Unchained - Pump.fun’s $370M Burn Was a Mistake, Says Luca Netz: Uneasy Money

Episode Date: May 1, 2026

Pump.fun set fire to $370 million in tokens. Luca lays out the airdrop math that says they should have done the opposite. Thank you to our sponsors!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ MultiChain Advisors is an emerging technology growth firm that has helped create $50B+ in enterprise value for 80+ clients over the past 4 years. They're the partner to help navigate markets.  Build real traction today at ⁠multichainadv.com⁠ Pump.fun had a choice with $370 million worth of its own tokens. It burned them. On this week’s Uneasy Money, Luca Netz argues that was the worst option on the table. He lays out the “people’s champ” math that, in his view, could have turned Pump.fun into a $5 billion-a-year business if Alon Cohen had launched the biggest airdrop crypto has ever seen—and bought the tokens back at the bottom. Kain Warwick and Taylor Monahan also dig into the 137,000 ETH community effort to plug the KelpDAO hole, why Tay thinks Aave—not Layer Zero or KelpDAO—is the key player in DeFi’s latest blowup, and Luca’s blunt new take on whether DeFi yield is even worth the risk right now. Plus: Meta paying creators in USDC, the ghost of Libra, and OpenAI’s leaked AI-native phone. Hosts: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Kain Warwick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, Founder of Infinex and Synthetix ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Taylor Monahan⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, Security Expert ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Luca Netz⁠, CEO of Pudgy Penguins Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey everyone, I'm Kang Warwick and welcome to Uneasy Money because what happens on chain never stays on chain. Before we start, nothing you hear on UnEasy 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 I begin. You can find all our disclosures at UnchainCrypto.com slash uneasy money. And before we begin, here's a word from the sponsors that make the show possible. Multi-chain Advisors is an emerging technology growth firm that has helped create 50 plus billion dollars in enterprise value for 80 plus clients over the past four years. They're the partner to help navigate markets. Build real traction today at multi-chain

adv.com. All right. Hey guys. I'm here with my co-host Taylor Monaghan, Geertie Expert and Luca Nets, CEO Pungy Penguins, who is an avatar today because he was disfigured in an Antarctic plane crash, unfortunately last week while he was visiting Antarkey. So we'll just have to make do with a static image of him this week, which will be fine. Welcome, guys. How you doing? I'm rocking and roll and a little disfigured little chalk up, but you guys can see my penguin, so happy to be here. Nice, nice.

So speaking of people being chopped up and disfigured, Defy, how are we doing? So the Kelpdow hack we talked about last week, all of the other hacks we talked about the other weeks. There have been and continue to be almost daily DFI hacks. But this Kelpdow hack in particular, given the fallout and the impact on Ave, the freezing of various markets and all of the different people. and protocols that this touched, there was a movement, I guess, you might call it, to try to close some of the gap, basically. So the first that I saw of this, and correct me if I'm wrong, but the first that I saw of this was Danny coming out saying, hey, I'm going to donate 5,000 of my personal funds to cover the gap. It's now up to 137,000.

8th, about 307 million across 116,000 wallets and 126,000 transfers, which is pretty wild. And I know there's some big, there's some big, you know, people in there, like, consensus was 30,000-Eth. Arbitrum. Is this the 30,000-8th that they go back from the hacker or a different 30,000-8th? No, I think that's the 30,000. That's the frozen Eath. Got it. Mantle, who are insanely rich somehow, they also have donated 30,000 Eith.

Abe Dow, 25,000, layer 0, 5,000. Some people might say that's a little stingy, I don't know, given the overall situation. but Luca, you'll probably have something to say about that. How do you feel about Layer Zero being the lowest contributor on that list? Elegrino mode, baby,

that's my guy. I love it. DJEath. It's because he thought it was the right thing to do. I support it. That's my stance. All right. Okay.

All right. I think they're doing some other stuff, though. It's not, right? These are all weird. These are all a bit weird of deals, right? because they're not they're not straight donations are they or are they? My understanding was that this is a charity drive and people are donating ETH. I don't know if there's like deals where they get anything background or whatever, but

my understanding was it's just like you give the ETH and plug the whole basically. I thought Zeller had a pretty funny take. We don't have the tweet here, but he was like, I think this is the first time that I've donated money to someone who's richer than me that could have solved themselves, which, yeah, I think that that lands for sure. So, I mean, there's a bunch of interesting things about this because there have been many, many hacks over the years. And some hacks, the holes have been plugged by people like the wormhole bridge hack from

God, I want to say 20, 21, I'm going to say. But that was circa 500,000 Ethan Jump, stepped in and plugged that hole, which also, you know, when sometimes it takes like someone stepping in and dropping whatever at the time, $500 million into a hole to like plug a company that they've invested in for you to realize just like how profitable their business must be. So, so yeah, the, like, I think broadly this is, this is bullish defy. It still just feels a little bit weird to me that we weren't able to kind of solve the problem directly by kind of holding accountable the people that, that, you know, should have been accountable. Like, we don't see Kelp Dow on there. I don't know what the plan is there. So, so, yeah, I don't know. What do you got? Are you guys? bullish on on this solution this is not a long time solution right you can't keep doing donation drives if we glorithal up right so i think it's a it's a bit more complex than we're used to

just because you have okay so you have like layer zero who built this thing that kelpdow was using uh and then kelpdow was the one that was actually using it though for their assets and had set the configurations and on and on. But then the old ultimately like, I guess like where the biggest impact was to end users were AVE end users, right? Were AVE people. And so it creates a bit of an interesting situation because, like for

example, when people were talking about the, are we going to socialize the losses across the L1 and the L2, the arguments were a bit silly because as a user of this thing, Like as an impacted user, you didn't necessarily have to even know what helped out was. Like you had just put your money in awe of it. To then conceptually have someone make an arbitrary decision about whether or not your losses were going to be socialized based on like what, uh, what layer you were on just felt so detached from like reality and from the end users who were impacted. So I think that's why we sort of ended up in this situation, right? in this like donation drive situation so so this raises a fairly important question i guess you might say

which you know um dun levy wrote an article about um about this on x basically awesome question is deep i yield actually compensating users for tail risk right um so you know credit risk there's like very clear kind of, you know, risk algorithms. You can apply, you know, using the risk-free rate and expected loss and et cetera, et cetera, et cetera, right?

