Unchained - The Chopping Block: Telegram's Founder Arrested, OpenSea Under Fire, and Ethereum's Dilemma - Ep. 697

Episode Date: August 31, 2024

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest news. In this episode, the squad is joined by Rebecca Rettig, Polygon’s Chief Legal & Policy Officer, to dissect the SEC's impact on the crypto landscape, particularly focusing on OpenSea's Wells notice and impending legal challenges.  They discuss the arrest of Pavel Durov, Telegram's founder, analyzing the political and cybersecurity ramifications. The conversation shifts to the internal frictions within the Ethereum Foundation and Vitalik Buterin's criticism of DeFi, reflecting the community's mixed reactions. The broader implications for the crypto industry, privacy, and regulatory clarity are highlighted with special insights from guest Rebecca Rettig, who adds depth on the legal and historical context. Wrapping up, they anticipate future challenges and emphasize staying informed. Show highlights 🔹 Arrest of Telegram founder Pavel Durov in France sparks global free speech and encryption debates. 🔹 Impact of Pavel Durov's charges on Telegram's role in global communication and crypto communities. 🔹 DeFi protocols face challenges with decentralization, privacy, and regulatory pressures. 🔹 OpenSea receives a Wells notice from the SEC, raising concerns about NFT marketplaces and royalty enforcement. 🔹 Ethereum Foundation's spending and Vitalik Buterin's critical comments on DeFi stir community debate. 🔹 Tension between public goods and financial services in Ethereum's future development. 🔹 Real-World Assets (RWAs) and their controversial role in Ethereum's ecosystem. 🔹 Speculation on future Ethereum protocol changes and their impact on network efficiency and user experience. 🔹 Broader implications of the SEC's aggressive stance towards crypto exchanges and NFT platforms. Hosts ⭐️Haseeb Qureshi, Managing Partner at Dragonfly  ⭐️Tom Schmidt, General Partner at Dragonfly  ⭐️Tarun Chitra, Managing Partner at Robot Ventures Special Guest  ⭐️Rebecca Rettig, Chief Legal & Policy Officer at Polygon Labs Disclosures Links Plurality philosophy in an incredibly oversized nutshell by Vitalik: https://vitalik.eth.limo/general/2024/08/21/plurality.html  OpenSea’s response to SEC Wells notice “Taking a stand for a better internet” by Devin Finzer https://opensea.io/blog/articles/taking-a-stand-for-a-better-internet Timestamps 00:00 Intro  01:24 Telegram’s Pavel Durov’s Arrest 05:12 Free Speech/Encryption in the Crypto World 09:26 Policy Implications for Tech Platforms 13:57 France's Role and International Reactions 27:49 SEC Targets OpenSea 36:35 SEC’s Jurisdictional Strategies 40:29 Good vs. Bad Actors 45:16 Ethereum Foundation: Public Good or DeFi? 56:43 Vitalik vs. Crypto Twitter Learn more about your ad choices. Visit megaphone.fm/adchoices

Look, the one thing I'll say about the SEC's general stance towards crypto is that it makes the environment much more rich for scammers because they are putting so much time, so many resources, so much attention on good actors. 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. I'm in the trading firms who are very involved. Polydeathe is the ultimate Defi Protocols are the antidote to this problem. Hello, everyone.

Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insider's perspective on the crypto topics of the day. So quick intros, first you got Tom, the DeFi Maven and Master of Memes. Hello, everyone. Next, we've got Tarun,

the Gigabrain, and Grand Puba at Gauntlet. Yo. Joining us today, we have special guest, Rebecca Reddigg, Protocol Policy Pro at Polygon. I was wondering what my intro would be. Thanks for having me. Great to have you. And I perceive the head hype man at Dragonfly. So we're early-stage investors in crypto, but I want to caveat that nothing we say here is investment advice, legal advice, or even life advice. Please see Chopin Block. X, Y, Z, for more disclosures. So Rebecca, we wanted to bring you on the show. You're something of an old hand within the crypto legal and policy world. And it's been a very chaotic week for crypto law. So there's two big stories that I want to cover that I think is going to take us quite a bit of time to get through. The first one, at this point, everybody in the world probably knows this. It's been front-page news. on, you know, pretty much every corner of the world is the arrest of Pavel Duraev, the founder

of Telegram. So let's back up a little bit and just talk high level about Pavel Telegram, the history here, and why it's so significant that he was arrested in France. So Pavel Duraov was originally the founder of V-Contacta, which was the Facebook competitor in Russia. He ended up fleeing Russia after the Russian authorities wanted to basically get a bunch of information on users of V-Contacta, and rather than comply, he decided to sell off his stake in the company and leave Russia. Then he found a telegram. Telegram, of course, is a massive messaging service, has almost a billion users around the world. It's used very prominently in crypto, but in many countries such as Eastern Europe, Russia, Ukraine, India, it's the dominant messaging

platform. And it's been noted as being an important platform specifically for the Ukraine war where a lot of information about what's happening in real time for folks who are in Russia or in Ukraine are coming through Telegram. So Telegram very famously has an anti-censorship policy across the board. And supposedly the Telegram, the company, has not been willing to comply with requests from law enforcement or from around the world, not just in Europe, to docks users or to give information or to censor particular conversations, whether that applies to, you know, normal people, political dissidents, or whether it applies to criminals. And it's widely known that there are many criminal groups that use Telegram to engage in all sorts of chicanery. So,

Pavl Dorov was in France, and he was, I think, transiting on a private jet when he was arrested, when he set foot in France on Saturday. And at first it was unclear exactly what the charges were supposed to be and why he was arrested. But we now know that he's being charged with complicity in CSAM, or basically your child pornography, narcotics distribution, terrorism, fraud, and then basically refusing to cooperate with French authorities when they were asking for, hey, you know, can you take down this thing? Or, you know, we don't know exactly what they were asking, but we can kind of infer that it was something about some kind of censorship of criminal activity on telegram.

Now, around the same time that this happened, it caused, first of all, a huge backlash around the world, one coming from nation states. so many politicians actually putting pressure on France about, you know, why is this happening? We've seen protests in different parts of the world, and we've also seen a lot of the tech intelligentsia speaking out in favor of Telegram and of, you know, this sort of being an overreach of an attack on free speech by the French government. There also was, at the same time, of course, Telegram is associated with the Ton blockchain, which was a blockchain project that Telegram kind of adopted, let's say, originally from the, the telegram white paper many, many years ago.

