The Pomp Podcast - #389: Sam Bankman-Fried On Capturing Profits In Crypto

Episode Date: September 22, 2020

Sam Bankman-Fried is the CEO of crypto derivatives exchange FTX and Alameda Research. He majored in Physics at the Massachusetts Institute of Technology. In this conversation, we discuss crypto exchanges, DeFi, yield farming, governance airdrops, toxic environments, SushiSwap, and the Effective Altruism Community. ============================== Smart investors know being early is critical to success in crypto. CoinList is where early adopters invest in, earn, and trade the best new crypto assets before they list on other exchanges. Try CoinList Pro and be first to trade Filecoin on network launch. Sign up via coinlist.co/pomp and earn $10 in BTC after you trade $100 ============================== Athletic Brewing is re-imagining beer for the modern adult. We love beer. But we also love being healthy, active and at our best. No matter your motivation, if you want to keep a clear head and drink healthier, we are here for you. Athletic makes non-alcoholic beer that you don't have to compromise to enjoy. The beers are fully flavored, clean ingredient, and a fraction of the calories of full strength beer - they fit in any occasion. Check out www.athleticbrewing.com for more details and free shipping nationwide. ============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Sam Bankman-Fried is the CEO of crypto derivatives exchange FTX and Alameda Research. He majored in physics at the Massachusetts Institute of Technology. In this conversation, we discuss crypto exchanges, DeFi, yield farming, governance airdrops, toxic environments, sushi swap, and the effective altruism community. I really enjoyed this conversation with Sam, and I hope you do as well. Before we get into the episode, though, I want to quickly talk about our sponsors. First up is CoinList. Smart crypto investors know that being early

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Go check them out at athleticbrewing.com. Lastly, don't forget that I write a daily letter to over 50,000 investors about business technology and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get in this episode with Sam. I hope you guys enjoyed this one. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp

as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Sam here with us. Thanks so much for doing this, man. Yeah. I mean, thanks for having me. Absolutely. All right. So I think that you are one of the most fascinating people in all of crypto, And many people don't know your story. So let's just start with kind of where you grew up, where you went to school, and then how you got into crypto.

Yeah, I grew up in the San Francisco Bay Area on a Stanford campus and had a really nice sort of quiet suburban upbringing, so to speak. And yeah, I mean, it's sort of a good early life. Parents are both law professors. and sort of thought, you know, maybe I was going to do math or physics or, I don't know, it wasn't, the plans were sort of very non-specific. You know, it's sort of like select whichever subject I was doing best at in school. And like, that's what I'm going to do, you know? And so I went to MIT and I quickly learned there I wasn't going to be a physicist.

I mean, it was like the sort of least favorite things that I'd done were try and do physics research. So that wasn't going to be the answer. But that doesn't sort of answer the question of what the answer will be, what I will do. And I spent some time in college trying to think about what I could do that sort of have the most impact and ended up thinking about how I could donate as much as I could. And that sort of led me to quant finance. So I was a trader at Jane Street Capitol for about three years in New York, which is a blast. And he's really had fun. There was really, really nice. And then, you know, sort of after three years or so, I had a, you know, sort of a fork in the path of like, you know, am I going to sort of do this for the rest of my life

or am I going to try and do other stuff? And it was a tough call. I really liked it. But sort of felt like I wanted to explore. I wanted to try other things. I want to see what, you know, that that maybe there is huge upside to doing other things too and so that sort of you know i left and shortly thereafter i mean sort of checked out crypto markets which is late 2017 and i mean markets are completely insane then like is and the arbitrages were just gigantic and that's sort of my background and so that's sort of how i ended up in crypto all right so when you're in school uh obviously you're smart you got a bunch of smart classmates uh everyone is kind of going into all these different things, the kind of classic tale is people gravitate towards Wall

Street because that's where you can make the most money. But I think one of the most interesting parts about your story is this idea of how do I make as much money to give it all away? So maybe let's just start with kind of where did that idea come from? And kind of how did you formulate, you know, a strategy to go do this? Yeah. So, I mean, it's sort of like a wandering path to get there um started with you know what can i do that i'll have impact went through a bunch of random things i you know went to get into animal welfare um thought about global poverty and stuff uh ultimately met a group of people who were thinking about similar things the effect of altruism community um sometime my my junior year sophomore year i guess of college and they sort of said like

suggested like you know hey if this is what you're thinking like you know obviously there are a lot of things you can do but one thing you should ask is like if there's some charity you think is cool like would they rather have you know you working for them or you donating money to them like which and obviously again for different people it's different but like you know sort of given my background it sort of seemed like well actually like you know quantitative skills are a pretty good fit for uh for at least what what nowadays is is often lucrative careers um and i had some friends who had interned at jane street said good things about it and so i just started side i don't know let's you know try and you know try try interviewing see how it is see see if it seems

like a good fit and and and sort of really like the interview and it wasn't so much i like calculated out every path and was like this is the highest dv which to be clear maybe i should have done uh but but i didn't instead i was sort of like oh wow i had no idea what he's doing and now all of a sudden this seems like really high value like it seems like i could potentially donate a lot of money this way. And that seems great. Got it. And so that's a very unique way of viewing the world, right? Kind of talk through how you think about it from, you have seen money to live, right? Yeah. There's a story recently, there was a, I think a multi-billionaire who basically had amassed a fortune of like $8 billion. And he has now successfully given it all

away. He literally lives in like a shoebox San Francisco apartment, says that he's incredibly happy. And his entire life goal was to give away his fortune. And he's now done that. But he amassed the fortune and then gave it away. Are you kind of as you're making money giving it away? Or is this a let's get as much money as possible and give it away? It's a good question. And I sort of think if you can do it, the ideal thing, in some ways, there's a lot of activity about this is sort of the actual answer and here are sort of two ways to think about it right one is like well if you amass money you can grow that money you know and like then you can give away way more than if you'd been giving away the whole time because you know you get interest on that money

one way or another the other way of thinking about it is sure well also the charities could have been doing things with that in the meantime and you know they could have been saving people's lives who have been contributing to the world and like doesn't that have some compounding effects too. And sort of the answer is, yeah, actually most things that are really high impact have compounding effects. The compounding is sort of part of what makes them high impact. And you have to sort of think about which is bigger. And so I think, you know, part of how I think about it is like given where I am right now, you know, what's sort of relatively larger. And I mean, I think for people who are in crypto right now, it's not going to shock them to hear that like returns on

capital can be pretty significant. And, you know, I think that you just have to look at like what's happened in DeFi over the last, you know, four months to see that, like, that's going to outstrip a lot of things. And so part of my answer is like, well, if you think you have unusually way, you know, unusually good ways to grow money, which you probably do if you're in the business of growing money, then that's like a decent argument towards sort of growing it over time and then donate. On the other hand, a lot of people would say this, and I think they have a real point like yeah sure i've heard that one before you know like like person says oh yeah don't worry like this is you know i'm i'm one of the good guys um and and i think that that's like

you know that's a real worry that you can have about other people and it's a worry you can have about yourself even if you're not you know even if you're not selfish it's a sort of drifting way forgetting about why you got there in the first place and so what i actually do and i'm not saying this is the perfect thing like there's things pulling in all directions here but you know i sort of give away enough each year that it's sort of a real amount that's a significant amount and that it sort of keeps me honest and and you know keeps me i i yeah sort of keeps me um keeps reminding me of like why i did this in the first place keeps me in touch with people who are thinking about it keeps me in the loop about things i can do keeps me thinking about what

