Unchained - How OpenAI's Math Dump Has Crypto Rethinking Its Cryptography: Uneasy Money

Episode Date: October 8, 2026

Justin Drake told holders not to panic. Ben DiFrancesco says if AI weakens elliptic curves, the clock is how fast Chinese models catch up. ======================================================== Thank you to our sponsors! Visit 1inch to swap tokenized securities, crypto and more. Simple. Secure. Self-custodial. Whatever asset you’re buying - swap it at ⁠⁠⁠⁠⁠⁠⁠http://unchainedcrypto.com/go/1inch-sn⁠⁠⁠⁠⁠⁠⁠ ======================================================== Quick favor: We’re deciding what Unchained does next; new shows, stream times, what’s worth paying for. ⁠⁠Our listener survey⁠⁠ takes five minutes, it’s anonymous, and I read the write-in answers myself. Everyone who takes it can enter a drawing for a free year of Unchained Premium or Bits + Bips Premium. Open through Sunday, October 18. — Laura ======================================================== OpenAI released 722 math papers, and Justin Drake followed with a "don't panic" tweet suggesting large holders consider moving funds, setting off a wave of speculation that elliptic curve keys might soon be easier to brute force. Ben DiFrancesco, Founder and CEO of ScopeLift, joins Kain Warwick, Taylor Monahan, and Austin Griffith to separate rumor from risk. DiFrancesco puts low odds on the rumors but argues crypto would get hit first, patch fastest, and could leave traditional finance as the worse place to hold money, with Chinese open-weight models setting the clock. Monahan untangles the 0.36 ETH MetaMask staking incident that got pulled into the speculation. They also cover ZachXBT's undercover investigation of a DPRK money launderer, the NEAR Intents hacker sending funds back, and a push for Swiss authorities to intervene at Safe. DiFrancesco closes with a warning for token teams: the regulatory excuse for skipping value return is going away. Hosts: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Kain Warwick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ - Host of Uneasy Money and Founder of Infinex and Synthetix ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Taylor Monahan⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ - Co-host of Uneasy Money and Security Expert ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Austin Griffith⁠⁠⁠ - Co-host of Uneasy Money and Builder Enablement at Ethereum Foundation Guest: ⁠Ben DiFrancesco - Founder and CEO of ScopeLift Timestamps 🔐 01:57 Why Justin Drake’s ‘don’t panic’ tweet has crypto eyeing its cryptography 🦊 06:12 Taylor on the MetaMask staking incident and the 0.36 ETH that tipped it off 🧮 14:03 Ben on why even a worst-case ECC break wouldn’t mean instant theft 🏦 20:04 Why Ben thinks TradFi, not crypto, could be the worse place to hold money 🤖 25:02 How AI models went from flubbing 2+2 to formalizing hard math 💧 30:45 1inch: See how LPs can back multiple positions with one token balance at http://unchainedcrypto.com/go/1inch-yt 🔙 31:49 How the NEAR Intents hacker ended up sending the money back 🕵️ 37:07 ZachXBT went undercover with a DPRK money launderer: what he found 😤 51:25 Why instant outrage is the tell for launderers and Sybil farmers 🏗️ 56:11 From Gnosis’s 2017 ICO to Safe, the multisig securing $100B+ ⚖️ 01:02:23 The push for Swiss intervention at Safe and what it actually claims 🗳️ 01:08:12 Ben on how regulatory fear warped DAOs and why value return matters now 🧱 01:17:12 Blast and Abstract shut down: too many L2s, and never build a wallet Learn more about your ad choices. Visit megaphone.fm/adchoices

the speculative premium that these tokens had during the hype period is going away. Right. So if you're going to put a governance token in front of your project and allow decisions to be made in one way or another or mediated through in one way or another token holders, then you have to be able to provide economic security through that token, right? Because if the value of the token drops below what it would be worth to steal the assets that the protocol protects, then it's not just like something that you can just say like, ah, we don't care about the price. That's not our focus. Like, no, that's like a key component to why the system works.

And if it can work, that's why it's supposed to work. Go on and I'm Kane Warg and welcome to uneasy money because what happens on chain never stays on chain. Before we begin, here's a word from the sponsors that make the show possible. This episode is brought to you by 1 inch Aqua, the shared liquidity layer from 1 inch. Back multiple liquidity positions with one wallet balance and keep your tokens in your wallet until a swap fills. See how it works. at 1inch.com slash aqua. Not listening to Bits and Bips yet.

It's our weekly crypto and macro market show with Rom Alawalia, Austin Campbell, and Chris Birkins. Search Bits and Bips and subscribe. All right. Hey guys, I'm here with my co-host, Taylor Monaghan, security expert and Austin Griffith, Builder Enablement at the EF. And we have a very special guest this week,

Ben DeFranchesco, founder and CEO of Scoplift, the team behind Umbra and Captus. formerly tally that's quite the bio you were not formally tally that was that just was formerly tally that's right yeah all right just make you sure i've always been benny francesco has not changed okay you were you were never masquerading is a dow that was going out of business okay um good to know all right so our first segment uh i was saying before the show started uh like slow AI newsweek um and then I'm in Singapore, so yesterday it became not slow, and it's only accelerated since.

So we're now in this interesting, weird, rumor situation about Meta Mosque and Bunker mode. So Justin Drake, who I love, like his tweets of the baby, if he tweets, like, it's just like Max Chaos sometimes. It's amazing. So Justin Drake tweeted yesterday, don't panic. Always a strong start, strong start. That's what you want to hear. You may want to move all of your crypto out of the cryptography zone that it's in, which

not amazing. So, you know, don't rush, though, guy. Like, don't rush. Just, like, slowly panic exit, right? And the thesis was this was all on the back of Open AI being like, hey, you know how we take out startups all the time? Well, we're taking out mathematicians this week. Not a startup, but like we're going to ruin it anyway. And they dropped 722 papers, a bunch of them that were like formalized in lean. A bunch of them that like have implications for things. And one of the implications I think is,

maybe there's like faster methods to you know break and again like this is not saying that like elliptic curves are solved or something like that it's just saying that like there might be faster ways to brute force keys right and so you know if you happen to have more than 50 Bitcoin for example right because there's there's a bunch of Satoshi wallets that have 50 BTC because that was the original block reward But if you happen to have accumulated more than 50 BTC and it's sitting in a wallet, maybe move it behind like a hashed, a hashed wallet somehow that uses like a different a different hashing function to protect it.

Like, on one hand, it seems like fanciful and insane. But I just think that we are in a situation where like it's unprecedented. right like this is an unprecedented situation no one knows how to think about it the average person doesn't want to think about things and this like you know for me it harkens back a little bit to like covid right like crypto people are like autistically retarded right and crypto people were far more worried people crypto people are far more worried about um about COVID like I remember not going to ECC that year because I was like this is going to be a catastrophe. I did send my co-founder. I was like, you have don't have children. You go. You'll be, you'll be fine.

It was sacrifice you for the ECC. Yeah, I was like, someone has to go, but just not me. And so I said my co-founder, he was fine. It was like a, it was a hot spot, right? That year, if you remember, there were like 150 people that got COVID. He somehow avoided it. So congratulations. but it just feels like we're in an unprecedented situation. And, you know, of course, then what happens is people start to connect dots that may not even be connected, right? So one of the dots that got connected from this is like Metamask is rotating their validator keys. And like maybe they know something about like math being solved and they're like, which doesn't seem that credible to me. No, but I don't know,

why I, that's, I know what happened. It's not what happened, right? But it could have been. It could have. And that's, and the possibility is terrifying. So I can give you, I can talk a bit about the metamass situation. Not because I formerly worked at MetaMass but because I read the MetaMast tweet

and I could explain it in more human language. it seems like So MetaMast staking, formerly consensus staking, is a non-custodial staking thing, right? The stakeholders have two keys. There's the withdrawal, move the money key, and then there's like the validator key. The validator key that does the work

is on the server somewhere. The withdrawal key is yours as the end user, right? Okay. So there's a third, it's not even a key, there's a third configuration that is neither of those keys. That's the fee. It decides where the fee goes. So MED fees and block rewards go to specified address. This is actually not signed.