And there is even more stuff that can happen in DFI that is not really present in traditional finance, right? Now, there's like an efficient markets version of this tape, which is like, Yes, Defi does price it in because in, you know, practice usually defy has higher yields. You know, the whole point of Kelpdao was to juice up yields, right? Like these levered things and, you know, when those people are juicing up yields,

that does have this flow on effect to other venues where they have higher yields and et cetera, et cetera, et cetera, right? the the you know like talib 100 a thousand and one days of a turkey you know picking up pennies in front of a steamroller question here is like especially lately right if you are getting even two X the yield right the risk-free rate is 4% and you're getting 8% right so you're getting you're getting twice the yield in defy that you would have been getting in Trify. But every week you blow up, then the answer is no. You're not being compensated. You need a hundred and four percent to or like like seven hundred and four percent.

Like something insane. You need like some insane yield to compensate you for the fact that like once a week you blow up. Right. You need to make back all of your principle plus the proportion of the four percent. you would have made in Tradfai in order to justify it. And, you know, I think a lot of people were kind of caught out by this, right? And in Ave, because they're like, no, no, Ave is safe. Yeah.

Ave is the risk-free rate. You know, I'm getting paid 3.2% or whatever to loan out my ETH on Ave. And the risk-free rate is, you know, eat staking or whatever, which is 1.8%. So, like, yeah, I'm getting compensated. And then they're like, oh, I didn't know some random L2 nonsense looping thing could blow up ABA. Like, I didn't sign up for that, right? So, yeah. So, you know, like, I think this whole thread from Tom is like a little bit of intellectualizing what is realistically like pretty clear answer.

No. Yeah, exactly. Exactly. And like, we can, I don't know. we can dive into it all we want and we can rationalize we can do the numbers around and stuff but at the end of the day once again we're seeing that

all these sort of like loose Dow affiliations and relationships that are not super clearly defined like we don't have waterfall structure defined for how to do this right we're like deciding post hoc like is it the L1s or the L2s

and meanwhile the end users are sitting there like wait what like cute I just thought this was an asset and I also don't even know that I was exposed to this asset um and I think it's just like it's a bit of an absurd predicament that we found ourselves in and therefore like this whatever we want to call it donation drive whatever want to call it like it's good because that's what has to be done to not just like completely wreck everyone but ultimately like everyone like really needs to stop up their game and I think that perhaps in like the blame game we lost sight of like who's actually to blame here but like literally everyone is to blame and the incentives are also

to blame right like everyone failed here everyone dropped the ball here and I think the choice moving forward is like okay it's not just it's not as simple as just saying like okay layer zero needs to improve their security like that's not going to be the solution right no just it'll happen

And during my next time. Yeah. So. And, you know, like, fundamentally, I think this is the challenge, right, is in TradFi, you have counterparty risk, right? Like, you are in some structured product that's lending money to, like, Venezuela, right? And Venezuela is like, actually, no. Sorry, we're not going to, we're not doing this anymore, right?

there are places where you have low up risk in, you know, TradFi. It's not like it only happens in Defi that you get zeroed on something, right? What you don't really have in TradFi, I would say, is like you have a counterparty of Goldman Sachs and North Korea infiltrates them and steals all the money. Like that's not like a thing that typically happens. You don't hear about North Korea like raiding an office and like, taking all their gold or something. Like literally all of it. Yeah, like all of it.

There's not even a speck of gold left in the whole building. They just like gone. All of it. So yeah, that's I think like when we talk about how do we eliminate this or like dramatically decrease the tail risk. It's like we have got to get away from like this. Oh, layer zero needs to be more secure or oh,

Kelpdow should have done their configs. No, no, no, no. All they cannot allow their, they're, their entire market to get in this position. Exactly. Exactly. Period. And in part, they can do that by having things in place to ensure that, say, Kelpdow can't get racked for 100% of their money or to ensure that the layer zero

OFT thing can't get hacked, right? They can do that. But that's not like at the end of the day, you can only go so far because ultimately these are third parties, right? you don't you're not literally sitting there running this stuff yourself and even if you were like then okay so then i'll make you get out right so how do you evaluate the risk how do you um uh like actually properly price that but most importantly how do you make sure that your thing does not get completely underwater because one of your third parties was relying on another

third party that wasn't perfectly secure compositability baby that's what we're here compotability baby that's what we're for, right? Like, and this is, you know, the, the fact that anyone can just turn up and connect their stuff to other stuff, right? The only protection you have is having really clear risk gates, right? Like, don't add that random L2 wrapped thing with one of one, you know, multi-sig control, et cetera, et cetera, et cetera, to your collateral with infinite borrow ability. Like, don't do that, right? Which, you know, this is the, the interesting thing I think about this is that, like, for a long time, you know, there's been this, like, morpho of a war of, like, who's right? And morphos, like, oh, we have curators who are responsible for the vault. And therefore, like, you know, you don't have this, like, principal agent problem where, you know, the people who are managing the risk have no exposure to it.

which is interesting, not necessarily true, as we've seen with Morpho all the time, right? But, like, in theory, it's a different approach to it, as opposed to like a centralized risk management system, you know, where something like this can slip through the cracks. And it's like, oh, yeah, we knew that this was a bad idea. And we did it for like this reason. And then we forgot about it. And now it's, right? So I think Dan Robinson also had an interesting take. and, you know, I always like his takes because they're pretty rational, where he was like,

I agree that defy lenders seem to be underpricing risk, right? Like, if you look at it on paper, you go, this doesn't seem rational, right? But, you know, he's a market structure guy, right? And he's like, you know, basically that doesn't mean that rates should be higher than they are. You have to take into account demand. And I think I think the point of that take is that as much as DEPI is connected to the rest of finance, it is still somewhat siloed. And there are market structural reasons why someone may be stuck and not have access to the like global finance risk free rate for in like weird market structural reasons. It's a global market, et cetera. And and so that, you know, creates more supply than,

then, you know, there is demand for borrow. And so there is no ARB here. And you end up in a weird situation where like, maybe it should pay like 25%, but it pays four. And everyone's like, oh, this is fine. Like, the market's telling me, this is what it is, right? And so, like, the whole market is getting this, like,

misspriced signal of how risky AVE is. And it's actually not a four. It's a 20. And, you know, and especially when when things change quickly, right? Like, if the market starts changing quickly, i.e., things get hacked every day, you know, then, yeah, it's, it's hard to kind of keep track of that as long. Like, my AVE position was, I want to say, 18 months old. Was I doing like a weekly resatity check of like, no, I was not? I just was not.