I can do with money. And, and so even if it's not like most of my money each year, even if a lot of it is, is, you know, the goal is to compound it and give it later. Um, I, there's a lot of good that, that I think you can, there's a lot of good you can do now. And I think that there's a lot of value to at least giving something away to keep yourself honest. Absolutely. And so let's talk about what you've done to, uh, grow wealth, right? So you've got kind of two separate things. You You've got FTX, and then you've got Alameda Research. Jane Street is a pretty legit shop, right? Yep.

That's a pretty good job. When you decided to leave, did you know that you were going to go into crypto, or was this more of you left, and then as you were exploring things to do, crypto kind of caught your eye? Yeah. When I left, there were like 12 things. I sort of didn't know exactly what I was going to do, and actually, I was going to try working at a charity. It was one of the things, an effective altruist charity. And I think that, like, sort of, there are all these paths, and they're so hard to think about, right? Like, you know, here's one thing that, like, you know, and there's so many things you think about, and you're like, oh, boy, who the hell knows how valuable that is, you know? Like, you go campaign for policies that you think are good, or for politicians you think will implement them, or you could go work on climate change, you could go work on third world developing diseases.

some of these turn out to be somewhat analyzable like you can look at sort of a classic example it's like how many lives per dollar can you save donating to third world health charities and you can actually ballpark that right you can just do trials right you can go into a village you can give malaria trade bed nets um and and see what happens to the malaria rates and there's a lot of complications but like you know that's sort of an analyzable thing but many of these things are really hard to to ballpark you know if you're gonna like how much impact can you have on the world as a journalist? The answer has to be a lot. Clearly, they have impact on the world, but it's really hard to think about how much and what the right things do. So my thought was like,

boy, there are all these things I want to try doing. Some of them I can think about. Some of them I have a lot of trouble estimating, and it's just going to be hard to know how big they could get until I try. And so that was sort of the thought was try a bunch of things and see what sticks. Got it. And so when you eventually discover crypto, was it literally just the arbitrage opportunity was just so big that like, it was hitting you over the head and saying you have to go do this? Or was there other things that that kind of dragged you in? Yeah, I mean, that was the first thing that dragged me in was just, you know, looking at literally looked at coin market cap, you know, I clicked on Bitcoin, I saw these numbers, like those aren't the same

numbers, you know, like I see a list of exchanges and prices, and the prices are different. And And that's not complicated arbitrage, or so I thought. I was like, literally, nothing that simple ever happens. But the numbers, they weren't even a little bit different. They're like 5%, 10% different. And so sort of my first thought was like, that's fake. I don't know why yet, but that's fake. That can't be real.

And then I sort of investigated. And the answer is, half of it was fake. But half those exchanges were not real. But half of them actually were. And there were some real arbitrages sprinkled in with the fake ones. um and the real challenge back in 2017 was not finding a good trade it was being able to do it um and the operational setup involved in it was just massive okay explain this because i think a lot of people don't understand we're talking about like super simple arbitrary arbitrage is

basically just you go to one exchange you buy bitcoin you move it on to another exchange you sell it there's literally two different prices and you take the difference exactly this isn't weird derivative you're not thinking about interest rate literally it's a coinbase and bitstamp have different prices for bitcoin right like that shouldn't be too hard so what happens i'll explain maybe one of the more complicated simple arbitrages um and because i think sort of rolls into one all the different things you have to think about and this is uh the the japan arb so i was uh you know late 2017 early 2018 japanese bitcoins were just trading like 5 to 15 percent higher than American Bitcoins. Meaning you go on BitFlyer or CoinChecker, BitBank, or one of the

Japanese exchanges, and it's an $11,000 Bitcoin. And you go on Coinbase and it's a $10,000 Bitcoin. And it's sort of like, there's an arbitrage. And that one was big. There's a billion dollars a day trading on each side. So if you could do it, it sort of seemed like maybe you could do it big, which is pretty exciting because it's also like 10% a day. I don't know. It's a lot. you know so then you try and do it and you fail for 12 reasons and like so many reasons it's so over determined so what happens well first of all you realize you don't have a coinbase account there's a three-month waiting list um you realize you don't have a bitfire account and you have to be japanese to get one and there's a three-month waiting list um you get those then you wire a

hundred dollars as a test transfer to your coinbase account and your bank shuts down your bank account because they don't like crypto. Then you realize that you can only withdraw to a Japanese bank account from BitFlyer and you need to be Japanese to have a Japanese bank account. So, okay, you get a new bank account and you find a Japanese person

or company or something. Now you have a Japanese bank account. Then you realize you have $3,000 a day withdrawal limits on Coinbase. And again, there's a three-month waiting list to get your withdrawal limits raised. Then you realize that your Japanese bank account can't do international wire transfers.

So it's not clear how you're getting the money out of Japan. And she's like, you go through so many things here. And thing after thing after thing is like, I guess I have to learn how to start a company in a foreign country and hire people there and get a bank account and lawyer. And then you go to do a wire transfer in Japan. You realize you don't speak Japanese, and that's going to be a problem because their website doesn't – there are no online – there weren't – you couldn't do it online. You had to go, okay, also I'm not in Japan. And I don't speak Japanese, but I have to do it in person in a branch of a Japanese bank. so there are two more problems they have to solve somehow and you finally get someone there and and

the banker is like what the fuck is this like this is definitely money laundering you're like no no it's not it's arbitrage like no you don't understand you're wiring millions of dollars every day from crypto to an overseas bank account in a different name like this is like that's it's the sketchiest thing you can be doing it's always in the same direction it's not like you're moving it back it's just all only going one way you're like no you don't understand on the back end i got bitcoins going from gdax to bitflyer and like i didn't understand any of that but this checks all the boxes of a sketchy transaction and also remember you don't speak japanese and they don't speak english and so now you go hire japanese lawyers not to like not to like for a court

case or something you hire them to go talk to a banker because like they're like a trustworthy person who can speak the language so it's just like it was months and months of setup that went into like all of these different pieces and the problem is if you have all but one you have nothing right what you end up with you end up with a ton of japanese yen pooled in a bank account in japan that you can't do anything with and it's not like you're cycling and arbitraging every day just sitting there so it's like you need to put you know 12 pieces together to do a single round of arbitrage so that that's sort of the problem that you've run into is just like you know it's Crypto is incredibly logistically complicated because it's decentralized.