Well, it's sort of signed. You have to sign to shift it, right? Like to ship where the fees go? No, it's a configuration on the servers. It's like a Web 2 thing. Right. And so basically a whopping total of

0.36E was redirected from the original fee addresses that people had specified into new addresses. And that set off the alarm in terms of like, wait, what the fuck happened? Metabask has not come out and said exactly like

the, I think Joe came out and said that they're working that once it's all resolved, they'll do a full post-mortem and disclose everything. But just based on my understanding, of this incident and then also formally about a year ago Kilm had a similar situation. Usually what happens is basically like something happens on the infrastructure somewhere. You see signs of bad things happening. And so you just proactively, if you have strong security, you proactively start rotating

things to make sure that nothing else bad can happen. What's super interesting is that with validator setups, there's actually a very low risk of money being stolen because the keys don't live on the servers, right? Yeah, I mean, I have a confession to make here. I'm not sure that I know where my validator keys are. Like, I've got all my nodes. They're all running. The fees get sent to cane.e.

So that's fine. But like, it was such a long time ago, man. Like, how much was to remember? If your fees suddenly went to a different address, would you have noticed? Gone, no. Absolutely not. So when I saw this, I was like, everyone's freaking out. And I was like, you know what? I can't believe they voted's .36

I know. It was diverted. But it's just a testament to like actual like strong. Yeah, I mean, it's impressive. It's impressive. I'm not running a very, I have the least effective validator set in Ethereum history. So I've got like 40% downtime historically over like five years. It's like shockingly bad.

So zero-nines is our policy. Zero-nines. I would notice mine. I would notice mine. It's like my network there. My couple of validators is like my nest egg. So I would notice it differently. But also like the keys are hard to remember where they are.

I do know where they are. But I remember one time, a long time ago, Kane, someone stole one of your validators. I remember you tweeting about it or something. And you were like, good luck because you can't do anything with the stolen validator anyway. Like it doesn't actually have the keys on it, right? Oh, yeah, no, this was my DapNode. The machine disappeared.

The machine, the whole machine disappeared. There's nothing you can do that, right? It's the funniest thing. This DapNode, like, I bought a DapNode, and I was like, I'm going to self-validate. This is what I'm going to do. And I spent so much time setting it up, whatever. And this is like, I've now thought back on the process,

and, you know, memory is very fallible, right? And so the confabulations that I have, about the process that I went through to set up these validators, have no bearing on reality at this point. Like I have, like, I've got no idea what I did, when I did it, what room I was in. But in my head, I'm like, oh, I know I was here. So if I can reconstruct it, I got no idea.

But by the way, way, way easier now. You can give AI, like SSH access and say, let's room a validator on this thing. And it's going to say, do this and that. You would still have no idea how you did it. Right, exactly. Because AI did it for you. Yes.

Yeah. You'd at least have the session. You'd have the session, right, to go back. Like, yeah, crazy. You know, the session files are like my memory now. It's the only way I know what happened, right? I'm like, hey, two weeks ago, why do we do this thing? Go look at the session file. And I'll ask them to tell me what my reasoning was because I'm like,

I can't remember why I thought this was a good idea. I'll do that yesterday. Like two days ago. Sorry, go ahead. No, I was just going to say, it's weird. I've added, yeah, my AI sessions are like a form of memory now. And it's like the first one I go to. And there's so much goodies.

There's so many goodies in there. It's dangerous. Well, Austin, you called me the R word 10 times. And then you're wrong. Sorry, Ben. No, I was going to, I mean, what I was thinking is like, so this, the, the metamask connection to like the AI, you know, possible break of encryption thing does to me feel a lot like. kind of a COVID era, everybody's online, a little bit on edge.

And like, you know, we're all kind of like, you know, Charlie and that meme where we're connecting things on the whiteboard, right, that aren't really connected. So it definitely feels like COVID in that respect. It also kind of, I think, I think the comparison is apt because it feels like we're at the beginning of like an exponential process, right? And people who are like too online and like paying close attention, like see the like start of this exponential curve happening, right? And we're like, huh, that's, that's a little alarming.

Like something is happening here. But like, everybody else in the world is like, oh, you know, a virus in China or like, yeah, I can talk to Chad GBT or whatever. And like they don't, you know, it's not kind of. And by the way, I'm not saying that AI is going to be like bad or a disaster. Like kind of doomer kind of thing. I'm just saying the changes are exponentially. It's an exponential process.

Exponentially fast. Yeah, exactly. Yes. And we have really bad intuition about exponential. processes and and so you know autistic like terminally online people are going to be the first ones to notice that like there's a gap now between you know the the the y-axis and and so yeah it's it's like yeah it's crazy um so and also hold on though i want i just wanted to ask because i was really like just and drake's like this morning right right if if like cryptography is

Is the cryptocurrency the worst thing, the thing that's going to end the world? Or do you think it's a little bit of, I mean, the thesis I think, right, from his tweet is that it's like we haven't broken elliptic curves, right? Like what we've done potentially is make it easier to brute force them. And so if you have 100 GPUs in, you know, a server farm, which funnily enough, people weirdly for some reason have fucking have now, And you're like, ah, these AI tokens are like, cool, but maybe I'll just break Satashi's wallets instead. You know, we've got so much fucking compute laying around. So, yeah.

Well, I will take, I'll modify what you said a little bit. I do think that if it's, if it becomes possible to brute force in any kind of reasonable human time, you know, X the keys, then that is basically ECC being broken in a sense. Sure. But you're right in the sense that it's not as if what would happen, even in the worst case scenario, it's not as if what would happen is tomorrow anybody can sign a message. Read anyone's message. Right. Yeah, exactly. Like even in the, even in the bad, very bad scenarios, what would realistically happen is you would have some kind of weakness in the

underlying cryptography that's been discovered, right, that allows brute forcing to happen, but still requires a long time and enormous amount of compute, right? And you're right, we do have a bunch of compute now, but the other side of that is that the compute is now very expensive. And that actually helps here as well, right? Fair, yeah. Because, you know, basically it sets, again, even in the worst case scenarios where you can just throw GPUs

and get a key for any address that's signed a transaction, even in those scenarios, you know, a lot of addresses are not going to be holding like, economically worthwhile amounts of funds, right? Which is why if you read Justin Drake's tweet, he focuses on like the big infrastructure providers. And that's not only because they stand to lose a lot, it's because they would be the first targets, right?

The ones who are like custodying enormous amounts of assets in, you know, in a single address or whatever, right? I mean, like the worth address to me feels like a fun one. like or zero zero address just even better yeah zero X dead right like but you know weth is funny because like there's always been these like it just feels like a bad

it's like the start of the horror movie right like weth is like walking through a dark forest and you're like something bad is going to happen to this guy he's too beautiful for the world and and so like you know I I just, I've always had like a fear of the wet address.

5.5.5. And so, yeah. 5.5 billion in West right now. Yeah. Is it really? Jesus Christ. I know. It's crazy, man.

That's what I'm saying. It's too big. It's too big to fail. Well, but to be clear, that's a smart contract address too. So it's not secured by a private key in the traditional way. But, you know, your point is, is a good one. I also think like, I think it's just, I, I, I also just want to pause for a second and think about how crazy it is that we even have to consider this as a possibility right now.