And Ton actually has come down quite a bit since, it's something about 18 to 20 percent since Daraev was arrested. It was also down, the blockchain itself was down for about seven hours yesterday. I think that might have been a coincidence just because of some meme coin air drop. But overall, it's been a very chaotic time, I understand, for Telegram and the Telegram team. So right now, we don't still know a ton. We just know the nature of the charges. But my understanding is that the specifics will take.

take some while to unfurl. I think he's being arraigned and he's posted bail already, but he has to stay in France for the foreseeable future until we see how the French judiciary decides whether or not to move forward with these charges that have been unveiled against Pavel Derov. So I'm going to stop there. Rebecca, let's start with you. What was your reaction to these charges? And what do you feel like this portends for the free speech platforms and folks like Pavel, who are very free speech absolutists in the modern world. Yeah, I think that's a great question. I think let's break it up into two parts of it, because I think there's a free speech part,

and then I think there's an encryption part that and both have a lot of implications in the crypto world. I certainly took it from a crypto stance where there's a question about, and we talk about this a lot in crypto law and policy and have for many years, well, it's just creating and hosting a social media platform or other sort of tech platform put you in the line of fire for potential. criminal charges and the like. Some of that seems here in a little bit, especially because you're in the EU and it's a much less transparent process than it is in the United States, harken back to what's happening with Perthsev and in the Netherlands, one of the tornado cash developers,

which is you don't have tons of transparency, what is into what's going on. They talked a lot about how a lot of the investigation is secret. It's been secret since March, and supposedly this investigation has been going on a long time. But I think it also goes really far back, if we want to take it back into tech law, into things like Napster and Grokster and what state of mind you have to have when you're creating a certain type of technological app and how you can be found to be complicit in whether it's criminal activity or violations of civil law like they were in Napster and Grokster. So that was my first reaction to it, which is, you know, this ventures into where it's a line between creating software that's used by bad people versus being complicit in it.

and I think the complicity charges were really big. There's another little small piece to the charges about encryption. I don't think we have as much clarity into that. But there are import and export rules all over the world, but including in the EU around encryption. They've been in place in sort of the late 90s. And whether there is a part here where they're going to try to get him on some technicality where they didn't register importing encrypted technology into France.

I don't think we have a lot of clarity around that, but I did see like a brief mention of the encryption point, and that's important when you think about what we're all building in crypto as well. That's bizarre. We used to have something like that in the 90s, right? And then we got it repealed of these export controls on cryptography, no? We have a little bit of it still in the U.S. It's not totally repealed unless I've missed that part.

Oh, I see. Interesting. But yeah, I think to your point, this was part of the whole crypto war in the 90s is that, yeah, some of this of a public cryptography was considered munitions. And so, you know, this is going back to whole, you know, Adam back and Cypherpunks and kind of the OG thing there. I think, I don't notice that in the charges, but yeah, I don't know enough about French law. I don't know what is and is not allowed. I think there's also kind of the spread that's been going around on crypto Twitter, which is, I think, you know, you can kind of come at this from two angles. One is, you know,

hey, this is anti-free speech, anti-censorship. I think the other angle, that's kind of maybe more nuanced as well, you know, technically conversations on Telegram are not end-end encrypted. They do have that feature that you can opt into, but ultimately, Telegram still retains a key for decrypting conversations and, you know, they charted and try to make it difficult to access and make it so that, hey, one single actor cannot go and decrypt all the messages, but they have that master key, they retain it. And so, you know, I think you kind of look at this and you think, oh, it's like signal or, you know, encrypted email. But it's not kind of quite one to one in that as long as you have this access, like you are going to be, you know, someone's going to try to point a gun to your head and make you try to use it. And I think that is part of the complication here.

I mean, if you look at the tornado case, it kind of doesn't matter whether or not you have the key. The government's going to point a gun to your head and make you try to claim that there's some mechanism by which you can try to do it. So I take the point that telegram, you know, telegram is built differently than Signal. And it is in a way, maybe this is some vindication of the fact. that, okay, if you give yourself the ability to be able to decrypt the messages, of course, you're going to face tremendous pressure to use that tool that you have built into your protocol. And this is one of the forms of that tremendous pressure. I think it's also worth clarifying for some folks who haven't been following the story. So I mentioned some of the charges of, you know, terrorism and narcotics and child pornography. Obviously, Pavel Daraf himself is not being accused of being in some kind of direct conspiracy

to commit those things. It's that his telegram the service harbors people who are participating in these kinds of crimes and he is not cooperating in giving up these groups to French authorities or decrypting the messages or whatever it is exactly that they're asking him for. I think it is, it's one of these things. You know, we see the same thing with Elon Musk, where Elon Musk is trying to take this, you know, very strong free speech stance with X. And that works in the context of an American set of value.

and American jurisprudence. I think there's a lot of latitude to fight back and claim that, hey, the government interest here in getting information about these people is not strong enough to overcome the natural free speech rights of individuals. But it's just not true around the world, right? There are very, very different notions

of free speech in different countries, and in many countries they don't have the concept of free speech. That is not considered to be a right given to people. And so using these platforms to export this very Western notion of free speech into an international platform with billions of users is just going to hit a wall at some point. And this is one of those walls. What's surprising about this is not that there's a government that's really mad at Telegram and try to arrest Pavlov. The thing that's so weird is that it's France, right?

Like you would expect this to be, oh, you know, it's Kazakhstan or something. It's like some, I don't know, nothing against Kazakhstan. But like, you know, some country that has very authoritarian values and does. doesn't believe in, you know, free speech and free expression. But you would think, like France, you know, like the, I don't know, like, you know, the French revolution, all this stuff. Like, it very clearly embraces these values in a deep way. I think we're sort of seeing this, you know, we saw Macron, the president, go on Twitter and basically say, like, look, just so everybody knows, like, this wasn't me.

I, you know, this is not the government. This is, you know, the machinery of justice is happening on its own. We have no ability to intercede here. I would be, I'm just like very, very curious how all this is playing up behind the scenes. There were some reporting as well talking about how Macron himself apparently personally uses telegram. And even though like many folks in the French government don't use telegram because they don't consider it to be particularly safe for like, you know, I don't know, they prefer signal maybe or something.

But Macron himself is a telegram user. So there's, and supposedly, so Duraf has French citizenship. He's a UAE and French citizen. Presumably he's renounces Russian citizenship because everyone keeps reporting he doesn't have Russian citizenship. The weird thing supposedly is that Macron gave him his French citizenship.

And so Macron gave him his French citizenship. Macron is a telegram user. And then France arrests him when he drops his private jet into France. So just a very weird pattern of facts and it does make me think that there's something more than meets the eye to this story from a political perspective.

