Unchained - The Chopping Block: Biden's Resignation Odds, Market Predictions, and Chevron Ruling's Impact on Crypto - Ep. 669

Episode Date: July 4, 2024

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Robert Leshner, and Tarun Chitra explore the latest trends in the crypto world. In this episode, special guest Laura Shin is sitting in for Tom to discuss the impact of prediction markets on politics and crypto. They explore how prediction markets like Polymarket affect public perception during the presidential election, contrasting their reliability against traditional journalism. The conversation also touches on the implications of prediction markets on insider trading, market manipulation, and the role of expert information. Additionally, they discuss the Supreme Court's overturning of the Chevron doctrine and its potential impact on regulatory shifts in the crypto industry. The episode provides an insightful analysis into how prediction markets could revolutionize journalism and the evolving landscape of crypto regulation. Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Pandora, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show highlights 🔹 Discussion on the recent presidential debate and its implications for prediction markets and the crypto industry.  🔹 Overview of the prediction market phenomenon and its growing importance in political forecasting.  🔹 Examination of the recent Supreme Court ruling overturning Chevron Deference and its implications for crypto regulations.  🔹 Debate on whether the ruling will lead to more specific legislation from Congress or if it will hinder effective rulemaking.  🔹 Speculation on how different political figures might impact future crypto legislation and regulation. Hosts ⭐️Haseeb Qureshi, Managing Partner at Dragonfly  ⭐️Tom Schmidt, General Partner at Dragonfly ⭐️Robert Leshner, CEO & Co-founder of Superstate ⭐️Laura Shin, journalist, author of ‘The Cryptopians,’ founder and CEO of Unchained Disclosures Timestamps 00:00 Intro 01:50 Presidential Debate Chaos 04:25 Mainstream Media vs. Prediction Markets 16:48 Insiders in Prediction Markets 30:38 Prediction Markets vs. Sports Betting 38:58 Market Manipulation 50:22 Supreme Court Ruling & Chevron Deference Learn more about your ad choices. Visit megaphone.fm/adchoices

Market manipulation is more defined as making markets converge to a price that does not reflect reality. In this case, if you are Biden and you know you're going to resign, you trading on the market actually gives information as a positive externality to everybody else that somebody who has inside information knows that this is going to happen and therefore we should update accordingly. And that is the point of prediction markets is not that people have fun trading. It's that it elicits this information that everybody else can act upon. Here's where all disagree. So if Biden in his head knows that he's going to announce a surprise press conference Thursday at New York, just using this as a hypothetical.

And Thursday at Robert has insight from him. Yeah, not a dividend. It's a tale of two quons. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. Unnamed trading firms who are very involved. I like that EAT is the ultimate policy. DeFi protocols are the antidote to this problem.

Hello, everybody. Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insiders perspective on the crypto topics of the day. So quick intros. First, we've got Robert, the Cryptoconuconist, and Tsar of Superstain. Howdy? Next, you've got Tarun, the Gigabrain and Grand Puba at Gauntlet. Hello. Joining us today, we have Laura, CEO of the show. Hey, everyone. And I'm the Steve, the head hype man at Dragonfly. So we are early stage investors in crypto, and I want to caveat that nothing we say here is investment advice. advice or even life advice, please see chopping block that XYZ for more disclosures. So we've been off for a couple weeks, and as always, there's a lot of stuff happening in crypto as well as in the world. And we're going to jump into it with, I know everybody loves this as their favorite politics podcast. There's a certain time of year that every podcast becomes a politics podcast,

and this is one of those moments. So last week we had the presidential debate. I was actually in Japan at that time, but I was like listening in as I was running around during the day. And the debate was an absolute shit show. Biden, as has been widely reported, had just, you know, basically onstage dementia. And it's now revealed to the world that Biden is very likely not going to be a competitive candidate for the Democratic Party going into this upcoming election. So there's been, so one, a lot of people arguing about, okay, one, what does this mean for crypto if Biden is going to take a back seat and somebody else potentially is going to be taking up the Democratic ticket. So that's one connection to crypto.

The second thing is that this has shown a huge spotlight on prediction markets. Because prediction markets, even before the debate, so namely polymarket in which robot and dragonfly are both investors, Polymarket, which is the biggest prediction market in the world, has almost $200 million being bet currently on this presidential election. And that, on Polymarket, it already showed even going into the debate that Biden had north of a 25% chance of dropping out of the race, which is something that at that time, mainstream media was not acknowledging in any way that there was a realistic possibility of Biden dropping out. After the debate, that probability shot up to north of 50% immediately after the debate took

place. And now, currently, Polly Market is flashing 70% plus probability of Biden dropping out of the race. It now shows, in prediction markets, that Kamala Harris is more likely to win the election than Joe Biden. and is more likely to win the Democratic nomination. At a time where still you go to mainstream media, and mainstream media are talking about the beginnings of an insurrection, the beginnings of Democratic players who are to talk about replacement.

I don't know about that totally, because the day after the election, sorry, the debate, the New York Times editorial board wrote a pretty scathing, like, you shouldn't run. Yeah, but actually, so I do want to ask about the timeline here because my memory is that it didn't go above 50% until after NBC reported that Biden was going to be discussing what to do with this campaign on Sunday. So I actually think after the debate, it was something like 40 some percent, if I remember, remember correctly.

Yeah. And honestly, yeah, there is like a little bit of a tango between. Like it feels like the prediction market moves up based on reporting from the mainstream media, actually, typically. But you're right that going in, they had higher odds. What I will point out to, so I, like Nick Carter has. this whole thread where he, you know, was saying like, oh, the mainstream media lied to us, blah, blah, blah.

And I tried to explain, like, I don't know if you guys remember a few weeks ago. The Wall Street Journal did this article about like, oh, yeah, Biden and doesn't seem to be all with it. Like, do you guys remember this? It was like two or maybe three weeks before the debate. Okay. So what happened was, like, I'm in this alumni group for Wall Street Journal. Sorry, I'm in this Facebook group for Wall Street Journal alumni.

And I saw some of the people in there kind of criticizing the story because when you read it closely like any journalists would do. Like we're realizing like, okay, all the named people are Republicans. And it doesn't name any of the Democrats who obviously are the people who are probably working with him more closely. And so, um, you know, as a reporter, like, if you're going to go to your editors with that kind of story, then the editor's going to be like, oh, this is just like, the Republicans want you to run a hit piece like for, you know, to like help them in the election. And but the thing is like, obviously they still ran it, right? And you know, it says, like, they talk to multiple Democrats who like wouldn't go.

go on the record. So the point is what I said to Nick was like, it's not that the mainstream media didn't talk about it. Like there was that once or I understand it's just one. But he was saying, oh, but you know, like it's so obvious like, why did you have to do that? But, you know, like the bar for publishing is like higher than just like what you like you like so there is a mainstream journalist who did say something as recline in February. But as recline, he is an opinion columnist. He is not a reporter. And a reporter, you know, you, if you say something, you have to have backup. You have to give evidence. And it's better if you like name the sources and all that.

