Unchained - The Chopping Block w/ Stani Kulechov: Operation Chokepoint 2.0, Ethereum Innovation Push, & Polymarket Whales - Ep. 717

Episode Date: October 10, 2024

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and special guest Stani Kulechov chop it up about the latest in crypto. In this episode, the crew dives into the latest speculation about Satoshi Nakamoto, spurred by the just-released HBO documentary. They also discuss Ethereum’s big debate over block times and blob storage expansion, exploring whether these changes can keep Ethereum competitive. The conversation gets heated with talk of a Trump whale on PolyMarket, Operation Chokepoint 2.0, and TikTok’s role in onboarding memecoin buyers. Don’t miss this episode packed with crypto conspiracies, performance debates, and insider gossip! Show highlights 🔹 Who is Satoshi? Speculation about the HBO documentary “Money Electric” possibly revealing Satoshi Nakamoto’s identity. 🔹 Trump Betting Whale on PolyMarket: Discussion about a large whale accumulating Trump shares in Polymarket and addresses conspiracy theories. 🔹 MEV Reduction Through Shorter Block Times: Reducing Ethereum’s block times from 12 seconds to 8 seconds could decrease MEV by making arbitrage harder, with potential UX and cost improvements for Ethereum. 🔹 Blob Space Expansion: Increasing Ethereum’s blob storage for rollups might prevent alternative data availability layers like Celestia from gaining ground, raising whether more blob space is necessary. 🔹 Operation Chokepoint 2.0: New revelations suggest that regulators, possibly spurred by Elizabeth Warren, pressured banks to unbank crypto firms without formal rulemaking, with Tom calling it “shocking” how accurate initial speculations were. 🔹 Ethereum’s Future Performance Debate: Stani suggests Ethereum should continue to innovate and improve Layer 1 performance, advocating for faster block times and more radical changes to maintain its competitive edge. 🔹 DeFi Market Dynamics: The panel dives into how competitive decentralized finance platforms like Aave and Compound maintain resilience in an ever-evolving landscape, with Stani commending Robert’s contributions to the space. Hosts ⭐️Haseeb Qureshi, Managing Partner at Dragonfly  ⭐️Tom Schmidt, General Partner at Dragonfly  ⭐️Tarun Chitra, Managing Partner at Robot Ventures Guest:  ⭐️ Stani Kulechov, Founder & CEO Avara Disclosures Timestamps 00:00 Intro 01:09 Mainnet Conference Recap 05:39 HBO & Satoshi Nakamoto 12:55 Election Betting 21:24 World Liberty Financial 31:54 Operation Chokepoint 2.0 Exposed 39:44 Challenges in Crypto Disclosures 50:18 Ethereum's Potential Upgrades 1:03:59 Future of Avara Learn more about your ad choices. Visit megaphone.fm/adchoices

Wait, so what is the block time you would want? So there's a limit at some point. Yeah, yeah, yeah, but I mean, what would you want? Roughly like 100, 250 milliseconds. 250 mil? That's faster than Solana. You want faster than Solana blocks on Ethereum. Yeah, fuck it. 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 trading firms who are very involved. D5 protocols are the ultimate. D5 protocols are the antidote. this problem. Hello, everybody.

Welcome to the chopping block. Every couple weeks, the four of us get together and do the industry insider's perspective on the crypto topics of the day. So quick intro, first you got Tom, the Defy Maven, and Master of Memes. Hello, everyone. Next, we've got Tarun, the Gigabrain, and Grand Puba at Conlin. Yo. Today we've got a special guest, Stani, the architect of Ave.

Hello. And I'm a Cive, the head-hike man to try and apply. So we're early-stage investors in crypto, but I want to caveat that nothing we say here is an investment advice, legal advice, or even life advice. please see Chopin Block at XYZ for more disclosures. So we are together in person in Salt Lake City for permissionless.

It's rounding out the year of conferences. It's been a very busy time of year. I just heard that you guys were at Mainnet in New York City. Tell us what Mainnet was like because I heard not amazing things about the Maynet turnout. Sonny, you said you were there. Tell us what the volume.

I didn't go. You didn't go. I said in my hometown. It's in my hometown. How did you not go? It was too close. I didn't go either. Yeah.

What do you? We both live. You went to side events, right? Yeah. I mean, telling me how to after party, actually. Yeah. You had an event, you kind of went. I think it's just more like, hey, you know, people are in town, maybe have a little party.

But I feel like everyone I talked to is like, I'm not going. Like I just kept asking people, are you going this conference? I think a lot of people who came were like outside of New York. Yeah. And there was like, there was like token 2049. It was like huge event. went and like people are like topped out I think yeah a lot of conference fatigue yeah so okay you were at the main event I was at the main event what was it like getting on stage at main net I mean first

of all it was great for me to be there in in New York but I do think it was way more quiet than it was in Singapore and Singapore audience was a little bit different because it feels like the east and the vest were there yeah in terms of like crypto yeah mean it wasn't like that it was I'd say it was like a lower turnout and it was more, I would say, a little bit stratify to some extent. RWA's was one big topic that people were talking about. I feel like that's kind of my vibe of Mainnet, though, is like that is the people who would normally go. But I mean, obviously the big thing is Selkis is no longer part of Misari.

And I feel like it's also kind of the draw. So I feel like they're actually kind of doubly cursed in that like people who would normally go to like see his like aren't going to go or because he's not there. and then other people are very turned off by his old political bent. And so they're also not going to go. And so I feel like actually... Because Salkis was not there at all?

I think he did show up, but he did show up. He did show up. He's not. He's not the emcee. You know, and so I... Oh, really? No, he left Masari. So I think... So who's emceeing now? Who's like the main guy?

This is exactly the point. It's like, I don't know. I'm not going to this event. And so I feel like he's about probably feeling vindicated in some ways that it's like, look at what this conference is. Look at what this company is without me. Like, you know, I am sorry. I see.

I see. So it's like Apple without Steve Jobs. Yeah, exactly. Look at me now. All right. Yeah, yeah. Okay. All right. Well, hopefully,

permissionless has better vibes than that, but I don't know what the turnout from permissionless is going to be, but hoping it's going to be somewhat better because I just feel like a lot of people are here. Yeah. Yeah. Also, why are all these conferences stacked in this time of year? Like, why not spread them out throughout the year? I remember last year they did permissionless literally at the same time as token.

And so you had to pick one or the other. And that was a big mistake. Oh, yeah. And there's like no events beginning of the year. Yeah, exactly. Why not just spread, do your events then? Actually, I like it because I don't need to travel half of the year. Yeah, yeah.

Well, it's like, you know, it's cold. People want to stay home, you know. No, no, it's cold in half of the world. The other half is hot. That's true. Australia could be all where all the confidence part of the world, though. So, yeah. Okay, but speaking of token 249, so actually, I wanted to issue a correction.

So if you guys recall on stage, we were with MoShake and Arthur Hayes. And while I was on stage at token 2049, I made a statement about Kaya, the blockchain that was a fusion between Clayton and Fuchsia, or sorry, Fincia, which was the Lyme blockchain. And I made a claim that I heard from some guy at a party that the Kaya blockchain was a rebrand from Clayton because Clayton had been raided by the CEO of Kakao and that they had stolen a bunch of money. So apparently this was, I got in touch with the Kaya team because they were not.

not happy to hear that I was saying this. Apparently, that is bullshit. That is not correct. I probably should not be reciting things that I heard from random people at parties. So apologies to the Kaya team. This is a Taroon's party. Yeah, Tarooney, all sorts of bullshit. There you go, exactly.