Like it is what I was saying. It is really right. Yeah. Right. You asked me. You were like, you're like insane in what way? And I was like, oh no. Yeah. It's like, I'm just processing. But the fact thing you have to process is wild. It is wild. But if you think about it, right? Like we are sitting here on our planet with our like rudimentary technology. We think we're really cool and really smart. We're like way smarter than all of the other dumb fucking meat sacks, right? on the planet, right? Like whales and shit, like, what the fuck have they done? And then and then aliens land on the planet, right?

And of course, their technology that come from like light years away. Their technology is way better than ours, right? And they're going to be like, oh, hey, guys, like, we're just going to secure all of your Bitcoin first before we like start giving you, you know, solutions to like elliptic curve, cryptography and what have you, right? and a bunch of other shit, right? I'm sure they'd have to do to before they could like,

they couldn't just be like, here's the trove of all of the solutions to the things because society would blow up, right? Unfortunately, the aliens that have landed on our planet are also like pretty retarded and they're like owned by humans. And so this is like the worst case scenario for us, right? Like it's, there's no process here. Like the aliens, you know,

you would hope that those aliens like this is, not the first, imagine it's the first planet that they've found. Like, they would fuck it up, like, hilariously, right? Like, they'd have, like, all these ideas on how they're going to do it. If we're, like, the thousandth planet they've arrived at, it would be... No, they have a process. They're like,

oh, man, remember, like, the 30th planet? They nuked each other because we told them that their gods weren't real or whatever the fuck happened, right? They haven't come up with the prime directive yet, you know? Yeah, exactly. And so... Yeah, exactly. So, but unfortunately, that's not the scenario we're in. The aliens

we invented and they have no idea what they're doing to us they're just being like hey i was told to formalize this proof and i have done it here you go we don't even know what to do with it either like that's the it's not going to end well it's crazy man so with elliptic curve it is crypto but to answer tay's question it's also https and like all internet track that's what i mean yeah when the aliens landed they could plug in and just like see everyone's internet traffic immediately yeah right yeah yeah so this is like thing that that i've always explained to people since for like a decade now right when they're like but how do you know that the cryptography is stronger or strong enough or you know the answer is well we don't necessarily like forever no however if it will be signs there will be

there will be signs, but also the first thing to break is not going to be the Tocci's coins is going to be like the most powerful people on the planet hacking the second most powerful people on the planet, meaning like, you know, probably one government hacking another government or the rest of the world or whatever. Like that's right, because cryptography underlies a huge amount of the technology that the world operates on. So including by the way, the traditional financial system, which I think like to your question, Taylor, like, if this is, if this turns out to be true,

which again, I put like relatively low odds on it, but let's say it is, if it turns out to be true, then, you know, I think similar to the way, similar to what happened when these models suddenly got very good at cyber attacks recently, right? Like finding bugs. I mean two weeks ago, man. Two weeks ago. Like, yeah, like last night. Right. So I think open source got hit like hardest and first. because the source code is there and it's open and it's permissionless and you can scan it and find bugs, right? But then in the long run, I think open source is going to be the most secure, right? Because the same reasons.

Like it's a permissionless bottom up, like tons of eyes on it. Everybody's going to apply those resources to these open source code bases in a way that a closed source proprietary thing can't afford to do. And so I think you could actually see something play out similarly if it turned out to be something like this with the traditional finance, system, you know, in the long run, being the worst place to have your your money, actually. Like, crypto networks get hit first, but then they can react and fortify and fix the bugs and patch node software and do rollbacks and all the messy, terrible things that would happen. But then, you know, these legacy institutions, financial system that is built on. They're not going to be as reactive.

Yeah. They won't have the ability to react. They absolutely won't. Yeah. Agreed. Yeah. I saw a hold that the people that first gain access to this magical. power of being able to basically do anything with any technology is going to be like the

those people don't need more money like they can just like print money out of thin air right so they're not they're not going to be stealing satoshi's coins let alone like go lubin's coins they wouldn't start with something that's like extremely obvious you would assume right they would be doing you know they're going to be doing what like real power like geopolitical like the world type shit. There's, yeah. Like to your point,

if Open AI has figured this out, right? It's already been, you know, moved into classified, you know, sections of the government, like it's being used for cybersecurity.

I think the bigger concern, you know, for a crypto, like that gives us a window to act, right? And I think if it, if there's anything to these rumors, and again,

I give them relatively low probability of being true, but if there's anything to the rumors that like Open AI is coordinating with the EF or whatever, Like, we'll see things happening in pretty short order to tell us because the real risk is like with, as with all the AI stuff, is that the Chinese models are not far behind. And in that case, you do have, you know, first of all, they're open weights, but there's also an adversarial part to it, you know. So like that is, you know, you have maybe some number of months. If open AI was able to do this with their, you know, cutting edge frontier model, then you have some number of months before a Chinese model is going to be able to do it. Right. So that's like the clock if this were to actually be the case. Yeah.

Agreed. I have to say that at least this is very interesting. Usually when we're talking about hacks on this show, it's a few up on the stack where it's like. No, we're into some system. Somebody stole. Now we're talking about like math breaking. Then this is interesting, you know? Yeah.

It is. It is. It's wild. A decade ago when I would explain to people, like your private key is secure because of XYZ, right? the saying is that, like, in order to brute force it, you have to, like, consume more energy. They used to say heat death of the universe. Never saying, 2027, 2028. Oops.

Which, by the way, like, we might not make it there, right? We might not make it to 2027. So. It's just wild to, like, think about, like, my entire, basically my entire career has been like, yeah, yeah, totally safe. Why? It's been a. the density of energy in the universe.

And then it's like, it's like, okay, cool. Actually, maybe not. About that. I mean, I do think it's worth like highlighting a part of what Justin said in his tweet, which is like don't, you know, panic and rush and do something like stupid. You know, the average, like, you're much more likely to lose funds because you go to like rotate all your, you know, cold wallets and screw something up. then you are to have it stolen by a GPU farm anytime soon, right?

So for the average holder out there, even the above average holder out there, like even if you're a whale, like don't panic and do something that's going to be much more likely to cause you a problem than this, right? Yeah. Yeah. I think that's I think that's a fair call out for today. Yeah. For today.

Yeah. Like the time, like the clock is ticking here, right? Like time is, time is running. out like i mean the thing that was maybe the the most scary to me uh about uh the like math dump i don't know what better term to to give is that uh the description of the process that they went through right like the erdos problem they spent 10 million dollars on um this they gave it to like one model like one model in one session like it doesn't seem like this was like a brute forcing of like running you know uh 10 million dollars of compute to solve this problem they just

like gave it to the whatever the latest and you know it's kind of it's it's very interesting because models are spiky and we know that um and you know it's easy to forget that there was a period of time like two years ago where they couldn't add like two plus two yes like you ask a model like what is two plus two and it would come up with plausible answers like seven like it's in the area right but they were not correct and and you know it didn't say like 80 trillion right but like it was it was not right um and it would get like very trivial math problems wrong and people would like you know pose slightly tricky math problems and they would get them like even more hilariously wrong and they were like see look they're idiots they have no idea right um and that was two years ago right and and

what's interesting is the the skill set of models you know, does kind of reflect the evolutionary pressure of like making smarter models, right? They're really good at scraping data. And scraping data is like not like, you know, it doesn't take genius level intelligence, right? It takes like some brute force and, you know, some trickiness to get around, you know, whatever things that people are trying to stop you from like stealing all their data by scraping their pages. But they're like super good at that. If you ask them to scrape a website, like they will scrape the shit out of it, like faster than you could

imagine, right? They're really good at engineering, at writing code, which is more trivial than solving hard math problems, right? But now, weirdly, as they've like stepped up this scale of intelligence, right, they've all of a sudden gone through this like spiky thing where they're really good at math. And, you know, we saw this play out with engineering where, you know, really good engineers were like, oh, look at the dumb mistake that it made six months ago. And now, like, the best engineers are like, I, this is like, we're done. We're not doing this anymore. So, you know, I mean, I was actually, Eli was at the event that I was at last night from stocknet, stockware, Zcash fame. And he was like, I used to be one of those guys that did this thing. And now it's not a thing

anymore. And he wasn't talking about coding. He was talking about math. Crazy. Yeah. Yeah. It's clever math that's breaking it. I feel like, like my smooth brain take on this is like there's levels here and ECDSA gets cracked by just clever math. But then you have like hash functions and hash signing that are harder. And then you have like quantum computing and all of that stuff. This is like a couple layers down. Even though it sounds scary, like clever math only breaks the first level, not the second and third level. So there's something there that's like less scary but still scary and interesting.