Yeah, I mean, I think there's part of it. I mean, I'll put on my just like traditional lawyer hat and say, I think when we talk about the free speech aspect of it, it's the extension of this type of case. But when you actually look at the charges themselves, they're pretty nuanced. Like, I mean, you'd hope that they have. And as we've seen in the Prince of case, they don't necessarily have. And we don't have the same sort of legal process in Europe that we're used to in the United States, but you'd hope that they have, like, real evidence to tie him to actual distribution of child pornography versus knowledge that it was being used, right? Like, those are the distinctions that I think we should really focus on, like, knowledge after the fact that your, the application

you've built and are continuing to build is being used for bad things, which, by the way, Google probably is too, right? Um, uh, underage people are using Google to figure out how to buy guns, right? So, you know, whatever you think about that. But like, technology can be used. in bad ways. But I really do think these old cases are really important, which is how much did you know, especially when you're bringing criminal charges against someone. So, like, yes, the implications are very wide ranging, both for free speech and for what we're building in crypto. But if you look like deep down and think, well, hopefully they have evidence to back up what they're actually trying to charge him with. Otherwise, they are just venturing into the free speech world. Terun, what's your take on the

whole Derov situation? I mean, I think in general this has been the sentiment in Europe. the last, I want to call it three to five years, probably since the pandemic really, it accelerated that platforms need to be controlled and our local laws should apply globally effectively. Like I feel like there's a little bit of this manifest social destiny type of thing that Europe is trying to pull on everyone. It has not been successful so far. So, you know, pretty much every other social media company has given them the middle finger.

So I feel like they went for the weakest link, even though Telegram obviously not social media, but they're trying to treat it in the language that's used is very similar to the kind of social media language. And there's no like section 230 equivalent in most of Europe. And I kind of just view Europe as this authoritarian place nowadays anyway. So it's like I'm not really that surprised to see this versus other parts of the world. And I'm sure maybe there is something behind the scenes but I actually think this is just more the frustration of Europe being you know like A they've tried all these AI laws that haven't worked and people just been getting around them like B they've tried to go after Facebook and Google and Twitter and like clearly none of that has

worked either so I feel like this is like hey who do we beat up on the playground we go for the smallest easiest target and that's kind of what this looks like to me yeah it does feel like I mean, there was a lot of calls on Twitter for essentially, you know, boycotting France from a tech perspective or just even not serving French customers. Well, I definitely, I will say the crypto Twitter thing about not having ECC in Paris, I think is a very fair thing. Yeah, that'll show them. That'll show them.

France will think twice. But I feel like it is. Nice. Okay. No, and as I was going to say, I mean, to Turun's point, they actually have a full data protection law that they put in very recently called the Data Act. And they put in this small little, if we're talking about crypto stuff, this small little provision that smart contracts have to have a kill switch. And there was a lot, there was a lot of pushback against that.

Now, it was only, they say it's only in very narrow circumstances and for very specific types of, like, it's not meant to capture all of defy, right? It's not meant to capture everything in crypto. But to Turin's point, they are being very expansive. And when we look at Mika and everyone was lauding it as, oh, great, we have regulatory clarity. I'm not sure, given that it's in the EU and how they have been treating technology and data and generally, that it will be used in the regulatory clarity way that we're all hoping it well. So, okay, do we think the situation has broader consequences for crypto for our industry? So obviously, this wasn't directly related to crypto, although Telegram.

does a lot of crypto stuff through Ton. I mean, the most direct consequence was all the Ton liquidations over the weekend. Weirdly, Ton has actually been rallying over the last few days, even though the rest of the market was being kind of treaded water. Right after the news came out, crazy swing. Right, but at least, you know, to Rebecca's point,

to the implications, I think, around privacy. For sure, I was just, I was speaking. The pendulum is swinging. No, no, I got you. But it does feel like the pendulum. is swinging in a strongly anti-privacy direction. And if we if we if we if we basically think now that like, hey, to be a privacy oriented or kind of free speech maximalist or censorship resistance maximalist means that you are now really exposing yourself to tremendous legal risk. It makes it a lot

harder for founders to embrace this kind of this concept in a in a full-throated way. Now there have been concessions to things like you know proof of innocence. You remember there was a Vitalik had this big write-up about it. I know Railgun, which is a privacy protocol on Ethereum, has incorporated this kind of proof of innocence mechanic, such that you can essentially prove that you are within a, that, you know, when you redeem from a privacy pool or you exit a sort of tornado-like pool,

you can prove that you are within a set of legitimate users or KYC slash, you know, not evil people, without revealing any more information than that about yourself, using zero knowledge proofs and, you know, general moon-mathy type stuff. So I am seeing more. more things like that. And maybe we see the extension of those concepts to other things within end-to-end encrypted communication is that you can prove certain things about your conversations

and maybe even the service itself can prove certain things about your conversation without actually being able to read the contents. So we may see more of this kind of selective or configurable privacy as opposed to this all the way privacy that ends up just causing, you know, folks like the EU to just throw up in their mouths and start arresting people. What do you guys' thoughts about this concept of more of a sliding scale of privacy being the new default? I think the question is how do you actually achieve that, right? Like in the zero-knowledge proof, you know, example, okay, maybe there's some actually

trustless private way to, like, prove that I'm not engaging in something illicit. But, you know, generally this looks like a dragnet, right? It's sort of like, you know, like the Snowden NSA stuff where it's like, we're just going to scoop up all the information and then we will pick through it and look at what we actually want. And I think that is almost kind of the issue with telegram, right, is normally on something unencrypted like a, you know, Facebook or Instagram, great. We can just run algorithms to search through all the data, find the stuff that we don't like and then go after those people. Here it's like, well, you're kind of keeping the data in this, you know, seller in a locked box. It's kind of a painly asked to get to. So you can't automatically go through it and scan and find the stuff.

that you want to sort of pick out. Maybe there is a way to do that in a way such that it's kind of deterministic and it's not just sort of this, you know, carp launch access to user data that I think governments actually want. But it's not really clear to me how you would go about doing that. Again, I think maybe railgun is kind of like the closest attempt. And without knowing in advance, who you're supposed to be going after, I think it is pretty difficult to achieve.

You know, in American jurors, produce there's a concept of prior restraint, which says that you can't tell people what they're not allowed to say in advance in most cases. And it's sort of a facts and circumstances thing of when somebody is actually engaging in speech that is illegal. And I don't know, Rebecca, am I just totally torturing that concept? No, no, but I wanted to bring it back to this whole question back to Turun's invocation of 230, right, which is a law in the U.S., which basically says, oh, if you just host a website, you don't do anything, you're not going to be liable for like random posts. But there's a corollary to

this, which is if you are curating content and things like that and you're actually monitoring what's on your site, there is liability, right? And so I think the same thing in theory should apply. It's the same thing that I think about whether you like hold an admin key versus no admin key, right, over a protocol. If you are doing something proactive to be able to see what's going on, And I actually think having all the data in the seller isn't a proactive thing. It's just like you're hosting the data. And so maybe you have to comply with a subpoena, but like you're not necessarily complicit.

Then I think you, you know, you need to have a sliding scale of liability there, which 230 does, right? If you're really actively involved and you're seeing it come through, then you actually have real legal obligations versus you're just hosting a website, totally different type of obligations. Yeah. Okay. So very interesting to see.