And like you think about, well, how about normal finance? What happens? The answer is all U.S. exchanges clear under the same clearing symbol with a centralized clearinghouse. You store everything with a centralized custodian or clearing firm who also stores all your money and has connected to all the exchanges for you and can do foreign currency transactions and everything. It's all in one place. But in crypto, because of the decentralization, one of the sort of side effects of this is that if you have to do something that touches a lot of different companies, you have to separately figure out logistics for every single one. And so as you're doing this, the name of the company is really interesting to me. So Alameda Research.

The research component is not what I think most people would expect, basically a trading shop. And so tell the story. Alameda, I've heard where that comes from, so explain that one because that's just cool. And then the research, what was the logic there? Yeah, so Alameda started out in Berkeley, California, which is in Alameda County. So that's where Alameda comes from. Research, 10% of it came from the fact that there is some research there. You run studies, and one example of this would be you want to figure out – arbitrages are simple when I describe them the way I describe them at least to think about.

But let's say that you're in the middle of a market move. It's like a two-second long market move, and every exchange is reporting a different Bitcoin price. And you want to figure out if there's a trade to do, but all the exchanges' data is lagging. So you don't know if it's really an arbitrage, or if this is just like one exchange is pre-move and one is post-move, but you can't actually trade on the pre-move one because it's post-move now. And you might have to do a lot of statistical studies and a lot of data analysis to try

and figure out what's actually going on there. so there there is some research in it um but that's not really where the name come came from really where the name come from well we're we're trying to think of an a name for the company and we're not good at naming things i mean it's just like a weakness of i'm not good at i don't like but we needed name like we're sort of like at some point our corporate development is blocked on having a name and what were the criteria um the criteria were not like you know bitcoin arbitrage trading shop what variant on that should we use we sort of took a step back and we're like all right we want a bank account and if we're bitcoin arbitrage trading shop founded

by a bunch of 20 year olds if that's the name of our company we're not getting our bank account like the compliance department's going to take one look at that and just like that that's it right and so we're like all right what's like what's what name is never going to give us grief you know what name is not going to stop us from being able to do anything like research no one doesn't like research you know no one's like i don't know research i don't know if we can deal with that that's where it came from it's completely an offensive name that is an amazing story so give us an overview of kind of what you guys are doing today right so you uh you guys are based in hong kong i believe uh yeah kind of what exactly does alameda research entail yeah it's

And the core way to think about it is it's a liquidity fighter. And what does that mean, a crypto liquidity fighter? What does that mean? Well, one of the things it means is it does arbitrage. And what's the connection between those? Well, if there's buyers on Bitstamp and sellers on Coinbase of Bitcoin, then you provide liquidity to the sellers on Coinbase by putting out bids. You provide liquidity to the buyers on Bitstamp by putting out offers.

You make money by doing arbitrage and you help tighten spreads and you help keep, you know, keep things in line and provide actual coins for people to buy and dollars for people to sell into. So that's sort of like the classic, you know, simple like liquidity writing via arbitrage connection. And that's a lot of what Alameda does. But increasingly as crypto branches out, it does too into all the wacky ways that crypto demands liquidity. And so, you know, then you get to futures and derivatives, right? Like providing liquidity on futures, you know, if you want to go trade on, you know, let's say that you want to go, I don't know, you know, pick your favorite exchange with futures, right? You want to go to Binance or Huobi or BitMEX or whatever, and you want to buy a Bitcoin future. Someone has to be on their, they're on the other side, so we're keeping it at about the price of the Bitcoin.

And so that's sort of another thing is like, you know, futures versus spot arbitrage. um but then there's sort of you know there's there's fiat arbitrage right so keeping japanese and u.s exchanges in line with each other is sort of another branch of this um and recently i mean what's been you know what's the thing that crypto sort of needed liquidity provided to in the last few months well it's defy that's where all the activity is you know and so it's like for dying liquidity in all the wacky ways that you couldn't buy or sell comp you know like it's not just like binance to coinbase liquidity there's also like you know uniswap and all the borrow lending protocols that have it and uh and and otc and and then there's like yield farming

and and so basically wherever there's trading activity in crypto um there's you know there's sort of a place to provide liquidity and there's a place to make money by doing arbitrage if there's enough demand and not enough supply. And so what Alameda is spending its time on varies from month to month, depending on what crypto is spending its time thinking about. Got it. And then where does FTX come in? Yeah. So Alameda had been going for about a year. This is like late 2018. And I mean, something that had been clear from the beginning was that exchanges make a lot of money in crypto um seems like a good business to be in the product there's a lot of complications on the outside but if you think about the really core product of like a matching engine that is not

that complicated like that is sort of like well you can place a bid and place an offer and if they cross then you match them you know that that's like and so we're sort of like okay like we can do that that's not that hard that's a lot easier than the bots we're building and they seem to be doing quite well um but the problem is that a lot of other people can do that too and have done that and we don't know any customers we don't have a network we don't like so yeah we could launch yet another bitcoin tether exchange and hope people used it and no one would that that's sort of like where we were for a while and where we were stuck on um and what sort of finally got it out of that that rut to some extent was i a few things happening at once i moved to hong kong

and i had a lot of meetings with people here i only built out no tc desk and i built out a network in crypto from that um so all of a sudden we had some institutional connections had some personal connections um and then the other thing was all the derivatives exchange just sort of shit the bed at the same time and um and it's sort of like you know there's the overload problems there are massive clawbacks everywhere it's like hundreds of millions of dollars a year being lost to this and so it's sort of like okay like a drifted exchange is is harder there's more that goes into it there's a risk engine margin leverage the matching engine's harder because of the risk engine um a lot of the players right now seem to be having a lot of

trouble with it there's a ton of volume going in in them and now with a bit of a network and that was sort of enough to make us feel like we had a plausible path forward there um and so you know started building out ftx sort of late 2018 early 2019 and i and yeah went live spring of of 2019 and at the very beginning of sort of an experiment of like we think we can build a good product like that we think we can do um is that enough like a good product and a little bit of a network you know can that become a big exchange and the answer is no that's not enough to become a big exchange that fails um but if you take those and then you just like push a lot you you do a ton of work at everything from recruiting users everything from retail customers to large

institutions um to making a ton of ui changes to doing customer support um and all the random crazy things that come up that you have to deal with um and then you just push really hard on building out a user-based network while simultaneously building out the product then yeah you can do it and um and so that's sort of you know what we've been doing over the last with FTX. And it's grown to roughly the fifth biggest exchange, which is pretty cool. It's still sort of derivatives first in that the majority of its volume and sort of its most well-known products are derivatives. But it has spot markets as well, tokenized products, fiat, and a bunch of other things. Got it. And all of this has been self-funded,

or you guys have raised capital outside? How have you built all of this? Yeah, so Alameda was a combination of self-funding and lines of credit from like friends and family and stuff to bootstrap, which was sort of a high wire act for a little while, but set us up really well for the future. By the way, hold on a second.