Yeah. I mean, let's not forget. Yeah. Let's not forget, right? Like, you know, we, it was, it was less than six months ago where people were like, oh, these things, you know, like a year ago, they couldn't like fucking do a gig commit, right? We're at the point now where you can give a clever model an open source code base, and it will transcribe the code base from going to rust in like 24 hours, perfectly.

You're saying that the rungs will be climbed quickly. They tend to get better at stuff, because all I'm saying, right? Like, I don't know. I don't know. Yeah, I agree with that. Yeah, I mean, I've stopped making predictions about where it'll go because it says like it doesn't seem to work out that well. I mean, there's, so my understanding of some of the math stuff is that a lot of it is sort of like a kind of a computational or a brute force exploration of, you know, solutions bases. I don't think as far as I know, math people check me on this, that anything that's been produced by the models yet, is such that a human can't review, an expert mathematician can't review it and understand it. In other words, it's not as if the models are at the point where they're, you know, solving problems in a way that's incomprehensible to human beings yet, right? Where we just have magic technology that we literally are incapable of understanding.

Yeah. But I think your point, Kane, is a really good one. But like we were saying, well, the models can't do this six months ago and they like blew by that. So again, I've stopped making predictions. I don't know. It's crazy. It's an interesting question of like, is it possible for a, you know, ignore models, right? Like genuinely aliens.

Imagine they're super intelligent aliens that are, you know, for some reason a thousand times smarter than us, right? Would their math be incomprehensible to us, right? Or like, is there a comprehensibility to math that a smart human, any math thing, like, we are past some, you know, intelligence horizon. We're like, old Matt, it will be scrutable to us. We'll find out.

We're about to find out. I'm telling you we're going to find out in the next six months, like whether or not that's true. So that'll be fun. Hold on to your butts. $540 million. That's how much concentrated liquidity sat idle in a given week in the first half of this year.

About 30% of the Defi TVL, if you're wondering. That's according to Dune research commissioned by One Inch, but there's a solution. One Inch Aqua is the new shared liquidity platform. It lets LPs back multiple positions with the same token balance and keep their tokens in their wallet till the swap comes. Why does that help? Because the LPs don't have to split their tokens across positions. They can cover more market conditions and pairs with their full balance. That means more activity across deeper liquidity. See how it works at 1 inch.com slash aqua. Remember that providing liquidity carries risk

and fees aren't guaranteed. If you like this show, there's another one from our network you should be listening to. Bits and Bips is our twice weekly market show. On Mondays, Ramm Alawalia, Austin Campbell, and Chris Perkins chat about where crypto and macro collide.

It's sharp, it's fast, and it has its own channel. Search Bits, plus sign Bips, and subscribe. All right, we were back. So we talked about this, Last week, the near intense hack in the intervening time, the hackers sent their money back, which, you know, you see this happen occasionally, right? You know, they post a message, you know, Alex from Aurora said, we've identified you, sir, and then imagine it with money came back.

Now, you know, the interesting thing about that is that whenever this happens, like it's obviously not North Korea because they wouldn't care. era, right? Um, so, you know, it means it's some probably not nation state level actor, right? Um, it's, it's just some dudes. Um, yeah, I don't know. Uh, what's your, what's your take on this one day? Well, okay. So the, one of the interesting things was that the, the attacker actually sent some dust to, to the, to Lazarus, the Ronan address, the, the infamous Ronan address, uh, which is the same thing that the oiler, hecker did back in the day. It's been like three years now. But yeah, there's like a certain demographic of hackers who think they're like clever and are like, huh, everyone's going to think of North Korea. And then they like send the money to the ronid address. And then they immediately get caught and send all the money back. Like this happened with Euler and now it's happened with NIR. I don't know what to make of it. I think it's also interesting though because I feel

like the Euler team and the NIR team are like, you're just sort of cut from a different cloth a Like they don't like they get hacked and they're like Let's go get our money back like that's like the only path that they see um I don't know it's wild I would love to hear the story if someone knows the story or maybe the near team Please let us all in on the secret on the back I mean you know it's funny right Like when when we had the the Oracle hack like we'd shut down the things like I couldn't get the money out but like i was pretty clear with him like i will hunt you down like you can you can play this

game as long as you want but like i will actually physically hunt you down and like he didn't seem to appreciate that um so you know i think if you're if you're i like and you know you're a physical incorporated body in the world like you're not like you know you're not unfindable um everyone can be found. And, and, you know, if you're not a nation state actor, if you're just two guys, um, who are, you know, hanging out in Southern California or something, um, not naming any names, uh, then you can be found. You can be found. Um, and so, you know, uh, like, I think that there are teams that are like, we will find you. And there's people that can find people. Like, there are people in the world who that's their job. And if you make the money worth

enough like four million dollars like people fucking find you for a lot less than four million dollars trust me um so yeah uh you it's just like you know the teams that go eh i mean and this this is this is the funny thing right because but they don't that's a thing cane it's like they don't go and they like write a big post and they're like you give us the money back we're gonna get your finance account and the law enforcement is going to come after you're like it's not credible You see it. They're just like sometimes it's credible and sometimes not credible.

There's something really real. Like Alex can't do on Axel. He's like, I'm not even to bother them with an on-chain message. I know this bitch is watching my Twitter. Literally. I know. We've identified you, sir. Like, it's just like it's a completely different tone. It is.

It doesn't feel like there's any larping with it. And then, yeah, the guy's like immediately like sends all the money back. By the way, he also, he's zero percent. bounty. Like that's how it's done. 100%. Like why are you paying

fucking bounty of these guys? Newk them from space. Yeah. Like fucking UAV right into their house. Yeah. I'm not kidding. Bounty after you hack something guys.

No. Literally. You made a mistake. You made a big mistake. Yeah. So like I don't know. It's just fun. Like you know, there's so many times where teams get hacked. Right. Like this especially used to happen in the olden days, right?

Like, you know, a project that's like doing poorly or whatever and it gets hacked. And people will be like, oh, it's an inside job. And, you know, I don't think they were all inside jobs because people do definitely get hacked. And, you know, you can look at the like on-chain kind of forensics and go, ah, this wasn't the team. Like, this is an ammo, right? Of someone who's, you know, done this before or whatever, you know, but like a lot of the private key leaks, you're like, oh, this is very fucking convenient, isn't it?

And then it's like, you know, we're mounting a search party to go off through the guys and they're like searching around. And it's like, no, like you did like you killed them. Like what are you talking about? Like, so, yeah. So I just, I think, I think there are certain teams that you just don't fuck with and near is one of them. Do not fuck with those guys. Like, don't hack them. It's not going to end well for you.

