continue. So that's the first thing I would do if I was trying to take down kind of like Unisop. You need the community. So once you have the community behind you, you know, the rewards are good enough because people are hearing about sushi. The price is good. So the APY goes up, more TVL gets locked up, right? Then the theory of this thing could kill Uniswop starts to really take off.

And you start to really see this traction play out. So, you know, that succeeded, obviously. and they got a lot of TVL and it lent credits to those theories from people. And then it continued on. But then at some point, and for some reason, Chef Nomi decided he would just dump his sushi, right? After building up this community, he thought the best course of action was to dump. And maybe they wanted the money, right? But I don't believe it's as simple as that.

And this is going maybe a little bit deeper into the rabbit hole here. But I do think that this was done on purpose, right? what you do is you kill the protocol right or you kill the community or you put a wedge in the community you defect as david said you you you make the community think that all hope is lost right the price dumps price goes to like a dollar or something from from a high of like 10 dollars it was that like four dollars i think before this happened but it goes for dollar and then the next day the white knight comes in right sam comes in sam comes in sam comes in says i'll help sushi right is sam sorry sam bankman fried from from ft xx

The CEO of FTX, which is a pretty large crypto exchange. If I was to say, like, what I compare it to is probably Binance in terms of, like, how fast they move through things and what they want to do. Sam also works closely with Solana. He's building a decentralized exchange on there called Serum. So it's kind of like what CZ tried to do with Binance, with like the Binance chain and everything. But Sam's playing it a bit differently. I think Sam has identified the fact that the Ethereum community can be naive and can. and he wants to go after that, right?

And he wants to take DFI. Okay, and Sam was like involved as a participant in sushi at the beginning. They listed it, right? On the exchange. And they were the biggest farmer of it because they have a lot of money and they get really involved with DFI. So he's probably the largest sushi holder as well. And yeah, he, yeah, he's most incentivized to see this thing continue too, right?

So there's that angle as well. But the way I viewed it, it was just like he just, saw this, maybe it wasn't a grand plan, but he saw this opportunity where he was like, okay, I can come in and be the white night now. So what ended up happening was someone anonymously on Discord. So this is another thing. Someone on the Discord anonymously said, and he actually had the name like SBF, right, on the Discord. It wasn't, it was a fake SBF, but he had that. And he said, give me control of the protocol or something like that. And then everyone's like, oh, this is a fake SPF. But then people are like, well, why don't you just like tweet about it or something? And then I think

Sam tweeted about it and he's just like, here's my address if you want to pass kind of the ownership to me. And then Jeff Nome was like, okay, here you go. And he basically passed the ownership of the protocol to SBF.

He, I think he opens source like the front end, put it on GitHub or whatever. That was like one of his last tweets. And then he vanished, basically. He's like Kaiser Soze, right?

Just gone. And then Sam now has control of the protocol. He's setting up like a multi-sig thing where people can, there's going to be a bunch of signers on there. And he's doing the, the migration as well. So that vampire attack I talked about. And now everyone's like, oh, well, Sam saved sushi swap. This is still good. The community is still fine. This is our new white night.

And Chef Nomi gets away, as I said, Scott Free. He gets away with this money. Who knows who he is, who knows, you know, whatever he is. And I think I need to basically explain the theories around who he is as well. I know I'm going on long here, but this is, this story is crazy. So basically, once this happened, obviously people are going to try and identify this person, right? Like, who is this person? Can we identify them? Can we actually hold them accountable? So they basically went out there and discovered a bunch of different things and a bunch of different evidence about the, the CTO of Ban Protocol being linked to Chef Nomi. There was things like the domain name for Ban Protocol and, so the domain for

ban protocol and Sushi Swap was on the same hosting provider and they were the only two crypto-related things on there. So that was like one piece. of evidence. There was evidence that the ban protocol CTO liked like Halfstone and built things for Halfstone and Chef Nome is a Halfstone character, which was, I think, more circumstantial than hard evidence. But there was a bunch of other evidence as well. Then someone came out and said that Sam and the CTO Ban Protocol actually went to school together, like college together or whatever. I haven't fact-checked this all myself. FTX was one of the first exchanges to list, Sushi. Is that correct yes but that could also be because that were the biggest farmers of it too right so

they were also one of the biggest farmers of it too right right but that's the thing there's all these things happening and this is why i kind of like go in my mind i'm just like it's just it's just too many coincidences to be you know uh to be not like uh like this kind of plan and maybe it wasn't a plan from the start maybe sam saw the opportunity and was just like d ming the chef the chef no me person and was like okay how about we do this right um you know or And there's another wrinkle in this too, right? So Sam comes in, White Knight, I'm going to take over multi-sig. I'm going to take over the protocol and restore it to its former glory, right?

