Unchained - The Chopping Block: Why DeFi May Be Over-Complying With Tornado Cash Sanctions - Ep. 392

Episode Date: September 3, 2022

Welcome to The Chopping Block! Crypto insiders Haseeb Qureshi and Tom Schmidt chop it up about the latest news in the digital asset industry. In this episode, Jill Gunter, the empress of Espresso, also joined the conversation.    Show topics: Whether product management is the new consulting What is going to happen with macroeconomics and whether monetary policy is data-driven Why Jill’s faith is getting renewed, especially after listening to Fed authorities The TL;DR on the Ava Labs conspiracy story Why the industry needs a decentralized RPC The role of Flashbots and Ethermine in censoring transactions  Potential over-compliance from the biggest crypto projects on how to deal with sanctioned addresses Whether social slashing allows Ethereum to stay uncensored The importance of educating regulators on crypto What Haseeb thinks lawyers would recommend to Coinbase about validating transactions from sanctioned addresses The significance of both transactional and application-layer privacy How stablecoin providers need to implement some basic levels of privacy Why corporations do not run Ethereum and whether users are pro-OFAC restrictions Hosts Haseeb Qureshi, managing partner at Dragonfly Capital https://twitter.com/hosseeb Tom Schmidt, general partner at Dragonfly Capital https://twitter.com/tomhschmidt   Guest Jill Gunter Twitter: https://twitter.com/jillrgunter Episode Links   Tornado Cash Treasury Press release  Tornado Cash developer arrested  Circle freezes USDC in sanctioned wallets Crypto exchange dYdX blocked accounts that received funds from Tornado Cash What the sanctions mean for privacy coins Celebrities get dusted Previous coverage of the Tornado Cash Sanctions on Unchained: Is TRM Labs Blocking Addresses From DeFi Protocols? Ari Redbord Says No  Tornado Cash Sanctioned. Did the Government Overstep Its Bounds? The Chopping Block: Did OFAC Overstep by Sanctioning Tornado Cash? Ava Labs Accusations: CoinDesk article  Crypto Leaks article   Social Slashing and Censorship on ETH Axios summary of the situation BitMex research on how the sanctions affect Ethereum Ethermine banning transactions Nic Carter’s article Eric Wall’s article on social slashing Hetzner banning Ethereum users Previous Coverage on Unchained Given the Sanctions on Tornado Cash, Is Ethereum Censorship Resistant? Learn more about your ad choices. Visit megaphone.fm/adchoices

Not a dividend. It's a tale of two Kwan. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. Unnamed trading firms who are very involved. Like that eat is the ultimate pump. D5 protocols are the antidote to this problem. All right.

Hello, everybody. Welcome to the chopping block. Every couple weeks, the usually four of us get together and give the industry insider's perspectives on the crypto topics of the day. So we're broadcasting this one live here from Palo Alto. We're all in town for the Stanford Blockchain Conference. So quick intros. First of all, we've got Tom, the Defy Maven, and Master of Nims.

Actually, Tarun could make it today. So Jill is our stand-in Tarun. So she is the Empress of Espresso. Thanks for joining us, Jill. And then we've got myself. I'm Hesiv. I'm the head hype man at Dragonfly. So we are early-stage investors in crypto,

but I just want to caveat that nothing we say here is investment advice, legal advice, or even life advice. So, Jill, it's great to see you. It's been a long time. seen you in person. I think since the pandemic, we haven't seen you. Yeah. How's, how's pandemic life been? It's been pretty good. Yeah. I mean, San Francisco itself, which is where I've been based, it's felt like I've been like the last woman standing in the Bay Area at times. But SBC this week has been so refreshing to have all of the old crowd kind of back in town

be able to see the likes of you guys in person. So that's been great. I think in a bear market, You need an event like this that is not about hype. Because almost every conference you go to, it's like consensus, permissionless. They're all about like, oh, my God, this crazy thing is going to happen. Stanford Blockchain Conference is great because it's slightly sleepy. Yeah. You know, it's like the people who are there. They're like there to give talks.

It's mostly researchers and academics. There's a whole this bravitas around. Exactly, exactly. So you go up and you're like meeting all these like Stanford dropouts who are like, I'm starting an Oracle project and blah, blah, blah. And you're just like, oh, okay, yeah, This is like, they're still here. People are still doing stuff.