So, you know, I don't know if people fully understand kind of like the bar that needs to be clear to like report something as fact or like obviously that's a strong word even in this case. But like you would want like multiple people to say things. And so my conclusion for that Welsh Street Journal article is oh, okay. So yes, it didn't quite meet like you didn't cross every single T or dot every I where you would have. have like, you know, named sources for everything. But they must have been very confident in their in their sourcing, which is why they ran it anyway, even though they had like unnamed Democrats. So I'm just trying to explain, yeah, like why it is that people were saying like,

oh, the mainstream media missed it. And I'm like, well, if your sources aren't going to give you what you need to do the story, then like, you know, I mean, there are many times and I have tried to, you know, write about something and have not been able to because the sources wouldn't give me what I need. Like maybe I had one source and that was it. So anyway, just so plain. Yeah. Okay. So as long as you are embracing the frame of this is like, you know, crypto slash decentralized information versus mainstream media, which I don't necessarily think that's how we should frame this conversation. But since you, since you gave me the bait, I'm going to take it. I think so for one, I mean, what you're basically describing is that

the media has a bias toward the stories that, the administration wants to tell. And the story, obviously, the administration wants to tell. No, no, no, no. Of course, there was the her report, right? The her report was a very well-sourced, extremely, you know, very, very well-documented thing that basically said, look, Biden is very old. He has crappy memory.

He is essentially a borderline dementia old man who doesn't remember basic facts about his life and about his recent history as a politician, right? And this was widely criticized by most of the mainstream media as being a hit piece. as being, you know, just like, I remember that. This wasn't that long ago. Okay, yeah. So, yeah. I was trying to dismantle this report, which was the most credible story and the most sort

of investigative journalism or the most, you know, kind of first party credible examination of Biden's state as a mental state. And it was widely ignored. And this Wall Street Journal piece was attacked broadly by other journalists as being a, so the idea that, well, there was this one piece by the Wall Street. Journal, therefore, the mainstream media is not systematically trying to tell one particular narrative. That's, like, I think all of that evidence points in the direction of it.

It's the opposite. The mainstream media was very systematically trying to tell this one story. And when this other story came out, most journalists attacked the Wall Street Journal's story and minimized it. Yeah, I mean, I would just characterize it differently, which is, like, maybe they missed the story or they, you know, didn't know. I mean, I also tweeted back to Nick, like there were stats showing that Biden has done like way fewer press conferences. So I think people overestimate how much access journalists get to people like the president.

So or at least for this administration, I think there are other administrations that were different. But what I'm trying to say is that like just you're right. So maybe they didn't pursue a story that they should have pursued. But I do think the fact that they probably couldn't get the sourcing that they would need for that kind of thing is. is like part of the problem. So, you know, I mean, I can definitely think of things that, you know, I've tried to, you know, publish. And yeah, like, I kept thinking like, oh, so I have this one source. Just need like another, another good source and tried like many, many, many different people and like nobody, you know, sometimes people who are loyal to somebody, they close ranks. They do not want you to get

that information and they know they all talk amongst each other. And like, they know that you're fishing for that. And so my feeling is like, oh, I got the one like before they all like talked about it with each other. And the word got out being like, don't talk to Laura about X or Y or Z. And so maybe that's what was happening to in the Biden administration where they were like, oh, like reporters are trying to figure this out. Like, you know, let's have a meeting and say like we're, you know, we're not going to give anybody any of this. I don't know. I'm surmising. I'm just talking from my own experience and just trying to, yeah, there's multiple different things. because even like Tarun talked about the editorial board.

And that's like a completely different group of people from the reporters. Like that's like literally not even part of the newsroom, like those people that they're giving their opinions. So they're not part of the reporting effort. It's just like a separate department basically. Yeah. So just to take this back to prediction markets and crypto real quick. So here's my analysis of this situation.

Journalism is incredibly complex. But what we can observe at a macro level is that prediction market. seem in some ways to be able to front run this very complicated process of journalism and arrive at what appears to be very good conclusions faster or more dynamically than the speed at which hard, high-quality journalism can be accomplished that. That's my take. Right, which is why Zach XPT often is able to report things that, like, journalists can't because we would have to go through so many more hoops. So, yeah, because he's in a non.

Exactly. So there's many reasons why. But as, therefore, as a tool for society, there might be more of a adoption of prediction markets, which can basically filter information instantaneously, versus hard, high quality journalism, which doesn't move at that pace. And, you know, in a lot of ways, this is anecdotal, but this seems like one of the first elections where the speed at which this is unfolding on prediction markets, not just polymarket, but also predicted and all these things, is happening so quickly.

My entire news feed is basically people using the prediction markets as the news in parallel to the additional facts and circumstances which are being presented by the journalism route and using prediction markets really to explain the things that haven't even hit the journalism news yet. And there's a couple different views here. I mean, some people on Twitter are like, oh, well, that's because prediction markets are insider trading markets. And if you're Kamala Harrison, you know, you're talking about it, you would bid yourself up. And I think that's unrealistic because I don't think any of the politicians are like actually wagering on this. But others, you know, just believe that it's because it can respond instantaneously. The minute something

occurs or sentiment changes, it can be reflected in seconds as opposed to you know, the hours that it's currently taken elsewhere. So it's, I got in a little bit of a back and forth with Joe Wisenthal, who responded to one my tweets about, you know, polymarket upending a lot of the mainstream media reporting about the election. And he made the point that, well, look, you know, the mainstream media actually has shifted their narrative to now that Biden is, you know, he has this senility problem and it's very likely that he's going to get replaced on the ticket. All mainstream media started reporting on that the moment after this thing happened. And my counterpoint to that is that,

you know, to your point, Robert, looking at prediction markets, I think the reason why prediction markets, one of the reasons why they're now suddenly gaining so much cashé is that people have lost a lot of trust in mainstream media. And this is not a recent thing. This is like kind of over the last couple decades, probably. And one of the things that I think most people now recognize much more so about mainstream media. And often times, this is the mainstream media they don't like, not the mainstream media they do like. But one thing that they realize is how much flexibility reporters have to tell the story that their editor wants them to tell, right?

So let's say I want to tell a story about X causes Y, or X is causing Y, or Y has increased, right? Whether that's the likelihood of this person dropping out or the amount of this bad thing or this good thing happening in the world. And now how does a media, how does a journalist tell that story or how does a publication broadly tell that story that they're, broadly their editor

is trying to get them push out an overall narrative. Well, what they do is they go and find an anecdote and they find several sources who are high prestige to go validate

that general worldview, whether it's a head fund manager or a political operative or whatever, somebody who's important, they get two or three quotes and boom, there's a story.