But yeah, I try to avoid just, you know, just reiterating complete bullshit rumors. But actually, this is a good, this is good proof that you're getting insider gossip, although maybe bad insider gossip. That guy was not an insider. You're just like some guy at a Korean. A-Korean was basically my source for this. So, yeah, it was kind of a throwaway comment, but I don't want to be going out there, you know, just talking bullshit.

So anyway, okay, so putting all that stuff aside, let's talk about some other bullshit that's going on. So there's an HBO documentary that's supposed to drop today. The HBO documentary is called Money Electric, the Bitcoin Mystery. And the hype around the show is just going to drop on HBO Max. And the hype around the show is that, it's going to supposedly reveal who the documentarians believe is Satoshi Nakamoto. So there's a polymarket market for who is going to be the person that they name in the documentary as Satoshi Nakamoto.

And right now, as a few days ago, Len Sassaman was the leading candidate who's like a scriptographer, PGP, early, you know, cypherpunk guy. He has plummeted in the rankings. And actually so far, there's been some speculation from somebody, I think it was Samson Mao. who was apparently interviewed in the show, who claimed that nobody who is front-running on Polly Market is going to be the person named on the show as Satoshi Nakamoto. So now the market is plummeted, and it's like 80% that it's going to be either nobody who's on the list

or multiple people. So there's always, every couple years, there's always this frenzy of getting back into the speculation about who Satoshi Nakamoto is. I feel like we haven't had one since the pandemic. I actually feel like the pandemic stopped all of the specular world. A viral blog post about Len Sassaman that I think came out a couple years ago that got a lot of the speculation going again. I will say I've always found it kind of distasteful of like the speculation about who is Satoshi Nakamoto.

But I can't quite put my finger on why I feel that way. It just feels like a stupid thing to be spending time on. But I don't know. What do you guys feel? Because obviously nobody knows and the documentary will be live by the time this airs. But what do you guys feel about this, you know, hunting for Satoshi thing? first off isn't this sassaman thing like he has a bunch of he like satoshi has some posts after he died so like if if he is satoshi he's probably one of a group and i don't know personally i just prefer thinking

it's a group and that they've like made a death pact and no one will ever know or it's a CIA or whatever versus like one person i feel like this idolatry of like it being one person is actually the problem is like there's this expectation that there is this single figure, but like what's the likelihood that's a single figure? I'm a little on the fence. But the thing with the group is that at that level, like someone is tempted to actually like talk about it. Yeah.

It has to be like really, you know, secretive group or like, I don't know, like it feels like if there's that many, there's multiple people around it and they've been able to keep quiet so long. It feels like a really hard thing to do for humans. A lot of the candidates, it's died though, not in pretty soon after. Maybe they were better. I think it's good.

I just, a lot of them died at weird times and in weird ways. Yeah, I don't know. I think, I do, I guess I don't have a distasteful, but I find it strange that people, so many people are curious. A, I find it very hard if you believe that you're gonna find smoking gun evidence

at this point if you consider all the time and energy and bounty that's basically gone to trying to find Satoshi. It's like now, like almost 20 years later, we're going to find some, like, that just seems very improbable to me. And too is like, you know, part of the appeal of Bitcoin, I think, is sort of the immaculate conception. And we don't know who Satoshi is.

And there isn't, you know, some dufus who, you know, we're never going to dig up all the bad history and be like, look at this, all these bad things. This person said or like, you know, I feel like anyone at some point is going to kind of get, you know, milkshake ducked. And so I think, yeah, I think just like, let it be. Like, that is kind of the point. And it's like, what, what outcome do you want from this? I don't think there's anything better to put it.

I think the answers can only be bad. Yes. Right. Like there are no, there are a bunch of okay answers. And then there's some really, really bad answers. Like Adam Back is a very bad answer to who is Satoshi, you know, or like, you know, Peter Todd or something. If that turns out to be Satoshi is just like, that's, I don't know where the world goes,

but not in a good direction. If it turns out that like, yeah, he's alive and still has all the keys and it's just, you know, everything is terrible. Yeah. I don't know. So I get part of it, it feels very like kind of JFK assassination-y where it's like it's a fixation for a kind of person who their brainpower would be better spent on other things, right?

That's kind of why I think I don't like it so much. And to your point, like, it doesn't matter. It sort of hurts this immaculate conception story. Like the whole point of Bitcoin is it doesn't matter who made it. And that the person who made, like, even if it is Adam back, which, you know, again, probably not. But even if it is Adam back, like, who cares? Like, what does it matter other than like, okay, well, this guy has, you know, tens of billions

of dollars of Bitcoin now. And then that's, okay, that's potentially concerning. But beyond that, like, it doesn't give them any more legitimacy in deciding where Bitcoin should go. Yeah, I agree. I think, yeah, like, the other thing that I think was funny about this prediction market is, I think in some way it's actually kind of a indictment of prediction markets that, surely, like, press screeners and all these kinds of things have been set out. Like, surely many people have watched this documentary at some point.

And yet nobody is betting on the, or I guess maybe to the point, that's why it's 80% somebody else. but like. Well, that was only very recent. That was only in the last few days. Right. But you would think someone would be maybe, I don't know, sort of showing their hand or like, someone would have spoiled it at least just for like internet points. Well, I think what is in being implied there, I mean, so obviously there's Samson Mao saying,

you know, he was on the show. So maybe he's seen it. In which case he's like, okay, it's none of the people on this list. So people move their bets after that. It could also well be that the people realize that, okay, the volume on this thing is speeding up as the hyper on the show is speeding up. And then somebody who has access to, you know who the answer is. it's nobody on the list.

There's nobody in the list. That's how you make money. Yeah. So at this point, like, the thing that's interesting about this story more than anything is that it's kind of a new way to experience media. You know, this, okay, there's a betting market on who it's going to be. There's teasers that roll into it. It could also well be that the producers are a show of American, and so they can't bet on

the polymarket, you know. Yeah, there used to be like Vegas books would offer odds on like TV series finale. you could bet on the Seinfeld finale and stuff like that, but it's a very one-off bespoke kind of things. But we should get those going again, you know? Yeah, the soprano's, remember there was like a huge volume that was like in the front page of a newspaper. Highest betting volume, whether he would die or who dies?

Someone always dies in some products. But it could be even like interesting, like a go-to-market strategy, like just like create a market and start putting it into a growth-hack. Put some incentives to juice betting on the show. Yeah, that could be good. I mean, honestly, though, if I were to do that, I feel like reality TV shows have an audience that's captive and would be willing to bet more than like the type of stuff.

That's true. I mean, that's already basically sports, right? So you have to expand out from the sports betting market into other kinds of television. I mean, I would love to bet on Low Island. You know, who wins it. I don't know if you have it here. The problem is, yeah, I guess like the people on the show

could definitely bet on themselves. That is true. Yeah, again, some sort of death pact or something. Yeah, yeah, exactly. Or you do multiple edits and you don't reveal who it is. Yeah. All right, fair enough. Well, speaking of Polly Market, so Polly Market has also been ripping.

Obviously, we're now 25 days away, 30 days away from the election. So we're getting very, very close to home stretch. Polymarket odds from Biden or sorry, Kamala versus Trump. We're now back to 55, 45, 45. It's been wavering up and down. Now it's about 53-47 in favor of Donald Trump once again. We've seen all-time highs of volume. So the chart of betting volume for Polly Market just looks like it's getting steeper and

steeper with every passing week. So the interesting thing now is that polymarket, because the polymarket odds have now diverged a little bit from a lot of the kind of election modelers. So if you look at New York Times, you've look at, 538, you look at Nate Silver, their odds are pretty neck and neck. They're pretty close to 50-50. But the polymarket kind of had this outsized move with a large amount of volume being bet very suddenly on Trump. So this has caused a lot of conversation about is there a Trump whale? Is this inorganic? Is there somebody trying to move the market intentionally towards

Trump in a way that is outlying from the actual underlying odds? And if so, isn't the whole thesis that market's supposed to correct this. But it doesn't seem like markets are correcting it to move back toward the odds from all the other pollsters. So I'm curious to get people's thoughts. There's a lot of conversation now about this of, is there some funny business going on a polymarket in the home stretch of the election? Elon, is that you? There was some weird thread talking about, is this maybe Elon Musk?