Price gets a bump a little bit, but also submits a proposal to migrate some of the sushi protocol or maybe the entire sushi protocol to this new Ethereum killer, I guess, this new. this new decentralized exchange quotes air quotes as as you mentioned called serum right which he is primarily backing and building is that another angle of this like yeah i mean just trying to see liquidity for his serum exchange that was proposed during like the week as well um but yeah it's just another thing right there was that was so heavily involved with sushi swap from the very beginning right that it's just it's there's too many too many things links them altogether, right?

There's too many coincidences. I just, yeah, I mean, and from what I know of the people involved, right, and things going on, like this does not surprise me at all that they would act in this way for their motivations, right, based on what I believe their motivations to be, especially if you're building a competitor decks, right, or a decentralized exchange to an Ethereum, the centralized exchange, which he is, right? Sam is. And serum is being advertised as basically like this grandiose

thing. It can scale, you know, there's cheap fees, whatever, right? And of course, they're ignoring the fact that it's pretty much centralized, right? It's the, it's the finance chain of 2020, basically. Yeah, exactly, exactly. So it's just, there's so many things linking it together that I think that at this point, like, calling it a conspiracy theory is just like not doing it any justice. And yeah, yeah. Okay, so we talked about the division in the defy Ethereum community pre, right, sushi chef-nomi exit scam, right? But how about post? It seems to me, and I haven't dug into this, but my sense is, like, now a larger number

of D5, they're like, ah, I see what's going on, right? This is, you know, this was possibly a plan from the beginning. This is a total rip-off. This is not the protocol we thought it was, you know, others in the camp who kind of knew it all along are saying, basically, yeah, we told you so. But there are some in Defi who are kind of celebrating Sarum and Sam coming in and saving sushi and then hitching themselves to that train. Is that kind of what you're seeing?

Are there still these two camps? Yeah. I mean, I'm actually really happy that after this happened, a lot of the people in the Ethereum community that maybe were either on the fence or supporting sushi swap kind of backtracked on their support and kind of like discovered what had happened. But yeah, there seems to be a vocal kind of community that, are, you know, that like this new serum thing that that's being built. They like the fact that it's going to migrate to other chains.

They, they call it like, they basically say, oh, you know, if Ethereum maximalists don't like this, then they're just like, you know, they're being like Bitcoin maximalist and stuff like that. Are you, sir? Are you an Ethereum maximalist, sir? I mean, oh, God, I've talked about this so many times before because people always ask me this. but I mean, I'm, I guess I'm an Ethereum maximalist to the point that everything's happening

on Ethereum and it aligns most with the values that I have, right? And what I want to see kind of happen in the world and in the in this space in particular. Something like, and not just not to pick on any of the other kind of chains, but something like Solana does not appeal to what I want to see. Something like EOS does not appeal to what I want to see. The other chains don't appeal to it. Plus they have like little to no adoption. So it's just boring, right?

like I'm a fun maximalist. I'm a let's do cool shit maximalist, you know. So, but at the same time, I do think that a lot of these competitors have to attack Ethereum, right? They have to come at us from all angles because if they don't, they're not going to get any adoption, right? You know, defy is the biggest thing that you can do with a blockchain in my mind. Like finance or decentralized finance, whatever, is the biggest TAM, total adjustable market. The other stuff like, you know, NFTs and doubt and stuff are cool, but they still. fall into the defy umbrella in my eyes. So, you know, if you want defy on your chain, what better

way to do it than to vampire attack the biggest decentralized exchange on Ethereum and fool the community at the same time, right, to help you do it? It's genius. Okay, so we just gave some very skeptical criticisms of this new, this new sushi, which is the same sushi, but now under new management. And like, so we're still skeptical of this. However, we're still back into the world of like Schrodinger's farm, right? Like, it still could be the sushi that everyone wanted it to be. Like, that is still in the cards, right? And Amin Soleimani put out a really good thread. And like Amin Soleimani is, he's an interesting guy. And the reason why he's interesting is he's an Ethereum. He believes in Ethereum. He likes Ethereum. Like his company's built on Ethereum,

but he often thinks like a bitcorner, right? Like, he thinks very adversarially, which is a quality that most Ethereums don't tend to have. And so he put out this thread, great thread, definitely worth reading. And I think the best two tweets is talking about how, like, yield farming is a zero-sum casino. Yeah, there we go. And the farmers that are farming the tokens and selling them aren't necessarily like part of the community, right? It's the community are the people that, and he equated this to like a party, right? In the same way that I consider, equated like yield farming to like this club that were all at in two in the morning. and then the lights turn on, the real community are the people that are there the next morning

after the party is over and they help clean up the mess, right? And so, like, now we're in this, like, back into this world where, like, we don't know if sushi is going to be a thing or not, but it's up to the community to make it so, right? It's, if there's enough of the community left to help clean up the mess and then rebuild for the next party, then sushi is alive and well and I'm bullish. If there's not enough of those community members, then I'm bearish. But it's really, it's in the community's hands at this point. And that's what farms should be from day one.