Right? Now, the way that a prediction market tells a story is it says, you know, X happened and it caused Y to change by Z amount. And that is the thing that you will never see in a mainstream publication story is an effect size.

They will never claim Biden is now 10% more likely to drop out of the race because of this thing that happened. Because, of course, how would they know? They don't know. They are ultimately trying to give a general impression of why something that is newsworthy and should have your attention is going to affect this underlying thing that you actually care about, which is, should I be afraid about my safety? Should I be worried about economic job loss? Should I be worried about, you know, Democrats losing or winning the election?

And they do not, and in a sense they cannot. It's against the business model to properly contextualize how much does this matter? And that's what a prediction market always does. It tells you, wow, this really sensational thing happened and it didn't affect the odds. Actually, it didn't matter. It was a non-event. And it might be entertaining. It might be entertaining to read about it, but it actually didn't change any likelihood

of anything important happening. And that is why people now, it is one of the reasons why I think prediction markets resonate so much with people is that it is an credible way of filtering. What is bullshit and what actually matters. Yeah, actually one other thing that I would add is like I feel like what I was saying about how, you know, there's like different bars you have to clear or hurdles you have to clear to publish something. Like what prediction markets fill in is that moment where like people aren't willing to talk.

Like that's really actually where they come in because, you know, I think I think Joe is right. So like the prediction markets were right up until the debate and then now, and not that they're not right now, but right now they're frequently reflecting what is being reported in mainstream media. So it's like up until you get to that moment where people are kind of more willing to go on the record or your editors are more willing to let you publish something that has unnamed sources or whatever, that's when the prediction markets are especially useful. because yeah, they're there, it's, they're sort of like the quantified Zach XPT that can, you know, just say things before, like, you know, you do all the things that would be required for like a legal review and like to be sure you're not going to be sued for defamation or liable or whatever. Well, I mean, I think the other thing to always remember is that like, you know, the people not wanting to talk generally have some form of either inside. or prior information or some type of knowledge that everyone else doesn't have. Or they sort of have this kind of like huge cost to describing that, you know, that type of information, like if they reveal it.

And in general, I think the prediction markets are very good for, you know, in normal markets, we generally, you know, you oftentimes view insider trading as malicious or harmful because it, you know, it means that, you know, existing holders may kind of, not be able to price in information in a timely basis in a fair way. But I think prediction markets are actually the opposite. And to some extent, it's like, okay, it's when they don't want to talk. But in other ways, it's actually about, you know, being able to aggregate information from parties that would never share with each other individually, right?

Like they have the ability to coordinate the directionality of their information without ever having to share their identity and without having to share how they got the position. And I think that's quite different to normal journalism. It's also quite different to kind of the on-chain analysis you're referring to. It's sort of something that's like an information aggregation procedure that relies on anonymity and relies on insider information. Like you want the insiders actually trading because it means that you're more accurate,

which is the opposite of a lot of other public markets. Well, it works without insiders' participating just as well, right? If you had a market and it was like, you know, Biden versus Trump, like the market functions perfectly well without Biden betting on this market or Trump betting on this market, right? Like, and the amount of money that either one of them could bet to influence the market is negligible anyway. So I kind of actually reject the idea that you need insider participation because, you know, you take this huge market, you know, like there's been $200 million bet on Trump, you know, election winner, Trump first Biden, right? And you certainly don't need either

them as insiders or anyone close to their campaign betting on this for it to be accurate in real time. For a niche market, that might be the case, something that like the public can't observe and doesn't really know about where it's like, you know, will the launch of this product by Amazon take place on, you know, by December 31st or whatever, it was making this up. Like, yeah, like, the public at large has no information, really, you know, besides, you know, what an inside of the note. But, like, for a market, like, who wins the presidential election, the amount of capital is able to observe and participate and speculate on this is massive. So, you know, I think the idea that there's- Although it is, it is quite low relative to other markets, right? Like,

if I think about the monthly volumes of prediction markets, while they're quite impressive relative to where they were six months ago, manipulating this market is actually quite low cost in some way, in the sense that noise trading doesn't help you. And so there is some advantage in these markets to having insider actually trade participating. And in a way that I think, I agree in the politics sense, it's like who is the insider?

It's like clearly 90% of people who are lobbyists or in Congress can't even use a mobile phone correctly. so I don't see them trading in any of these types of venues. But I would say that there's definitely this aspect of like people who are trying to strategically trade and trying to get information ahead of time. That's what I mean by insider. I don't necessarily mean insider like they are the person with the information, but I mean like the trading firms that are market making on these places are definitely

trying to get some information advantage over the average retail punter on this. So, like, that's what I mean. You need someone who is willing to go source that information edge and then trade in size on it, right? And, like, you know, that's why you see like the SIGs of the world doing prediction market trading now, which is like very different than where prediction markets were three years ago, where it was, you know, individual traders being the market makers, not like firms and larger institutions.

And this Biden dropping out thing is also pretty weird because it is one of the few cases where obviously Biden himself and Kamala have an enormous amount of asymmetric information relative to the market. But normally, if it's like October, there's actually very little that the Biden campaign knows that other people don't know, right? All the information is basically public. And they're responding to the polls just as much as 538 is responding to the polls. So I think in most prediction markets, actually the insider is not adding a lot of information that, is relevant, we're not in most prediction market, sorry, but in a normal election market, this case is so weird, because it's about a personal decision being made by a candidate

that ultimately has the most impact on how this market is playing out. But I tend to agree with Turun that, in a sense, it is kind of weird. If you just think about it ex ante, you know, there's so much money being bet on relatively minor questions about, you know, whether certain commodities will go up and down over any given period of time. Whereas one of the most momentous questions in the world is who is going to be the next president of the United States and there's only $200 million bet on it on the market.