I find that to be just completely, like, I read the thread. I'm just like, what is the evidence of that there's some guy who bet a lot of money? Yeah, there is one account that's just been accumulating Trump shares. And so, yeah, I don't think it's Elon, but that is, Some of the pressure, but I think specifically there was just a weird move up. Like a lot of this has been like one leg up. I think it's like basically Monday market open in the U.S. There's like a tick up to three percent.

And that's kind of where this is. Converment now, it's just persisting. But I think to your point, there's been all these conspiracy theories around like, oh, well, I'm like, you know, this market is, you know, symmetric. At least it has price right now. Like you could go and make money on this pretty easily. And then people always try to explain away, oh, well, you know, operational risk. and you have opportunity cost.

And it's something that are technically true, but I'm also like, you know, 25 days. Well, the opportunity, exactly. Opportunity costs is bounded. Yeah, yeah. Now it's only a month away. Yes. So it's not bad.

So I think maybe part of it is on just people, you know, don't have enough conviction. There is just a wide range, there's a wide envelope of outcomes. And, you know, it's hard to say that you're really, you know, making, you know, three cents if you're, you know, selling Trump at 53 trends or vice versa.

Yeah. You can capture a bit of an AR, but maybe it's not attractive enough for people. So or you know, again, maybe someone has some sort of inside info. Maybe they're looking at future polls or something that is like indicating something more bullish for Trump. But I don't know. I think everything else I kind of assume the market is working as intended and it's functional. And like I'm inclined to more trust that more than again, some of the even more sophisticated models.

Yeah. Polling error is a lot wider than three points. Yeah. Yeah, exactly. I mean, my thing is actually, I think the elasticity of the market versus the elasticity of the polls to like certain events is very different. Like the polls don't respond to these like 60 minutes type of things as fast as like the market does. And I feel like that that 60 Mads interview was. I mean, disastrous might be the wrong word, but it was not a good interview.

I feel like I think that was like to call her daddy interview with with Kamala. That was probably got a lot wider distribution than 60 minutes. Yeah, yeah, I just watched the 60 minutes one because like I thought that and I don't think that people were maybe like. I don't think it was like the same demographic that is trading on polymarket is the one listing to 16 minutes. But the TikTok reels and the the small videos that people were making from it were very bad. Let's put it that way. I was actually like it would they had a lot of bloopers.

But yes, yes, yes. We've been through this before. You watch TikTok? You also watch TikTok? Yeah, totally. It's like you get the, you know, you get the news fastest from from TikTok. Like, that's why kind of like... Do you get the news fastest?

Yeah, because like in TikTok also like you get a lot of videos. So for me, actually, TikTok works really well. And because I go from every direction on TikTok, like the algorithm just keep changing. It's really, actually gives me like from the hurricane news and everything, all the, all the latest news. So you're getting US news. You're in London, right? Yeah, yeah. I mean, the TikTok algorithm really is really something else.

It really picks quite well of your location, backgrounds, even like if you use the same Wi-Fi and similar type of content from what other people. Do you get crypto content on your TikTok? Actually, I don't at all. No, no. I see. I do think there was some correlation between Elon, like there's interesting events. Elon stepping into, you know, the triumph rally in Butler.

And then at the same time, you have this like a huge bet on polymarket. I think that's like a kind of like what you mentioned Taran about the audiences. that there's some correlation there. I still, yeah. I mean, I use TikTok for restaurant reviews, honestly, because I think the best restaurant reviews are on TikTok. Oh, that is true. That is true.

The really good restaurant reviews, much better. The Google reviews are all gerrymandered and fake reviews, but the TikTok restaurant reviews, it's much harder to fake the full video right now. I mean, I know in five years, we won't be saying that. But like, right. And so, like, you get good restaurant reviews. Are you also a TikTok consumer?

I deleted it. You deleted it. Yeah. Yeah. Just not. I don't trust TikTok. I honestly, I don't trust a mole. I used to be like that.

And then I just use it on this burner Android phone. Okay. You have a dedicated TikTok phone. Yeah, yeah. You don't want to give any data. Yeah. It doesn't touch my normal phone. All right, damn.

That's good. Yeah, that's, I actually, I tried TikTok one. This is totally unrelated to crypto, but I tried TikTok once in Singapore because it was on a TV. There was like a smart TV that had TikTok on it. And so I was like, all right, I'm going to try TikTok. This is not my machine. Is that connected me in any way. And so I saw Southeast Asian TikTok, which like aggregates a lot of different countries together because it doesn't know where you're from.

So it gives you like some Vietnamese content, some Indonesian content, some Chinese content. It's really strange. It's really strange experience. But did not make me want to spend more time on TikTok. Yeah, I guess the, but going back to the. Yeah, sorry. The podcast and the these clips. Yeah.

I think the clips from these events are probably from these recordings, these like long hour plus long things. are much more impactful to the polymarket pricing than they are to the polls. And I also think the poll sampling is like, if you look at the median age in a lot of the polls, it's like way higher than the median age of like a polymarket user. So in some sense, they're just different data sources. Yeah, it's probably right.

They're doing corrections for it, but those corrections probably can't incorporate something like this podcast just came out and TikTok hates it. Yeah. And like that's losing her, some of the, Gen Z vote or something like that. Yeah, I have never seen Polymarket advertised to me on TikTok. Have you?

No. Advertise on TikTok. Or just like, sorry, like someone not advertised. There's a lot of crypto content on TikTok, but it just doesn't surface to me. You got to the content? Okay, yeah. It seems, it seems very different than the kind of stuff on Twitter. I think the only time I've ever seen crypto content on TikTok was 2021 when I would get,

I got a TikTok that was like, here's, Here's how to log on to Binance smart chain and buy Safe Moon. There's a lot of onboarding. Good old time. Yeah, it was like, what? I know a lot of meme point stuff happens on TikTok. And we, don't we have content on TikTok? We've experimented with some shorts.

It's kind of just the classic, you know, I've been trying to get our intern to do more like the dual screen brain rock kind of thing, get some like subway server going on the bottom. So if he's listening to this right now, which I assume he is, You know, tune into the chopping block TikTok for some good condensed content. So you got to get, you got to get subscribed to the, you can't subscribe it. You can follow. You can follow. Even the following isn't that big thing on TikTok because the algorithm is so powerful.

Just such as the content. So, okay. So as we're talking about politics, obviously one of the big stories in crypto has been World Liberty Financial, which is the Avey Fork. I think it's still supposedly a fork. Unconfirmed. Not a fort. Not a for. Let's get, all right, now that we have you here, we've been trafficking and rumors the entire

time that this has been a story. So I'd love to get from your side the narrative of how did all this come together? What the hell is Doe finance? How did it come into play? And what is the connection between World Liberty Financial and these guys who are helping run this thing and AVE? Yeah. So based on my understanding is that obviously Doe Fana is, was a team that is basically

forking Ava and trying to. to do like some sort of landing protocol. Is this a blessed fork? Is this like a, you know, you didn't know what's going on? I mean, there's not really like friendly forks of AVE, you know, people just use AVE. I'm friendly for it. But nevertheless, I think like they wanted to basically use Avae and build on that. And this team essentially they, their vision is to create some sort of like a new type of

experience and to a new audience and basically bring some new users into Defi, which I think is really interesting because I do think like whether it's like of a protocol or Defi in general, it's it's permissionless protocol. So anyone can actually like plug it, use it regardless of like their political backgrounds or, you know, whatever regions they are. But what's interesting here is that we don't have that much information about it. We know that. We know that. that it's integration into the AV markets, and that there's going to be a new product and new type of I experience and a new audience that they're targeting.