And that was the red flag about this farm was that it wasn't that. But I think there's definitely plenty of universes out there where sushi fulfills its original vision. Yeah, I think that, you know, that the house party analogy is also like you could add this to it. It's almost like the dude who threw the house party also went. through everyone's wallets, you know, while the coats were in the upstairs room and stole their money. Collected everyone's car keys and then rifled to their car keys and like just left, right? And he was, he was like the biggest party animal too and he was responsible for like three

quarters of the mess. And now you're asking. It wasn't even his house. It wasn't even his house. And now you're asking the community to go clean up after his mess, right? And that. Tough ask. Tough ask.

That's why I totally, like I totally agree. what you're saying like is it possible yeah but did the probability just drop from like a 10% to like a 0.01% yeah like maybe right because that's a that's a hard way to start your community if you like just you know kind of screw them over i won't necessarily get behind those numbers but i do agree in the the drop in probability yeah yeah and at some at some point right that like this is this is where you can bet you can make your bets right so at some point the price of sushi either drops to so low that you're like, you know what? I think it's this probability, whereas maybe I'm more bearish on sushi, I think it's this probability. You could choose to bet on it by purchasing it,

right? That's the fun part about this mini game that we're in, I guess. Yeah, I mean, I have to give credit to the plays of the game. They seem to have played this very nicely. You know, Sam is an interesting character. I have, you know, I've known about him for a while and I followed his movements in the community because he came he's kind of newer to the community i think ftx only started in 2019 and he started being public over the last few months so i've been paying attention to like this the stuff that they're doing they're doing um this kind of like fits in from kind of what i've seen uh he's a very smart guy like extremely smart and you know if i had to characterize him i'd say that he's like a very smart version of z i always thought z was like always missed the mark right

he missed the mark with finance chain right he didn't understand it he didn't he didn't do any of these kind of like things within Ethereum and with DFi. He didn't try to ally with the community. He was always outside of the community, whereas Sam's a bit like much smarter about it and he's allied with the Ethereum community while doing these things like to basically draw liquidity from DFI onto his own platform. So, you know, I mean, that's not a conspiracy. That's just what's happening, right?

He has a platform that competes with Ethereum. He wants liquidity. Like that's a fact, right? It's not something that you have to go crazy making up stories in your head about. Yeah, so I think also what you're saying is like we probably haven't seen the last of SBF, certainly, right? No, no. And these sorts of attacks, these sorts of attacks. Like, so somebody one time compared like Ethereum to some of the Hogwarts houses, right?

And like Ethereums are a bit more like Hufflepuffs, right? They're just like, oh, yeah, everyone's well-intentioned, you know, sounds good. When that kind of mindset is very susceptible, susceptible to Slytherin type attack. right that's why by the way david that's why i love amine because like amine is like i think like slithering right and i'll sometimes i'll use my powers for good slithering in the best of ways right yeah exactly exactly we need people like that in the community to call it out because a lot of people you know can't call it out due just different circumstances right depends you know people there's a lot of different things going on in the

industry where everyone's connected right and you have professional connections Amin seems to not like, maybe not not care, but maybe he just is like, I'm just going to tell it like it is. Yeah, he doesn't give it. That's his deal. Yeah. Yeah. And I really, really respect that. Like, as you said, David, he's an interesting character.

But I really respect the fact that he calls out things, calls a spade, basically. What do you guys think of Solana? Like, so what is? What's a Solana? What? Do you know what Solana is, David? I know. I know it's like the newest.

to Ethereum killer. Yeah, do anyone have a take on it? What's your take, Anthony? It's like EOS 2.0 in my eyes. It has the similar architecture from what I've seen in terms of, you know, delegated staking and things like that. It's got kind of the same players involved.

It's doing the same thing where it's claiming to be like. Yeah, like infinitely scalable, like low cost, right? We're going to do all these amazing stuff. And they're never talking about the tradeoffs, of course. And the tradeoff is basically that the big, beefy validators kind of have to live in a data center somewhere can't be run on consumer hardware. So an average person can't run it.