Like, I was like, oh, this is a thing that I'm doing and it's fine and it just hangs around there. Luca, um, you guys have been working on building up your defy tops, right? On, uh, um, how do you guys think about this stuff? Like,

because my assumption is that yield, like higher yields are something that, you know, drives TBL, drives demand, like gets the flywheel going. Um, yeah how do you guys think about this this uh like yield um problem we were we were we were we were thinking

about it a lot and then now as of recently it's like reassessing the risks i mean the problem is it's kind of you made an interesting point which is like i always underwrote ove as like i didn't really i was probably a little naive but i didn't really like i didn't really like i underwrite necessarily risk. And hindsight, obviously, like, that was stupid to underwrite it as such. Yeah. I think we, over the last six months, we've been working in this direction. And I can tell you internally over the last couple of weeks,

it's like, is the risk even worth the reward? And I probably tell you that the answer is no. It's not. Because I think, like, one of the things, one of the things, one of the things, here that's unequivocally clear to me is you can come back from a lot a half with sustained realized losses

is not something that I think is it's just the one place where I'm like scares me to death yeah it's just like it's not worth the game let me double click on that for a second right because I think

I like broadly agree with you. But it also depends on how much traction or like PMF or whatever you have. Like if you're trying to bootstrap something and it gets hacked, then yes, it's probably dead. But like, is your take that Layer Zero or Avey is going to like have some long-losting kind of headwinds from this whole event or

or you think it blows over? I think if they can't, if they couldn't make user's whole, yes. And so I, am I in a position you know, am I a part of the defy cabal, right? That, like, has the relationships to go and make a hack like that whole? No. Right? Like, that is just not the place that I've built relationships over the last couple of years, though I'm sure obviously the space would unite and rally and, like, kind of have they done.

So the answer is, as long as users can maintain and stay whole, then you're in the game. And obviously, organizations like layers Dero and Ave, it's as deep into the crypto nucleus and the cipher fuck nucleus as you can probably get. Like they have resources, investors, and relationships to go and capture that capital. And the protocols are too integral to like the foundation of crypto itself. Like nothing necessarily that I'm working on like I think has that like structural dependency within crypto where like you know, if, if something were to happen, a Pudgy Penguin NFTs, God forbid, some AI, you know, whatever.

Like, it's, I would show up. Don't worry. I appreciate that. I would show up. I don't. I would bail you guys out. Like, I'm, I'm here for it. I'd be, I think, rounding it up.

I think Pudgy Penguins are too big to fail. I, I appreciate that. But, like, if I'm underwriting new initiatives, it's just not a risk I'm willing to pay. right for a position i want to put myself in and like dude in this world with i like it's impossible for you to convince me that that risk just doesn't get higher with time until we get like a real breakthrough on the tech stack that like makes me feel otherwise got it so so are they layer zero too big to fail uh and they made users whole and so they're ready to rock and roll right users are whole and outcome is users as whole if i'm a net new builder

trying to get PMF and I'm using yield to leverage that PMF and I'm doing some sort of scheme to do it like the risk is not worth the reward to me in that function. Yeah, fair. Yeah. Yeah. I think that I mean, that's like part of the conversation right now with the, you know, is this a moral hazard? Should we not bail everyone out?

Like, there's a lot of moral hazard. Not every law. Not every. The whole thing is a moral hazard. It's like this thing about framing and positioning. I was talking to somebody about this the other day, but it's like you can like take Warren Buffett, for example. It's like on one side of the world,

like Warren Buffett's the greatest investor of all time. And like anyone who's in finance or on the street has so much respect. Some like super woke like just different side of the spectrum type of person be like, yeah, well, he invested in Coca-Cola and contributed to like more deities and more deaths than like any single human on the platform. planet. Like it's all so subjective and like it just really comes down from the lane the lens in which you frame it like I just don't think it's productive. I think like you have to have you know, it's a deeper conversation that we won't have here. But you know what I think we've lost track of

is like some like 20 years ago and I was very young or even 10 years ago when I was more conscious like there was some baseline moral barometer right like hurt people bad. right stealing bad right and and just the world over the last couple of years even to like this point like how it's like what we went over last week like how couldn't you say that making users whole and like preventing huge financial loss is is bad yet somehow some way somebody has conjured up a perspective in a framing of the situation that is making that bad. And it's like, where has the moral baseline? Like, how has it dissipated so insanely over the last couple of years? I couldn't tell you. But like, that's just like,

it's not even an argument to me. Like people like that's, that's step number one. But besides decentralization and integrity and anything, like losing people's hard earned money, that solved that first. It's insane than anyone would think otherwise. Yeah. I think, you know, this is also part of the like Coda's law wing of like insanity right like you know you're you have a very user customer centric view of the world if you're like if you nuke your customers you don't have a business and like there are people in DIPA that are like those are bad customers it's good that this happened to them like genuinely right like they're like they're like they didn't price their risk uh adjust the yield correctly

and this is a good lesson for them all. And so here we are. That was a real argument, by the way. Was like, is it later, there's a child out as in Avey. And there was people who were like, well, it's the users for putting their money in Avey in the first place, those idiots.

No. Yeah. I'm sorry. Like, shut up. I think that, I don't know. My biggest takeaway is like, look, you have to fix this, mostly because we're in no position

to talk about moral hazards at this point. Like we can talk about that once we, I don't know, once there's a blow up with a waterfall structure, like, agreed, generally agreed upon. Right. But like we're literally flying by the seat of our pants, post hoc, make people whole, do what we can, come together, try to get the best outcome. And in my opinion, like, nothing about, however this lands, I don't see it dramatically impacting, like, what. people do in terms of the future like security measures and risk measures like if you

don't bail out I think like what they're going to do next is basically generally the same as if you do the only difference is who's harmed and like whether or not they can come back and like how much

is lost and that kind of stuff but I just don't see any position where any of the involved parties are like well that was fun Like, no, this was not freaking fine. Nobody thinks that. You know what? Like maybe down the line, we can have, like, more structured conversations where we're, like,

actually adults. At this point, we're not adults. Again, like, we... Yeah, I think, you know, the argument of, like, oh, if we make these people whole or donate or whatever, then it won't change the behavior. Like, the behavior needs to change in the protocols, right? Like they are the ones that have the responsibility to deal with this. And I think irrespective whether users are made whole, they like are still feeling pain.