It sounds like they haven't talked that much with you guys. Well, here's the thing. Usually a lot of these things happen in the governance forum or either at some point, essentially. So I actually wake up every day and I see something new in the governance forum, and I'm like, fuck, I need to, like, read this and a lot of time will go. Like, a lot of things actually, you know, happen outside of our team, and we don't know anything about it. There might be a service provider that is working with a particular team, and, you know, they work on a proposal.

And a lot of things happen in a very decentless way. But I think that's a whole point of a decent dress organization is that these teams, they don't need to rely on us. They can just go to the Dow and, you know, propose their thing. And also, like, if it's a pure integration, you can just plug it in. So you don't really do anything. But this is not a pure integration, right? They're forking AVE. They're not forking AVE.

They're not working AVE. No. So you're using AVE on the back end. Yeah. So their liquidity comes in through Avey. Yeah. Oh, I see. Okay.

And there's some easy way of like onboarding with Fiat and whatnot. So I mean. Respect to hustle. Way way, yeah. Then W.LF is a meme coin officially. Me because it doesn't really have any. Well, no, no. Isn't this the whole thing about applications on the user?

blah blah, blah, right? It's an infrastructure-flavored, a meme. If it doesn't control the... Infraiserable parameters, doesn't control fees. Why doesn't you control the risk parameters? I guess it does for a vault or something that I don't know. We don't know what the token does. There's some sort of a vault structure.

Okay, okay. Some sort of a walled structure where... Okay, if their fees, I take it back. Yeah, there's fees. There's a fee. There's audience. What about all the wallet front ends that are charging fees? You know, those like meme

coins for Unispop, no, there's a real apps that are like, you know, just charging fees on top of no, no, but they don't have a token. Whereas this is like they do have tokens. Oh, yes, they like who? Like banana gun. Oh, yeah, yeah, sure, sure, sure. Yeah, I guess if you're comparing it to that, I was thinking more like phantom or like a vertically integrated. Oh, sure, but this is making, you know, money. But if you have audience and you have user based, then then basically kind of like you can you can manage that and control like fees, for example. So I think there's a lot to do. I actually you think that, you know, like we should figure out beyond kind of like these like infrastructure protocols and like what can be done on that like app level if you actually

like own the users and what you can basically do with like fees and and and sharing revenue. It still feels like a weird access point to bring people into crypto, right? I mean, obviously everybody loves AVE and you know the lending markets and money markets are some of the oldest things that really worked in defy, but they are kind of a power user thing. Like, you sort of show you, the first thing you do is not like, great. Let me borrow against my ether and, like, recursively stake or something. Yeah, but I think the power user comes because, like, AVE enables all these, you know, different pools and strategies.

But the most simple use case is just like if you have a stable coin, you know, put it somewhere. And then, like, the step more, like, easier from that is that's true. How do you go from, like, just put your Fiat and in the back end it goes to Ave essentially. So, like, there is kind of like an easier path there. You're bringing people in off the street. Like, because my, I'm imagining, okay, you're selling people, steak knives, for profit universities. It's like, oh, here's the crypto thing you can do.

Come into here and like borrow against your assets or like, I would think it'd be like, okay, trade meme coins, you know, do some other crazy thing. I didn't know what I would have touched. Exactly. Exactly. But actually, I still think WLF is good as a meme coin because one anecdotal thing I will say walking around New York, which is weird, right? In New York, I would not, I don't even think this was, this is definitely not true in

2016 and 2020. But the amount of Trump merchandise being sold on the street is insane. And I feel like if WLF is a meme coin, it's just a, it's basically, it's the same as that stuff I see in the street. I see this unlicensed Trump. Unlicensed Trump stuff is selling everywhere. In Chinatown, you can't walk anywhere to New York without seeing it. It's like, which was never true in the last few elections.

So like, I feel like WLF could capture the market. I think you have both, right? So like defy in the back end, you know, secure and then, you know, meme coin in the front and then governing fees. But I do think like why it makes sense to me, for example, is that we don't really have like C-Fi defy when it comes to lending. Remember like block five Celsius and Genesis, whatever lending? They all like, they don't exist anymore.

So it's pretty much like defile it mostly. And one thing what's interesting about these kind of like a C-Fi landers is that they were actually able to make it very simple because they're very forward facing on the user. So like I think it was like sales use that was offering like, was it like consistent like 6% yields like super easy. On the backend obviously they couldn't like sustain anything and like when the market crashed, but they were able to make it like super simple. So I think like if you remove that backend that they had and just replace with like a

defy back end with like Aver and these other protocols, you could actually like focus completely on that owning a user and making it super easy to just supply funds. Right. I agree with you in principle. I think my question is how do you, I mean, there's a balance between having it be super simple and then being transparent about risks to users. Like there were also a lot of, you know, anchor Neo banks that like went through YC in 2021 and they just, yeah, you know, ACH in your money and we'll give you 20%.

I mean, just an anchor front end and then, you know, kind of kind of went down. How do you sort of, not that Avey's anchor, to be clear, but it's like, how do you sort of think about disclosures and I guess like how much to kind of expose to the end user? Well, good thing about defy is that there is like disclosure 24-7, kind of like, it's just about like how do you bring it to the user? So I guess like there's like multiple steps removed between like the visibility and and also things like, also like resiliency that these defy protocols can be very resilient as we've seen. So it's just like the last mile.

Like, how do you make it safe and also easy to use? At least, like, defyre some of the issues, but it's not kind of like a silver bullet. I mean, after. I still screw up. After reading the 0xb1 lawsuit, let's just say, I feel like that's a very far, Celsius was a far cry from we just use DeFi protocols to get yelled. Yeah, the other thing is true is like disclosures don't stop you from making stupid decisions. Yeah, exactly.

They just stop you from hiding the stupidity, right? But like you can still put your money in anchor even if the anchor disclosed. Like everyone kind of knew that, yeah, anchor is not sustainable. I mean, it's pretty tough to sustain this. The people were like, oh, they'll probably make a word. I mean, one of my favorite governance fights in crypto of all time is the 22, like, I think it's like March or February, where people were trying to reduce the anchor interest rate. I remember that. That was so funny.

That is like exactly this. Very morbid now to look back on that. Is it? I feel like we've had a couple of years. We can make the jokes. This is, you know, I feel like we can make anchor jokes now, right? I was kind of. I think so. It's a lot time. Yeah. I mean, anybody who died from that is like deep in the ground at this point. So that's true. Yeah, that was going to run me via that drill tweet where it's like someone helped me, my family's starving and it's like food $80 and the candles and the candles, $3,000. Spend less on candles. Like, no. And it's like, that was like, no. It's like, we're not going to cut the rates, you know. Yeah. Yeah.