Clearly. Clearly. Okay. And then. I'm speaking of people not to fuck with. Zach XPT. Yeah. Zach XV.

when undercover, this is amazing. Like, I love the story. Tay, walk us through this because I think you have a bit more insight into it. Yeah. Well, and I've also, I've known, I mean, whenever it's act as a thread, I get, like, the full, I get to experience the full experience of reading and absorbing the thread and the full story, like, in one go.

But I was aware of, like, a lot of these efforts as they were happening. And it's just a wild story. Okay, so basically after the Bible, hack. And even before the by bit hack, but the by bit hack, it was just a different of a different level. We would always see, and I've talked about this on this show, the guys, the loud guys bitching about their funds being like fucked up, biching about like, how long is my swap going to take? When they get frozen, they would show up, that sort of stuff. And I remind everyone, like, if there's someone like making a big scene somewhere, like they're probably a money launderer,

like it's that consistent. We had been saying this. And so, but then Zad was like, all right, let's figure out how the fuck these guys operate and went way harder than anyone else, had it ever considered. So, Zach became friends with one of these guys. His name is Jimmy Green. He's a Chinese money launder for DPRK. He basically became friends with him. He also did like a full undercover operation multiple times to get his addresses, basically fully get the, the, trails and how these these operations work the level the amount of intel and the level of

intel is absolutely like it's just insane um the insight that we now have into the laundry networks is wild um there was i mean everyone just has to read the thread because there's like so many details but like at one point they're talking about breakfast talking about drinking coffee Jimmy is trying to like lose weight but like it's just a wild a wild thing um but one thing that also just like kind of opened my eyes too was I think there's this I don't know there's a sense that like you have DPRK and you know you know that they're like handing off the money to be laundered like it's it's over a billion dollars that they laundered in like four or five months you know that there's handoffs happening what this story and these conversations and other conversations that have

happened reveal is like the money launders they know exactly what the fuck they're doing like they are completely shameless completely shameless and they um they will again they will use the industry's language as their own so they'll be like you're not if their swap isn't going through you're not decentralized you evil person it's like they're the biggest bitcoin maxis and it's a bit scary to think about like it's just a bit scary to like consider that like they basically in a sense like co-opted the industry's own language and it's like consistently then you're use it sort of to get there to complete their end goal, which is to steal and launder literally billions of dollars from society. And then the other wild thing is like just he's like,

yeah, Kim Jong-un released 50 Bitcoin today. Like I'm happy money launderinger today. And like he's completely shameless. It's wild. It's crazy. Yeah, it's wild. It's wild. But yeah, Zach just like going really balls to the wall and getting all this is just a wild wild situation i think what did he say like four hundred thousand dollars to get all the different addresses and all the different trails and stuff his own money right three hundred yeah yeah he put in yeah yeah like yeah insane balls so it's a it's an amazing level of autism uh you have to do not fuck with zach right like Like, Zach, like, you know, it's, it's funny because I had, I had like a pretty good relationship with him in, in the early days.

Like, you know, you a couple times, like, asked me stuff and I would help out or whatever. And, like, I think if I DM'd and now he would still respond, but a couple of times I sent him messages about things that people were like, hey, can you put me in touch with Zach? And, like, he just, he put up this wall at one point where he's like, everyone's trying to exploit me. Everyone's trying to get me to do stuff for them. No one wants to, you know, support anything, blah, blah, like, you really soured on, like, how extractive, you know, people were. Like, you know, they don't want to hang out with them. You just got to launder some money for the Koreans.

Now you know. Come have coffee with you right away. Yeah, exactly. I'm trying to lose some weight over here. So, so, yeah, like, I, it's just interesting. Like, I feel like, you know, he's such a unique person in space. And, you know, like, there's stuff with the way. like meme coins and like weird shit where like people send him meme coins and he dump them and stuff like

there's a bunch of like weird things but like he's just at the epicenter of so many things uh over the years that that uh you know he seems to have like he seems to be coming out of that like very cynical mode and he's like back doing things like altruistically again um which feels good like i think he had like a bit of a dark period where um he just felt like everyone was exploiting him for his skills to, you know, oh, something bad happened to you. And then you would turn up on his doorstep and be like, help me, Zach. And he's like, why the fuck should I help you? You didn't even help yourself.

Like, I told you to do this. Like, you know, I'm trying to help. And you idiots just keep, like, begging at my door. It's just a weird, I don't know if that's your impression. But like, it just, yeah, it seems like. I think every like I mean I've gone through my own journey processing with like this sort of stuff I used to be really bitter in like the ICO days and the post ICO days I would be so bitter that so when we're when I was running meu right like yeah it was like we're you're literally

begging for donations I still had a real job I still had I had clients that I was working for at the time. And, and then I was just watching all these people around me make like 10 million, 20 million, 50 million with our product. And then they wouldn't even, they wouldn't even have like just the audacity. Like, it would just send their users to us for support. Like, something went wrong with their I see how like I was like. Yeah. And it was just like it would just it just ate away at me in a really like dark way. And I had to like sort of come. to turn because I was like, wait, why don't we sell out? And a lot of people, by the way, told us to sell out.

But like, you should be charging each of those ICOs, like millions of dollars and tokens. And, like, they want to be listed, like, charge them. And I was like, yeah, but I don't, I was always like, I don't want to work for the tokens. I want to work. I don't want to work for the piece of shit, right? I want to work for the people. We ended up figuring it out, obviously. Like, my life is, like, fine and great.

But, like, it's, it's, I think that. There was a period, right, where, like, you're, like, staring into the abyss. And you're like, what the fuck. is going on here, right? Like, it just feels like, yeah, I know. You feel taken advantage of. You also are like, I mean, I hate to say, I feel like the meme, like everyone around you is getting filthy rich except for you.

There are a lot of days where I was like, I feel like I should be rich right now, guys. Like, and someone else out here. And just the, I think, like, also just like having a relatively like normal existence. but being surrounded by people that have like that we're literally we're talking about like 20, 50, 100 million dollars is a wild existence to like live. And I don't know. I think that that the combination of like that much money plus the idea that you're being

taken advantage of or that you deserve more or something, it can really put you in a dark place. I think Thack's experience is different than mine. I think that there are similarities in terms of like, yeah, and it's just like, like, you guys make, and I mean, I still do it when people get hacked, right? You're like, sorry, you have like, how are you so stupid? You have $200 million to lose. How the fuck are you so stupid? Yeah, yeah, exactly.

Can you use a fucking hardware wallet, please? Like, and it's painful and there's like guilt and there's, you don't want to like, you're, really don't want to insult the victim. But like sometimes you're like, like, man, if I had $200 million, like I would buy a fucking $60 ledger and I would use it. What the fuck? Like, why can't, you know, like, you don't deserve this?

Like, there's a lot of just really dark thoughts that come up when you are doing this day in and day out. And I think Doc also just gets the, basically the worst end of the stick because people are so entitled. They feel so entitled to his time. And, like, that's the entitlement. right like i i remember there was there was a guy um who uh who did say like i'll pay zach to like help me with this thing he's like there's this whole theme that's going on and no one knows about and i want Zach to like help you know expose it or whatever um and i'll donate to him um and zach was like

fuck that guy like he's like tried to buy me like you know he's almost like he's trying to bribe me to like care about his particular thing right um and that was when i was like all right i'm not sending Zach any more things. I was like, I'm done. Oh, is this why I take care of your people now? He does run on chain grants and donations of how the guy operates. So like he's hungry. Yeah. Yeah. Yeah. I think, I don't know. This, this investigation felt good. I hope that he feels good about it. That's all I'll say because it is like this is like just the pinnacle of Zach. And, and especially being public, these sorts of investigations do happen behind the scenes, especially like the state level. we don't usually see them.