That's a great way to say you raised no outside capital. That's right. Yeah, Alameda has never raised any outside capital. And, and that's sort of important to it because anyone who has investors is aware of the pain of having investors, you know, and I, it's just, even if they're the best investors in the world, there's a pain associated with it, you know, and just to give one trivial example, let's say you want to open up a bank account for your company. you go to the bank and they're like can we have a signature of all the owners and you're like no i am not all the owners some of them are thousands of miles away they're like great come back when you have their signatures and that doesn't sound that bad because you email them you're like please sign this um but all of a sudden you sort of like doubled the work it takes to do a lot of

administrative actions and once you do that a lot of them like it just slows down a bunch of things And not having that's been really great for Alameda. FTX started out the same way, although there was FTT, a token sale. But since then, FTX has taken outside investors. And so FTX, it's still majority internally owned, but does have outside capital. Got it. You mentioned DeFi earlier. And so I think what most people are wondering is just you have a fantastic trading business with Alameda. You've got a fantastic exchange business with FTX. Quite simply, just what the hell are you doing playing around with all this DeFi stuff? talk through just how you see DeFi and kind of what I'll call a lot of kind of like the financial engineering and experimentation and kind of all the wackiness that's going on there in light of the greater kind of crypto industry. How do you view DeFi? And then we can talk about some of the things you're doing there. Yeah. So I sort of stumbled into it at the beginning. And, you know, a lot of where this came from was that's where the winds were blowing.

That's where crypto attention was turning. And it's really important for FTX to be responsive to that. Like it's, you know, it's three months earlier, everyone was asking about options and wanting us to improve our options offering. No one's asked about options in the last three months. Like no one cares anymore. Probably they will get in four months, you know? And when was the last time you heard about Deribit, right?

like probably like april um that doesn't mean it's dead it means like you know in six months maybe deribit's all people are going to talk about again like it's sort of like you know deribit's best known for its options and so but so anyway you know one of one of what we're trying to do with ftx is is to be uh to be offering customers sort of whatever they want you know when they want it as much as we can and i you know what that means is basically like well i it means that when the world's moving to defy we try and offer defy products and it's a little bit tricky um it's like you could do some of that FTX. We listed compound markets, sure. You can list DeFi tokens on the exchange, and we're one

of the first exchanges to start doing that because we got a lot of interest and demand in it. But there's a problem. The problem is that FTX is not DeFi. It's centralized. It just is. and what that meant was like anything FTX action was that's where customers demand was um you know we wanted to be able to fill that and you know so pivoting at FTX as much as made sense for its product um I sort of did a deeper dive in and I basically came out with with two main thoughts the first is that a lot of the products had serious shortcomings um but the second was that there's some really cool shit there and you know some things that sort of i first of all just found like the on-chain governance uh the idea of that really cool and really powerful and sort of

surprisingly sleek and like i sort of like surprised that that just worked now you could make it just work although obviously theoretically you could um but second of all i think the thing that really grew on me over time was composability. And if you ask me what the biggest advantage of DeFi is, it's that, it's composability. It's the fact that if two different people make two different products in DeFi, you can glue them together. And what that means is, let's say that you take a DEX and you take a borrow lending protocol. So you take like Uniswap plus Compound or something like that, SushiSwap plus Alve or whatever you want. You can in one transaction do a margin trade on the DEX. And the way you do it is, I mean, you sort of like get the leverage

from the borrow lending protocol and the deltas from, from, from the decks, you know, basically you send one thing to borrow lending protocol, use it for another thing, send it back to the decks and buy the first thing with it. And now you've gotten levered in it. But the really cool thing about that is that you can just do it by gluing those two together, even though they're totally separate projects. And if you imagine doing that, I, you know, you imagine doing that in in centralized finance you can do it but it's a hell of a lot more annoying and harder like you're ping-ponging between multiple exchanges you have to deal with withdrawal limits and withdrawal times liquidation on both sides and like it you know you sort of have to have like

an automated trading system set up to be able to really do it realistically whereas in DeFi you can just glue all the shit together and that that's just really cool and it's super powerful And it means that like, you can have a lot of people working on a community kit together and all building useful things for it and not independent things where just the best one wins, like things that add together. So anyway, that's sort of like what sort of struck me as like one of the most powerful things about DeFi, but also just, yeah, the products were not, were like a little underwhelming. um and so recently you talked a little bit about uh kind of this like toxic defy environment

so kind of talk through like it feels like there's a lot of potential with the direction the technology is going then there's all kinds of craziness with like the people the projects the tribalism like just talk through that a little bit yeah it's um i mean it it's it's weird because it's in some sense the most in some sense it's a lot more cooperative than c-fi is like people are all building together but in some sense it's also a lot more toxic and at least in places and i don't know there's sort of been a bunch of things that sort of combine to do that but but just sort of throwing some of them out there like i i one thing obviously is protocols like there are big believers in a lot of protocols um you know maxis is often the

like i don't know if it's quite derogatory some people i think use it derogatorily some people use it non-derogatorily but you know bitcoin maximalists ethereum maximalists um you know i'm sure that there's some maximalists for you know pretty much every project although you know Those are the two biggest communities by far, and they don't get along so well. They don't get along so well with other protocols, and that's sort of independent of whether they're right. I mean, they can't all be right. Maxwell's for two different communities. It's a little hard for those to both be right, at least in the strong version of them, but maybe one card.