Is that sort of the main train-off? VC-funded. Yeah, I mean, most of the tokens are held by VCs, and, you know, they are the ones who do the validating and things like that and have most of the stake in the validation. So, yeah, you're right. And that's why it reminds you of EOS, right? Because EOS has to run on beefy hardware too, right?

And that basically turned into a cartel because it's just, you know, it centralizes, right? because of scale. But yeah, I mean, if you can't run the kind of like software on your own kind of PC, then I just don't see the point. I mean, it's kind of like, why not just use a database, right? Why do you need to use this beefy thing that is pretty much like just as centralized as a database? Like a normal database on like AWS, right?

It's like a bunch of companies getting together to run the software and like signing things with like some keys. but they can be compelled to do things, right? Like, you know, if they wanted, it doesn't have to be a malicious thing either. It can be just like government saying, well, you need to remove this off Solana. And it's like, we know you can because you can basically get all these people in a room and do it. Right. So, and like no one can stop you.

And yeah, I mean, there's so many different risks here and different things that people just gloss over when discussing these things that it just reminds me of EOS. Like if anyone was around in 2017. It does. It feels so much. like we've seen this we've seen this story already play out even down to David as you said the same vc's like pumping it at future Kyle Samani and anything that multi-coin capital touches really they really just want to try and eat Ethereum's lunch and it's just not going well for them you know in the in 2017 was it 2017 or was it 2018 when EAS launched 2027 well 2018 when they did their token was out in

2017 yeah they did that year-long token sale where you could trade it at the same time as the I remember at the time, they were definitely putting out some pieces that were just like, Ethereum is dead. This is the future. Ethereum can't scale. See CryptoKitties. Now, EOS. Right.

And not, I tell, I remember reading long reports, listening to podcasts. And, like, being like, what am I missing? Is there something here that I'm not seeing? Maybe I'm the idiot. Maybe I'm the fool. But, like, fast forward six months later, nine months later, a year later, those same VCs had dumped all of their EOS. And we're openly telling people that it would never work.

Right. And just incredibly. Yeah. Kyle from MultiPoint has openly said that like they made a mistake on EOS. That's like a public thing that they talk about. But I wonder if that was a mistake. I don't mean, I haven't seen multi like they probably made a lot of money on that mistake.

That's the thing about the about a lot of these stuff is that you can be very, very wrong, but you can still make a lot of money being wrong. right um it's because of the fact that these things are traded like like crypto we know we all know how crypto is traded um i also feel i also feel open to these things as layer two's too that's why i i don't want to like you know crap all over uh salana or serum like if it's a layer two i don't care as much right i mean i and by that i mean like um you know uh coinbase listing eith pairs and doing things with the eth right that's completely centralized right but that acts as a side chain into Ethereum. And if gas fees are too high, you can do things in Coinbase, you can onboard

Fiat. If Salada is going to be that kind of a companion to ETH, then, you know, it's more symbiotic. It's not taking away from the whole kind of bankless idea of everyone has self-sovereign money. But if it's trying to replace, if you're trying to replace Ethereum with a banker coin, I mean, like, why not? I'm fine with the SWIFT system in Fiat, right? At least like, I mean, that's more distributed than what's something like Salon is. So I guess I find it hard to articulate

because I don't so much have a problem with these things as like side chains or layer twos. What I have a problem is like with the idea that they're going to come in and replace the credible settlement layer of neutrality of something like Ethereum. Yeah. I don't want to see that.

Yeah, I mean, I mean, that's, that's what I problem with. It's, it's really the gaslighting and the, misleading marketing, right? Where it's basically, as you said, Ryan, like, what am I missing? It's basically putting this idea in people's heads that they must be missing something, right? They have people telling them that Solana or any other thing is like centralized, you know, it doesn't work. You know, it's not going to beat Ethereum. And then you have the companies building these things saying that we're going to kill Ethereum, right? We're scaleable, where decentralized? So who do you believe, especially as a newcomer? You're just getting

hit from all sides by people that have obviously vested interest in different things. And as a newcomer, you're seeing these gas prices and you're like, oh, okay, they have a point. Yeah, yeah, exactly. So it's, it's unfortunate what these, what these are like, I guess quote unquote competitors will do. But it makes sense, right? If you're a competitor, you're going to bend the truth, right? You're going to mislead people and try to try to get market share. But, yeah, I mean, not to say that some in the Ethereum community don't do the same thing, right?

don't exaggerate things. Like, we all exaggerate. But I do think I agree with you as well about these things being like a side chain to Ethereum. That's probably inevitably going to happen anyway. But we'll have to see. Yeah, I don't think they're going to kill Ethereum, that's for sure. Yeah.