Yeah, there's real stuff happening. It's also just been a nice reminder that, like, you see people in person, and generally people are a little toned down from their, like, Twitter personalities, that's true. Reddit, Discord personalities, whatever. And you're just like, ah, yes, there is sanity in this industry. And, like, you know, you can relate to these people. That's true. It's not just, like, you know, all of the tomato throwing that you get on social media.

Yeah. It's also, it's weird, being around a lot of Stanford kids, because there's a lot of Stanford kids, adds to SBC. So many of them are dropouts. And it's like, I guess it's like, I mean, you were telling me about this because Tom is also a Stanford kid. It was once upon a time back in his kingdom. Yeah, we're old now. It seems like if you drop out of Stanford, they're just like, oh, yeah, of course.

Like, why wouldn't you drop out of Stanford? Yeah, yeah, yeah. They're supposed to drop out of Stanford. Yeah. What's like the culture around startups and. Yeah, that's like top tier. Top tier is like, oh, you dropped out. You know, you're too good.

And then, you know, middle tier is maybe, you know. Graduating three years, that's like middle tier. Yeah, yeah, yeah. And then it's like, oh, you're working out of a bang startup or something like that. Okay, that's like C2. Yeah. Although I was kind of just hardened to learn recently. So I did computer science.

And it was very popular as I was started to be there. I was talking to some recent CS grads. And they said 20% of all the CS grads now are going into product management. And I'm like, I think that's cool. But I would like to see more. you know, engineers coming out of the CS department or, you know, something like that. What was it in your day? Probably, like, sub 5%.

Sub 5%. Wow. Wow. You did not drop out. I did not drop out. I'm a loser. I have an undergraduate degree, so. It's such a nerd.

Me too, and mine's not even from Stanford. So, yeah. That's true. Well, yeah, I, uh, it does feel like product manager at a fang startup is like the new management consulting. Yes. That's like, if you're, if you're just like kind of clean cut, respectable, smart and but you don't want to be doing some boring nerdy stuff.

Totally. Product manager is like the elite job, especially West Coast. Yeah, yeah. Although, you know, I don't know. Now that we're in this broader bear market, I mean, it's not just crypto, obviously. Tech is also feeling it. You know, we just saw yesterday, I think we saw Snap, like way off 20% of their, of their workforce. Yeah, which is crazy.

So it's, it's dreary all around. Yeah. In tech land. So maybe things will be. Coming back around, maybe finance will get hot again. Yeah. Although. Are you guys feeling bullish or bearish on a macro level?

Because you ask this of everyone who comes on the show. We do. That is the one question we're known for is asking. Yeah. Yeah. What do I feel about macro? Dude, I don't know. Like how...

The thing is, I think I had a view on macro that I felt like it was interesting to articulate six months ago. Now everybody knows everything there is to know, right? Like, everybody's watching these inflation. numbers. Everybody understands that, okay, will the Fed pivot, will the Fed not pivot? So I think I've zero alpha in predicting where macro is going to go. What do you think? I don't know. It is just kind of wild that we've come full circle from sort of the quantitative easing days where everyone was watching the Fed then, obviously, to, you know, see how big the buybacks or whatever we're going

to be that month. And now here we are watching the Fed try to drain all of that liquidity out of the market. And I feel kind of the same way. I mean, in general, I think that I skew bearish, just because it feels like there has been such a pump into the money supply and whatever over the last several years that is only just starting to get mopped up. And again, maybe it's partly living in the Bay Area, but like, I don't know, my coffee gets more expensive every day still. I've yet to, I've yet to feel like that liquidity is being mopped up out of the market. But as you say, It's a very unoriginal take at this point. It's just sort of trying to read the Fed tea leaves.

I was bearish on the market back in December, January. I remember telling a lot of our LPs that, like, I think the market's going to turn and things are going to get rough. And at that time, I was, like, very proud of myself about prognosticating about macro when it was relatively quiet. Yeah. Now it's just like, I mean, every single one of RLPs is thinking about macro. You know, nobody, nobody, at this point, everybody is kind of a macro armchair analyst. I will say watching the macro environment, especially like everyone paying so close attention to Fed speak and all of that, it does kind of renew my hope and faith in these new models that we're creating in crypto.

Because it's very easy sometimes to look at like, I don't know, you go on like the maker governance forum and you're just like what the hell is going on here. Like this is a total shit show. This is going to be no way to like create the future of money. and then you realize, like, we're all hanging on every word of these suits, you know, hanging out in Jackson Hole. And, like, that is driving literally the undulations of the entire global economy. And you're like, all right, you know what? I'll take the maker forum, actually. Like, this is maybe an improvement.