But sort of one way or another, like, there's a lot of flaming that goes on from adherence to one community towards other communities and other projects, again, which isn't to say, like, one of them might be right, but one way or another, there is a lot of toxicity there. um there's also um yield farming is weird it's i mean i so i sort of i don't know i i did the math and was like actually kind of surprised at like how legit some of it was in that like it's i think there's a version of yield farming which which is actually sensible sort of which is basically like you build a valuable product and want customers and sort of the and want people to build on it and stuff and the deal you make is you're going to hand out most of the value of it you're just going to drop the token on its users in order to get other people to use it and incentivize to build on it um and yeah you give them yield for

that. And that vision is not crazy. And if you think that DeFi is worth tens of billions of dollars, then it could be a fair bit of value that you get out of this. All right. So I want to take a second for you to explain exactly how this works. Because I think there's a lot of people who listen to this, who they've heard of yield farming, like the terminology, they have no idea how it works. So kind of just walk us through exactly what's happening when people are doing this yeah uh so first i'll just say mechanically here's there's a lot of different versions of it um i'm just gonna like talk about sort of a really simplified version of it and you can put as many knobs on it as you want but at its heart what is it you build a product and uh it's a product people

can use um you know maybe it's a borrow lending protocol maybe it's a dex um whatever uh let's for now say that it's a borrow lending protocol that's where this all started um and what you say is all right i want a lot of people to be borrowing and lending for my protocol right and what do i mean by borrow lending protocol something like compound or ave where you can basically it's you know put in ether and take out usdt or whatever you know there's sort of like a bunch of of accepted tokens and you can lend some of them to the protocol and you can borrow other coins against it um and then other people can borrow the coins you're lending out and you're paying each other interest for this um i so um so you want to incentivize growth in

your project and you want to incentivize people to start using it building on it integrating with it um and so what you do is you say all right first of all all the revenue is going to go to token you know you create a token it's the equivalent of you know an exchange token a protocol token whatever um and you say all the revenue for my project's going to this token you know with compound is calm um and what we're going to do is for the next three months we're just going to every day airdrop a thousand tokens on everyone who's using the platform just proportionally to however much you're using it so however much you're borrowing plus lending out you know that's how many points you get and then this thousand these thousand

comp tokens just get divided evenly between all those people um and i what happens then is you know a lot of people go to use your protocol because they want to get your token for free so they start borrowing or lending um and they get your token you give up most of your tokens or some, I mean, it depends on the project. And they get yield. And what yield means here is basically like, they're putting up $1,000 of capital and every day they're getting $1 of the token airdropped.

And so they're getting 10 bps a day on their capital, just literally putting it there and lending it out. And the yield is coming in the form of the protocol token that's being airdropped on them. And the vision is now all of a sudden, all these people who use bar lending protocols top of your token. They want yours to win. They want to build on yours. They're aligned with you. And they provided a value by providing liquidity to your protocol, by providing coins for people

to borrow. And so all that's great and helps you out. You help them out. You're aligned. That's the theory behind it. And I'm sort of like taking sort of like the positive light, the optimal version of this and ignoring all the bad shit that happens. Okay. So when people are doing this, just to summarize, the whole idea is to incentivize users to adopt my product or my network over another one. And therefore, basically, I pay some rate of return for them adopting that, right? That's right. Over another one or over just doing nothing. But yeah. Okay. The interest I think is, or the return on some of these, I think is where kind of, especially people who come to the traditional water, like, wait, what is going on? Because, you know, the return can be a thousand percent, right? Or, you know, crazy, crazy numbers. So kind of talk through a little bit. I'm assuming that you, you believe that like, that's not very sustainable and we'll kind of get commoditized down, but maybe not. Yeah, that's a really good point. And that is where a lot of the shit starts to get weird, is that when someone says that they have an interest bearing product for you, you know, like, let's just say, get rid of crypto, right? So it's like, I got some bonds, you know, they're like, I don't know, corporate bonds or something. and they're going to pay you interest each year.

You're like, great, what's the interest? It's like 6% a year. So you're like, all right, you know, that's a number that I find plausible. You know, I'm sort of like, is that better or worse than putting it in the stock market? Like, I don't know, maybe it's a little worse, a little safer or whatever.

Anything between like 1% and 15% a year is sort of like normal land. And crypto interest rates are higher. There are a lot of ways to think about this, but just generally crypto interest rates are like 20% a year, roughly. So in crypto, you have something that pays 20% a year, and that's actually kind of reasonable. There are a lot of people who pay 20% a year for capital.

There are a lot of people who loan capital at 20% a year, whatever. So, okay, anywhere between like 5% and 30% is like plausible in crypto. But as you said, some of these are 1,000. And 1,000 is equivalent, like it's just like that's a ridiculous number, right? Like no one ever pays you 1,000% a year, right? And why is that? first of all, everyone would do it. Also, why are they paying you so much money? Where is it coming from? This is way too much. You could have said 100, and I would have been amazed at it. A thousand,

that's ridiculous. So sort of your thoughts, this has to be a scam. This is the send one Bitcoin to and we'll send you two back type scam right um and and what's actually happening there is i well mechanically what happened was yeah they're air dropping the tokens on the users and just do the math you know they're like giving away half of all their protocol tokens the next two weeks and uh that's a quarter billion dollars worth of tokens are given away and you know there's optimistically going to be a billion dollars locked in this protocol, using it so then you have 25% over a couple of weeks. That's where you get these insane numbers from. And there are sort of a few ways of thinking about this. The optimistic way is like, yeah,

time horizons are shrinking. They want their protocol to do well soon. So they're like, we're not going to pass out these tokens over the next two years. Let's just do it over the next two weeks why wait so yeah it's a ton of yield for two weeks it we're getting away most of the value the protocols the users and that's that's the trade we're making in return for getting a lot of users and i it's a little weird because people should be putting a shit ton of money in like that should be drawing a hundred billion dollars out to make the return more reasonable right like um that's sort of the optimistic take the pessimistic take is like it's a scam. Or it's not really a thousand percent a year. And what does that mean?

Here's an easy way to give it an insane yield. You just take a token and every day you double the number of tokens. You just mint another entire new set of them and airdrop it on the current token holders. So yeah, you're giving a hundred percent a day, but obviously the price is crashing. It's just a hyperinflating token. You're not actually giving out value there. And so another thing that might be happening is that the token's price is actually crashing just as fast as it's paying you, so you don't make money for doing this. Or maybe it's a scam. They're going to steal all your money somehow. And so those are sort of the pessimistic takes. Are these just like the new ICOs?

Yeah. I mean, they're not exactly the new ICOs. I mean, there's differences, and everyone will come up with their own sort of reasons for why they're different. And not structurally, but just in the sense of using a new mechanism for capital markets and incentives and kind of acquiring users. ICOs was one version. This seems just like a second version. And that's not passing judgment on good or bad. It just is what it is. Right. And I think in the end, my answer to you is closer to yes than no.