I actually kind of think that France is going to find a way to try to de-escalate. I know that obviously they didn't have to press charges at the end of the arrest, and some people were surprised that they did go ahead and press the charges. But I sort of suspect that they're going to be getting a lot of international pressure to chill out and maybe turn this into something more along the lines of, hey, you didn't comply with their subpoenas, here's a big fine, like, you know, don't do that again, as opposed to, you know, putting him on criminal trial for, like, child pornography and, you know, I don't know, I just think it would be such a circus in France, seeing this much pressure from, you know, like, the France economy is not in a great state.

So I think seeing this much pressure internationally from all these, you know, kind of tech moguls of saying, oh, my God, this is an assault on on freedom and free speech and criminalizing technology. I think that France is going to back down from the worst parts of these charges. I actually almost, I'd be willing to at least place a small bet on the other direction in that. They want to go after someone because they've been, like, losing all these other attempts. And this one, they have sort of, I wouldn't call it bird in hand, but they at least have bird in jail. So it's like, you know, or like house arrest. And so it's like, okay, well, we can actually go after this case, you know, versus like, okay, we've tried to do all these AI laws and subpoena Sam Altman to come to Europe. And then he gives us a middle finger.

It's like I really feel like there is a there is a kind of like don't underestimate the like ego issues involved. At least that's my personal feeling. It's just so non-strategic for France, right? Like what exactly is the upside? But personal ego or like nationalistic ego is very different than rational thinking. It doesn't like France is like a tech center that we're all going to and like everyone's going to take their their companies and move them out of France because of this. And I think, you know, all of us lawyers when we talk about Meeker are like, and they didn't do a great job with Web 2.

And they're continuing down that path. So they don't have anything. So to Turun's point, it's kind of like, what do they have to lose? I think they have plenty to lose in that, you know, the economy is not doing amazing. And they are spending a lot of money to try to attract entrepreneurs to France. Right. I mean, Paris is giving out tremendous incentives to entrepreneurs to move there. It's not successful in getting a lot of entrepreneurs there.

But I think they realize, like, look, we're just going to burn our reputation. internationally by prosecuting this very, very, very high-profile case that also has, you know, foreign policy consequences for France. And I think like if the answer was like, well, you know, we can't get him to reply or subpoenas about narcotics investigations, I'm like that just the scale is just way, way, way off for this. And I think my guess is that they didn't anticipate how big of a firestorm this would be, right? Otherwise, why is Macron on Twitter trying to do damage control for France? Yeah, I think to your point, too, I think companies will just continue to opt out if they feel like it's not worth the hassle.

It's impossible to comply with some of the regulations. I mean, you're already seeing this with the new iOS that's coming out. A lot of the features are not going to be available in the EU because Apple's like, well, we can't build these things in compliance with the AI regulations that you've built. So you're just not going to get it at all. And it's not really worth the money or the time or the effort to go about doing that. And I think that's, you know, kind of what happens when you maybe overplay your hand. And to be fair, I'm, you know, as much as it's very easy to dunk on France here, it's also equally easy to dunk on the U.S. in the same way.

And like, I bet you, you know, for instance, the California SB 1047 law that, for AI that passed yesterday will make stuff not happen in California for sure. Like, I mean, if I were a founder, it's like the dumbest place. I mean, that is very different. That is very different. California is a massive economy. My point, yeah, but my point is I kind of think, like, there is kind of a very big similarity between the kind of ego aspects

of like how the enforcement and regulation was done in both of these cases. And it wasn't totally done in a way that I think is purely rational according to law. And so, like, that's why I think maybe your reasoning about this is if you're assuming that there's a purely rational intent here. And I don't, I'm just not convinced that's true. I think in the beginning stages, it can be, you know, sort of driven by one tentacle of government. And then all of a sudden, you know,

the rest of the body wakes up and is like, oh, shit, there's much larger consequences to what happened here. And I, you know, I think you just see it all the time in history, is that there's sort of one kind of narrow body that decides that it's in itself interest to do X. And then they realize like, oh, my God, there's just way, way larger consequences to what we've just done. And ideally, the rest of the body kind of pulls back this tentacle and says, hey, you know, hold on.

Let's, let's, you know, I don't know, just seeing like some of the prisoner exchange stuff that was just done in between the U.S. and Russia to get back, Evan Gershkovich, the Wall Street Journal reporter. Like, you know, we handed back to them like this guy who just like murdered a political opponent of Putin in broad daylight in Germany. And they were like, okay, yeah, well, we'll give you him back. Yeah, it's fine. Let's say the U.S. definitely did not win the negotiation now. Well, that's the thing is, like, we just didn't care, right? It just doesn't rate compared to getting back a Wall Street Journal journalist. And so I think in the same way, like, Pavl Dorov is an international hero to many, many people, you know, both in the West and especially so in Eastern Europe, in Russia and in, you know, the geography is where they use telegram all the time.

The only government that has said anything is the UAE. and I think he technically has four, three. No, Russia as well. No, Russia as well. Oh, yeah, Russia also interceded. Yeah, yeah. But I just meant like hugely important to France. Although I think there were reports that he didn't want the UAE's help.

And he asked them not to intervene. Interesting. Oh, is that right? Interesting. Interesting. Okay. All right. Well, so we, moving on from this story, let's talk about another tentacle of government,

which is the SEC. So OpenC, the NFT platform that once upon a time was the dominant venue for trading NFTs announced on Wednesday that they had received a Wells notice from the SEC. A Wells notice, we've seen a few of these now. Wells notice is a notification for the SEC that they plan to sue you for something and it gives you a time to, a venue to give a response. But usually if you receive a Wells notice, you're getting a lawsuit. So they claimed that the reason why the SEC is suing them is because the SEC claims that there are unregistered. securities that are being traded on OpenC or were being traded on OpenC at some time. We don't, obviously, we don't know the details of what a potential suit might include.

This has caused, once again, a lot of fewer on social media about, you know, is OpenC in exchange? Despite the fact that OpenCC, of course, is non-custodial. There are smart contracts on the blockchain that actually custody the funds. The swaps are all done peer-to-peer, but it does take a fee. It does editorialize listings. And it does, you know, co-market with many of the NFTs. that are traded on the platform. So much like with the SEC against Coinbase and Cracken,

in this case, they decided to go after, they've gone after a few issuers. They went after Stoner Cats. They went after another one called Impact Theory, but they've been very sparing on actually going after NFT issuers. And instead, it looks like the SEC strategy is to go after the big guy, the exchange. And, of course, one of the advantages is that you can allege that certain assets that were traded on OpenC's unregistered security.