All right. Well, speaking of rates, another big story that has come out this week is a redux of Operation Showpoint 2.0 being now under the magnifying glass. Can't make jokes about that. We can make jokes about this. But it is a very live story. So Nick Carter has coined this term Operation Showpoint 2.0 as being a description of the FDIC and the Fed putting a bunch of backdoor pressure on the banks, particularly after the collapse of FTX, to stop banking the crypto industry. So this has been kind of alluded to. There's a lot of gesticulation of, oh, maybe there was some untoward stuff that was happening. But some recent reporting by Nick Carter and then continued on by some of the Unchained team this week has shed a lot more light about the particular things that made or the particular ways in which regulators were putting

pressure on the banks to stop banking crypto companies. So the two particular details that I thought were very salient in the story. One of them was that apparently the FHLB, which is the Federal Home Loan Board, which was a common source of funding for a lot of banks, was pressured by Elizabeth Warren to cut off Silvergate very early on before any of the bond market pressures really started roiling over and making all the stuff very unpalatable. So apparently Elizabeth Warren was very directly intervening on the sources of capital for these banks to remain solvent. A second point, which was just brought up recently was that a lot of the folks at the banks, as well as at FDIC and the Federal Reserve, were communicating this 15% deposit cap, saying that banks should not

have more than 15% of their deposits, banked with crypto companies or crypto-affiliated companies. Now, normally, when you pass a rule like this, it has to go through a rulemaking process. That is part of the APA, the Administrative Procedures Act in the U.S. You're not allowed to just decide this and promulgate something that is a rule without going through this act to allow some democratic input into this rulemaking procedure. However, the rulemakers and the regulators who were doing this at the time were not putting any of these rules into writing. They were not going through any kind of administrative procedures process, and they were intentionally only doing this through phone calls without avoiding a paper trail,

which would allow some kind of FOIA request to get information about the fact that, hey, it seems like there's some backdoor rulemaking going on that is not being admitted to in public. So if you notice any of the public statements that were made by the regulators at this time were all denying that there was any kind of pressure being put on the banks to not bank crypto companies. So now that a lot of this is coming up, especially due to some of the I think the testimony in the Silvergate lawsuits, we're now getting a lot more of the word from these banks as well as some of the backdoor reporting that's taking place through folks who are not willing to come fully on the record yet. but we're getting a fuller picture that Operation chokepoint 2.0 was exactly what we thought it was, which was there was pressure from the administration and or from Elizabeth Warren or or her compatriots to unbank the crypto industry and pin the tail on the donkey and say the banking crisis was because of crypto, even though now in retrospect, that was clearly not true.

So reactions, responses to many of you guys of seeing how all this stuff is coming to light, that the pressure coming from the administration was much more direct than we thought it was. I guess now I can make a joke. I guess we learned a lot about people's data retention policies. In what direction? In the sense that they were able to produce sufficient information about this. No, no, no, they didn't. They didn't.

Yeah, as in they deleted everything. No, no, it was phone calls. It was phone calls. Yeah, but they didn't. Phone calls is the OG way. Signal disappearing messages are the new way. O.G is just phone calls. Yeah, I had a similar kind of re-er.

I was like, it feels like something that would have come out in like a FOIA request, but I guess to your point, like, that's obviously not possible. And obviously it comes out through this Silvergate testimony or deposition or whatever happened. Yeah, I don't know. It's kind of like, I guess, shocking how like on point, like kind of the original image of what this was was going to be. I was also really reading like the wiki article for the original operas. and kind of what happened and like I feel like there was actually like like not that much kind of political fallout from that. And so I don't know, it feels kind of like maybe that also

emboldened people to kind of do the same thing again. But yeah, I don't know. It was just, it was just kind of shocking. Yeah. So Operation choke point, the original Operation Showpoint, for those who are unaware, it was pressure that was put on by the Obama administration against payday lending and a lot of these kinds of firearms. Firearms. These are politically unpalatable industries. And it was. It was sort of this nudge, nudge, okay, high-risk industries should not be banked. And if they are, then, you know, maybe we're going to give you extra examinations or, you know, we're going to make your life more annoying if you're a bank.

And this was ruled later to be unconstitutional. But as you mentioned, it's not like payday lenders are very popular. It's not like, you know, firearms dealers are exactly, you know, the thing that everybody cares about. And I also don't do people think this was like a stain on the Obama administration, you know. I mean, people remember like Bay, Bush-Omba more than they remember, like, Operation Choke Point, even though it was, you know, way times worse. Yeah.

I think the counterpoint of that is that, of course, now, crypto is much more politically organized. I think, you know, I don't think about payday lenders as having any particular clout in D.C. But crypto, especially within the last year, has really gained a lot more clout such that I expect there will probably be probably will probably be probably be probably going to be seeing congressional hearings. I mean, I think we're also. House in or Republicans, especially if they sweep, then we're probably very likely going to be seeing congressional hearings about this. You guys have other reactions? Yeah, I mean, I think we're also in the point where like the amount of like crypto donations goes to both of these parties. I think we're we're basically seeing like some amount of like support also from Democrats.

Now obviously we know like kind of like the support that they could be like on the Trump administration. But I do think that you have to reimagine again, like the position and measures for crypto and what to do in the future, regardless who's going to be in the office. So I think that's kind of like the difference we have now and in the past. Yeah. I mean, the defense that might be levied in favor of this is to say, well, look, it was fog of war. There was a banking crisis. And, you know, it's the job of regulators to try to get banks to divers. diversify their deposit bases.

So one might say like, well, you know, I mean, can you really get that mad at regulators for saying, oh, it seems like crypto is exploding. You should probably lower your risk on it. I think the fact that this was all done through over phone calls and they were very clearly avoiding having a paper trail to me feels like the biggest sign there's a guilty conscience here. And this is not just like, oh, hey, you know, bank regulators. It's a tough job. You know, what are you going to do?

Yeah. This stuff. It feels very similar to the COVID. What was it? the thing that like where Anthony Fauci was like they were giving us some, they were using like an asterisk for some word. You guys didn't see the story? Yeah. There was something about the lab league hypothesis. We're not really reading as many conspiracy theories as you.

That's clearly what we just left. Clearly. It's not a conspiracy theory. This is like this again came out in congressional hearings that basically Anthony Fauci and I forget the department that he's responsible for. But basically there were there were credible, there were more credible reports of a potential lab league or like potentially validating the Wu Lab League hypothesis and they intentionally, in their emails where they were discussing it, they change the name to have like an ampersand or something so that it wouldn't show up in document searches for FOIA requests.

So like this is a thing. Yeah, I've seen this happened before too. Exactly. Exactly. I think, I mean, to your point, I think they also discussed in the Unchained article that like, well, there wasn't pressure on SB to diversify away from like VCs and startups. And that is arguably what brought it down, right? is like one sort of monotonous, very similar credit and risk profile group.

And so it's like, it's weird that crypto would be singled out when, you know, other groups or not. Or First Republic and New York real estate. Yep. Right. Which is like, okay, that's a very not diversified. But, you know, was anyone telling them like, hey, lower your exposure to New York real estate? So.

I do think that, you know, FDX definitely like caused a lot of, a lot of the challenges. And obviously the reception was that, you know, if this can happen, like with FTAX, it can happen again. Obviously, like, that's one big challenge. I think, like, in crypto, maybe, like, we can also, like, do a little bit better, like, I don't know if, like, self-regulation is, like, kind of like the right way to think about it, but, like, somehow, like, self-policing and thinking about it. I was thinking about this the other day after our last show because we talked about the Eigenler disclosures. And, you know, we don't really have a standardized, you know, people talk about like, okay, come in and register, right?

There's security laws that you can obey. Come in and register. Obviously, there's no way for a token project to come in and register with the SEC. That's been widely attested to by everybody in the goddamn industry, including SEC commissioner, Hester Purse. That being said, you know, the kind of disclosures that normal equity companies need to do are kind of useless for token projects. And so people have kind of gestured at what a disclosures regime for tokens might look like that does make sense. And I think if there were a credible, sensible disclosure regime, people would be happily willing to do it. You know, it might slow down a little bit, but there's already a lot of costs associated with launching a token in this day and age.