My answer is sort of like, yeah, these kind of are the new ICOs. That's actually not a bad way to think about it. And whatever. There's a lot else going on there. Obviously, it's not that – but yeah, at its heart, there are a lot of resemblances to ICOs. And it also feels like there's this game going on. In my opinion, there's people who I'm probably closer with that would say Bitcoin is the only thing. Nothing else matters. All this other stuff is frankly garbage and whatever. um what i think is interesting though is if you say okay like that is one view of the world and

and probably more right than wrong in terms of bitcoin having immense value kind of moving forward but there's also this like kind of thought process of wait a second there's a whole bunch of financial engineering and craziness going on here if you're a pure capitalist and you say i have no emotional connection whatsoever to any asset uh you can make a lot of money right and drive a lot of returns if you almost come at it like from a hedge fund perspective where a hedge fund says i don't care what the asset is all numbers on the screen and basically i'm just looking for things i can buy low that go up and then i can sell higher and you know make a return that seems to be the people who are thriving in this environment yeah and you know there's sort of i

know i've retweeted this a number of times although it's not actually my quote i is a group cms uh It's a cool firm who I coined this, but, you know, sort of, do you want to be right or do you want to make money? And, like, you know, there's sort of this thought of, like, all right, you can use your words. You can say whatever you want, you know, and I'll be here making money because I'm going to go yield farm. And you're not going to yield farm. And, like, you know, we'll see who wins. I don't know what winning means, but I've guessed about who's going to end up with more money. you know that that's sort of like maybe what you're getting at there which is like

put aside all the like moralizing and all the philosophical aspects of in the projections and just say like can you make money yield farming the answer is yes you can make money farming you make a lot you don't have to lose a lot i mean it's you know if you just yield farm scams then you're just gonna lose all your money and um if you don't understand that tokens can crash and that their prices can move, even if they're not scammed, then you're going to end up yield farming and all the pools are probably going to crash. So it's not like you can only make money doing it, but there were ways that were actually just not that risky. And so how much money can be put to work in these strategies, right? There's a lot of people who

kind of come from the traditional Wall Street world and they say, hey, if I can't put $50 million into the trade, then it doesn't matter, or hundreds of millions of dollars. My understanding is you can't do that, but you also can do more than $10,000. And so kind of talk through your experience with how much capital can actually go into some of these trades. Yeah, it's a really interesting question, and it's really different for some of them than others. You find a new project that has sort of nothing in it, and if you put in a million dollars, you'll double the total amount of money in it. You'll have all the returns, and no one's going to be there to buy the tokens you're farming. So some of them, the answer is you can put $10,000 in, and if you do a whole lot more than that, you're just killing your return.

Like there's, you know, others, you know, different ones are different sizes. And sort of what you should be thinking is a combination of two things. First, how much yield in dollars is being handed out? Not in percent, but in dollars, right? If someone's handing out $1 million total of yield ever, there's just a limit to how big you can do that trade. If other people are doing it too, you're all fighting over that. You're not going to have a trillion dollars at work trying to do that. If someone's giving out a billion dollars of yield, it's worth tying up a lot of capital to get that.

The other way to think about it is just how big is the world doing this? How much impact will I have doing it? How much liquidity will there be in this token evidence mining? Can I sell it? Not that you necessarily will sell it, but can you sell it as sort of the ultimate truth of like, is it real money, right? If you're getting all this yield, but you can't sell the yield, it's sort of a sign maybe the yield's fake.

But if you could sell it, then even if you don't, maybe it's kind of real. And so anyway, to answer your question, on the low side, almost none for some of these. On the high side, well, you can sort of look at the numbers, and there's a lot of different numbers you can look at. One of them, right, you can look at the sushi swap migration and how many funds moved with it, how many funds accrued to it, how many moved back. It's not clear exactly what the right number to use, but they're all in the same order of magnitude. You can look at how many funds got locked up in compound at its peak when it was like the only one doing this. You can look at how much is in curve. i mean there's a lot of versions of this if you look the biggest ones out there and the number

is about a billion that's about how big the world can do this probably more probably a few billion dollars worth of funds um and it sort of has to be that big because it's been like a billion dollars handed out and if you could have gotten all of that for like 100 million dollars that's like a ridiculously good trade i mean there's a lot of ridiculously good trades but 10xing in a month pretty good um and and suddenly you say okay but you couldn't actually put that much at work right like come on i don't know i think i think kenny you could it's big it's really big it's now again not everything right like only a few of these pools have not been you described like okay there's something you can put $10,000 from what you've seen, like,

and you don't have to use names, but just like, what's the biggest single opportunity from a size standpoint you've seen? Yeah. A single pool billion dollars. It's that, that's about the biggest they've gotten. You know, if you look at how much dye was being, you had many hundreds of millions of dye in compound at one point, you had hundreds of millions of dollars of bat in compound at one point. um you had uh you know you've had a billion dollars in sushi swap you've had a billion

dollars in curve um i balancer had hundreds of millions of dollars yield farming um yeah i think like a billion's about as big as the biggest single pool has gotten now obviously put another billion in there you're crushing the market but i you know if the question is like could you put 50 million dollars to work yield farming yeah the answer is yes you could okay uh you're saying that with a smirk on your face so i won't ask any questions um but uh let's talk about sushi swap yeah absolutely like this to me is like the epitome of just app you know chaos in crypto oh yeah in every positive way and every negative way combined in one thing um tell us kind of just your perspective of what's played out so far oh it's been a fucking soap opera i mean it's it's

insane um it's i i mean i thought that i'd seen some insane things but this is so much weirder um so yeah it it was one of the the yield farming pools they did their yield farming on on unit swap and i think they kind of did two things that other yield farming didn't do um one thing is they chose a really good thing to yield farm um most yield farming is not done on uniswap which is weird if you think about it because what product is the most used product in defy like it's uniswap what product would you guess would be the highest revenue product in Well, not Uniswap because it hasn't turned on revenue, but if it turned on revenue, then maybe Uniswap, right? Like exchanges, and it sort of fits, high volume, it's an exchange.