And you only have to prove one in order to prove that, you know, this thing was, you know, should have registered as an exchange. And the having an unregistered security without having, without having the issue of that unregistered security, be a defendant in the case. Also, in a sense, makes it easier to go after the industry on the whole without the issuers being able to defend themselves, make their case and, you know, show up in court as a, like, hey, I'm an artist or I'm a creator and I'm legitimately creating art. you know, those people aren't a party to the case. And so if the SEC says, aha, this person clearly was making an unregistered security, that person can't show up and defend themselves. So we still

don't know, again, the details. But some people claimed that there may have been a connection because about 24 hours before the SEC Wells notice was announced by OpenC, Trump launched a new NFT collection. And I believe this was on Polygon, correct? Yeah. It was. So he launched it at third NFT collection on Polygon, and within 24 hours, the Wells notice was announced to open C. So, TBD, if there's any connection there, might be a coincidence, but, you know, knowing crypto Twitter, we love to speculate. I think that's a coincidence. I have no reason to think otherwise. Before you get a Wells, you usually have a very, very long investigation and run up before they issue anything like that. I think there are so many problems with this. One,

saying all NFTs that are being traded on OpenCR securities is a huge leap. And it goes very much. But they don't have to establish that. So I don't think I agree with you on that. And I think I thought about this a lot in the Coinbase case because, okay, that one NFTs of security will delist it. And now we have thousands of others you have to go. The same is true.

And Coinbase Robin Hood, Cracken, Finance, all of these other cases. Like, you can delist the one they prove. And then you're not a securities. right? And so I actually don't think it's as easy as showing one. Maybe if you showed one, you say we delist and we pay a small fine, we don't shut down the entire exchange, right? And so they actually have a much bigger hill to climb in all the exchange cases. And I think a lot of people in the industry thing. I think the other piece of this, though, is this flies in the face of both so many court cases at this point, including the crack in case that just came out that said

the underlying crypto assets themselves are not investment contracts. And so I think on the NFT front, that's the underlying crypto assets. So that's not the investment contract. Now, we don't know what they've alleged yet, right? No complaint. We haven't seen what the Wells notice says. And we know in the crypto case, in most crypto cases. So, Rebecca, can you flesh out this distinction? Because I think it's a fairly subtle one. The idea is what does it mean that the token is not a security, but the investment contract is a security? Sure. What are those two things pointing at? Yeah, so great question. So I think we can all agree these underlying crypto assets, just the tokens themselves are software. And the SEC, most of the court cases that have been coming out now really acknowledge that, right? We started with Ripple like XRP itself is not a security. But what they said in the Ripple case is, well, when you had these agreements with your investors out at the outset where you said, we're going to give you, we're selling you this staff or contract for you to buy XRP and we're going to ensure that the token goes up. It's not the token that's the investment

contract. It's the agreement between the issuer or the company and the investors, right? So, you really have to prove that the transactions themselves are securities transactions and not the underlying assets. It's this crazy concept, right? Like, oh, the oranges weren't securities, but the contracts in Howie to sell the Orange Groves were the investment contracts. So what I think, though, is so flagrant is that the SEC is now going against almost all the court cases that they've seen in district court and what they've been saying a lot privately, or even when you have ex-XSEC officials on panels now, they're like, no, no, we're not saying that the underlying crypto assets are the securities. And so the SEC sort of loves to change the gold posts, you know, all the time. And I think they are really stretching the securities laws well beyond anything we have seen in this case and in other ongoing investigations that the SECs, that the securities laws were not meant to protect this kind of activity in particular. Okay. So let me try to steal man the SEC's case. Obviously, we don't know the details of the SEC's allegations here, but we're just going to kind of infer what they probably are.

So, you know, we've seen many NFTs that are just kind of obviously. you know, like, oh, you know, we're going to do this mint. And with this mint, we're going to, like, build stuff that's going to make the NFT ecosystem more valuable. And, you know, many of these NFTs, they have, they had royalties that were going back to the teams. And they were very often explicitly funding some particular thing that they were going to do with the NFT sales. Okay. So there's some, you know, and many of those you saw that OpenC would explicitly not list them if they felt like, wow, this is very security like, we're not going to, we're not going to allow this to trade on OpenC. But a lot of them, you know, they just kind of got through because, you know, whatever, it's Wild West.

There's a ton of projects and you can't monitor everything perfectly. So, okay, so the SEC alleges that there were certain securities that were just like, come on, if you look at this thing, very clearly this is a security. They're trying, you know, they're a business fundraising using NFTs. And in these kinds of cases, I think the SEC has a, you know, has a reasonably strongly, like to say that, hey, you were listing and allowing to trade unreasonably. registered securities. And there were just so many tokens on your platform that you weren't monitoring exactly how many of these were compliant and which ones are not compliant and maybe the standards by which you were choosing to not list certain assets were very lazy or loose or, you know, something along these lines. I think that might be the allegations that the SEC advances.

And to your point about, okay, well, is it the token itself or the NFT itself that is an unregistered security, or is it the investment contract? Well, you know, the issuers have a very strong interest in getting the secondary market to, you know, do well and to appreciate, right? Even if, okay, I initially made my money in the mint, but, you know, OpenC, very famously was enforcing royalties, right? They were enforcing royalties for creators, which meant that all the trades on the platform, like the value of the NFTs on the secondary market was very important to the issuers of these, of these platforms. And OpenC was sending the royalties to. them in a way that was not enforced on the blockchain?

Okay. So maybe those types of, and I don't know every transaction and what contracts even OpenC had with some of the issuers, like those things, if there were lots of accoutrement around it, maybe you could say those few types of transactions were securities transactions. And we'll have to see what the complaint says because it sounds like OpenC is going to fight. So we'll see a complaint getting filed. I think the other thing that this shows.

is that the SEC is trying to game out where it gets favorable decisions versus not, because you have this NFT case, this impact litigation that was brought affirmatively by the Song of Dayman in Texas. And that's a very favorable jurisdiction. People think the Fifth Circuit's very favorable. If they file against OpenC, they're going to do it in the Northern District of California, presumably, because that's where OpenC is. And they've gotten really good decisions. The SEC has gotten really good decisions for them.

out of the Northern District of California. So they're gaming this all out. I think it was he's in New York, aren't they? They have an office in New York, but I thought they also had an office in San Francisco. Maybe they don't anymore. They've gotten some, and they've gotten mixed decisions. Well, then, regardless, they've gotten mixed decisions out of the, out of New York, too. They're just trying to game it out.