Right. Like, you know, no one wants to have to donate 5,000 to bail out their users, right? Like that still hurts no matter, no matter how much eat you have. So, all right. Let's move on to the next segment because I'm pretty excited about this for a reason. So a few hours ago, it looks like meta announced meta, i.e. Facebook, announced that they are going to pay creators in USDC. So, like, for a bit of background here, this is a thing that I think has been around for a long time, but like definitely from my perspective, X was the first time where I saw this, like, become a kind of tactical. highly talked about thing where like you get paid based on views on the social media site that you are on

and then you know uh i know that like ticot has this and and instagram and probably lucca you have a better sense of this from your uh from your uh from your uh handle marketplace days um of of what the like backstory of all of these creator payouts are but like my first experience with it was was x Yeah, I mean, it's it's pretty cool. I mean, it makes tons of sense. Like, those payouts in the past had fees associated to it. Like, if I'm meta, like, there's no way I don't come to this conclusion. So it's nice that they're acting on it. I mean, fundamentally, like these businesses live and die by how many people are creating on their platform because the creators, they're custodians of the communities and the audiences and social networks are quite literally hubs of, people's individual personality and community. And, you know, issuing, you know, stable coin payments just is going to add less friction to people getting their dollars. I think people are underestimating just how big USC and USDT and this whole initiative is just

for the strength of America and the dollar system. I mean, like, the fact that we just keep putting these dollars in people's hands, like, it's just creating such an amazing moat for the country. and, you know, I think it's just one of those situations where, you know, meta's leading the charge. And it's all going this way. It's just unequivocally better payment rails. It's been obvious for a long time. Probably my great.

This is like one of the largest, it must be, you know, like the Instagram industrial complex must be one of the largest creator. Yeah. Yeah. Systems, right? Like, for sure. So top. I'm not sure about Facebook directly. like I don't know if they pay people for for stuff I'm not they all do they all do in some capacity

YouTube is the highest paying per and thousand impressions but they all do now so you know I mean the beauty but like understand the network effect I'm a creator I get paid in US dollars obviously we get to see the UXUI but if I get the US dollars on chain then I see NFT on timeline or mean coin and then I just can buy it easy like the network of effect of what this is the seeds that are being planted here for all of like my delusional bowls in the room is like continues right like this is setting up for like the all run that we've been like waiting for for like that crypto super cycle like it's going to be off the backs of the seeds that are being planted like this right where everyone everyone has USCC easily they don't

need to buy it, they're being paid in there, right? So the interesting thing about this is when X first released their payments, I was like, oh, cool, and me being an idiot, I literally assumed that it would be in stable points. Like,

it did not occur to me that it would not be in stable points because how are you supposed to pay people all over the world? It was not. And so I signed up for it just to like see what is this flow. It took me, I think, like a day and a half to like get it completely booked up because you needed like give a bank account and there was like K. YC

and all of these things. And it was just like so painful. And I get paid. I think like I want to say it's like 50 bucks a month or 100 bucks a month or something like that. I'm not even sure if I would know how to turn it off at this point. I don't even know where it goes. It goes in some random bank account. I have no idea where mine goes. None. Yeah. And it was. If it were my like wallet, it, I would see it, but like, it just goes somewhere and, and that's kind of it, right? So, um, yeah, this, this feels, uh, this feels super bullish. Um, so there's more to get. I would love to get paid in like crypto and have a joke because I literally don't know where

mine go at all right now. Yeah. I mean, I mean, I mean, my old year account. I'll make sure shows up somewhere. Just let me sign it. Well, so, and I, Kate, you're like, it took me a day and a half. It didn't me freaking like six months. because my stripe account was on my, like I hadn't used it in like a decade, but it still

existed. But it had out-of-date K-Y-C under my maiden name. So I was like, oh, you need to give your real docs now. And I was like, okay, cool. And so I give the real docs. And then they're like, what? And I was like, oh, shit. Like it was so long.

It was so long ago. And so, yeah, then I had to go through like a whole manual. It was just a pain in the butt. And then when it finally, like, worked or whatever, I guess it just goes into that account now. But I don't know where it comes out. Like, it's completely same. So the thing that the reason, like, this is amazing. And I agree with, with Luca that, like, having millions, tens of millions, hundreds of, I don't know how many people they pay.

Like, 100 million people getting paid in USC every year to the tune of, like, maybe, you know, billions of dollars is insane and amazing. But there is another element to this story, right? Which is the Facebook stable coin coming full circle story, right? So we've got a tweet here, and it's an old tweet. Let's see if we can put it up from Maxine Waters. So this is, and it's funny because it's referring to Trump, right, basically saying that this is like, again, I guess six years ago. Ancient, ancient in history.

Six years ago, right? So she says, Facebook let Russia manipulate voters and put Trump in the White House. So this is not this version of Trump. Like, she would be horrified to know that like we did round two, right? Now they want to create their own currency with no regulations and run it. out of Switzerland, we need to stop this now. So, this tweet and this moment in time, right?

And Facebook's sheer idiocy back in 2016 or whatever it was that they were doing this, right? Is for a lot of people, I think, the moment where the Democrats said, actually crypto is the devil. Like, this was the first

thing where they're like this is not just a weird toy money thing we can ignore or whatever like this is actually super dangerous is like a risk to civilization basically because particularly at that time

and I think this is maybe kind of declined a little bit over the years but there was a period of time where the like you know what became the Mag 7 was like hugely problematic for Democrats, right? Like they had this real like kind of antipathy towards the large, you know, tech conglomerates,

right? Google and Microsoft and, and, you know, there was like, you know, antitrust things. You know, that had been going on for a long time. But like there was there was a real kind of sense within. you know, a wing of the Democrat Party that like these companies were really bad, really too big. Really evil. Really evil. Like really, really. Like it was like a mashup. And like once they got involved, once the election stuff happened, it was like, I mean, she says it right. She's like, social media who let Russia elect Trump and Artney, right? That was the narrative. But it was like,

yeah, it's this perfect storm of like these powerful people who are like running around Silicon Valley being rich. It's like capitalism in a nutshell. And then you have freaking the Russian, the politicians on top of it.