And there's like 300 million people who have a view on this and who are passionate about it. And the thing that is interesting about it is that like, I also think this is actually what creates the inefficiencies like due to biases because, You know, the funny thing that also happens in prediction markets historically that I've observed as just a participant on the outside is you have events that are actually incredibly improbable. But people feel passionately about it for, you know, non-academic reasons where they're biased and they have capital. So, like a great example of this is, you know, after the last election, where it was Trump,

Biden and Biden won. It was like, will Donald Trump be like inaugurated, you know, by like, you know, July 22 or something like. Like if you remember these like crazy prediction markets and like there was people out there that were like, you know, Q and on riding the train, you know, counts that were like betting on like, yeah, Trump's still the president. Like, you know, highly irrational. And we're bidding these markets up to like, you know, 15 cents and things where

that objective reality probability was closer to 0.01%. And because of, you know, the personalities and the bias inherent in that, the markets were way off their fair value, right? These markets currently, maybe it's a function of size, like because they're multi-100 million-dollar markets, they're more efficient or whatever. These markets seem more efficient. But, you know, it's possible there's still inherent.

individual bias into the smaller markets where, you know, because they're so accessible, people are like, Donald Trump is still the president, you know, like, he's going to be reinstated. The only other thing I want to mention is, like, if I think about normal markets where, you know, either there's some final settlement of an asset, like you have to deliver you the gold or have to deliver you something, or there's some notion of like, well, there's arbitrage between venues. One is the primary dominant venue where people, do large size trades and the other venues are smaller so people can arbitrage them,

but they stay synchronized. Prediction markets don't really have that right now. There's like, it's very hard to actually do the cross market arbitrage. Like I want to go long, uh, Biden on predicted and short on polymarket. Like getting those positions to offset perfectly is actually very hard right now. I think that's one other thing that quite impacts the efficiency quite a bit in that if you look at the spread across markets, it's actually quite high still. Like, even for this, like, who will be the Democratic nominee, like the predicted versus polymarket versus manifold

markets are not staying synchronized. And like, it does also tell you that there's like some inherent inefficiency due to that that's worth pointing out. Well, I mean, but manifold, no doubt, because it's not a real money. Yeah, yeah, sure, sure. But, but, but, but, but, but, but, but, but, yeah, but, to, to, uh, to Robert's point, like, there are certain things that we know systematically prediction markets are not going to give you accurate probabilities for. So one of them is very, very lopsided outcomes, right? It is just the case that if something is like 5% to 95 prediction markets systematically overestimate the probability, if you just sort of take it at face value, they systematically overestimate those very low probabilities

or very, very high probabilities because of the fact that even if you think that the prediction market is wrong, it's very capital and efficient for you to just, that against it, lock up your capital for a long period of time for a relatively small payout because of the fact that there's no cross-margining, there's no way to go use or have your capital sit in treasuries while it's sitting in a, like, we don't have any concept like that in prediction markets, which required you to compete with opportunity cost. So there's a lot of things like that that we know have the, that prediction markets have the systematic problem, but when you have something that is relatively competitive like, you know, the election where it's like

50-50 or 33-33-33-33, that's where prediction markets are much more accurate. And they scale inaccuracy, the bigger they get. So, you know, to turn's point, once you get the SIGs of the world and, you know, very large, sophisticated players coming into these markets because of their size, that's where the probabilities are going to be much more reflective of reality. And I tend to believe that just looking at the scale, like, the polymarket right now is by far the biggest presidential prediction market, really the most explicitly presidential prediction market in terms of the,

the amount of money at stake. And I tend to assume that the reason why you see divergence would like predicted or manifold is because they're weird, not because polymarket is weird, more likely just that predicted is tiny. Like there's $10,000 betting limits or something. For sure. I guess my point is just more that like because of that there's this, there is some, you know, you get, you know, your opportunity cost argument is actually even more is worsened when you can't trade between venues, right? Because you're like capital gets stuck somewhere. Yeah, exactly. So I think like the next step for prediction markets is actually like almost like, you know, crypto perpetual futures like working a lot on the capital efficiency side.

Because like that that will make this type of stuff converge a lot faster. Hey, wait. So quick question. We've been talking about like how the markets between all of these are different. So polymarkets like a little over 260 million. I'm on prediction. it right now. I can't figure out what the volume is on that. Do you guys know? If you go to election betting odds.com, it aggregates all of the major betting platforms. It says right now Predict it has about $20 million bet on the election. Oh, wow. Okay. So interesting. Yeah, it's way smaller. If you go and predict it, there's also at like the bottom of each market a price and volume chart like you would see on pretty much any stock trading application.

and you can like hover over the bars to see the volume traded on each, you know. Oh, no. Each day to give you a sense. Okay. Well, yeah, one thing that I will say, and I'm sort of like scooping my own podcast, I guess, but Nick Tomeino is going to be the next guest and mentioned to me kind of like more about the history of prediction markets. And what's fascinating to me is that so Americans did use to bet on the election until it got banned.

And I think the last time that there was such a prediction market that the volume was actually very similar to what we're seeing now, which is so fascinating because obviously when you have the same dollar amount, but like with inflation and everything, this means that like currently this is actually a fraction of what it could be if it were to reach the sort of like saturation levels that it was ad back before it was banned. So that's just so interesting to think like, oh, okay. So if this comes back then in the not too far future, we might be seeing like weight. way, way bigger volumes on this. I would I would bet yes on that in a prediction market. One thing that's actually kind of interesting is like, you know, in a lot of other countries, like say the UK, right, they've had no restrictions on these types of markets. But they don't really ever have that much volume, right? Like if I look at like the bet fair volume in general for elections, it's significantly lower than the online market. And so this is another thing where there's

like there's something very odd about prediction markets and like people are you have to really be out on the risk curve to participate. And so I feel like because of that, it's either you, you have inside information or you're just like a person who likes to be perpetually online as opposed to like, I go to the horse race and, you know, bet on this horse. Here's the thing that I find interesting. And this is just an observation about the population at large. A quick Google shows that there's 50 million people, 50 as in like 50 million, which is far more than whatever wager on politics that are betting on sports in the U.S. 50 million people are betting on sports and like 100,000 people are betting on politics.

And I think in terms of like the societal importance and the relevance and like the excitement, I think politics is for sure not one 500th as exciting as sports. I think it's probably like 10 times more exciting. So what I think is that like in general, politics and prediction markets are still just like insignificant compared to the other sort of like speculative betting on events activity that occurs. I mean, sports betting is massive, right? And it completely dwarfs all prediction markets.

And it completely makes this entire conversation. about Polymarket or any other platform or whatever, they all seem inconsequential in comparison to the volume that's running each day into predicting the outcome of two sports teams. Or the volume that goes into predicting the interest rate. Yeah. Way more than sports. Yeah.

So, okay, so I think... Also, we need to get a professional poker player. We should get Shane on. We do. We do. We do. We need to get Shane on at some point. So having previously been a professional poker player... poker player and having spent a lot of time around gamblers in general, I will say my theory of the case of why sports betting is so much larger than politics betting is that if you don't have money riding on a sports game and you don't actually care, like it's not your team, I think a lot of

people find it difficult to care enough about a game. Like, it's just much more entertaining to watch a sports match when you have money riding on it. And so I don't sportsmen, why wouldn't that apply to politics? Why would it be? Because politics is already very entertaining whether or not you have money riding on it, right? Because you always have skinning the game in politics. So that is one of the things that I think does make it somewhat different is that I think people who watch a sports game and like, you know, you get dragged along with your significant other like some game and you're just like, I don't care.