And I think that it's a really interesting, like, there's a lot of people in, like, Web 2, pride by security that look at this. And they're like, this is insane. But they're also like, wow, like the, you can actually move a lot faster with the information being public, like, rather than everything under wraps. And it's really interesting for, like, security and thwarting these sorts of threats.

Cryptos just doing things differently. That was going to be my question. about this like having perused the thread you know what is um what's like the practical like does this help disrupt these money laundering networks or like how people avoid certain failure modes like like what's the immediate benefit of it which i'm not saying there is where i'm wondering what it is so i mean to be clear like this is the actual conversations the money laundering happened like a year and a half ago the information was you shared with various relevant private public sector people at the time.

Because ideally, like, there's a number of actions that theoretically can be taken. Usually they just stay under wraps forever. I think it's just a different dynamic when Zach then makes something public. It lights a fire under everyone because it's kind of like, wait, if this bro on Twitter can tweet this, why didn't anyone do anything about this beforehand? but the other thing is just knowledge. A lot of people don't understand the money laundering dynamics. A lot of the teams don't understand, like the, especially the centralized exchanges.

It's a clear, it's a day DPRK hack, but then they'd see really strong Chinese indicators in Chinese language and Chinese everything on the accounts that we're laundering the money. And if you don't have any like open source public reporting on the laundering dynamics, you're basically like you're basically like one by one trying to explain and to convince these exchanges we're often Chinese by the way like no no we swear this is like

these are money launderers who know that they're laundering money right and if you like yeah if you follow me on Twitter post by bit even pre-bybit you would see me bitching out a lot of the exchanges for not reacting to this yeah but I mean the amount of times that I have sat there and

to the exchanges yes they're chinese but they're working like really hand in hand with dpr k um yeah so yeah i think i think like raising awareness of like just how mercenary these people are like they're not being tripped like yeah they're like they're like exactly what they're doing yeah and i didn't i didn't see anything where they were like what would have been great is is uh if they were like making fun of the exchanges for like being retarded that would have been amazing yeah because then you could be like see these guys are like just cynically exploiting you and calling your idiots like get them you know uh but yeah unfortunately i didn't i didn't see that in there i'll have to go back through my logs and see if there's any

i do know that they i mean they just they walk they'll waltz into the thor chain discord and telegrams the waltz into all the different like yeah any d-by protocol they'll go in you said that you stood for the little man and decentralization it's like oh lord like it's painful okay let's talk about last week too and I didn't totally understand this but like when when they're going in to complain and they play the victim saying that they have their money locked up they're actually money launderers trying to move money through the system and they'll come in complaining

in the Discord as if they're like yeah yeah yeah yeah I have one I have one guy who replied to me today he actually replied to me and Laura today he watches the podcast he's like he's been laundering for DPRK for like four years

he'll come in he'll talk he'll be like I'm just innocent man and you take my money legitimately and I'm like but it's always it's always like Twitter like it's the bad actors Just like, like we, we, because we about gas sponsorship set up in Infidex, right,

with how people come in, there's like one Vietnamese guy that like comes in and finds like these ways to extract gas, right? Like, especially salon or rent, whatever. It's been happening for like a year and like, it will catch it. And then, you know, we'll freeze his accounts. And then he always turns up, right? And he's like, something bad has happened. What is going on?

And we're like, we're like, we're not. like yeah something bad has happened you stole three thousand dollars from us in salonar red man like and and it's so funny because i like jokingly say like there will be a point where i'm like i'm going to fly to Vietnam and find this and and it's not there yet like because it's just like it's just like this annoying amount of money where you're like man like you know it's not like he's like pulled like five million bucks out or something like that but but yeah it's so funny because they'll turn up like one guy one guy turned up um I can't remember exactly what they did, but they did some kind of civil attack, right,

where they exploited something that we're doing and they ended up with like 50 of our patron NFTs, right? But they're in individual accounts. So every day, and they got seven of them. So I was a bit disappointed with my team on this, right? But every day for like two weeks, they would turn up as a different person, like put on a different outfit, turn up in email and be like, hey, I've just tried to do the thing and it's not working and can you help me out? And they just like pretended to be an innocent user. They got caught up in this drag net of like Sybil, you know,

whatever. And like it went on for like, and after seven days, one of my team was like, it's so weird. We keep getting like a new and I was like, oh man, this is the same guy. What are you guys doing? Stop giving him fucking NFTs. And then.

Yes, yes. And then as soon as we stopped it, as soon as we stopped it, then the outrage came. Like, the next day it was like my account that I've gotten this thing and I'm not getting it. And like, how could this happen to me, an innocent user? What do you guys stand for? And I'm like, man, you're the same dude. Like, come on. Like, give me a break.

And the outrage guys are usually the worst. But it's straight outrage. You know it's a bad actor. Like, normal users don't go straight to outrage. Yeah. exactly I was going to say like there are people who get screwed by certain things so like we do the same thing with the metamask the fishing block list right or deal with this every single morning I wake up and there'd be false positives there are legitimate false positives and people do get outraged about it and totally legitimately so but there's also like 50% of them are like literal scammer drainers we're like you block my what the fuck I have files on these guys you know what I mean and it's like so painful and you have to remember to stay, especially when we were like first rolling out like blockade and stuff.

Oh my God. It was like I had to remind myself every single morning, like take a deep breath and like clear the palate. Because like there's going to be one true false positive for the 10 scammers. Yeah. But like it was hard. It's so hard. It was so hard to like,

you like have the patience to actually respond to each person like as if it might be a serious issue. knowing knowing that like 90% chance yeah yeah yeah well one of the one of the uh PayPal Mafia guys it might have been

Elon or Peter Thiel or something I don't remember who but they they said that like in the PayPal days the people who would scream the loudest about fraud when they would you know like reverse the transaction due to fraud or whatever were the fraudsters like they were the ones who were outraged and you know like they've optimized they've optimized pipeline getting the thing overturned right like they have really optimized it and they know yeah

like they've got and also they've got the numbers game right like they know they've tried all the different ways and they're like outrage like instant outrage and you're like i don't want to deal with this customer man like just give them their money back right and they're like oh that works okay you know as soon as they find a vector they'll they'll exploit it right let's go to our next story so uh safe the safe foundation um no sense just, you know, so maybe a bit of backstory on this, just to contextualize this, right? So NOSIS, speaking of people with a fuckload of ETH, did an ICO. And they did an ICU in early 2017, late 2016.

I remember. They were on the up. They were on the up swing, right? Yeah. That was the one, by the way, by the way, that was the one where they tried to do the reverse Dutch auction. Yes. Yes. They were so smart that they did this crazy scheme. The epitome of autism, right?

It's like the bullish bull market is like hype, hype, hype. And people were like, no, people will act rationally and wait so that Nosis doesn't get all the money. Spoiler. They did not wait. They bought it at the absolute. They bought it. And now the hilarious thing is, again, like, this is my recollection, right? I haven't looked up these numbers.

but the market cap that everyone paid was like $68 million, right? And which was insane at the time, like absolute insanity, right? You know, this was a prediction market, right? This is this is a prediction market, right? This is one of the failed prediction markets that like, and, you know, Ogre and Nosis were the two, right? But people were bullish on prediction markets because Vitalik was bullish on them. So they got 330,000 E. In this ICO.

But it should have. If people had been logical, Kane, and rational and, like, just waited a few more minutes into the ICU. The people would have gotten more tokens or more ETH or whatever. They ended up paying. But basically, they get it all to the team. Yes. But this is the amazing thing. The team that, like, they were like at the limit, right?