And they just, yeah, it was like a perfect storm and they really decided that like really all social media was like truly evil. And that like there was no way in hell that that Facebook meta was ever going to play a role in the economy.

That was just like not, not a thing. They were not going to allow that to happen, right? So they killed it. They killed this stable coin. But here is the, you know, the fact that like Facebook was so early to this well, right? Like this is like, this was the thing when like stable court, you know, there was only tether, right? And they were like, oh, we're going to do our own stable coin. That timeline where this doesn't get shut down and like, Bium becomes a thing.

But the thing that was the dumbest part of this from Facebook, and I do not know how they did not sense check this with like someone was the this was not going to be a US dollar stable coin. It was going to be a weird bag of currencies, right? that that was going to like some cypherpunk in Facebook somehow like like did some weird like anti-USD pilling of zuck somehow and like got this over the line but like it was such a crazy scheme i mean it does speak to the fact that it was early crypto that you could actually it with a straight face be like we're going to make our own weird denomination of currency and and do a stable point but like this set off what eventually became like the whole you know the ginsler era of crypto of like crypto is

dangerous and destabilizing to u.s interests and we must stop it and everything about it is bad etc etc they're like this is pretty clearly that so the fact that 10 years later crazily enough where we've come full circle and they're like actually us the US dollars are good bro let's let's just give it to people um is pretty wild because yeah that that alternative just going to do it right like they're just they're not asking permission anymore which I think that's the way it's going to do it yeah I don't know why they ever asked Congress permission in the first place that was weird um they haven't shipped it that was why Congress got their hands around them in the first place it was

like they had net they had not shipped it yeah it was they announced it took like two years it was And like every, every step of the way Congress was like, get up here and explain why this is fine. And like, you can't. Like, it's a gotcha environment. Okay. This was, right. This was 2019 that this happened. So, 2000.

I mean, that's still, like, we're still talking pre-NFTs, pre-D5. Yeah. It was basically just ICOs. Like, that's always just ICAF. It's weird, though, like the, the, I'm, I'm, we're a bit confused on this timeline. We'll have to dig into this because like the election was the big thing, right? This like, you know, Facebook let Trump. I guess they were still banging on about it like three years into his term.

I mean, it was the whole thing. They hadn't given up on on the whole thing. So, all right. Let's go to an ad break and we'll be back with some pump fun action. Multi-chain Advisors is an emerging technology growth firm that has helped create over $50 billion in enterprise value for more than 80 clients, like Pith, MoonPay Commerce, and Wormhole. They've worked with some of the largest and most impactful companies in the space. They're the partner you want when you're navigating markets and trying to break out from the noise. They help navigate TGEs, go-to-market, BD and partnerships, Capital Markets Advisory, PR, media placements, KOWA activations, and more. driving execution from launch to scale. Their results are measurable.

To learn more and start building real traction today, visit multi-chain adv.com. Okay, so we are back. Pump Fund yesterday announced that they have burned $370 million worth of pump tokens that they ostensibly bold on market. I think that was the explanation of where where those tokens came from, although there is a lot of skepticism from a lot of people.

I saw a lot of takes on the timeline of like, did they even burn them? A token real? Is pump fun real? Like, people are very weirdly skeptical of almost anything that the pump fun team says. Like, the conspiracy theories are wild every time they say something. And I think a big part of it is that they have an expectation that there will be an air drop. And I'm not sure that I have ever seen like an explicit thing where the pump fund people said there'll be an air drop. I think it's always just been this assumption of there must be an air drop. They keep not air dropping. Maybe they did say they were going to do an air drop and change their mind. They did. They did. Okay. So, so people have an expectation of an air drop. And they were

like, hey guys, $370 million with the tokens that we have accumulated over here. And then they were like let's light it on fire. I sold some good memes of A-lon burning the tokens instead of distributing the people. We've talked about this before. As the founder, you have $370 million for the tokens and you have a choice of sending it to, I don't know, let's call it 370 million people and giving them a dollar, right? Or you can can burn them. Just from like a very pragmatic standpoint, Luca, like, sending those tokens out to people,

we know what they're going to do with them. Oh, yeah, we do. Okay, what's the argument from, what's the argument? I can argue this all day. All right, all right. The argument is, and it's a very anecdotal with Pengu, is, and I burn tokens too. Remember, can you give me some shit for that?

I did. Yeah, I did. I'm glad you still remember that. I'm glad you still remember that. Of course. Of course. Now, I remember. But it was frankly not because I burned it.

It was because I kind of moved the needle on how I burned it. But that's a different story that we won't bring back. For what it's worth, I think, like, in the light of day, two years later or whatever it is, I think, like, it was definitely the right call. Seeing the... Wait, wait. What's the... But why are we burn things?

What's the value here? Okay. So the burn... the the and this they thought the same thing my logic around the burn was you know supply crunching aligning with community right like we burn 13% of the supply it to some a similar number it was like $280 million and it's supposed to be a signal that like look like these tokens still exist in the world and rather than doing something else with them like we're going to align with you guys the best of our ability and and that is principally what it is now

Now, the difference, though, between us and them is we had already given 50% of this supply to people, right? So we were already like this people's coin. This idea that, you know, that the air drop if done right, and I thought we did it right at Pudgy, at least for the time, because everyone in their mom was like, dude, 50% liquid float. You are math, right? In a world where floats were, you know, three, four, five percent of the fully diluted value. it was actually a very contrarian bet. And if you look at it, right, post that announcement when we talked about the distribution, we went from getting a couple million views of post to like 10, 15.

I mean, I don't know if anybody remembers, but like for two weeks, I was clocking like 15, 20 million views of post. It was madness. And that actually was able to kind of wash out the cell pressure on the size of the airdrop because there was so much volume, so much buying and selling. their issue is that they never air drop they had you know i think he deleted the tweets but i'm like 99.9% certain he had mentioned that he was going to air drop they never did it and rather than you know fulfilling on that promise and that expectation you kind of create like this new idea that you're like aligning but you still haven't fulfilled the first promise so that's where it fell short how i would like i'm actually a component that like air drops done right can be like huge

beneficial and that's why I took you know put the money where my mouth is in terms of that statement and like actioning on huge distribution and that being beneficial their whole strategy though Kane and I know you appreciate this as somebody's like stared at tokens and tokenomics it actually functionally makes no sense how they got here and I have no reason to believe that these guys aren't incredibly bright I mean they invented the bonding curve they are not like stupid operators but like the emotional quotient is not in that room. Because you actually just think about it logically.