Like it doesn't matter to me who wins. But if you have 20 bucks riding on it, you're like, Steve's revealed preference revealed. No, so to be clear, I hate all sports. I don't watch any sports at all. But it is just like a magical hack to make things more interesting. And of course, the time cost of money, as we just talked about. a sports game is like, you know, two hours.

So you're locking up capital very briefly. Locking up capital for an election that's going to take place in like, you know, six months. For most people, most people don't have that kind of discretionary income that they can just lock up capital for six months. So despite the fact they do care about the election. I've once heard this very hilarious thing that, you know, someone who worked on building a prediction market once said to me, which is, you know, A lot of countries around the world have this kind of mandate where you're forced to vote. So like Australia, for instance, like you have to, well, I think if you don't vote, you pay a higher tax rate or something. It's like you have some type of penalty for not voting.

But that's sort of like the stick. But one version that might be the carrot is to give people a basic income where they have to spend that basic income on betting on the election outcome. And that's the way to bootstrap that. Yeah, mandatory. That's great. I thought that was like a very funny idea because it's like it, it, it, it's sort of serves the same purpose as forcing people to vote. But I think the thing, I think the thing that will cause prediction markets around

politics to become more like sports betting is one if they become more widely reported that the odds are moving up and down and it becomes more. It's in of itself a newsworthy event that, you know, Biden's all. have doubled, but it's like nine months away from the election or something. And then second, that we normalize people trading in and out of these bets, right? Because then it can be something that, like, you are day trading the election, which right now, it's the way that we think about a prediction market is you buy. That's a dystopian career in the future. Election. I mean, yeah, it's a pretty sad way to spend your time. But it is, one, it allows people to, you know,

respect the time, cost of money. You can, you can say, like, look, we're going into debate. I bet Biden's going to crush this debate and you have people on social media talking about like, you know, basically buying an option on Long Biden and that pays out at the end of the debate, right? That sounds like the kind of thing that I think really could go mass market

because it makes, again, like a lot of people watch the debate and they're like, oh, it's kind of boring or they only watch the first half. But if you had money writing on the debate about what the odds were going to be post-debate, you would watch the end and you would enjoy it much more.

So what you're saying is if there was zero DTE options on political future. Well, more like two hours, two hour time to expire. Yes, correct. So it's like, will Biden's chances go up or down or Trump's going up or down?

Based on this one two hour event, it becomes more like fantasy daily sports. Exactly. What is DTE? Right? A kind of bite-sized thing. Days to expiry. Oh, okay.

Basically a very short expiry option. Got it got it. It's more less close to gambling. They're trading like zero DTE options to get the absolute most amount of volatility and uncertainty and Yolo gambling in the line. Yeah. Yeah. Technically is a financial product, but it's really more of the company product. At the end of the day, I do think like, yeah, there is there is some weird bias towards like these markets attract, to your point, like far on the risk curve people.

And I'm not sure if it's like a UX thing that like what you're saying, which just feels more like. a U-X thing than like a market structure change that would attract more people. But, you know, I think there is a world, there is a version of the world where, you know, both the media and prediction markets like have a feedback loop to each other and there's some equilibrium that's reached. And so I feel like that that's like kind of an interesting world where like the media uses prediction markets, changes and, you know, probabilities to be like, okay, there must be some new information. So I'm going to go find a source and then I write something. And then once that's

written it, like, causes the market, you know, the confidence in a role to shrink around that outcome. You know, like that. I feel like that's like a nice, nice version of the world. Yeah, not going to lie. Like, I was just like, oh, actually, I should be checking these out to see what are the random markets. And like, there's probably a story there. And hopefully some political reporters are listening to this and we'll take the hint as well. I will say there was a great publication that was started by, I can't remember who was some Bay Area stats person called the base rate times, which basically just reported on changes in prediction markets. And so I think this was particularly around the Iran-Israel conflict, where basically

like prediction markets were just the most accurate way to get a sense of what's actually happening on the ground. And the same thing around LK99, if you remember the superconducting magnet that people were speculating on whether or not it's real. And the prediction markets were way better at understanding, like, sort of integrating all the information about what was happening than just trying to read the latest headline. And I love that vision of journalism that like the main story is the change in the odds. And the color of the story is the quotes and that, you know, okay, let's go find the insider who will tell us why the odds went up or went down.

but like the the magnitude or sort of the direction of the story is defined by what the markets are telling you and the rest the color gets filled in by the actual investigative reporting and getting the sources and so on but instead of the other way around which is that you know the vibe of the editor is what decides what the direction the story is and then you find the sources to like give you that direction yeah the issue is like of course as we've been discussing it would need to be a market that has significant volume because otherwise you could be subject to, yeah, some kind of manipulation and publish the story that has like no basis in fact. But I think it can be a useful part of the discovery process, even if it, even if there is an

insider. This is, again, like one of the weird things about prediction markets versus normal markets. You do want some insider information, not pure noise trading. You do need a little bit for them to like correctly generate, you know, kind of people adding and moving liquidity at the right times. Well, I disagree. I don't think it needs insider information. I think it needs expert information. Fine. I'm just saying comparing noise trading versus not noise trading. Yeah.

This goes to the whole Matt Levine insider trading thing, right? Which is like in the U.S. at least, the definition of insider trading is that you are misappropriating information that rightfully belongs to a company or some other organization that should have a right to that information, right? There is no such thing as insider trading on knowledge of what you are going to do. So if I know that I'm about to buy something, me, or I don't know, I know that I'm about to, you know, dump a bunch of copper or something. Biden knows he's going to resign. Right.

Right. Biden knows he's going to resign. Right. That's a perfect analogy. That's a perfect analogy to the kind of thing that we might think of in terms of fairness as insider trading. Oh, it's kind of unfair that you're profiting from information that you know is going to impact the market. That is not legally what we mean by inside of trading. It's not prosecutable.

So unless it's like explicitly market manipulation, and market manipulation is more defined as making markets converge to a price that does not reflect reality. In this case, if you are Biden and you know you're going to resign, you trading on the market actually gives information as a positive externality to everybody else that somebody who has inside information knows that this is going to happen and therefore we should update accordingly. And that is the point of prediction markets is not that people have fun trading. it's that it elicits this information that everybody else can act upon. It's a positive externality.

Yes, no. Here's where all disagree. So if Biden in his head knows that he's going to announce a surprise press conference Thursday at me, just using this as a hypothetical. And Thursday at... Robert has insight in from him, okay. Yeah. Me and Biden, we all hungry.

I'm part of the inner circle, you know, no, I wish. So if Biden knows that he's going to announce a press conference, Thursday at noon to announce his resignation, hypothetical, right? And at Thursday at 1130 a.m., he dumps $50 million on polymarket, you know, on the will Biden dropout bet and makes a ton of money. How does the market seeing that price 30 minutes before he announces the press conference benefit the market, society, even like... The probability was the probability was closer to the truth, at the time before the realization event happened, right? That's the point.