Like the the we will sell in the in the in the whatever best case worst case scenario we'll sell only like three percent of the tokens for 330,000 or whatever it was right and then they were shocked and that's exactly what happened because we're in the middle of ICU mania and you could buy anything and flip it instantly and make a profit and people did it was wild right like you just the craziest shit. So anyway, like cut to 10 years later, they still have like 180,000, Heath, right? Heath is no longer $10. It's, it's now. They don't have a prediction market, though, but they do have one of the primary. One of the most important things. And this is like,

this is, this is just like life finds a way, right? Like, you know, they've done so many academic experiments and things. And, and, you know, like, I would say they're one of the most proliferation. prolific priors of things you know this is why i think the we'll get into the investors being like uh lazy fox not doing anything whatever um but like but you know they've released so many things many of which have not worked um but the one that's probably worked the hardest right um maybe two cow swap right they invented cow swap um and uh which like i still remember the conversation with martin when he was first explaining the first version of Kalswop, which was the most nonsensical zero chance of working thing that you could possibly imagine. Like, just like the, like, I was like, bro,

like there's no way this can work in practice. And he was like, but the theory is so beautiful. And then they did it and it obviously didn't work in practice. And then they were like, oh, actually, if we do this much more pragmatic version and then everyone loved it, right? It was like suddenly amazing. Anyway, so, so many. such guys. They do find a way. They do find a way. Like they iterate and and anyway so so so save which you know thankfully right post-parity hack so we had a we had a multi-thig wallet called parody and it didn't go well for us and and these guys kind of stepped into the breach and said we need multi-sigs we will build one and they built one and it's fucking amazing and it secures like

100 billion plus of assets or whatever. You know, it's insane. It's like been super robust over like multiple cycles, blah, blah, blah, blah, amazing. Anyway, against that backdrop, some fucking jerks have shown up. And like you could say like, oh, you know, they haven't monetized it well and it's not a business. And they're too academic. There's a lot of things you could say about, about Nosis and SAFE and, you know,

safe got spun out. they have a token, whatever, right? But you cannot say that they have not produced value for the world, right? Like, if you went back and asked those people, you know, whatever the amount of it was, like, I think they raised 30 mil or something like that at the time, right? You know, if you said to those people, like, hey, are you happy with the outcome of this thing? Like, I think most of them would say yes, right? You know, even if they didn't directly benefit from it.

And, and, you know, like, it's wild to me that you would turn up and be like, oh, and this is not to say DALs aren't retarded, they are, and they're terrible, terrible at organizing things. But, like, the empirical output from Nosis, if the, you know, the, if you trace the through line from the ICO all the way through. It's been, it's been a decade. It's been almost a decade. Like, we got good shit out of there. We got good shit out of it. doing stuff. Easy. So, anyway, sorry. The economic zone. They're doing the

atomic swaps between L2s and they're doing cool shit. They always have it. Yeah, they do cool shit. But they're now being sued in like Swiss Foundation court or something. Basically saying like, you know,

and this is interesting. I was kind of surprised to hear this. Money and safe account. fell from 66 billion to 30 billion, which where is this money going? That seems weird to me. I don't know. I don't know. Like, we have no other.

Did the market just move? Is that? Right. I was going to say, is that just the price of the assets like changing over time? Like I would. Possibly. Right? Isn't everything down 95%?

Like, isn't this? Like, yeah, I don't know. Also, by the way, and I wanted to mention my understanding is that they're not, they're not being sued, I don't think. I think basically, I'm not a legal expert here, certainly not on Swiss law. But, like, I think basically, like, this group has asked the Swiss government to open the Swiss.

Yeah, they're asking for an intervention. Right. Yeah, it's like, you know, it's like, you know, chance to record. It's like Delaware Chancery Court. You can turn up and say like, hey, this, this, you know, this, they did bad stuff in business land and, you know, someone will, will kind of mediate the dispute or whatever.

they've got a Swiss version of that. But they're not, are they accusing safe or noses, what, are they accusing of like fraud? No, no, no, they're just saying they're lazy. They're not doing enough stuff. Like malfeasance or something? I mean, there was. No, it's not even that.

It's not even that. They're just saying like, you have a responsibility if you have a Swiss foundation, right, to operate the foundation to the benefit of the foundation members, etc and you know if you are not operating the foundation well to whatever the mandate is now the funniest part about this is like Swiss foundations I have one like they have no recourse right like there's nothing like like and you know even the investors say that right like you know Mike Dutis is like it's critical we transition away from lazy unaccountable foundation boards

Simon from Moonrock was like the lazy delusional teams that just happened to be in the right place the right time. I mean, fuck like pot kettle, man, but, um, I was about to say, like, I'm sorry. Like, you're not, I'm not saying that I'm not saying that they're 100% wrong, but I'm just saying, like, if your grievance is that people in 2017 collected a whole bunch of money and then didn't optimally build with that money, even though they're still here in building, if that is your biggest complaint, like, Jesus fucking Christ, I'm so sorry. What percent of teams that did an ICO in 2017 are still doing anything in crypto let alone anything useful which which nosis and safe obviously is like yeah i don't know it's and the irony though here i think is and like i say this all the time i've

said it to martin right like they are too academic i sent to him when he brought me the fucking weird moon math cowswop v zero thing right i was like uh i'm struggling to understand what you're saying to me right now man like i literally said that to him i was like i don't understand what this is. Like, how am I supposed to use it? And, and, you know, it was too theoretical, right?

Like, you know, so, so, they do have a tendency to... That is the Ethereum way. I know. This is part of our soul. This is our blood. Okay, we are fucking autistic shit and inefficient.

And we want to believe that the world is a great place. And we very, we are so close. to just full communism. Okay, that is the Ethereum way. That does not mean, that does not mean you get to freaking call them fraudsters.

That's a different thing. And I don't think they're, they're not even saying, like, but the thing that I would test, right? And, you know, Gabe Shapiro also says, like these foundations are set up to, oh, no, duties to anyone. They are. Like, that's in the mandate, right?

Like, the people who said these things up are not idiots, right? And, and, you know, on one hand, you go, okay, you know, there is a nosus token. a safe token and both the tokens are down, right? So you can look at that and say like, you built cool stuff, but why have you not returned value to the owners of those tokens, right? Fine. Like, you know, not many tokens are doing well out there, just quietly, right? So, so, you know, that's not really an indicator whether you've built value. And the thing with, you know, with safe, right, is one of the reasons why it has such, you know, wide adoption is that it doesn't

charge fees, right? And, you know, they've tried to monetize in other ways or whatever. But like, if you put a fee on SAFE, I think that people would find, people would, you know, and SAFE has infrastructure requirements. It's not just a pure smart contract. There's like off-chain components to this and, you know, a bunch of complexity to it. And, and so, you know, could you monetize it more effectively, like maybe, but it's not 100% clear that it wouldn't get forked and, you know, someone would spin up a no-fee version of it or whatever right which would be worse because the forked version would inevitably fucking lose people's money for sure right um and and so you know this is this is like kind of a stable equilibrium and it seems fine um and so but at the same time i i can see how if

you're holding safe tokens uh you might be like make us more money right that's like a re you know like it's a it's a token it's supposed to go up um so i can see how you get yourself here but like also like all right let's just let's zoom out because ben you you live in or at least on the edge of the world of like deep governance dowland yeah what do what's your read on i don't even know if we want to call it the swiss thing but like ideally like where does safe go from here or or any dow well yeah maybe zoom out further from like the specifics of the safe situation and just talk about kind of dows in general i mean i think people real people outside of the industry if you're not like working in it and working with