They're in a position that pretty much almost nobody else is where the flywheel and the monies that they make are so insane that if I was then, I would literally give the biggest air drop the world has ever seen and I would fray it drew down 95%. Because in the case that it, because in a case where they are not capital constrained, they can then basically buy the entire token.

And if they would have done this from day one, they would have drawn down 95%. They would then own the entire float. This thing would be vertical up only. And it would be the biggest champion the space has ever seen. Instead, somehow some way, they decided to redact the airdrop somehow, some way, and not give it to the community.

Half of them like get any time they get a chance to grave dance, on the guy. They try to do it. And now he's like perpetually fighting not only the market sentiment, but the internal community sentiment. His own users. Right. And he has a perpetual float problem that like he could have addressed, you know, at that moment. And like, dude, we drew down 95%. It hurt. It was the worst time of my life. But like, we brought it back, you know? And like, he is way more prone and capable to bringing it back because of the resource of capital that they have to basically control. their token. It actually makes zero sense how they've gotten to this point on this side of the

spectrum in regards to how their token kind of functions within their ecosystem. Because I think that's a very good take. And I like broadly agree with you. The fear, right, if, you know, to kind of like frame it from their perspective, past, to be that like we do have this flywheel and if we give people the tokens and the token goes down by 95% what happens if that somehow kills our momentum or whatever and like quarter to's worth i think this is unfounded right like they have product market fit the token they're doing the worst thing that they could do with the token and it doesn't seem to be impacting their their PMF so i think they could absolutely bear this as as you say you know even if it was to draw down 95

then put your buybacks like the buyback revenue is not tied to the token price at all they're completely decoupled it's not like this is like some token price flywheel where if the token price goes down the thing stops um but i can see how there was a period of time where everyone was like never airdrop even i say it like never airdrop it's like the worst idea possible you know, you just end up getting a bunch of people who dump on you and doesn't actually drive awareness or growth or any of the things that you're you're hoping to get. Of course, there's counter examples and I think, you know, Pengu's is one of them. But I can see how you get yourself to the point where you're like, actually, air drops are dumb and we're not doing it. I would agree, but, you know, there's two points to that.

their claim is that their moat is way more defensible than people think. And I actually don't think that's a Fugazi claim. I think that's actually true. From the branding to the DNA to the behavioral pattern, I mean, everyone's tried to fucking take market share from them and they've lost. Yeah. Right?

Yeah. And so like in a world where you have a real defensible moat, right? Like the thing that's going to stand the test of time for them to keep the gravy train going is the sentiment of their community. and there's such a discorrelation between price of their token and success of their business, that the only thing you can come to is just a complete mismanagement of the community sentiment and the emotional quotient of their users. And the thing is, is like, dude, like, I would argue if he gave a ridiculous air drop,

like, let's just do the map, right? Let's say it came out at $4 billion. He did the biggest air drop of all time, or like one of it could have been a top 10, easy. He drew it down 95%, took, you know, that same $370 million, bought it back at a call it, let's say it drew down 90%. The thing has a fully diluted value of 400 million bucks. Within a month, he'd control the entire flow. Everyone would allow them. He would promise another drop a year or two years from now, right? They would then use the platform 10 times more because they knew he'd bless them. you could then, you know, say, I'm going to bless you even more.

He'd add the facts and the, and the credibility to say that. And then he would get like 20 times more users, just like, no matter how many ways you skin this cat with this specific protocol, with this specific build, the right decision was just to give it all, let it draw down, buy it all back off. I mean, not only is their revenue. I mean, they raised 400 million on the sale. Like, they have so much cash. And then this could have just been an infinite money printer for them until infinity.

how you fix this I mean look Alan if you're listening to this you can you can give me a call I'm one and happy to give you a free app Mr. Luca be free Luca do you think Luca do you think that there's

maybe some element right and and you know I'll call out that like I was an investor in the fund to Alliance Dow vintage that these guys like came out of it was it was no much money and and I think

we then went into or tried to go into the billion dollar round. Do you think that there's some fear, pressure, whatever, coming from those investors that invested at that billion dollar round? To be like, do not give out free tokens. We just bought tokens at a billion dollar vow. If you do that, you're fucking ass. And they're more worried about their, like, reputational risk when it comes to institutional investors than like the actual users of the platform.

Well, and they also might, the thing is that that billion dollar deal was not that long ago, right? So we don't know the terms of that deal. But if they, if the investors have certain terms, whatever those may be, those might impact the way that you can do anirdrop. Right. And it's not necessarily saying that. I do know the terms and I'm pretty sure that's not the case. I don't think that there was any restriction on because I think at the time that they did the deal,

there was still this like assumption of an air drop. So I don't think they're prevented from doing an air drop. Oh, no, I'm not saying that they're prevented. I'm just saying, uh, uh, like, like,

I don't think there's like 20% of their drop. Yeah, I don't think there's like a clause to like let people sell back to them or anything like that. I'm at least my recollection is that's not the case but um but yeah so but assuming that they have nothing preventing them like where where do you sit lucca and that doesn't make sense because it's assuming that they the assumption where it wouldn't make sense where that would be a case if I was an institutional investor would be the assumption that it wouldn't bring more liquidity and dollars to the flywheel that already exists and I'm

convinced that if you do this and do this right, they will only make more monies. And the difference about crypto than traditional equities is it's more reflexive, meaning like, okay, will those billion dollar guys, like, will there be a moment of nervousness? Sure, but you guys are investors. You have balls on you. So like, you know, that's part of the gain. The beauty about this and like the money that they make is they can crunch the supply so quickly at the right price that they, they They did this right. There would be two days of 100% candles back to back. And everyone in their mom would be jumping for joy, right?

The variable here that makes them so unique and such in a position to just people please and literally be the man. Like, he's already the man. He's how however old he is worth a billion bucks and they're split amongst a couple guys. Like those guys already like the guys. But like they're not the people's champ. They're actually probably the polar opposite. Like most people fucking hate them. Right?