So it's not as though it's like, well, we're completely averse to giving disclosures about tokens. Actually, the market wants disclosures about tokens. Really, you're telling me that meme coins want disclosures? Wait a minute, buddy. I think for most credible tokens that get listed on the major exchanges, like, yeah, there's expected to be some standardized disclosures like Misari, which we were just talking about, they have kind of a disclosures page about every token. It's like, here's the issuance, here's what it does, here's the white paper, here's the GitHub.

So the question of my mind is like, why hasn't there been some convergence on one disclosure? Do you know the XKCD comic that says we have 15 standards? Yeah, but are there 15 standards? I don't think there are 15 standards. Yes, there are. I bet you if you go and compare like Masari. You bet me, but like you don't know of any. No, if I compare what Masari considers, for instance, versus what token terminal considers, versus what each individual project discloses about their, the investor breakup.

You know the pie chart, the pie chart that every project shows you. The pie chart is a meme. They, they just, everyone chooses what random categories they want. There's not even an agreement on that. I think it's more like, okay, like where is that just, Sometimes it's in like the Git pages or the wiki or something's like stuff reported. Yeah. Or and then it's like, wait, was it actually verified on chain?

Not usually. And so it does feel like there could be some sort of schema or something that would actually resolve this. Yeah. I guess I wonder like, why hasn't there been more of a push from the industry to create one disclosure standard and just be like, yo, SEC or whatever new law is going to be passed? It is literally the 15 standards. It's like use this one. 15 standards. I don't think that's true.

Totally true. Name me one standard. I will give you an example. Okay. Let's compare the top five proof of stake networks and their inflation curves and how they actually decide their inflation curves and how it gets distributed. How do I compare those? I compare Solana where the foundation distributes a lot of the delegates, all of the tokens.

So it's like, okay, I now need to have the foundation disclose who all its delegates are, which it may not want to do for security reasons when there's a kind of an attack. Yeah. I also may need to figure out, okay, like, what? It's actually the ratio at which the unlocks are happening for entities that have been dissolved, like at the Alameda FTX stuff where there's OTC trading of the locked hook. There's so much. There's fractal complexity to everything in the world.

That's also true for equity disclosures. Equity disclosures, though, are like... Like every company's different. Everyone's special snowflake. Everyone's business models weird. That's not true, though, right? Like, if I look at all these tech companies that IPO in the 2010s and the non-gap accounting stuff they do, compared to the gap accounting.

They still do non-gap accounting bullshit. No, no, no. But my point is, like, I think in crypto is even harder. Like, the non-gap part is, like, continuous time. Like, you actually have to monitor it. Are you claiming that the reason why this is not done is because it's fundamentally harder in crypto? That sounds like what you're saying.

Yeah, I think it's harder because I think it's way more continuous. You think this is why it's not being done. Here is a very simple but stupid reason. Okay. Which is in crypto systems, there is continuous time issuance. There's new issuance all the time, right? Yeah, yeah, fine. every equity instrument, there's fixed time, discrete issuance, and there's a notion of when the supply

update your thing every quarter. This can't be every quarter. This needs to be real time. Okay, so do have the real time thing, but the SEC needs something every quarter. My point- Businesses are also real-time. My point, though, is that it's like very different when you're like changing your cap structure continuously, right? That is a fundamental unique. That is a unique thing to crypto. That's not unique to crypto. There are lots of businesses that have continual streams of income. No, no, no, but they don't have continual equity dilution. Yes, they do. Who? Give me an example of someone who is selling their equity every day. Give me an example of a company, equity company,

anywhere in the world that is selling equity daily. Doesn't have to be daily. This also does, again, does not seem impossible to capture in some sort of form. Like even when you're looking at your vesting tokens that are block by block. It's really just like you send in like a block number or like a timestamp and like, okay, we're going to calculate how many you have at this moment in time. Like, this doesn't seem impossible to me. It's just everyone that has different standards for it. Well, okay. I think to answer your point, maybe as a why the standard is not evolved,

it's because there's not been market pressure, right? Like, like people are not rejecting tokens that are not extremely transparent or accurate at their disclosure is the same way. If you're not in your C20 token, like you're probably not going to get integrated into all the wallets, all the exchanges can be hard to list you. And so I think the question is, how do you sort of create that market pressure? I think some venues that do some job. I actually think Defy Lama, for example, is a good job where if you want to be on

Defy Lama, they have a little Git repo, you can fork it, build your own adapter, feed them data. Great. Now everyone has the same sort of spec for like feeding data into Defy Lama. Coim Gecko, a very similar kind of thing for, you know, what is the total number of issuance? What is the current float, et cetera? But like these are also, you know, fragmented one-off instances versus having something kind of more holistic. We need like a disclosure or a call based on, it's a sort of. Yeah, something like that.

It just feels something. Really good idea. I'm going to go and raise now $100 million. Who's going to invest? We're on board. We're on board. I think you're absolutely correct that the market pressure is the thing. So who is the final boss for tokens that need to become more legible to people?

The answer is finance, right? The answer is the exchanges. And the exchanges. I mean, we've seen some crazy percentages given out recently to the final boss. Is that true, actually? I mean, it's in the docs. Yeah. Yeah, I've heard it's like 10, 15% for some of the latest projects.

I don't know if that's that high. Scroll was like five, right? Yeah, I think it was like 5.5%. Scroll was like five. Yeah, scroll is an ATIR project. For a lot of these people who are like doing launch pool and doing all this other stuff, it's like I've heard lately numbers are getting up to 15%. So it's kind of crazy.

But it's very subject to your market power, right? So if your scroll, you can, you know, get away with a lot better than if you're, you know, Katizen or whatever. So, but also all that is to say, I think there's a lack of coordination, right? If you look at the forms, so there's like, you know, a front page if you want to say, I want to list my token on Binance or on Coinbase, there's a form and you fill out the form. And like the form is also very different from like DeFi Lama, right, where DeFi Lama is programmatic.

The form you fill, it's literally like just a Google form. And the forms, in a way, are the closest thing that we have to a disclosure's regime because you have to disclose all the stuff to the exchanges. And I guess what really feels like there should be is the exchanges coordinating together, do like, you know how universities have like this common application that fans out your university application to all the university in the country? Like, we need to have something like that for tokens. And then that can evolve to become this disclosure regime that countries that are figuring out how to do disclosures around tokens can just say, ah, just pick this up, add one or two things to it.

And then like, cool, it's like ready to go, as opposed to reinventing the wheel, which like you've seen all these proposals from the SEC, not from the SEC, but for the SEC, are all kind of just super convoluted and very, very complex in a way that feels like they don't, they don't really, they don't really work with each other particularly well. So 15 standards. My claim is zero standards. My claim is, or, you know, right now there's, there's not anybody trying to fight to make a universal standard. I think people just, they don't want to docks themselves or, like, docks their amounts and like, unless there's, like, what you said, like about, market forces just pushing people to do this.

Yeah, yeah, yeah. Kind of, kind of. I mean, like for something like AVE or scroll or whatever, it's like, okay, it's all out there. Everyone knows the co-founders. And it knows the amounts. They post the pie chart, you know, so. And it's like, okay, well, I want to be like scroll.

We don't, the standards definitely applies to these pie charts. Like, yeah, there's no standards to the pie charts. I mean, there are, right? When you break the standards, you get yelled at. So there are standards. Barely. When you break the standards,

I mean, my time, my things don't add up to 100 100%. Yeah. I mean, yes. But my point is there's a lot more hidden in the, in the sectors. There are, but like, you know, it's also true in disclosures. I think it's just that we've never for boring tradified people, they're just not used to the idea of continuous dilution, continuous disclosure.