projects day to day like on this stuff i think it's really easy to underestimate the degree to which our entire industry and dows especially as a category but really the entire industry has been like warped over the last you know four to 10 years by regulatory fears and so much of what was done or not done or behaviors that seemed weird or whatever was done because like people didn't want to go to jail or get a nasty gram from the SEC or whatever, right? And you don't see that from the outside because they don't talk about the fact that the reason they're setting it up this way is to like hack around some kind of regulatory concern, right? Obviously, because the lawyers will jump down your throat if you do that. But like that's the reality of what has been happening

in the industry for like a long time. So, you know, not to completely excuse the retarded behavior. of many dows, but a lot of it does come from, like, a lot, a big chunk of the dysfunction does come from this sort of like things. That proximate cause of like obdiscation of what's actually happening, right? Yeah. Yeah, agreed. And value return is definitely one of those things, right? Like people had to, you know, people had to create these tokens that were not going to ever

return value. There's no dividends. There's no buybacks. there's nothing. We're never going to do that. It's just governance because if you said that you were going to do that, you were at serious risk of violating securities law. Now, the good news I think is that that's changing, right? And so what comes along with that, I think, is increased scrutiny on teams who aren't doing it. Right. So if you're a big protocol and you are monetizing or have potentially the ability to monetize and you have a token or you're thinking about issuing one,

you ought to have a story for how to drive value to that token that's actually rooted in something real, right? Like not some like moon math. We're setting up the incentive so perfect. It's like, no, we're charging a fee and then we're distributing those fees or we're using those fees to buy back the token in this like programmatic way. The way that like say Uniswap or other, you know, big projects are now doing. right um and i don't and the other thing i'll say is that i don't think that's like a small like um you know the point of governance tokens and governance in general for projects um is that you're supposed to be like it's to provide economic security right um so it's not just like oh the token

doesn't matter like i don't i don't buy that excuse anymore right the regulatory excuse is going away. And like the speculative premium that these tokens had during the hype period is going away. Right. So if you're going to put a governance token in front of your project and allow decisions to be made in one way or another or mediated through in one way or another token holders, right? Then you have to be able to provide economic security through that token, right? Because if the value of the token drops below what it would be worth to steal the assets that the protocol protects, then, you know, so it's not just like something that you can just say, like, we don't care about the price. That's not our focus. Like, no, that's like a key component to why the system works.

And if it can work, that's why it's supposed to work. Right. So, you know, I have very good impression of the NOSIS team as well from my years of interacting with them. I think they have built amazing stuff. I think as a category, a multi-sig is like a brutal business, like the amount that you're securing. And yet we need it.

Yeah. And yet we need it. Like the thing fucking God that they built it, right? Because if they hadn't, never build a wallet, guys. Never ever build a wallet. Life advice. Why not put a small fee in the front end?

Like, why not? Because people would fucking hate it, man. If you, like, I would, like, genuinely. Do you know the number one brand damage? The number one brand damage is the met about sloppy. Okay. So what's the second multi-sig? What's the second best multi-sig?

in the space. There isn't. So why not? But a fee, a small fee. Because. Because I have okay, so I, for the record, I have always said that a transparent fee on convenience features in the wallet is the most aligned

and best way to support, like to have a sustainable wallet. 100%. But I will also say that it is the most hated feature in the fucking world. And it, there is a tradeoff because you do, you want to think that only like the biggest whales and the very like these people that are just more

sophisticated won't use the feature but that's actually like not entirely true and then the other downside is that like the argument at least is is that only the stupid people you're basically explaining people who don't know how to go to uniswap directly that are etc right there's all these like there's there's there's just complicated there's potential other ways to monetize it like the like safe secure like like everything in the world these days it's a power law right like Most safes have like 12 cents in them. And then there's like a few safes that secure like $11 billion worth of value. Right.

And like so you go to the people who are using those safes and you sell them some kind of like enterprise plan with like a bunch of, you know, security. Which they did try. They did they did they did have like an enterprise thing. But like, you know, people in crypto is so fucking retarded. Like trying to get them to do good security when it's free. hard. Like you turn up and you're like, hey, we're going to charge you to do good security and they're like, get the fuck out of my office. So that was the other, that was, and I don't know if a metamask is still, I should check in with the team because I'm actually curious. There's a,

there's a metamass like transaction safety feature that was in the works forever. And the biggest, the biggest, um, the biggest conversation about it was you're, it felt like you were charging people for basic security. Right. And like these should be a core feature. sure. I'm not saying it's easy. I'm not saying easy. I'm saying it's actually the opposite. It's a really brutal. It's a brutal business. And like we should be grateful that they have done it and done it like, you know, well for for a long time. But I also think on the flip side, again, zooming out, not just talking about safe. Like increasingly if you have a token, you're going to have to answer these basic questions about like what's the value return mechanism? Like what's your monetization strategy? And like that's actually a good thing. It's like a, it's like a. maturation of the ecosystem. I mean, I think the other thing I'll say from like the zoom out perspective is that, you know, a lot of people think that like DAOs don't work because there's contention

within a DAO or like there is, you know, there's a situation like this where somebody's suing someone or someone's trying to, you know, there's factions or something like that. I mean, governance almost by definition is going to involve at least the possibility of contention, right? Like if everyone agrees on something, you don't need a governance. system for that. Like the point of a governance system is to resolve disputes when they arise in a kind of structured matter so that you can progress beyond the dispute and not be deadlocked forever. Right. So I think part of the problem, like we were talking about this earlier with the Ethereum

culture, everyone is sort of like idealistic to the max and autistic and things like if you just set up the incentives, everything works perfectly. It's like, well, no, like things are messy. and that's like the point of having a governance system in the first place. So like if you thought that DOWs were just going to like solve human nature and get rid of contagious arguments. We absolutely did think that. Yes. It's not surprising that you've been disappointed, right?

But like I think the bigger thing is like for me it's about like the capture resistance and some like ultimate accountability to people that run projects that have huge network effects, right, which we didn't have in Web 2. and that I would like to see us have in Web3. So, like, that's like the, like, bedrock goal of DOWs for me in the long run. And, you know, for as much enormous dysfunction as there has been, I do think that, like, we're better off in that regard than we would have been otherwise if we didn't, you know, try these experiments with DOWs and do things that we did.

Agreed. I think that's very true. I think we've got to wrap it up here. Just one quick thing, because we should probably mention this. We had two L2's blast and abstract shut down this week. Like, bullish shutdowns. I don't know. It feels like this is like the capitulation at the end of the cycle that happens where people just run out of juice and then it's up only from there.

So, yeah, it feels very bullish to me that we've got some L2's. I mean, the L2 market, let's be honest, right? like it and you know I'll take some personal responsibility on this one trying to meme it into existence but like we probably have too many L2s I tried to do one I was like what if we just do one or two

and instead we have a hundred and fucking 80 million of them so LTs need to differentiate right like every L2 needs to be different than just a general purpose EVM what abstract was doing was good UX like they were trying to bring he did a bunch of cool stuff but it didn't work

You know why? Because there was a wallet involved. Abstract wallet. Kiss of death. Never build a wallet. That's the theme of the episode. The theme of the episode is never build a wallet. Absolutely.

Absolutely. Taze kiss of death is if you build a wallet, you'll go straight to the gulag. All right, let's wrap it up here. Thank you, Ben, for joining us. Thanks for having a very fun show. All right. Thanks everyone for joining us for this episode of Uneasy Money. what happens on chain never stays on chain we will be back next week until then do your own research

before aping in see you guys nothing you hear on uneasy money is financial advice we're just three builders talking about what's happening on chain and we want you to always do your own research before aping in you can find all our disclosures at unchaincrypto com slash uneasy money