You want these markets to converge to a probability that reflects the real outcome. Okay, so if one minute before Biden announces a press conference, the price on Polly market collapses. It's like, oh, he's 100% out of the race. According to the Polly market, one minute before Biden goes and gets sent on his tweet, right? Right, but if it happens one, okay, so it, okay, in the world where we don't allow insider trading on a prediction market, it happens. one minute later instead of happening one minute earlier. And the recipient of that win is the fastest

HFT firm, you know, SIG or something that like automatically parses the transcripts and makes the trades instantaneously and then dumps on that market. From the perspective of the positive externality of the information being a seat, it's basically the same, right? One minute earlier, one minute later, doesn't really make a difference. Right. One second earlier. One second later. Yeah, one second early. One second later. Also doesn't really make a difference. And the fact that the retail investors who were betting on that market in the first place all lost. their money to somebody else, but they lost it anyway, right? The people who are along Biden, they got screwed. But it doesn't really matter who screwed them, right? What matters is that the

well, they bet the wrong direction. Right. What you might worry about is the adverse election that people might not be willing to bet in the market in the first place if they know that somebody who has inside information is just going to be ruthlessly dumping on them. But at the time that they made the bet, that inside information wasn't, didn't exist, right? Biden didn't know that he was going to drop out. nobody knew Biden was going to drop out. So the point at which you made the bet that you're long, however maybe Biden at 70% to win the nomination, that was actually completely fine at that time.

So from my perspective, it doesn't impair the integrity of the market for Biden to be the person who makes the, Biden himself to be the person who makes Biden converge to zero versus SIG being the person who makes Biden converge to zero. Either way, it's supposed to converge to zero. And in fact, the sooner it happens, let's say Biden decides that,

a week before the press conference. And Biden decides, you know what? I'm going to dump it on the market. And the market goes to zero the week before. And people are like, what the hell happens? Somebody must have inside information. And they start buying and saying, oh, this is like manipulation. But that person keeps selling and pushing the price down.

People are like, ha, I guess that's that. The market is kind of showing us with its might that Biden is going to resign. That's good that the information comes out a week earlier. I agree in a very macro. ro zoomed-out perspective, the more information of the objective reality of like the state of our world and our universe that we can get sooner is hypothetically better for the human race, right? If we find out things even sooner, right?

It's hypothetically better. I'm just like haven't really done the mental exercise to like fathom about like how that actually therefore then, you know, trickles out and makes the world better. I think like the place where prediction markets can lead to bad outcomes are places where there is a negative outcome where the value of betting on that negative outcome is so big that the person themselves could profit from manipulating the outcome towards this thing that's actually net negative for the world. Right. So assassination markets are the most obvious. You know, is this person going to die? And okay, I dare. Dare I give us the SBF flip a coin to fix the

world version of this. Let's ignore that. Let's ignore that. Let's say, for example, there was a different market, which was, you know, Kamala Harris right now is very likely to become the Democratic nominee. And she says, you know what, you know, becoming president, maybe my expected value is like, you know, I don't know, $20 million. Maybe that's a massive underestimate, but let's say that's what she thought it was. Prediction market is much bigger than that. If I just go, accept the nomination and then massively short Kamala and then drop out of the race myself and hand it off to Gavin Newsom, I'll actually make more money than I would being president. And so I'll do that instead, right?

That is one of these places where prediction market can give a bad incentive to an insider to manipulate the outcome. It's like throwing, you know, it's like sports betting, right? And you throw a game in order to, you know, yeah, this happens obviously in any kind of market that is not strictly regulated. That, I agree, is a problem. But an insider front-running information that's going to otherwise happen, that I think is not a problem at all.

I think that is a feature, not a bug of prediction markets. Is there anything in Polly Market that makes you sign an agreement that you're like not the subject of the actual, you know what I? Like, is there something prohibiting? No, you can trade from the smart contract even. Oh, okay. Yeah, I mean, I didn't think so, but you could imagine like a non-crypto version of such a thing that would prohibit that sort of like. I mean, I think Kalshi does kind of have something. Like Kalshi is like the CFTC approved one, which is obviously kind of losing out right now because the CFTC won't approve a bunch of the election markets.

And so they're suing. I think they're suing the CFTC or something about that. But anyway, Kalshi is, they, I think they have all sorts of extra regular. It's almost like signing up with a futures exchange and saying like I don't also own all the warehouses that are storing the, the minerals and charging might yeah which was a scandal in the 2010s that the banks had does kashi not have any like markets that are like winner of the election i thought they like can't and so now they're trying to sue over this yeah because all of their markets are like ridiculous it's like they're all about what is someone's approval rating and i guess it's like a

back yeah yeah they just they filed a challenge to the cfTC to do this Yeah, I mean, like, I do wonder if, so I understand like why Polymarket doesn't have that, but since so much, so many similar things in our society do function that way, like even simple things like, you know, you can win a prize if you, you know, do something with this little leaflet that we put in your cereal box, like whatever. And then it's like, but you know, you can't submit if you're related to an employee of Kellogg or you are employee of Kellogg or, you know, what I'm talking about? Like, haven't you ever seen those contests? Like, just any brand? I never read the fine print on those. Okay. Well, I didn't know that employees in college and how loud. No, I'm not talking specifically about cereal.

I'm just talking about, like, anything where it'll be like, oh, we're holding this thing. But, you know, if you work here or if your employee were, sorry, if your family member works here, like you can't participate. I do wonder if, like, in the future there might be something like that just because so many things already function that way. But I think prediction markets rely on that. The problem is they rely on some of that information. Like, it's, it's the worth different than normal market. They don't strictly, yeah, they don't strictly rely on it, right? Like to Robert's point, the election market works perfectly fine.

I guarantee you Joe Biden's not betting in this market and the markets. That's true. No, he's definitely not. If Joe Biden was even using a computer, I would actually. I would, I would go buy the he'll win the nomination if he could vote, could buy his own shares. If he could, yeah, exactly. If you could buy a share in the power market, that'd be a copy trade.

him if he does that. Well, you won't know what Tim, though, because it's totally an hour. I know, I know. But I, but I, I do think there's some, the prediction markets are kind of weird versus normal financial markets, right, where you have to really do all the disclaimers. Because there is some sense in which you, if you're part of the event, it, it changes the calculus, right? Whereas like, you know, in a, yeah.

Or if you're related to the event, I actually think the most natural hedgers in these markets are like the staffers who work for private. Right, right, right. That is way too sophisticated. To me, to me, though, that's the people who I call the insiders. They are the ones who have like inside information who are trading. They're, they're the ones who are pushing up the odds at Biden while drop markets. They're like, got to think about my future.