Like everything has always been this discreet. There are fixed intervals. You have earnings at a certain time. You have fixed dates, fixed duration. Right. Why are perpetual products and duration-free products so much more popular in crypto? It's because the intrinsic asset itself is constantly changing. I don't think this is true.

Like CEOs talk to the media all the time about their companies and the- That is not the same as disclosed as my equity assets inflating itself every day. But you can do disclosure upon a date. So let's say like February 1st, this is the amount. Sure, but like I think- Yeah, I just think this is not a difference in kind. This is just not a difference in kind, you know? There's a big dump of disclosures on a quarterly basis by companies,

but there's also continuous disclosure. There's also continuous communication. It's not continuous. Also continuous repricing. It's not continuous. All these things are happening on a daily basis. It's nowhere near continuous way. We can switch to one day block times if you want instead so we can like, you know,

yeah, there you go. There's not that that's what I'm saying. I'm saying like I agree with you. There's some batching size that's fine. But I think there's a lot more nuance to how, A, people think about inflation curves. Be how fees are burned. Be how. Let's pause here because I feel like we're going in circles a bit.

But speaking of block times, there is a good segue. What segue? There is one EIP that is gaining a lot of traction right now. EIP 7781 proposed by Ben Adams that is proposing what we were talking about on the last show, which is the make Ethereum great again, of expanding, reducing the block time on Ethereum from 12 seconds to 8 seconds and expanding the amount of block. from six to nine. So Justin Drake has come out in favor of this proposal, claiming that actually there are a lot of positive flow-through effects if you just decrease the block time. So one of those

things, of course, is you ask. But another thing is that you just get less MEV if you decrease the block times because that means that, you know, the block times you can think of as the exchanges are down for eight seconds at a time all the time. And if the exchanges are down for eight seconds, then that's just more arbitrage. That's more M-EV roughly 1.2 times more efficient, more efficient in dexes that would save about $100 million in sex decks arbitrage. That's an estimate from Justin Drake about how much more efficient defy on Ethereum would get by just lowering the block times just moderately from 12 seconds to eight seconds. Of course, as always, there's concern about solo builders.

Are they going to be skipping blocks? They no longer be as competitive. But it seems like now the momentum and this meme that we talked about on the show is gaining some traction. So if you remember, I think it was last year, or maybe, maybe early this year, we made a bet among the four of us on the show about whether or not Ethereum would move some of these big improvements about increasing the gas limit and lowering the block times. And I think I'm the only one who bet both increased gas limit and decreased block times. And it looks like we are now into that phase of the meta where all the big changes,

you know, multi-proposor and all this stuff is not happening. All this is not happening. And the decreasing block times and increasing the gas limit seems like these are on the menu. Are they actually increasing the gas limit? Not a little bit. He's taking a little liberty with his. Well, we got it. There's still time. There's still time.

There's still time. And I'd say also increase the amount of blobs is kind of a backdoor, you know, that sort of like a Yeah, I agree, but it's still different. Yeah, I mean, look, we'll see, we'll see. So anyway, thoughts on Asani as a Ethereum builder, how do you feel about EIP 7781? Not a block builder, just to be clear.

Yeah, that doesn't know, not a block builder by Ethereum, you know, in the Ethereum ecosystem, how do you feel about make Ethereum great again vibes that we're now seeing revitalized. Well, I think like the previous idea was that, you know, we will, like, Ethereum will move very slowly and a lot of the innovation will happen in all twos, and that's where you can experiment, do some interesting, crazy things. And what has effectively happened is people are just forking, like, get there and, like,

creating all these networks without much of a innovation. So I think actually innovating on Al-1 is the right way to do it because that's where, like a lot of the value is. And that's basically where a lot of like the baggage is actually. In terms of like where it during could be today, I think there's a lot to do. And I think this is just like a first, as you mentioned, like with these two different changes, I think these are just two out of like multiple many that could be done over like the next few years just to make it the best executionary environment. I think this is a really right direction to go.

especially because we have to have an infrastructure where you can simulate similar type of trading that you have in some like stock exchanges and so forth. To be clear, innovating is a strong word. I would not call this innovating. Well, this is not. But I think they should go like 100x more into this idea of like how to improve. Yeah, how to improve Ethereum, L1. Are you advocating like massively lowering the block times?

Not just that, but just innovating. Not just that. So you want to also massively decrease the block times? Well, of course. But also besides that, I think there needs to be a lot of innovation on Ethereum in L1 as a kind of like pure like an idea. Like Ethereum shouldn't move slowly with changes. So I would analogize. Like we've made a lot of comparisons with like this make Ethereum great again thing with like Trumpism.

And I think it is kind of analogous because in my mind, lowering the block time is kind of like lowering taxes. It's very easy to do. Juice of the economy. it like, obviously like in the long run, you know, you can't keep doing this forever. Like at some point you need taxes. Same with gas, increasing the gas limits. Right, exactly. You sort of, you kind of, you can't just lower your taxes in your way to prosperity.

Eventually, you have to pay the taxes back. But it sounds like you are much more of a performance maximalist on layer one. And you want to see like what kind of block time would you want to see and how do you respond to people who say that, well, look, the thing that makes the theorem different is the home-seeking philosophy, the decentralization maximization. If you lose that, do you not lose what makes Ethereum Ethereum? I think we have a, like, decentralization is a really loaded world. It means different things to different people. And I think what's more interesting is resiliency, how Ethereum can sustain to be resilient, but at the same time can be performative in terms of

infrastructure. I think that's the direction to go. And I do agree that these changes are like quick fixes, but like we should go into actually architecture and think about like how we architect Ethereum to be better. That's my two way. Reactions? Wait, so what is the block time you would want? Well, you will have to calculate that it doesn't really cause issues. So there's a limit at some point. Yeah, yeah, but I mean, what would you want? All things equal. Roughly like 100, 250 milliseconds. 250 mils? That's faster than Solana. You want faster than Solana blocks on Ethereum. Yeah, fuck it. Yeah, fuck it. Okay.

So, do we clear, 100 milliseconds. Sonny loves Meggie. Yeah. Yeah. Do we clear, like, that is faster than speed of light communication around the world. So that is a tall order of 100 milliseconds, but I like where I like, so you think, I do think getting into two seconds is, is okay. Two seconds. If it's, yeah, if it's possible and it doesn't really, you know, you still can have a resilient infrastructure. Okay. So that's an absolute.

performance maxi. All right. What's your what's your reaction to that? Well, I sort of dispute the claim the 1.2 thing because I think that's just coming from squared of 12 over 8, which is like 1.22, which is where Justin's number comes from because there is, it's not like it's like actually purely monotone that you decrease the MEV. There's like there is some some amount that gets increased also. Okay. And so like I think this is a very important thing that there's a lot of I told Justin's a god and you know what Justin says we have to obey yeah there's a lot of academic research on this There's one thing on which I will trust to ruin over Justin and it is uh you know quantifying MEV equations would I maybe I trust you more okay but no I mean it's a heuristic right the square root thing uh which is where it's coming from but that was it there was a grave insult that you just I'm more interested in the blob space increases actually because you know as it's a very very briefly can explain what blob yeah so blob blob blob

where L2s write data to the main chain, and that's sort of used as sort of temporary storage until the chains are fully valid, and their transactions are validated. So the proposal wanted to increase the amount of blobs that are available for each one. Yeah. And so I think the idea that blobs are going up is interesting

because, like, the blob market has sort of been anemic. Like, it's had a couple moments of a lot of usage and the fees going up for it, but it's been a little anemic. And so it's interesting that the question is like, does expanding that, it does have a, if you build it, they will come type of thing where like, you know, all the OPSAC chains suddenly are like, we're not going to use Celestia or Alt-D-A and come back? Or is it sort of going to be a remnant usage?