I mean, the point, the overall point still stands that they're just trying to, I think, game the system. And when they get decisions in district courts, they don't like, they try the same thing again somewhere else, right? Like consensus, or they got a great decision for them on broke, they got a bad decision for them on broker for wallet in the Coinbase case. And so they've now filed separate charges in a different district against consensus, also alleging that wallet is a broker because they just don't like the one that they got. And so they keep saying like, well, I don't know why the industry isn't, you know, following some of these district court cases. And it's like, well, but you aren't either. So, you know, I think we are in a very, very,

I agree with you is there are good arguments to be made for certain types of transactions, but I don't think we can take these blanket allegations from the SEC as we've been seeing them do. And if the SEC prevails on some of these arguments, the remedy is, okay, we'll delist those assets that you proved our securities, essentially, no? Some of them. I mean, to your point, I think it'll be hard because let's say you pick six NFT collections, right? They're not going to pick the thousands and thousands that are on there. I don't think even if they got a favorable decision on six that would shut down OpenC in its entirety,

the same is true for the exchange cases. Right. There are like eight to 12 crypto assets or transactions and crypto assets being alleged in the exchange cases. Those also aren't going to shut down the exchanges too. So very hard cases for them to win in some broad brushstrokes. And so I think they are trying to put a lot of pressure on the industry, including in private. There's a lot of a private investigation still going on that are well outside of the NFT context or anything else we've seen because, you know, they're trying to get wins in enforcement,

too. Right. I think the weird thing about this whole story is that, I mean, we'll see what happens when we actually see the allegations from the SEC, but I suspect that, you know, we've had a lot of debates during the NFT heyday about royalty enforcement and about the sort of the wisdom and the virtue of royalties. And I think this might have, my guess is that I think the royalty concept is actually going to end up biting the industry in the ass because of the fact that it ties the issuer to the secondary market and makes that secondary market integral to the business of the issuer in a way that normally is not the case, right? You make the argument about baseball cards and like, oh, paintings and da-da-da-da. And it's like, yeah, well, paintings don't have this concept

that the issuer has an interest in the growth and the trading and the volumes of the secondary market, it becomes part and parcel of that person's business to ensure that there's continued trading and speculation on these assets. It will help prove a common enterprise, right? That second Howie factor in a way that I don't think they have it with the exchanges, with the typical exchanges. Yeah. But ironically, something like Blur, which does not enforce royalties, doesn't have this,

doesn't have this problem. Yeah. So. And look, though, one thing I'll say about the SEC's general, uh, stance towards crypto is that it makes the environment much more rich for scammers. Because they are putting so much time, so many resources, so much attention on good actors, right? Like, whatever you want to say, you may not agree with the way open sea and force royalties or not. They were trying to do it right.

And they were trying to build in the U.S. You're right. I've been to their New York office and they're like, they're doing it out in the open, transparently, doing their best. they had real lawyers. Like, same with all the exchanges. And yet there are plenty of scams still going on. And nobody is enforcing that. And quite frankly, they probably missed a lot of those as well.

So I think it is just really perverse incentives. Yeah. I think there's two things I'd say. First is it's funny that the only NFT exchange that has no token somehow is the only one that's persecuted. That's like, that's like. Classic. move. Yeah. The second thing, not to kind of go back to your claim about conspiracy theories, my favorite conspiracy theory I read was that Trump had advanced notice for the Wells notice

and wanted to make crypto people like him. So he put out the NFT collection right before to make it so that people couldn't tell. It's like the reverse of the conspiracy you said. I was reading that yesterday and I really started laughing. thing. Yeah, I don't know, but about that way. He's done it's like a third, third time. I, um, as in he launched it timing wise right before. Oh, I see. Sure. Sure. Would kind of conflate the time, you know, in the way that was said earlier. Yeah. Um, it does seem like, you know, as again, as much as the SEC talks about being technology agnostic, like, I think, again, you can make a lot of these arguments around

the traditional world. Like, if you're buying art from a gallery, you know, generally they have like a rofer restrictions on sales and like a lot of things that do actually impact the secondary market that are obviously designed to ideally support the price of the painting. And so, you know, is that really, it's really different than, you know, putting it on chain and, you know, having recommendations even around royalties or limiting where something can trade? It just feels a little ridiculous. I mean, I go back to the exchange that Gensler had with Richie Torres in that hearing where he said is a Pokemon card of security and Gunster's said no. He said, well, if I put it on the blockchain, is it a security? He said, it might be.

Right? Like, I just, I just, I don't think he was thinking about the royalty point in that, but maybe, maybe guys are thinking about that. No, no, look, I, to be clear, I'm, you know, in advancing or sort of sketching out these arguments, I'm not actually sympathetic to them. I think that, like, I think, like, it's just so obviously opportunistic in that now that the NFT cycle is over, NFTs aren't cool anymore. You're not going to piss that many people off or, you know, not that much of the electorate cares anymore about NFTs because the cycle has come and gone. Now, when it's way too late to actually protect anyone and NFTs have come down already in like 90% in value from the market highs, now you're going to go after OpenC?

Like, really? I mean that, but also on the political front, we're at August 29th. They have an end date at the SEC to like bring cases as September 30th. That's a big date for them. So I don't I see. I don't think this is the only thing we're going to see between now and September 30th. Wait, so we'll piss off everybody else. But they haven't actually brought the case yet. They haven't actually brought the case yet.

They've only sent out the Wells notice. Can I ask a dumb question? Why is September 30th? It's just their internal calendars like a, it's a big, I guess, end of the board. Yeah. Like that just seems so arbitrary that they're like, we're going to stop. Welcome to government, baby. A little over a month before the election.

No, it's not for this year. It's every year. Oh, it's every. Okay, got it. Then that, I thought it was like, you know. No. No, no, it's every year. Well, OpenC has now joined the, um, the, sort of the vaunted status of companies that are being sued by the SEC.

Basically, it's kind of like, um, it's both a marker of just like really, really flagrant incompetent scams. Like, the really competent scams, like, the SEC just like never touches them. So it's only like the really kind of bumbling, uh, scammers that actually end up getting competent the SEC and then just the best companies in the space. So it's it's it's it's kind of this weird like they should just put a little marker of like we've been sued by the SEC you can trust us or we're you know maybe a totally incompetent scammer. That's that those are there's kind of the two classes of the SEC likes to to go after these days. Okay so switching gears a little bit. There's there's a story going around right now about the Ethereum Foundation. And it comes from a

interchange on Twitter by Vitalik. So sort of started with Vatalik, who's in some Twitter argument with some, you know, Twitter anon's talking about defy on Ethereum. And Vatalic seemingly showed that he was not very sympathetic to defy on Ethereum, claiming that he said, well, you know, defy, there's certain things I like, you know, I like polymarket. I like, you know, Rye, which is a, you know, a tiny stable coin with like $10 million market cap or something. And I think dexes are great. But, you know, where does all this yield than D.Fi come from. It feels like an oroboros, meaning a snake eating its own tail. It feels like this is all very cyclical, circular. It's going to break. I don't really trust it. And this caused

a lot of people to get very upset at this idea that, hey, you know, you sort of births this category, defy. If you look in the early Ethereum, you look at the Ethereum white paper, it talks about Defi, talks about Dexas, talks about, you know, all these, you know, the sort of fledgling concepts that have now, you know, blossomed into this industry. And Vitalik doesn't seem to like it. It doesn't seem to think it's very cool. Dankwright came in and said along those lines, we want a value-based defy sector that is positive sum,

not zero-sum. And it seems like many folks in the EF seem to share the sentiment that, hey, you know, Ethereum and crypto should really be about, you know, public goods and, you know, kind of putting cryptography back in the hands of users and encrypted messaging and, you know, quadratic voting as opposed to what it's

presumably used for it, which is stable coins, defy, trading, and these kind of stuff. On the other hand, there was other criticism toward the EF. There was news over the last couple weeks that the EF has been selling a large quantum of the ether that they have on the balance sheet. They sold something on the order of about $100 million that they sent to Cracken to sell. And people were like, why is the EF selling so much? And Ayamiyoguchi, who is the, I believe the executive director of the Ethereum Foundation, said that that was to cover their budget.