I can see that. I mean, it is definitely weird that, like, okay, the intonation that, you know, the intonation you hear in speech ends up moving markets, you know, by hundreds of billions of dollars. it's at the same time. It's all such word cell energy. And I say that as a word cell. But like, I don't know. I feel like monetary policy, it feels so not based in actual data. Like, where is that analysis?

And I mean, I guess it comes down to the fact that this data is actually very hard to get, let alone like clean up and actually, you know, analyze and form policy off of. But yeah, I don't know. That's my take. Well, it's funny because this. very much mirrors one of the big stories of the week, which we might as well jump into. So Avalanche ended up going down 20% a single day because of a new story that came out, which is, you know, again, not about data, not about numbers, but about a story.

So the story, I'll give the TLDR because it's kind of a long and kind of winding narrative. But basically what happened was that there's this class action lawyer named Kyle Roche, I think he's a name. He basically, he's kind of one of the same. these like chasing after big class action, a lot of spurious lawsuits against, I think there's one against Binance, there's one against Solana. And so apparently this guy was caught drunk talking to somebody who videoed him just kind of drunkenly rambling. Who is apparently an associate of Dominic Williams. Apparently who was in the employ of Dominic Williams, who's like a bitter enemy of Emin Gonsire, who's the founder of Avalanche. And so it looks

like there's some kind of oppositional research because there's some kind of lawsuit that is going on with ICP that Kyle Roche is participating in. It's very vague. There's all these like weird innuendos and conspiracies around this stuff. But TLDR, so he was caught on film and he basically claimed that he was the attack dog of Avalanche, that he owns a bunch of Avalanche and that he's intentionally suing other people in order to deflect attention away from Avalanche by regulators. And so soon after this, basically the avalanche team came out and said, this is not true. You know, this guy, he was at early, we used them as an early law firm. He owns some equity because we paid inequity in the very early days back in our seat round,

but we have like 12 law firms. He's just one of them. He's not our primary guy. And we definitely don't approve of any of the class action bullshit he's doing. And in fact, we actually, the Salana lawsuit that was announced not too long ago, the avalanche team actually published a. a blog post against the lawsuit saying that this was a Spears lawsuit and this is bad for the industry.

And then Kyle Roche also went out and said this was opposition research by the ICP guys, the website that leaked this called Cryptoleaks.Info is apparently funded by ICP in some way. It's very blatant. Like if you, the three releases, and they're all going after people who are going after ICP,

and it's like, if you want to have sort of like a, you know, an outlet like that that is, you know, just trying to publish, you know, pro news stories. You feel like you'd be a little bit less blatant. Well, did you notice, though, on this latest one, the headline was not about ICP. It was about Salana.

Like, oh, like, this guy's going after Solana. But then you read through it and it's like all that. Yeah, it's all that evidence. It's all that evidence. And like, yeah, I thought that that was kind of a hilarious, like such a weak attempt to mask the sort of like the ICP leaning of this crypto leaks website by just putting Solana in the headline. So it's all very stupid.

I mean, when I initially saw this, I was like, this is such a weird. Did you watch the videos? I did. I did watch the video. It's so painful. It's very painful. It's very painful. It's, I don't know.

I felt like, oh my God, I've had so many of these types of conversations with just these, like, I don't know, people in the industry who want to feel super important. And like, okay, maybe they are in the middle of things to some degree. But like, you know, the ego is what's coming first. They want to, like, flex on you about, like, how much of, like, some token, supply they have and, you know, how their work is, like, driving, you know, the weight that the industry is going. You're just like, oh, my God, please. I know what you mean. Like, how do I get out of this dinner right now?

Like, that was how I felt. People in crypto love to take credit for things. Totally. And magnify their own importance. Totally. But look, by large, so we were early investors into Avalanche. We were early investors into ICP. We own both.

This whole thing just seems incredibly stupid to me. and it's grown to such a crazy firestorm. I think Avalanche Price recovered a little bit once the denial started coming out and the market kind of gathered a bit of steam, but I don't know. It feels like we're at a pretty slow newsweek if it's like the main thing that people are excited about. Yeah, no, totally, totally.

But to me, like, I don't know, I read through the whole thing and I was like, okay, I don't think, based on reading it, that Avalanche, like, was telling Kyle Roche to, like, go do these things. Like, there didn't seem to be any sort of evidence of that even in the videos. But it would be totally believable to me that, like, okay, this guy has some outsized stake of some L1. Like, yes, it is in his personal best interest. Whether he's even processing that on, like, a cognitive level or whether it's just subconsciously, to go out and, like, cause a bunch of shastorms around other competitive projects.