All right. Well, Anthony, do you have some time to stick around? We're going to talk about a few other topics. Do you have to run? That's probably late where you are. Yeah, I think I have to run. It's one a.m. here. Oh, my God.

Then get some sleep, my friend. No, no, it's fine. Thank you for coming. I'll stay up for the state of the nation, for sure, anytime. Well, we appreciate it. Well, David and I are going to cover a couple of other topics, but it's been great to have you. Thanks so much for shedding some light on on what's going on in the space. Yeah, yeah.

Thank you for having me. And good luck with the rest of the podcast. Thanks, guys. All right. Thanks, Anthony. Thanks, Anthony. Bye. That was good.

David, we should talk about our sponsors. Do you want to start with Ampleforth? Yeah, Ampleforth. father of modern rebasing. So if you guys have heard about this new rebasing mechanism, it came from Ampleforth. Ampleforth is this very interesting monetary experiment, right? So it wants to be a base money on Ethereum that functions or operates differently

than typical base monies that you would be expected to. And the whole purpose of this is to generate like new and novel and uncorrelated economic outputs than from the typical assets you see on Ethereum. Because they're all, as we, I've seen in the last like, you know, five days of price appreciation, they're all pretty correlated, right? So Ampleforth is an attempt to be an uncorrelated M-0 money on Ethereum. And the way that it's different, the way that it's unique is like it's very similar to Bitcoin in the sense that it's got a non-dilutive supply, but in the way that it's extremely the opposite

or the inverse of Bitcoin is that instead of having an inelastic supply like Bitcoin has, where therefore if any demand to Bitcoin consumes that supply price goes up, that's how Bitcoin works. Ampleforth is the opposite, where Ampleforth tokens track $2019 over time. So one Ampleforth token is supposed to track $1.9 tenths of a penny. And if the price goes over that for Ampleforth, a rebase happens. And that mince new Ampleforth to bring the price down. And so you will find the amount of Ampleforth in your wallet going up and down. over time automatically in order to track $2019, right?

And so it's just swapping those two things and generating new economic behaviors as a result. They have a yield farming liquidity mining mechanism, which they call the geyser. You can find out more about Ampleforth at Ampleforth.org, which is also where you can find the geyser, where you can deposit ether and Ampleforth tokens to Uniswap to get a little bit extra Ampleforth token. So check them out. Awesome. I also want to tell you about Monolith, super excited about everything that Monolith is doing these days.

It's a way to go fully bankless, but in the real world where you can actually spend your crypto on real things. So Monolith is a Visa card, but it's more than that. It's an entire DeFi account. So it wraps your Ethereum address in a Visa card, a bankless visa card. But it also closes the loop from Fiat to DeFi. So now you can onboard. Fiat to die on Monolith with zero fees. You can then convert that die to A-Di, which is AVE's version of die, which is an interest-bearing savings account. Again, no fees. And then you can take the interest

that you generate and actually spend it in the real world, go buy a coffee, go buy some Starbucks. This is really the closest thing to the holy grail of bankless crypto visa cards that I've seen. And what you need to do is go download the app at monolith.xyz to get started. This is primarily for our European listeners because it works in Europe, but they are coming to North America soon, and we will be the first to tell you when they do. What they'll do after you order your visa card and ship you a beautiful package monolith visa card.

We love seeing people in package their visa cards on Twitter. You can tweet about it. Once again, check out Monolith in the app. store and get started going bankless in the real world. David, we've covered a lot today. A lot. It almost seems like we were talked, like it was just, it brought me down a little bit, right? Like sobriety is good, but also, I don't know, we should talk about maybe something that's a little lighter, some of the good side, the, I guess the cloud, the, you know, of all of

these things that are going on. And I think that's probably that probably brings up Gitcoin. We can talk about how some of these yield farming protocols are actually starting to set aside percentages for funding of public goods. It seems to be like a good outcome that's come out of all of this is what I'm trying to say. Right. And as we are sobering up from like this yield farming mania, like it we need to also remind ourselves that like there is something real here. right like this this didn't just come out of thin air like yield farming is a real thing like i expect yield farming to to continue uh it's just like now it's good to remind ourselves that what bad things can happen i'm glad that that happened relatively early so that i didn't because if it happened later it's