If they were, then I feel like I would have more confidence on that. Interesting. Okay. All right, let's shift gears, given that this is the politics mega show. One of the other stories is that there's been a spat of recent judgments given by the Supreme Court. And a couple of these judgments are actually relevant to crypto, the most notable one being this case called Fisher Bright. No, sorry, not Fisher Bright. Loper Bright.

So this case is specifically about this rule in jurisprudence called Sheffron-Deafir-Royt. Chevron deference is essentially a rule that says when a statute, a law is ambiguous, then when a statute is challenged in the courts and it's unclear from the rules of statutory construction exactly how it should go out one way or another. The court is required to defer to an administrative agency. Administrative agencies basically mean, you know, like three-letter agencies that are usually run out of the executive branch like the SEC, FinC, et cetera. So what this effectively means is that the Supreme Court has not overturned this rule.

This rule has been, in effect, Chevron deference for about 40 years. And I actually listened to the oral arguments in this case. And crypto was actually mentioned in the oral arguments of this case as one of the areas where Chevron deference plays a significant role in how agencies are potentially, you know, you sort of think of as grabbing power in areas that was not explicitly afforded to them by Congress. So the general rule is that Congress is supposed to lay out the rules of where the agencies are supposed to play and what their mandates are. And in the gray areas, normally what happens is that courts intercede, you know, somebody sues an agency and says, hey, there's an overstep.

The courts intercede and say, okay, here's what we believe is the best reading of the law of how this law should be interpreted. Under Chevron deference, courts are not supposed to do that. They're supposed to say, well, agency, you are the expert. You're the SEC. You know about securities. therefore we are going to defer to you if the law is unclear. Now, one of the laws that's unclear is the Exchange Act, the Investment Act, whether or not tokens or securities or investment contracts, is obviously one of these areas that is highly ambiguous. Most courts have basically engaged in Chevron deference and said,

okay, it's unclear, therefore we're going to defer to the agency, and the agency by default will have the preferred interpretation of the law. The overturning of Chevron deference potentially can be very, significant for the prospects of crypto to actually be able to challenge the SEC's readings of these laws that are admittedly highly ambiguous. Now, I think some people have overread how much Chevron is going to impact the way that a lot of these cases are breaking out. The reality is that Chevron deference is a very edge case rule. It only says if the court believes that the thing that this thing turns on is an ambiguous law. It's sort of like reading into the gaps between

the laws or the words in the law, then the agency automatically gets the tip and gets to define how this law gets interpreted. But not a lot of the rulings that have been laid down so far have even mentioned Chevron deference as an explicit reason why they decided to allow the SEC to win one case or another. That being said, it is a general vibe shift that this latest Robert Supreme Court has established, which is that there is in general going to be more skepticism of federal agencies. And this is part of a broad series of rulings that the Supreme Court has made, which more or less tells most appellate courts that, hey, if this thing is reviewed by the Supreme Court, Supreme Court is not going to be friendly to the agency. And so I think broadly this is perceived as being very good

for the dismantling of the administrative state and pushing back against agency overreach. And crypto is going to be one of these places, especially in the Coinbase case or in the Binance case or the Cracken case where it's very likely Chevron deference is going to be appealed to as, or the overturning of Chevron deference is going to be appealed to as one of the places where the agencies are overreaching and judges should feel more freedom to push back against the SEC. So Robert as our resident, you know, regulatory insider thinker guy, what's your take on? Wow, that was a lot of, I don't know, I don't know, what kind of superlative is that? Like, I was trying to freestyle something, but I couldn't quite.

No, it was a good freestyle. But I'll even, I'll preface by saying I'm not a lawyer. I'm not an expert. I am not a constitutional scholar. You know, out of the four of us, I will guess my way forward the best, hopefully. But, you know, my reason is that I think the importance of this has generally been overstated because this really only comes into play when Congress, isn't making specific rules.

And that's been the case historically. And I think one of the reasons is this the case is because it's easiest for Congress to just, you know, write a law saying like, oh, this agency, you can like sort of do whatever and figure it out. And like, they'll worry about the nebulous nature of like how to interpret guidance and how to make rules and how to apply it. I think what we might see going forward is very specific lawmaking for, innovative new industries, right? And there's one of the things that's been hopes for for crypto. It's one of the things that's been talked about for AI. It's one of these things that probably does warrant having congressional action on instead of, you know, an, oh, an agency

will rely on old legislation and, you know, it's all nebulous and figured out and the courts all just defer to the agency. And so I have no idea with the death of Chevron deference. I guess Sheffron in deference, whether, you know, this will change the relationship between the legislative and the executive branch. Theoretically, this should spur more good lawmaking, right, to define specifically what the rules are for high growth new technologies that don't fit into old paradigms. But we'll see. You know, it's possible Congress continues to sit on their ass.

And it just makes it harder for any rulemaking. making to occur because suddenly there's a gray area and the agencies aren't empowered with Chevron deference and their rules don't stand up because they're actually not empowered for this. You know, the way society has worked for 50 years, roughly, is, you know, the executive branch just sort of does what it wants, knowing that Congress authorized the agency at some point in its history. Yeah. Like, so just thinking about it in terms of crypto, I did wonder, like, is this really going to be good for crypto?

Because, you know, we all, we've all watched those congressional hearings where the senator or the, you know, Congressperson just asked the stupidest questions. It's so clear they don't understand this at all. And it's just like, oh, wow, like, is that who we really want to be making their roles? And I understand, like, you know, you talk to their staffers, like there's lobbying, whatever. But it definitely feels like because they are so prone to inertia and there's like all kinds of dysfunction there that like even when you are putting forth a great effort, like the notion that you would actually get some kind of legislation that passes. Like it's already so low. And then you throw in this extra hurdle of like they don't understand the issues. And like maybe their staffers are fielding, you know, lobbyists of, you know, environmental things, financial things like technology.