Like, yes, this is how incentives work. Like, for an industry that is entirely far. founded on game theory and incentives, it is bizarre to me that there's like, I don't know, all of this nays saying that like someone may be acting in line with their own incentives. Like this should not be surprising. Look, I understand the hatred toward Kyle Roche. For sure. All you have to do is watch these videos.

Yeah, I mean, look, he's clearly a douche. And he's class action lawyers in general, like, I don't know, they're like, they're like one step removed from, like, injury lawyers or something. Yeah, totally. You can tell when you watch the videos in this guy, he's extremely predatory and kind of just braggadocio. And it's just like, okay, whatever. Like, this is your jam. This is what you do.

You like sue. You find like weird plaintiffs and, you know, you kind of magnify cases and try to get people in trouble, which is fine. Okay. You got to earn your bread. I get it. Yeah. But I agree with you. Like, okay, class action lawyer is an asshole and he owns some AVAx.

Like, that's a story. And, okay. That doesn't seem like. much of a story to me. But I think there's a highlight look at that after all of this, this guy might get disbarred or might get some kind of disciplinary action. Just like, as a lawyer, saying public, I think that one of the big pieces that I think most of the press and most of the users don't care about. The users like this conspiracy that Avax is pulling the strings and causing all these, but the thing that I suspect- Discourse communities love a conspiracy. They do, they do. Now,

courts don't necessarily care, right? Because like where you get your funding from doesn't matter. But what does matter is that one of the claims he made was that he was using, he was using, using information he got in discovery from filing some of these lawsuits with other L1s and using that, you know, feeding that back to other people. And that's like extremely illegal. Like that's like super not cool. Yeah. So if he was doing that, he will get in a lot of trouble for that. But that didn't seem to be the thing that crypto Twitter cared about.

Yeah, that's being highlighted here. Exactly. Exactly. So whether or not that's true, I don't know. To me, this feels like probably something that we will know what he will be talking about in two weeks. The fact of the price moved, what was it, 20%? That is massive. Fonkers.

That is insane. I think sometimes it's like just very pure retail reflexivity where everyone's like, oh, this is bad and therefore other people think it's bad. Other people will sell. And it's like, you know, you see this around just random miscellaneous news items around different coins as well. Yeah. It's greater full theory on the way down. Yeah, exactly. Yeah.

Totally. Bizarre. Anyway, okay. I'm going to make an executive decision to move on because I feel like we've already lost 20 brain cells talking about this. So I feel like the other big news has been the continued fallout from tornado cash. So quick reminder, tornado cash privacy protocol. They were sanctioned by OFAC, the Office of Foreign Asset Control. So there have been many differing responses to how people deal with the tornado cash sanctions. So we mentioned, I think, in our last episode, that right out

of the gate, one of the first things that happened was that Circle blocks some of the addresses that were in tornado cache, there was Inferra and what was the other one, Alchemy. Alchemy also blocked API requests to tornado cash. But the damage has started to grow. It started to become more and more people who are increasingly convinced that they need to do something

to prevent retail users from getting access to tornado cash. One of the things that we've seen is that, so the natural thought you might have is that, okay, if Inferra is blocking tornado cash and Alchemy is blocking tornado cash, Cash, right? Those are two big RPCN points people use to interact with the blockchain. Then maybe we need some decentralized RPCN points that can give you decentralized API access to the blockchain. Enter in Pocket Network, which is a decentralized RPC network.

That's the idea, the decentralized inferior. Pocket network decided to also block tornado cash. We're just like, wait, what? Why are you there then? What are you doing that's different than the centralized ones? So when I saw that, I would just like, my brain just broke. And it was like, why do you exist? exist if you are also blocking tornado cash. And so Pocket Network has blocked tornado cash. And then we also saw a bunch of drama in FlashBots land. So FlashBots, TLDR FlashBots is an auction for

maximum extractable value, such minor extractable value, also known as MEV. Basically, it's a very integral part of the Ethereum kind of Mempool these days happens on Flashbots. And FlashBots, the company, FlashBots, they run the largest relay for these kinds of off-chain auctions, and their relay now integrates OFAC restrictions. Now, apparently, it had been integrating OFAC restrictions for a long time, but they, you know, I can't remember exactly what the precipitating event was.