going to be way bigger but there are good things that are happening here and one of the biggest signals that i think we all missed with um with a sushi guy was that he was super mean to hayden right like on Twitter. He was a mean guy. Like he was aggressive and he attacked Hayden who Hayden is generally assumed to be a nice guy. And so some some alpha signal there is that like the guy was mean. Like that don't don't trust mean people like trust nice people. Don't be a dick. Don't be a dick. Yeah. And don't put don't invest your money in protocols where the founder's a dick. Right. And so he's going to rip you off the same way. Right. Exactly. And so like there's there on the other side of things. There are some protocols. Yam, Wifi and now also based, which are contributed

a portion of their treasury to Gitcoin, right? And one of the fascinating things about all these farms is that a lot of them have treasuries, right? Like the whole point of yams is that it uses rebasing to generate a treasury. The whole point of yearn and wifee is that it collects fees from the urine protocol to contribute to a treasury. And same thing with based. And so this treasury is fantastic because that gives reason for governance, right? It gives purpose for governance. But then also we can signal, like with these farms, that you can signal your commitment to the space by allocating funds to Gitcoin. And so there was a fun little like happenstance of events where, yeah, like Kevin, this tweet that you're sharing on the screen, and by the way,

podcast listeners, if you're watching this on YouTube, there's plenty of visuals to look at as we talk about these things. So Kevin O'Waki, back in the last week of August, proposed, submit a proposal to the Yam governance that 1% of the inflows into the treasury goes to Gitcoin, right? Goes to funding public goods. And there's a lot of good that has come out of Gitcoin, right? The bankless nation being one of them, right? The good things come out of Gitcoin. And initially, like this, the proposal kind of was 50-50.

It was kind of neck and neck. And then it started to lose. And I think at the worst, it was like 63% to what's the other half of that? And David, this is yam holders actually voting on whether they want 1% of the treasury to go to Gitcoin for public goods or not, right? You're saying at one point the vote was losing, right? Yeah, it started 50-50, then it started to lose. And then Andre from Yern comes in with the dunk and goes, yo, turns out Yams don't want this, but Yerne definitely wants this. So I'm submitting a proposal to do 1% of the urine system, which makes a lot more money than the YAM system, by the way.

Oh, are you serious? So I didn't, I totally missed that urine was into this too. Yeah, yeah. Yeah. So Andre submitted a proposal to direct 1% of funds to, to get coin, right? And that- 1% of urine funds. Of urine treasury flow, right. But that's a lot. I mean, that could potentially be a lot bigger than Yam treasury funds. Yeah, yeah, by a significant degree, right? And so when Andre publicly signaled his commitment to his belief that urine should, commit to allocating 1% of funds, the vote on Yam started to sway, right? And so it started, it started to go back into, back to 50-50. And then I wrote this very quick article called,

don't be stupid, dedicate some of your treasury to get coin. And I tried to just put the nail on the coffin. And after after these two things happened, there, there was just the, the, the yam vote was completely in favor, right? So can I ask you, why is it stupid? Why is it stupid not to do this? Right. So like in the same way that Chef Nomi would have never done this, this is like a very strong signal of your alignment with Ethereum, right? And and so it's it turns all of the get coin media people, which are people like you and me, Ryan. And it tells it signals to them that you should be a shill for Yam and Yearn because it allocates funds to Ethereum. So which is why we're talking about it right now. Right. So like, good on yam and yearn they did a good job by allocating funds to git coin to help grow the ecosystem and therefore they get publicity and and organic free shilling from all the people that supports so it's a win win it's a good press for the protocol but also public goods get funded and ethereum being a protocol without any sort of issuance that goes to maintenance of the protocol is a chief primary public

good right right yeah okay so all of this goes to get coin um but for folks who haven't used gitcoin how does git coin work how does get coin distribute it and what like is is this like a non-profit that just kind of distributes the funds based on need or how does that work yes yeah so git coin is this very interesting platform which funds things that otherwise likely wouldn't have gotten funding right and this all came out of vitalics uh and glen while from the radical markets uh group their their belief uh their uh experiment around quadratic funding, right? And so it's a way to vote with your dollars, right? And so with Gitcoin, you as a single individual could donate $100 to a project, and then that project would receive some amount of

matching, right? Like, so there would be another $100 matched by the Gitcoin treasury, right? Which is where this money is going to. But then instead, if 100 individuals donated $1, so the same amount total, same amount aggregate, $100. But the fact that you, the fact that you, that 100 individuals donated rather than one means that those funds will be matched even more, like significantly more, like three or four times more. And so more of the Gitcoin treasury will be allocated towards the projects that received more grassroots funding, right? So like, not only is your dollar a vote, but also just the fact that you donated is also a vote. And you're signaling that you believe that this protocol or this effort should be funded, right?