And I'm kind of curious to see if the expanded blob space actually attracts some roll-ups back. I'm not sure it will, but I feel like it's very competitive. Yeah. It was funny. Like, yeah, I think Vitalx justification was like it's like 75% full on blob space. I'm like that still means there's like an oversupply of blob space, right? Like if only 75% is consumed, like imagine if only like 75% of block space was consumed. You know, it's like, okay, well, there's like way too much block space then.

It's not way too much, right? Because there are a burst. There's what, like seven consumers? Yeah, but on any given block. it's like, like he said, basically like anemic. So you're right that like you want a little bit of slack in the market. So that when fees spike, it's not like totally fucked. But yeah, it doesn't strike me that the market is screaming out that like we need more blob space right now.

Yeah, I agree. I don't totally understand why they're doing that, why that's coupled with this. That's the weird. That's the weird part of the proposal. It seems like it would make more sense to increase the gas limit because that's the actual thing that is we're bumping up against. Not the blob storage. The blob storage is fine. And if anything, like I've seen a lot of comments from people in the kind of Twitter, Ethereum

chorus or like, oh, make Ethereum price go up of maybe we should increase the minimum cost or even lower the blob maximum. So because right now it's basically, you know, marginal pricing is zero because there's no opportunity cost. But once blobs are, blob storage is full, then the reality is the willingness to pay for blob storage of like the rollups that are currently selling on Ethereum is very high. So they'd be willing to pay a lot of money. to put the blobs on Ethereum.

But right now they have to pay nothing because there's just, you know, there's no scarcity. So the moment that blocks are full, then you actually see what is the, what is the auction going to settle at? But when blocks are not full, there's no auction and therefore everyone's paying zero or, you know, some de minimis price.

So I understand the point of like, well, you know, we don't want people to start paying a lot of money very soon. Yeah, it feels a little cart before the horse, you know, like prove that you need to do it, which is like the weird part of the thing. Yeah, I mean, I can understand the thinking of like, okay, well, why don't we just snuff out all the DA layers before they even have a chance to survive by just signaling that Ethereum will always remain super cheap and we won't let prices increase. And we won't let prices increase. Right. That could be the rationale and that maybe I see that on some level is that, okay, once we kill all the other DA layers, then we allow prices to rise. But we don't let prices rise before then. Right. So it's almost like a-

But you would want to say it's illegal. What's that? I believe that's called dumping and that's illegal. Is that dump? That's not dumping. Is that dumping? Yeah. Kind of. No, no, no, because it's not below cost. No, it's not below cost.

I mean, what is cost here? Cost is below what the network is paying in costs, right? I mean, the cost is store. I don't know what the blob costs really are. Yeah, so you can stimulate that, right? And it's like, okay. But also, like, it's not cheaper than Celestia. So it's not dumping.

Like, Schlesias is even cheaper, you know? I think blobs are quite, they're quite cheap. Yeah, so almost nothing. Yeah, so, like, strictly celestial is cheaper. So that's not dumping. dumping would be like I'm undercutting Celestia intentionally, even though that's below my cost. Right? But that's just pricing strategy.

The pricing strategy is not dumping. Yeah, I guess I still don't think about that. Like the cost. Do you say Amazon was dumping before they started charging a profit? The only reason I would disagree at this is like we're kind of talking about Ethereum blobs, which are at Ethereum block time versus Celestia and Agendia blobbs, which are faster. So we have to like actually add up all the feed. That's an interesting point.

I think we actually have to write out the math. I don't, I think both of your could have some. Sure, but the cost is like the storage over time, right? Yeah, but like we, if you want to make this. Like megabytes, how much you can. Yeah, exactly. We should be like looking at the total. Sure.

Yeah, I'm also like, I feel like if anything, stuff is all kind of below cost, right? Because you're still having an inflationary environment, right? Like you're paying people to store these things more than they would be paid by the market. You're paying people to store these things? Yeah. through just like general sort of block rewards, right? Like you're still in like an inflationary environment. Oh, oh, I see what you're saying.

Yeah. I see what you're saying. Right. So the, I mean, the cost of the opportunity cost of including a block, right? And then the opportunity cost of storing the stuff, they has to get replicated across all the notes. Yeah. So.

I'm saying if the market, if market participants are not willingly paying itself. Yeah, yeah. My claim, though, is that the inflation is a totally orthogonal cost from the cost of, marginally including or not including a blob, right? Like the inflation is getting paid either way. And the inflation is security budget, right? It's not, like, the marginal cost is not the fixed. That's a fixed cost.

But it also affects people's, like, willingness to, like, run a machine and, like, about, I guess that's part of the issue of the people say. It's like what is actually, like, the cost of the game. Right, right. But my point is that nobody's turning off their machines because there's too many blobs running through it. Sure. You know, in which case, that's a fixed cost. Right.

That's actually a good point, which is like a lot of the solar sicker commentary on the block is about the blob increase. because they're like, oh, it's extra bandwidth for me. It's expensive. And that's why I think the idea that this change was like, lower the latency and increase the blobs, which is the thing that was getting complained about the most, is that's what stands out to move on it.

Right, right. Okay. All right, well, running up on time, and I know we got very wonky at the end about EIPs and blob storage and so on. That's just because you want to win a bet. Let's be real. We all know that we all know why you made this add this topic. To be clear, I think what's riding on this.

That is Red Bulls, so for which I have no use. For which I'm the only one who has a lot of utilities. Correct, correct. I don't drink Red Bulls. But Sonny, which are you looking forward to in the AVE universe or the Avaa universe? Because I know Lenz is also part of the Ava family, Ava family. What should we be excited about and anything we should look forward to at permissionless? There's a lot actually happening.

So obviously there's constant innovation happening on Ava side. We're working on V4, which is going to be a more capital efficient version of the OV protocol, more risk management tools. Also, there's obviously with Avara lens, we're working on Lens V3. And speaking of that, there's also like a Validium implementation where we're actually like using a DA. And that's where Thuron's comments is interesting because something like social where you need to push a lot of data. and you don't have enough basic data with these block time intervals. So that's something interesting.

We're doing family wallets, which is focusing on really, really nice design and experience on Ethereum. That's going to launch pretty soon. That's all the products we have. Okay, nice. And last thing I want to ask, so unfortunately, Robert couldn't come out because, of course, he just said a kid. but as we as everyone made fun of you on Twitter for her. To be clear, I was making a joke that he had a kid tie me with the bear market,

which is I was saying. Okay. My question is, what is your relationship like with Robert? You guys like frenemies? Because of course, Avey, compound, competitors, but then, you know, it's like he's moved on.

You're still at the helm. I mean, at the beginning it was weird because in somewhat like we're both building in the same kind of category. And I think a lot of people put us to kind of like compete with each other. Yeah, yeah. And I think at some point kind of like once we actually met in real life, you know, all that's kind of like weird tension just like disappeared and like we were like more friendly.

And this after he walked away from compound or you still? No, actually like still like during. Yeah, yeah. During I think that there's. I just think Robert is a really, really smart person. And he's like a really good inspiration for a lot of. builders as well. He's done amazing job with compound and he's doing now Superstead, which is really cool. And I think he's quite kind of like ahead of innovation. He kind of understands

what's the thing that is important to focus on to get like more adoption as well. So he builds cool things. He's a really heartwarming note to end on. I wish you were here. Yeah. Well, I guess you can get invited back. So thank you. Well, you're a great crypto connoisseur, although you're no Robert, but you're amazing in your own right. So thanks for joining us. Thank you. And we'll see you all next time.