I think it's like an underrated point that like, you know, if you look at what like, like Curve has maximized the hell out of their position, and they've done an amazing job given what they are. what they are is a stablecoin to stablecoin liquidity pool. That's like not an incredibly high grossing field in crypto in general, right? Like, you know, they've done amazingly given that that's sort of like what they've done so far. But all right. So first of all, yield farming and unit swap, yeah, okay. That seems like enticing. And the second thing that they did was they had this cool idea. Well, some people think it's blasphemous. Some just think it's awesome whatever um it's whatever you think it's potentially powerful which is um well if your goal is to incentivize usage and to kind of get a user base and grow it out what easier place to do that

than on a current version of the product so what it did was it started out not by building sushi swap the exchange but by just having people farm sushi by using uniswap and sort of the natural crowd then to give sushi to and then to fork and create sushi swap another dex um so it made a few interesting decisions i think like were powerful if nothing else and it gained in popularity and it became like the biggest yield farming thing one of the biggest buy returns but but the biggest by prominence i think that there's ever been um how much how much of that is driven by uh the meme and like the name and kind of the like twitter you know right gift lords taking over and really pushing it well certainly some of it is like that was definitely a driving factor but i don't think

it was the only thing i think that was it took off because it had a really good medium to grow on which is like you know something trying to become one of the preeminent dexes um and if if defy's booming probably dexes should be it's actually surprisingly few of them um it's uh you know you can kind of think about what you think sushi should be worth um i don't fucking know but like you come up with a big number if you make the right assumptions you know it's like it's it's not uh it's it's not like it's obviously just a dead coin eventually um sort of backing a real product and type of product that has potentially high upside so so i had a good substrate to grow on but then also um had great memes not the best memes i

think based has better memes but good memes you know good enough a solid a minus on the memes um you know to go with like a solid a on the product and and so okay sure you know as far as food coins go that's way ahead of the curve like the curve is like you know b and d minus respectively so like a minus and a is really good um and uh okay so it got huge sushi was huge like one of the most trade points in the world i second most maybe caught up to ethereum one day I don't know he's like right around Ethereum level um and uh ran up a lot and whatever he's huge um and everything was uh I don't know if humming along is quite the right word it's like a sort of massive like volatile uh uncertain kind of clunky thing but it is big and growing

and then I then and I sort of was on the outskirts of it in that FTX listed it um it listed Sushi um and uh and i'll make a farm some sushi and um and then i it was about to have the great migration which is like this point at which i sushi swapped the exchange the dex was going to become a thing um it was going to fork off from uniswap and try and migrate people's liquidity from uniswap to sushi swap um and like a day and a half before that um nomi the the you know face behind the project he went the founding felpers um i took the treasury and uh that was not well received and took the treasury for those that don't know uh means that all of the money that was sitting there uh was converted into eth and like took it personally right right and to right

And to be clear, it's not the – it's not like the user funds that were there. It's the – it was the – and it's this thing that doesn't exist so much in centralized finance, but sort of the project treasury, like the funds to be spent growing the project out. So it's not like they stole all the users' money. That would be like really bad. Yeah, it basically was the idea of what was being airdropped was coming out of a bank account, right? And they took the bank account. So it was not something that users had given them. It was something that they kind of had created, but it had value. It ended up being, you know, what, like $13 million or something. Yeah, that's right. And was not well-received. that's right um yeah it was very not well received and um the world realized shockingly right the

world realized a lot of things at the same time the first was oh shit um the second was oh we probably should have had a more in-depth conversation about what the purpose of this it was the dev fund the treasury like sort of you know pool of stuff to grow the platform what it was and whose it was and maybe we should have rushed to get a multi-sig control fix there's just no means sick but also maybe rather than rushing to at least we should have like clarified the ground rules for it um no there have been some sort of informal verification of rough ground rules and it is not exactly adhering to them like this is there's not what anyone had thought was was sort of going to happen or or communicated at all and so it was i i mean sushi crashed

hard the market crashed hard um and i the community was was furious no me seemed a little confused i think like certainly reading no me's twitter like if you take it at face value like were not expecting the backlash that they got. They should have been expecting it, but they were not. And Sushi's always nearly dead. It's weird. It all kept going on as it had before, except the token had crashed, and everyone had lost their confidence in the founder and the project, and there's no more treasury. So okay, not great. It's amazing that there hadn't been huge like rug pulls or thefts in DeFi so far that like none of these platforms had lost a billion dollars in them um but still you know 14 millions that's not not you know that that's real money

there and uh I and that was uh yeah it sort of sushi went from the hottest project in crypto too uh toxic in you know an hour all right so when all this happens uh i was not paying a lot of attention then all of a sudden when it started to like really really go up people started tweeting it at me so i kind of spent my obligatory like you know 20 minutes googling okay i kind of sort of understand it just enough to to know what bucket to put it in mentally but didn't really go deep on it and then all of a sudden when uh the treasury was taken literally my feed was just filled with anger hate laughing i mean just every emotion in the world coming from different people uh that i told you so crowd the somebody stole my money because i don't understand what actually

happened crowd the you know the token went down i mean just everything uh and so i was like okay that's probably not a good development for uh for a lot of people um and then i don't know 24 hours later uh somebody tweets at me and says hey it's been transferred as a project to you and i was like wait what is going on so kind of how did that happen and what exactly happened i guess Yeah, that was pretty fucking wild. So yeah, I was, I mean, I, like many people, were not excited about the developments with the Treasury. I think I was like a little more sympathetic than some people were, just in that I thought that there was legitimate ambiguity about what had been intended. um not that i thought this was an appropriate use of them but that i i also sort of felt like like legitimately like people didn't quite nail down what what the plan was for it and also that

like nomi seemed legitimately not to think that this was going to be perceived the way it was like there seemed to be a real like this wasn't sort of like him saying lol bye you know there's like a real disconnect here um but i but also sort of destroyed the project and also was the wrong thing to do and uh and like you know it was also not selfishly the right thing to do i mean it's made everyone worse off it's bad bad for everyone like it's and you know the honest truth is if like he had never done that and he's just like worked really hard for the project and made it be a great thing and then eventually was sort of like hey guys like like i think that like you know i should get a percent of the tokens i think people have been

like yeah that sounds right you know that sounds like a like you deserve that and i and you could have ended up with more than they did so um so how does it get transferred to you yeah so i i wrote some some tweet threads expressing expressing my displeasure and um and uh you know basically like you gotta fucking transfer control this project or it's just dead like you no one is gonna have faith in it with you with the keys like sort of like uh and um anyway i sort of like that sucks like that that's sort of it for sushi um and i don't know took a app and i i was like on a beanbag by my desk and so i just shouted out like hey someone just tweeted that nomi said he was gonna give you the keys uh and it's it's a weird moment um but i i don't know

i kind of got up and you know bolted to my computer and and in fact someone had 20 tweeted a screenshot of nomi saying he was gonna give me the keys to the treasury um so that's pretty weird and uh and i mean it was like uh kind of like an even more bizarre twist than the previous twist of him having taken like like sort of like you know was like a really strong negative twist and then an even weirder positive twist um but i but yeah i mean i don't know he he then did it like Like, he sent the keys to the Treasury. And that sort of changed my weekend plans. I mean, you know, whatever I had thought I was going to do,

it wasn't figure out how to do a sushi migration. But remember, the migration hadn't happened yet. Like, that still had to happen. And it was actually kind of a tricky, intricate process. and i mean we like i hadn't written sushi swap or anything it's sort of like you know so all of a sudden it's like okay like i guess what's happening this weekend is uh that we're gonna go figure out how sushi swap works um you you still have control right uh so we are uh so the He was passed, and it's sort of like technological control over some parts of it, although, you know, as sort of dictated by votes of community members.