Like there's just so many. Like how are they going to become experts on all of these and craft good legislation? So it just, that's the one where it's a little bit like, you know, be careful what you wish for is what I'm wondering. I think, I think a part that I find kind of equally as bad on the agency side is like, you know, the U.S. is not like Singapore or something, right? Where like I can trust the technocrat, you know, it might be a bureaucratic state and sort of very top down. But I can at least trust the technical expertise of people who. who work in government. I generally do not think that's true, right? Like, you don't see like really, you don't see like very, you know, kind of people with a lot of industry experience in technical

fields and technical kind of insight going back to government in the way you do in other countries. And as such, you, you end up with a sort of bureaucratic state filled with like lawyers regulating technology. I think the California state bill 1047 trying to like regulate AI is. a great example of this thing where it's like not you can't even like measure any of these claims that that people want to measure and so I think equally bad to the the kind of like okay I don't trust the the Congress people to even understand the law they're signing is the fact that you have agencies who don't seem to understand the thing they're regulating either because generally you don't get like the best people working on you kind of get yeah but I I

I would argue they probably do understand the issues better than the staffers of the Congress people, even if they're not the top experts in the field. Yeah, but they have very different incentives, right? If you are a, you know, if you are the SEC, I think we can all very clearly say the SEC's incentives around crypto are very weird. They do not really respond to the American public. What they're doing is obviously very unpopular and the SEC doesn't care. Whereas what Congress people are doing, they are responding to the will of the electorate, which is that, okay, the electorate is mad that we are,

not creating a sensible legislative environment for crypto. The rules are kind of difficult to interpret. No one knows what to do. We're somehow demonizing the entire industry, despite the fact that 20% of Americans own this stuff and they want it to exist. And so there's at least one a coherent democratic relationship between the legislature and the laws that are created. That's why we set up the system of government is that the people elect the people who make the laws. People who run, the agencies are not elected. They are chosen by other. elected people and they are not accountable. One thing that we've seen about Gary Gansom is that even the way in which

supposedly the agency is supposed to be accountable to Congress, right? Okay, well, Congress is really mad at the SEC. What can they do to the SEC? The answer is almost nothing. They can drag them in front and yell at them. And that's basically about it. There is actually no mechanism for Congress to like take their pay away or like, what can they really do?

The answer, like, I've talked to people in Congress and be like, yeah, you guys seem to be really mad at the SEC. what are the levers of oversight and jurisdiction that you guys have over the SEC? And the answer is like, we don't really have any. This is not something that has actually been, you know, kind of created

beyond the president dismissing this person because they ultimately work for the executive branch. Congress can't fire people in the executive branch. So now the other thing about Chevron deference, and I think actually it's very much worth listening to the oral arguments in this, in the Loper Wright case. Because it's a very, very, actually relatively easy to understand case. There's about like these fishermen who there's this law that they had to pay for these monitors

that go on these fishing boats and the law didn't say who has to pay for it. And the fishermen argued, well, the government wants this. The government has to pay for it. And the government, surprise, surprise, said, no, no, you have to pay for it. We don't want to pay for it. And the law didn't say who had to pay for it. And so if you side with the agency, well, the agency is going to always do what, whatever is best for the agency. They're always going to do whatever is pro-government. And that is not the way that law should work, right? our laws are not created to protect the government. It was created to protect the people.

And the ultimate end state of that is that if you say, and I think you're absolutely right, Congress are not experts, right? And congressional staffers are not experts and they try their best, but their legislation is never going to be perfect. If you really want this kind of deference to the agency, you can write it into the law. You can say in the law, and if anything is ambiguous about the statute, it should be decided by the agency.

The end. Done. you have baked Chevron deference directly into the law, but people don't do that. And as a result, one of the things that is argued in this case in front of the Supreme Court of why Chevron Deference should be overturned is that Chevron Deference encourages congressional lawmaking to be lazy in the sense that they can rely on their buddies in the executive branch to enforce the way they want this law to be enforced, especially if the same party controls Congress or is drafting legislation as controls the White House, right? It's basically you can kind of say, look, this statute

We couldn't get the language we wanted in the law, right? It was just too contentious. We couldn't actually get to agreement in Congress. So we're going to keep it vague, but we kind of know, you know, nudge, nudge, wink, how this is going to get enforced, right? So this Congress says, this loss says nothing about, you know, the FDA regulating emissions. But it's going to be loose enough that, you know, maybe the FDA will find some way to do that. And it's kind of vague enough that, you know, it'll get past it because we all know that,

you know, Democratic EPA is, or Democratic FDA is going to, like, do whatever in order to be pro-environment. And there is, there is some argument that, you know, agencies like the FDA are probably, like, the better ones that exist in terms of, like, at least they have. Depends on a U.S. Yeah, I know Obology doesn't like this. I already. But, I mean, they have, they do have, at least they have some level of expertise that, like,

I would say, is, like, within the top 10% of the field. Right. Right. Some of these other agencies are like abysmal and pitiful. And like it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's really, it's, it's, it's really, you know, people, people, people did, with expertise did go into government a long time ago. Now, no one wants to. That's true. And so to the extent that you'd think, the executive branch obviously doesn't like crypto, right? Biden hates crypto. He's made it a cornerstone of his overall administrative strategy to be tough on crypto, right?

If in a non-chevron world, what you'd have to do is get a law passed. That's how our democracy is supposed to work. If you want something to happen, you've got to get democratically elected members of our government to agree, compromise, and pass a law. And there are rules around what it takes to pass a law. You cannot just go and say,

hey, well, you know what? I don't like that. That's too hard. I can't get consensus in Congress about this. So I'm just going to do it and rely on the courts to, like, back me up because my agencies are smarter than the people in Congress, right? That is not how it's supposed to work.

And that is the reason why the Supreme Court has been pushing back on this administrative state overreach. And that's my best defense of it. again, Congress can always write this directly into a law if it can actually get the freaking law passed. But if you can't get the law passed, that means the American people don't agree. And if the American people don't agree, you don't get to pass a law. That's how democracy works.

Yeah, well, for that reason, I don't know, we'll have to see how this affects crypto legislation because clearly it's not been passed yet. But it did seem like finally we got a positive statement from Biden saying that, or not positive, but open to having legislation statement. Non-negative. I personally view that it's just at best a little bit of pandering pre-election while the wheels fall off the campaign entirely. Well, actually, isn't the largest super pack a crypto super pack?

No, it's like top five. Top. Okay, sorry, sorry. I think there's some. It's large enough that it's worth it. You get a message like this. That was sort of what I meant. It is very large.

It is very large. For the next episode, assuming that Biden drops out, it would be amazing to discuss which of the potential replacements you think are pro-cropto and not just suggesting it. That's a great question. We will need to do the analysis. Yeah. Yeah. I need to do the analysis.

I need to think about it. I haven't looked into all of them enough to know. We're going to invite them on the show. Yeah. Kamala obviously is going to come on. She's going to be our next guest as the Democratic nominee. 100%. Obviously, yeah, yeah.

Well, it's possible that we've had a VP candidate on this show before. That's true. Kamala, if you or your staff are listening to the Chopin' Block podcast, please come on this show and talk to us about crypto. Hey, we're a real voting block. We have one of the five largest packs. Yeah, crypto money matters. Richie Torres and Roe Kona.

I'm trying to think of the other Democrats that have been on my show. There's been a bunch. So who knows? Maybe some of them have told Kamala about this show. It's doable. It's doable. Okay. With that, we need a wrap.

Thanks, everybody. We'll be back next week. Thank you. Bye.