And the fact that like 1% of the urine protocol is allocating funds to the Gitcoin treasury and then 1% of yams and now 2% of based, which is which is why this is turning into like a snowball. There's a lot of money flowing into the get coin protocol. That's a lot of money. A lot of money. And get coin. The quadratic voting that means basically rather than rich people getting to decide where all the funds go, the people do. Right. Because if you give one dollar, it could be if you get a number of other people, individuals to give one dollar.

then your $1 could amplify. It could be $50, could be $100, right? So people decide rather than rich. That's what the- It's weighted for the favor of the people, right? Okay. And now with this growing treasury that perhaps, it probably won't,

Gitcoin round seven is happening in a week, right? So next state of the nation, we're getting Kevin O'Walki on to talk about this and also public goods and why public goods are awesome. Very cool. But it probably won't matter for that get coin because it just happened and the Treasury hasn't like accumulated that much. But I bet by the time like the next get coin round happens after that,

there's going to be significant capital inflows. And we're going to, and this is important for Gitcoin because Gitcoin needs that sustainability, right? It needs that churn. It needs constant flows of cash. And Gitcoin rounds one through six was basically all funded by like consensus and the EF, right? And like that is a finite amount of funds. Like consensus isn't really making money.

And they're not making money. And they're also a for-profit now VC-invested company, right? So can we rest assured that those funds are going to come moving forward? No. And the EF runs out of funds eventually as well. And they don't have that much. Right. Yeah, they've never had that much, right?

But protocol, everyone in the bankless nation that I've talked to are bullish on protocols. And so protocols can allocate money to Gitcoin. Then Gitcoin can perpetuate into the future forever and fund really important things. things that can like come out of the graduating class of git coin round seven graduating class of gitcoin round eight like like i said bankless was part of that like eith hub is part of that defy dad's a part of that cami russo like a lot of important stuff and that's just the media stuff which i'm biased too but there's plenty of tech stuff as well well yeah i mean uniswap was birthed from a unit swap it wasn't a get coin grant but it was uh was an eF grant of the same fashion so it's like zapper

right we look at it's a show sponsor now and it just got them started a tornado cash tons of fantastic stuff and also eip 1559 which uh like by the way i mean that is that's a public good that's not going to get done unless it's supported and funded adequately so this you know you know why this is super exciting now that you're talking about it like in this way is that it gives a a sustained source of funding that doesn't require protocol issuance, which is so key. Because the way other protocols are solving this, like a Tezos or a Pocodot, is basically they're saying, yeah, a portion of our issuance is going to go to this fund. And then who's going to vote where the, like that's so issuance is, you know,

minting of new coins, basically. And how is this fund going to be administered? well, it's going to be administered by essentially token shareholders. What does this sound a lot like? It sounds a lot like a corporation, right, basically, where you know, you have some sort of funding process and the individuals who own shares get to vote on where those funds are spent. In my opinion, a corporation in shareholder governance is not the right structure

for a credibly neutral monetary system. Why? Right? Because if, if, you know, Facebook governs your monetary policy, then Mark Zuckerberg and friends can change it at a whim. They can decide who to fund. I want to fund some of my cronies. So I love the fact that we're able to do some of this public good funding without having to resort to some sort of Ethereum issuance where like, because that just gets messy. It's very difficult to govern. And I think it removes the credible neutrality of the platform. It makes it. much more like a crony, like, you know, shareholder type system rather than like a, like a market. It's very hard to do fund distribution in a way that's credibly neutral, I guess, as far as issuance goes. Absolutely. And one of the big things that I'm bullish on is so the urine, URN protocol just decided to pay nine individuals, like salary wages to work for YERN, right? So the YERN protocol created nine jobs, right? And urine is only.

like a month and a half old, right? And that's kind of like the bullish case for protocols. And like what the original vision of a Dow is is code at the center and humans at the periphery. And now Yerun has nine instantiated people at the periphery working for it, right? And this is what Gitcoin does. Gitcoin, like I came, the reason why I have a job in crypto is because of Gitcoin. Like when I had my Gitcoin grant up, like David Hoffman, independent content producer. Like I made a decent amount of money to the point where I could like dedicate more of my time writing, which turned out and turned out into this job at bankless, right? And so, and I'm bullish on the more money that gets into Gitcoin, the more jobs Ethereum can create, right? And the more

jobs crypto creates, and especially Ethereum, just the faster the bankless world arrives, right? And so bullish on job creation, therefore bullish on Gitcoin. Like, Gitcoin is like the protocol for like seed funding, right? Or not even seed funding, but less than that. Like whatever, it's lower than seed funding, like microfunding. Like getting the proof of concept out the door, rewarding you for your work, telling you, signaling to you that your work is valuable and that you should continue. And then you can bootstrap your way into like doing a job in crypto.