But that control is transferring to multi-sig control, sort of step one. And that transference is happening maybe tonight. We have everyone's address now, and last I checked in, we're preparing it. so uh that's going to be sort of the next step for uh you know the next step for for sushi swap in sort of formally you know removing me of control which is sort of important to it because that's not it's not sam swap and it's not you know i'm not meant to run it i don't run it i don't like it's sort of like the keys were dropped on me but it's that's not uh it's it's you know meant to be the community's project and so so you have no plans this is not going to become

the next product line of alameda is to go no no this is not and it's it sort of can't be because that's not like it would involve fundamentally changing what sushi swap is you know like that's you know if if you know if i like at some point you know serum might create it or or ftx or something might create you know name amadex something like that but as serum did create decks but um i you know sushi swap sort of dropped on my lap and i want to be sort of faithful to like what it was meant to be and what people thought it was meant to be when they got involved in it got it that makes sense and and so let's zoom out for a second um you have your hands in uh alameda ftx the whole sushi swap saga uh you kind of have a front row seat to a lot of things

that are going on here just so people understand kind of where you see opportunity maybe just talk through like on a percentage basis of your time and mental energy how much of it is uh on the exchange how much of it is on trading how much of it is on like the defy world just how do you kind of think through um you know maybe the prioritization of these different things and i'll use your time almost as like a proxy for uh of kind of focus and energy yeah so um basically um it's i mean it varies right like a week and a half ago the answer was zero percent on sushi that's not a thing um and and and in a week it's going to be not zero percent on it but you know very little very very little it's it's like um so that's that's sort of like a a a you know

a little bit of a uh that's what's a word like a you know outlier yeah a weird musical interlude in the middle of uh you know but um you know i i've been spending most of my time on serum and ftx and so uh you know on the uh you know doing doing sort of accommodation management and in product vision and and things like that and also a lot of low-level stuff i mean you know sort of like a tricky support ticket comes in and like it's sort of not clear what's going on exactly I'll often take it. Um, and, uh, and so I would say, you know, recently it's been majority on serum, some on FTX and, and then just sort of general oversight of, of Alameda, but not a ton of, uh, you know, day-to-day, uh, intervention. Got it. Where can people find you on the internet

and find out more about FTX or Alameda? Yeah, so I've decided that a good, you know, as someone with recently one too many projects on their plate, a good use of my time is shit posting on Twitter. So that's where you can find me. I'm SPF underscore Alameda on Twitter and I'm tweeting way too much.

It's okay. So that's the easiest way to find me. And then FTX is at ftx.com. Serum, if you go to projectserum.com, you'll find a helpful website with a bunch of links to stuff. Got it. I end the podcast

with the same two questions for everybody. And then you get to ask me one. All right. The first is, what's the most important book you've ever read? Oh boy. I mean, I'm gonna be honest. like i don't really read books anymore i mean i think like i like fantasy books growing up but

they're they're really long and and and i mean i think that they're i don't have that long of intention to spend but even more than that i think like the world has sort of decided that like uh there are more efficient ways to convey things often and i i sort of agree so um i guess you know i'll say rather than that maybe some blogs that i like uh uh which are uh there's money stuff um so matt levine's blog if you like reading about finance it's it's it's the best i mean it's just uh it's in addition to being super helpful and useful it's uh uh completely bizarre and it has like wonderful anecdotes um and uh you know I think that's probably uh probably my favorite you know regular blog and then uh I also like a lot of the like the 80,000 hours if you're

into effective altruism um has a lot of good pieces coming out um about what you know you can do with your life um and yeah i mean outside of that you know i sort of like i should post on twitter and stuff but but in terms of media i think you know it's pretty much that that sports and netflix so second question it's more fun aliens believer or non-believer oh god i mean it's like i certainly would not assign 100 or 0 probably to it although some calculations will give you a hundred percent sort of i would not say like i i don't know how to think about this one exactly and i definitely get like contradictory answers like one way to think of this is you just sort of like are like you know you serve any reasonable model and then multiply by the number

of planets and you get that they definitely exist like there's no chance they don't um and then you sort of take a step back and you're like okay but we've looked at a lot of planets and none of them have it like like you're saying that any reasonable model would have assigned effectively zero probability to what we've seen and then you say no it's like there there are these reasons that that makes sense i i have not thought hard enough about this to reconcile it i will say that i would say more likely than not that there is something um although that something might be like seaweed or you know yeah a variant on it or more more likely something even maybe even less like it but I don't know. I would say, yeah, more than 50% chance that there's some life on some other

planet, although probably less than 50% that it's like us. I think that's a fair answer. You could ask me one question to end this. What do you got for me? Yeah. Which coin have you most regretted buying and which coin have you been most proud to have bought uh bitcoin by far uh in terms of um kind of most proud i guess i guess the the emotion of proud uh i don't know if i necessarily think of that as like a right hey i made this financial accomplishment right yeah but but bitcoin would be the positive uh answer there yep um early on uh in like you know i don't know 2017 i actually don't even remember like i i never really kind of waded into like what i'll call the the crevices of crypto that you know like the super illiquid

stuff but uh when ether went from like 10 to 30 30 to like 100 in the spring of 17 i just didn't really have nearly as much education and knowledge and like thesis and conviction and you know all the things that like now i think if you were to talk to me and say like why do you believe what you believe i couldn't have articulated any of it right then and uh to be honest there's probably things that like i bought and it was never big amounts but it was just like i was more like buying it because everything was going up i kind of feel like it's like stock investors today right like yeah you just put money in anything and it goes up index yeah um and so uh that was short lived uh um but but uh that's probably the answer it's just like there was all kinds of

it's like a coin whose name you you can maybe and maybe not even remember now like yeah and it's like dumb stuff right it's like oh you know bitcoin's worth two thousand dollars so like this other one's worth you know 300 like are they gonna go is it gonna go to three you know two thousand uh yeah so it's just super unscientific uh more entertainment than uh than investing frankly um yeah but that's probably it all right sam listen thank you so much for doing this this is absolutely fantastic i think people will love this and thank you you've built some amazing businesses in this space so well thanks oh and we'll have to do it again in the future absolutely