I'm an entrepreneur. I'm indifferent. Like, I'm not a pump fun user, right? But like, dude, pump fun, a low, like the function of just issuing tokens and, and just being so communal. Like, oh, my God, dude, if you were the people's champ, you'd be at a $5 billion a year run rate. It would just, I just believe that. And if it's not five, it's two, but it's more than whatever they're making, right? Right.

And we got to clip this and send it to A-LON and be like, all I just say this, I just pulled up the turn of their revenue. I'm shocked that their revenue has held. It's crazy. It's crazy. And obviously it peaked up before, but like, this is not like your classic ICO OpenC graph, right? Those go to the moon and then that's not that they are still doing numbers. It's like pretty decent numbers. So that's actually a really interesting dynamic because it's, you do have the business.

You have the revenue from the business. And then you have the token on top. It seems like maybe there is a, there is a, I should call out there is a conspiracy theory as well. Like the revenue is actually not real. They just think the money that they raised and they're like inflating the revenue numbers. Because of the crypto, right? So no one believes anything or not. So yeah.

Yeah. I don't know. I'm not suggesting that's the case, but if you go and, like, to your point, though, Luca, right? There aren't that many Lodgy Penguins conspiracy theories out there. Hudgy penguin holders are pretty happy. Even if the price is down, they still love the brand, love the ecosystem. They're not inventing crazy stories, whereas he go and look up on fun. The conspiracy theories are wild. It's crazy. So there's definitely a disconnect between like the users to the platform and and the team in that regard. He can fix that so quick.

He just has to have the willingness to fix it a little bit of fucking, you know, he has to believe in the thoughts that I leaked out or somebody else who lays out similar thoughts. And they just have to like, it's a neat bit. Have all the problems you can fix when you're making that much money, even if, you know, whatever the conspiracy is. They're making mine, right? It's all not, you know, because I know of enough people. And the principle of that casino, it's the greatest new iteration of casino that we've seen in the last, you know, five years. Like, they're making real money, right? Like, there's a way to fix this.

It's just like, is there, is there a willingness to fix it? Now, I know the investors are going to pressure them to fix this because you got guys who were in it who, you know, you thought, you know, they made a billion dollars on some of their investments and their great, people, but like, they're looking at the reality and they're like, this, the winning here seems lopsided to like the team versus like the people who took a bet on this when nobody else would. And so like, I know those guys are going to apply pressure, just going to come down to like willingness to like, you know, are you willing to take that bet? But I promise if they took that bet, they're going to win nine out of ten times. Yeah, fair. Fair, fair. All right, let's move

on our next segment. We probably only have time for one more. So let's talk about this open AI phone. If you guys are open to that, this is something that I've been

I think we've even talked about on the show, right? Like the culmination of vibe coding and this new form factor agents is going to force us to get new operating systems, I would say.

Like, operating systems will have to adapt. Like, the opportunity to break the stranglehold of, like, the Windows, Apple operating system, you know, Android, iOS, phone operating system kind of duopoly is like, finally here. And people have tried to do this before.

You know, Microsoft tried to do it and, you know, people have tried to come out with their own phones. It feels like, Open AI. Like, to be honest, I'm surprised that they're doing this because they just had this whole thing about focusing on, like, coding agents and getting back to like first principles. But, you know, maybe this is their fire phone moment, the Amazon, the Amazon phone. Everyone convinces everyone to do a phone at some point.

And 99% of the time they freaking fall on their face. ma'am you're saying that the seeker salonaphone who's not a roaring success how dare you I heard the air drop was nice though the air drops are good yeah yeah yeah the air drop

I've literally never heard anyone talking about the phone itself they're just like I've put the phone had money on it the phone had money on it's a good feature You buy a phone and it has more money on it than it costs you to buy it. That is a good feature. It's honestly a great feature. In terms of like, does it replace my iPhone? No, I'm sorry, guys.

So Open AI is there was a hardware leak that they are working on AI native phone with agents replacing traditional apps targeting 2028. and one of the large Chinese manufacturers, Luxhare, as the assembler of this phone. The interesting question, I guess, right, here is, like, do they build a fork of Android, like other people have tried to do before? Most people have tried to do because it is open source. Or do they actually say, no, like this needs a rethinking of, the operating system for an agent-based system.

And also we have like all of the coding agents in the world and we can just get them. So it's going to be a very interesting question. I mean, the other thing that it brings up as well though is the first of all like Tim Cook, you're passing the torch over to John Ernest, you know, the same way, that it happened when Tim Cook took over, like priorities shifted a little bit. One of the priorities that I think if you look back at Tim Cook's entire tenure,

the thing that Apple butchered, the worst of all of the things is AI. Like, it's just mind-blowing. Like, the only thing that they have going for them is like the MLX, you know, competitor to the Nvidia platform where, you know, you can do local inference and things like that.

Outside of that from like an actual user, which is their fucking jobs, right? Like outside of the like weird hardware like low level, you know, inference stuff, they have just completely flawed.

I mean, Siri was never good. Like it was never, it was never great. It was too early and then like I wonder if they're like, but they never pivoted it. They never. They also just never threw her in the trash or replaced her with battery. I don't know. I don't know what happened, but it was definitely rough because they should have been a contender.

And it should have made my phone better. Like, I still can't yell at my phone to actually do things reliably. Yeah. Yeah, it's pretty crazy that they just didn't land that, right? Like one of the, they just completely missed. So, you know, the market. opportunity though is that like people are frustrated right it's weird that my MacBook Pro as like all of these agents running all these like software agents and you know you've got like

flawed in an iOS app and and codecs in an iOS app and grok and you know perplexity and all these amazing apps but they're sandboxed to a tiny thing they can't do anything in the operating system the operating system is like functionally retarded compared to the apps like the delta between how smart the operating system is and how smart some of the apps are is insane like it's insane like it's absolutely insane you're like oh hey Siri like what how do I do this thing like Siri has no idea has no idea how to do anything like has no awareness of the world no knowledge like it's just it's wild so it will be very interesting to see how this plays out because because there's absolutely no question that the agent form factor in terms of how software works

and the hardware form factor of like holding a rectangle with a piece of glass on it is probably not going to change. Like they're going to have to come together somehow. And we haven't landed this yet. So like the opportunity is is massive. Right. Like they were not going to like be wearing fucking glasses or having brain implants yet. Like people are still going to.

walk around with a glass rectangle and want the glass to be smart. So someone has to land this, please, guys, we need to solve this. Yeah. I know I'm super interested on seeing if they, I hope they, I hope they do a new OS.