So for the bankless world that wants to get into working, think about something, think about value you can provide and then apply for a Gitcoin grant because now there's a bunch of money in it. Well, Vital calls this the quadratic freelancer, right? Somebody who can just live on kind of grants. But what they're actually living on, so you mentioned the Dow's, right? So urine and Yam, even based, these are all Dow's. And essentially if we were to bring it to a nation state analogy, these are like companies building on top of, say, the U.S., right? So this is like the S&P 500.

But now what these companies are doing, they're not taxed by the protocol based on their income or revenue, as a nation state might provide some kind of tax structure system, corporate tax system. But they're opt in donating to fund the Ethereum nation to fund the public good. So 1% and 2%, another 1%. I mean, I can easily see these treasuries growing like over 100 million this cycle, like 500 million possibly. right and one to two percent of that starts to add up to being a lot so now we have like this opt-in tax system but even more beautifully what we have is a and hopefully Kevin shares more with us next week I want to steal that thunder but we have this fair distribution mechanism right and I like I do

really love quadratic voting I think the outcomes of it as long as you can there have been some flaws and some problems Vitalik doesn't write up every single like grant sometimes there's there's civil attacks, these sorts of things. But on the whole, it's a pretty reasonable fair distribution of the funds. It's way better than it's a small community, so it hasn't scaled, but it's way better than something like the government bureaucrats deciding who gets funded and what. The people get to vote. And largely, the projects that have kind of risen up and gotten the higher donations have been the ones where I'm like, yeah, these guys are doing the most for the community at this point in time. It feels very fair. So it's like full cycle. Now we've got our taxed. Now we've got our

way to distribute this funds. And we've got kind of the Ethereum Nation, the flywheel effect, growing. And it's just going to grow from here. Very exciting stuff. Very exciting. Yeah. I do want to keep on talking about this. But also, I do want to leave a lot. Yeah, we should say some stuff. We'll get Kevin on here next week. So stay tuned for that. if you are watching this on YouTube or on Twitch, Kevin O'Walky are going to come and just really lay down the hammer on why public goods are so important. And I think one final note on this, Ryan, like the reason why I think that you like this mechanism in whatever,

in comparison to whatever mechanism preluded it, which is the government model, and part of the bankless nation thesis, or the thesis about human development and progress at large is like, you know, humans are messy, right? Humans and decisions and governance is messy. And the human species has been able to scale by turning over governance to the hands of protocols, right? Like the Bible was a protocol, and then the Constitution was a protocol.

And now Ethereum is literally a protocol, right? And quadratic funding is a protocol. So we no longer have to have subjective decisions as to, like, allocating funds because the protocol does it for us. And the reason why quadratic funding is so spectacular is because if you are a market maximalist, If you like markets, Gitcoin grant funding is market-based funding. Like there's a reason why EIP 1559 got, I don't know, like $150,000 in like 72 hours. A lot of people really want that. A lot of people really want that to pump their fucking bags as we've been doing when we talk about 15559.

So it just makes a ton of sense, right? It makes a ton of sense. Yeah, absolutely. All right, David, we're going along. Do you want to talk about the last thing, squad wealth? Or do you want to save that for another time? Let's save that for another time. We'll leave a little teaser on there.

But the TLDR is Bankless Nations of Squad, and we're all going to grow our squad together. It's going to be fantastic. You know what I'll do is I'll just put the article in the show notes so folks can read it and we'll talk about this at another time. It's kind of the most transformational article I've probably read maybe in the last six months or so. I don't know.

It's super good. I want to read it a few more times before I get my thoughts out on it, but we'll do that in the future. Yeah, David. Kevin's going to have some opinions on that if I know Kevin well. So maybe. Ah, very good. We'll save it for next time.

Perfect. Okay, guys. So that's your reading material. I think that is it for State of the Nation today. We talked about sobriety. We talked about sushi. We talked about Gitcoin giving and the lighter side of all of these things. We're going to have Kevin on next week as well.

So don't miss that. Thanks so much for joining us. Guys, everything we talked about. all of the assets that we talk about, none of its financial device. So whether it's eat or Bitcoin or yams or sushi, you know, tread carefully in these things. There are risks if you deposit funds in D5 protocols. You could lose everything. But this is about the journey.

This is about the constant learning that we're doing together as a bankless nation. It's not for everyone. But thanks for joining us. This is been State of the Nation, episode 13.