and their budget supposedly is about $100 million a year, which got people very, very upset that why is the ES spending so much money, is $100 million way too much money? Some people said, well, no, actually, $100 million is very reasonable, given the scale of Ethereum. So I want to take that kind of constellation of drama that we see playing out and get a reaction. Tarun, let's start with you. I see you're sort of grinning to yourself about your views on the situation.

You know, I think my problem is I kind of agree with both parties. in this sense and that like there is some truth to the the unsustainable yield piece but I would argue that in 2024 that has been shriveled compared to where it was anywhere near where it was in 2021 I think most of this stems from something like Vitolic well Votelic definitely uses on chain stuff right you can you can see his address he's very you know there's a lot of but someone like Dan Crad I feel like I don't know if I advocating for RW ways over everything else. That's just like idiotically, right?

Like in reality, if you believe ETH has any value, then you should believe there are other assets that can also have that value that are not intrinsically tied to some off-chain thing that are tied based on their usage, that it can be valued based on their usage. I found the DanCrad argument, the most non-credible one and kind of a little bit off-putting. I think Vatolix is a lot more nuanced, and I think a lot of it stems from like 2021. And like kind of not where we are now where it's like, you know, it's it's much harder to kind of bootstrap liquidity. There's a real cost to each new token.

There's a reason all these points haven't converted to tokens, et cetera, right? Like, like that I think the market has, you know, the market may be not instantly efficient at pricing these things, but it does price them eventually. But on the other hand, the budget stuff, I mean, I don't know. You really think that's overspending for like an endowment. nonprofit foundation type thing. I mean, look, there are more AI startups that have raised more than $100 million that have shut down or kind of been sold for parts in less time than a year. So, like, who we can, we can't really be.

I think that's a little bit crazy because, like, they do really fund a lot of core research. I think the main thing people are mad about is like, if I own Eath and I'm staking it, what am I getting forsaking it? You know, the narrative was like, I got all these fees. out all this MEV, there's this burn, right? There's like some implicit value accrual. And arguably, the value of cruel is just going to the L2s, which is fine, that that was a choice that was made.

But people who hold ether, obviously not so happy that they're not seeing number go up. And like, there's inherently this tension. That's actually the funny part about reading these arguments, right? It's like, if you look in the comments, it's like all of these people who are super, you know, hey, Ethereum needs to have all this value, blah, blah, blah. I mean, they're just like, hey, we want a number to go up. And on the other side, you see people are like, hey, well, you know, here's, here's kind of

this roadmap that's like a little bit ambiguous. But a little bit, I mean, quite a bit. And we're going to need to spend a lot of money on it. And also, we think all your applications are stupid, right? And, like, they're both, like, have some valid points. But they both are talking about each other. Our applications are pretty stupid. Yeah.

And they both are talking past each other in such a way that I feel like there's, it's, it's like, I don't think there's a reconciliation that will happen here. I think the reconciliation will just be the market, you know, kind of choosing a kind of dictum. But I will say, I think actually has Steve and I were at this conference the other day where, where everyone there was like, you know, and there, these are people. people who probably couldn't tell you what an L2 is, was like we're basically kind of shilling the long, Solano short Ethereum trade, which is like insanely crowded right now. I mean, if you look at the open interest on it,

it's like it is kind of insane. And I think that can only last for so long. So I think there's also some, like financially driven sciops going on that people are not willing to admit to. Tom, let's your take care. Yeah, I kind of, I agree with this evening. People love to cherry pick specific examples, even like in the open-sea thing where it's like, this is a very, you know, acute example of where someone was wrong. At all the times, they were right or they said good things who did the right thing and I'm going to sort of hammer on it.

And like, you know, people forget the EF gave, you know, uniswap. You know, their initial grant. And obviously, like, defy is working on Ethereum. Yeah, I mean, I agree with our point, which is like, if you think a, you know, permissionless, decentralized form of internet money, is valuable, which I think most people would agree, is, it has some sort of value. It's a unique application. Probably going to be financial services around it. And that's kind of where where DFI comes in. So it doesn't mean that, you know, RWA stuff is not interesting or valuable. I think obviously it is.

And, you know, that also has the- The irony is our resident RWA person isn't here to defend RWA. It's true. That's true. So, yeah, I just think people want to get mad. It's kind of kind of in the market doldrums and people are bored. arguing with each other on Twitter. Rebecca, what do you think?

I agree on all that. I mean, I love Defi. It's actually one of the things that I think has the most promise in the space. So I, but I also agree that many of the ways it's developed since 2019, 2020, or not what I think those of us who were around then had hoped, right? There is this self, I call it self-referential, whatever you said about the snake eating its tail, right? There's a lot of that and a lot of the yield and all of that stuff.

But I think there are some really, really useful applications. And so if we can just drill down on those and Uniswap being one of them, sort of building in that way. What I'll say, as I was listening to you guys, what I was thinking about is this is another example where the incentives are really perverse from a regulatory perspective. Because something like Unisop came on the scene, compound, and AVE and some of the really early defy applications. And people got really excited about them. I remember back four or five years ago, like, regulators were coming to be like, can you explain it? And you'd need to fight a lawyer who could come and explain to regulators, including on the U.S. government side.

So people just from the conceptually got so interested in it. And then there was all this talk about, like, do we need KYC? Do we need this? And got everyone really scared around it. And so I think people were building less and less interesting and simple things. Like the simplest stuff in DFI is the stuff that's worked best, I think, over time. So I think that's where I come out on that. And to the Uniswap point, I mean, Uniswap was way back in the day.

The Genesis for it was part of Vitalik's idea. So I think he does have at least roots in Defi, but maybe he's not happy with how it is grown up over the past four or five years. I mean, he has more than roots in defy. I mean, again, it was in the white paper, right? He sort of, in a way, kind of created the entire category. I mean, again, this is why I think his, his, you know, arguments are the most rational.