I hope they don't just fork Android because they're going to be so hamstrung by just how the operating system is already set up. I think if they get a few good people and let them go to town, give them basically like unlimited budget, you can do some really interesting things that sort of level up the world

theoretically in the same way that we went from like Blackberry to the first iPhone and then like the app store happened and it just, it was just an insane time. You can imagine the same thing could happen here, but it takes someone who's actually going to build the operating system, not just forked Android. And I'm not sure, based on what I've read,

I'm not sure that that's happening. Like it's not easy, but you have to actually sit down and from first principles of this new thing like do it better, actually different better in the same way that, again, the first iPhone was not Blackberry, was not Nokia, was not every other phone on the market. It was a side step around all of that stuff, right? Not more buttons, but one button slash infinite buttons.

I think the interesting question for me, and I've thought about this a lot over the last few months when it comes to the kind of, you know, these juopolis tend to form, right? Like, you've got this open AI anthropic juopoly right now, based in cloud inference where, like, they are out trying to outrelease each other and out feature each other. And it's like, it's amazing for users, right? Like, they just keep pushing things as hard as possible. What's interesting, though, is because they are both so good and there is, like not really a like strong differentiation that you could just go,

I'm never going to use that one and just use this one and like lean into it. You know, the way that that you kind of have to with like Apple and the Google ecosystem, right? Like you either lean into like having Android and all the Android peripherals and all of that stuff. It's really hard to mix the two. I know people do it with like Windows and and like iPhone, but that's honestly frankly retarded. I can't believe people manage to do that. I don't know how they live like that.

But this is a weird situation where like if you want the best coding software, for example, right, it's hard to see how either OpenAI or Anthropic can build it because they are locked into their own ecosystem and it's shifting so quickly that like you also probably want deep seek or like local inference. or you want to be able to use Cloud sometimes for like design stuff. And so you end up in this weird situation where you can't just use one platform's tools.

You need to have both of them. And so this is where cursor was like so well positioned because they're like, ah, you can use anyone. You can use Gemini. You can use anyone's, anyone's cloud inference. And we'll just give you the kind of framework to operate that in. So that's the open question for me, I guess, in terms of, like can one of the large labs builds hardware that locks you into their ecosystem and have it not be super frustrating

that like actually i want claude because claude just released a new version that's smarter than your guy they have familiar to figure it out but hardware is not software i'll tell you that much exactly yeah and that's that's the i think that's the issue that's going to be at hand is like what what is their goal with the phone. If they go hard on it though, it's going to be um it's you have to rethink it again from first principles in terms of like AI interactions and like what these agents are doing and what the user experience is actually like. But conceptually it's actually not that different from how the iPhone works, right? Like in the same way that the iPhone can give applications and certain pieces of the phone and the operating system and the firmware and the

software access to like the camera and to these things right but the way that it's set up right now is application focused so you have applications like the nest is like the operating system the applications then the applications can access core part of the firmware or the hardware or the software um and it's all this sort of like permissioning system it's really hard to imagine the AI being the same because, again, you want additional context and you want cross-context. And that's currently, like, one of the biggest issues with a lot of the iPhone apps is, like, you don't have, you don't necessarily have that. Yeah. Yeah.

You're in a sandbox. And so how do you, how do you, the biggest question is like, how do you get, uh, yeah, how do you allow the AI to access the context it needs without doing. so horrendously dangerously because we're past a point where you can launch an operating system that's like basically like how Windows or Mac OS is today. Like it's too like you can't. There's no going back to how it used to be. Everything's going to be more sandbox over time. So the question is like, yeah, how do you do sandboxing secure, truly secure sandboxing

with potentially interoperable agents who need context? Like I do not an easy one. So yeah, I don't know. We'll see. Like, if they do it, like, if they really go hard and do it, it's like going to be a life,

like a world changer in the same way the iPhone is. I don't know if they're, if they're in a position to like actually. That's the question is like, is the lab the right, you know, someone will do this and it does require a lot of resources. It's pretty crazy.

I was, I looked this up the other day. Open AI and Anthropic are like, their market caps are 20x. larger than Apple was when it launched the iPhone. The resources that these guys have, even factoring in inflation or whatever, right? Like, it's still like,

they're five times bigger than Apple was when they managed to launch the iPhone. So, like, they have the resources. There is absolutely no, and they also have, like, magical aliens that they have made that are, like, really good at coding as well, right? So, like, the ability for someone to launch something like this, like a new phone operating system, etc.,

is, has never been greater because they just have so much capital available to them. So someone's going to have to try this. It's just an open question about whether or not one of the frontier labs can pull this off or if it needs to be a third party. Like, I just don't know if I use a phone

that was locked into OpenAI. As much as I love Codex, like, you know, if I could, couldn't if I couldn't use Claude or if there was some restriction or it just wasn't as good, I feel like I wouldn't use it. The iPhone, people forget this. The first iPhone didn't have an app store. That what me took the iPhone from being like a better BlackBerry to a complete like life

changing, product changing, everything changing was the app store, was third party developers. And the, even more interestingly, jobs was like, fuck you and your. like shitty slop code you're never watching this phone we are the one we're going to write software for it you will never you know it was almost like a rejection of like the whole macOS ecosystem of like people keep writing this shitty shareware

stuff that's running on my beautiful machines and I will not let that happen for phone and he capitulated off for like you know less than a year less than a year he was like I've like yeah you win we can't we can't well and they settle they settle right like the internal people that's why that's why the apps were like it's still like they

dictate a lot of stuff and people take issue with this but like the branding the buttons the way that things are the right that's that's how the apps happen and you know what say what you will i've always used an iphone i'm like a decade now and like it's a better experience on android so yeah all right um let's wrap it up there thank you for joining us for this episode of Uneasy Money. Remember what happens on Chain, never stays on Chain. We'll be back next week. Until then, do your own research before aping in.

See you guys. Bye. Bye, 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 out of disclosures at UnchainedCrypto.com slash uneasy money.