I think there's some other people whose arguments are currently being lamb-based who maybe are a little less self-consistent. Well, I mean, Vitalik also, he criticized USDC, whereas, you know, Dan Krad was sort of saying, oh, we need more RWAs. Yeah, yeah. His whole thing was like RWA is for adoption, which is like, I feel like you're not really going to be selling the narrative of crypto. Why don't we just go back to using Stripe them?

That was a narrative like six or nine months ago, RWA's for R2. It's not gone. It's not gone. Yeah, I hate to say. We're missing the RWA defender on the show today. I know. That's true. That's true. That's true. RIP. So I think the interesting thing about me to, the interesting thing about the story to me.

So I think the budget stuff is stupid. Like the EF has more than justified $100 million in yearly expenditure for all the value it's created. And if you just think of YSWOP and all the grants they've done. Yeah. I don't know if you saw Josh Stark's. pie chart with that like in responses say I did see that which shows the breakdown and it's like actually quite reasonable I mean like yes you can say oh maybe they could have optimized their spending but like what nonprofit in the world has ever successfully optimized spending they always

are like very different than you know quite frankly you actually don't even usually know non-profit spending because it's so not transparent so this is like and there are like unisef and some other nonprofits have done these experiments to show donations and expenditure in crypto to enhance transparency. Right. And the EF doesn't take donations, right? Like it is a foundation that was started many many years ago with other people's money, not yours. But it's like the same. It's kind of like what Tom was saying. Like people need something to do. It's, you know, it's a slow Twitter week. Like that kind of thing. Well, what I think is most fascinating about the story is that Vitalik retreated from Twitter a while back and basically, you know, mostly stuck around in Farcaster.

And Farcaster just has very different vibe. It's much less adversarial, much less about price, right? And it seems like he's now come back into the fray in Twitter. He's starting getting more active and arguing with people again. And it sort of felt like he was almost unprepared for the different vibe on Twitter from when he left to now, which is that now, there's just this very, very strong sense that like, no, no, no, no, Vitalik, I know you invented all this stuff and you're, kind of single-handedly responsible for half of this industry even existing. No, no, no, no. Actually, I think you're saying, you're saying that first sentence you said, I think a lot of the detractors would not even agree with. They'll be like, yeah, yeah, whatever, I've heard your name. It's associated with Ethereum. But like all this stuff we're talking about actually, half of the people don't even probably know. Like, if you read the comments,

you'll see the fights. It's actually, I think there's a sense in which, you know, people who got into crypto in 2021 don't even know the provenance of that. that type of stuff. Fine. Okay. So they may not, they may not know. They may just know he's like an OG and a famous Ethereum.

Ethereum, whatever. Fine. But like the, I think, I think he maybe sort of did not expect the vibe shift that's taken place on Twitter over the last like, you know,

nine months or so since he's been off and Farcaster land where like now there's just a lot more despondence in the Ethereum community and a lot more anger about why aren't we shill. as hard as all those other groups, right? And there was this, there was this meme where, you know, Vitalik wrote some like 10,000 word blog post about, I don't know, governance or public goods or something. And then one of the very first responses was,

hey, why aren't you bull posting about Ethereum? And then he puts a meme of a bull with the word Ethereum is good in its mouth, and now that's become a meme of Ethereum is good. So I think it's just like the energy right now on Twitter is just not there for the kind of engagement that Vitalik wants to be having of these very philosophical, like Bitcoin talk tile conversations about what is blockchain about,

what is the goal of Ethereum? And I think he doesn't fully appreciate the degree to which crypto-Twitter has become very PVP and very, very zero-sum and very just kind of wound up about the fact that, you know, Ethereum has just been hitting a wall and unable to kind of break through this narrative cage that it feels stuck in. Yeah. I mean, I just think like there's also just, you know, it's damned if you do, damned if you don't in his position, right?

Like I do not envy that position. Or like, whatever you say, you'll get, you'll get an equal number of one million critics on both sides and you have to kind of like, you know, he's in a tough. I think it's more the other people, like I said, who then piled on who like where it's like, all right. Yeah. The only exception to that, the only thing that you will not get negative criticism. for is just bull posting Ethereum.

But I think that's where his inner critic is the one has just like. That's why I think he did the greatest, the game theory optimal strategy of posting the meme, right? And then right underneath being like, look, this, this got way more interaction than my post about philosophy. Like, you know, you got to give him credit. That was, that was clever. No.

I think it's a sign of the times that Ethereum is, Ethereum is hurting. And I think there was a lot more tolerance for Navalgate. within the Ethereum community a year ago. But it feels like today, the vitalic style sermon doesn't feel like it's resonating in this environment just because there are just so many Ethereum bagholders who are feeling the pain.

To bring this back to ECC, I will say when I was at ECC this summer in July, I did feel like there was a lot of sort of existential thinking going on of like what like what are we doing here right it's sort of an identity crisis for builders and stuff like that some people are like okay we're we're using this we're doing payments things that we talked about right on the financial side but general I thought application builders were definitely existential and even people even l2 builders and stuff we're thinking like what's happening next so I do think we're at a pretty existential moment and so like just going to bull posting

is sort of the vibe. The other thing I keep wondering about with Twitter, and I will admit, I am three weeks Twitter clean. Oh, wow. What's you do? What type of rehab did you use beforehand? But what I keep wondering about with Twitter,

and this is a little bit why I was okay, taking myself off for a little while at least, is like I wonder if the election and the deep, deep division over crypto being used as a political tool has really jaded people so much. And even the people who are engaging in these types of things, like if it just has a pall over everything Twitter-wise, maybe I'm taking the policy and politics side. But I've found the politicization of crypto, which it was real, I mean, to go back to what Vitalik was talking about, that was really not what we were intended to do,

if that's really amped up where things are on Twitter now. Yeah. I think at this point it's pretty hard to put the genie back in the bottle. I think the, you know, the Derov situation, the Open sea situation, they seem to be, like, it's kind of everything regalvanizes this conversation, which is how is American policy toward crypto going to shake out? I'm looking forward to more memes being made from me staring at the ceiling when people talk by regulation too much, though. That's apparently... I think that's our cue to wrap up.

Tarud is about to go on to, like an acid flashback. Well, hey, hey, that's talking about regulation too much. meme. The intern who probably is maybe Tom, but unknown. It's the intern. It's shout out to the chopping block intern. Shout out to the intern. If you don't know what we're talking about, check out the chopping block Twitter handle. You can find all the fire memes that our intern is posting. And hopefully we'll get one about Rebecca next. Although I guess you won't see it because you're clean, you're clean from Twitter. I am. But once people send me things, I click on, read it. Okay. Okay. Nice. Nice. All right. Cool. All right. Rebecca, awesome having you on the show.

hoping we don't have you on too much more often because something tells me that there's going to be more more bad things coming in our way. All right, that's it. Thank you, everybody. Thanks. See all next week.