Maybe they just noticed this at the time of the tornado sanctions. So they must have updated the OFAC sanctions list to, you know, used to be there was just a bunch of individual addresses that were sanctioned by OFAC, that were like tied to terrorists or whatever. And now they've added Trinidad Cash contracts. So now you cannot send Tornado Cash interactions through the FlashBots relay. And the last thing along this thread was EtherMine. Ethermine also started, one of the big mining pools.

They also started blocking Tornado Cash transactions from their own blocks. So we've seen a lot of different varying responses. Here's to get your guys' thoughts. Tornado Cash sanctions widening. Yeah, I mean, I think the big complication you're right is it's much simpler to in the past, an individual address gets sanctioned, right? Okay, this person, this entity can no longer interact with my application. Now it's saying anybody cannot interact with this sanctioned smart contract, which is sort of the precedent that's set. And now it's like fortunate for, you know, flashbots, for example, they have to inspect the bundle and say, hey, are you actually doing anything in this transaction that interacts with the smart contract?

So it's like a very different precedent. I think the other thing that has been happening over the past few weeks has been different DAPs that also run their own front end. So someone like AVE, for example, they build the smart contracts. They also run AVE.com. They integrate with services like TRM, for example, which maintains sort of compliance tooling for crypto, basically blocking on the front end people who interact with Tornado or people who are one hop from interacting with Tornado.

And I think there's been sort of a shitstorm around that of, hey, I get that, you know, maybe I can't, you know, if I've recently used tornado, maybe use your thing. But if you even have one hop, which is, I think, like, 30% of all Ethereum addresses or one hop from a tornado address or two hops from a tornado address, they can't use that. Really? Yes. Yeah. There's, I think, and it's three hops is like 90%.

And I think four hops is like 95% or something like that. Someone had to head a chart. So it's like, you know, it's just like, like, what are we doing here? Like, how, how reasonable can you sort of expect, you know, people to sort of comply? And this is all voluntary as well, right? It's, no one is making them do these things. They're just thinking about, hey, how can I sort of minimize my potential risk? How can I sort of, you know, protect myself, which I empathize with.

I think, you know, running a front end and is, you know, you're still, you know, taking active service. You're hosting this thing. But it does feel like, you know, when you're looking at three hops out from a tornado interaction, it feels very far. I think it's worth mentioning, though, there are players, at least one major player, if it comes to mind, who is not going the route of risk aversion over compliance. And that, of course, is our good friends over at Tether. I love that you can just always count on Tether to just be like shooting from the hip, like, keeping it Wild West crypto. Even though, you know, they've also come out and made statements in the past of like, yes, like we work within U.S. regulatory frameworks and like we are, you know,

fully U.S. regulatory compliance. Well, look, in their defense, in their defense, they claim that they were in contact with OFAC with Treasury. Oh, yeah. And that Treasury told them like, hey, do we need to, do we need to sanction? And they were like, yeah. Yeah. And I think that, look, I'm not a lawyer. Like, I don't understand all of the ins and outs of this.

But something that I have come to have a greater appreciation of is that oftentimes, like, OFAC is using sanctions as almost like a negotiating chip or like, you know, a bargaining tool to try to influence the behavior of the party, right, that's, that's being sanctioned. And so they don't necessarily even want over compliance, right? They don't want, you know, third parties, in this case, like these on and off ramps or front ends or whatever, to be taking steps that they have not been asked to make, right? Because that then starts to influence like, okay, well, we as OFAC then no longer have this lever to pull because all of these, you know, whatever, individuals, companies have already pulled that lever for us. That makes sense.

So, again, I'm not a lawyer. I don't, I'm not one of these Washington, D.C. mucky mucks, but based on my understanding, like, tetherous position may not be totally unreasonable. And, and I, again, I just kind of love that they're willing to stand there as sort of the mavericks to be like, no, like, you know, when we get orders to take certain steps, like, we will take those. But until then, you know, we're not freezing tether that you're a USDT. that has touched the contract. Well, it's not just that, right? The tether that's in tornado cash is really tiny.

It's like in the single digit thousands of dollars. So relative to, I mean, the overwhelming amount of assets that were in tornado cash were ether and then die, right? And then there was a limited UCC. The tether was like almost nothing, a very small amount. One of the things that I think, what this whole episode has really demonstrated is that, of course, like the day that the sanctions were announced, everyone was scrambling. Nobody knew what to do. No one had ever seen this before. Yeah.

Right. Clearly, what the hell does it mean that you're sanctioning? A tornado cash, right? And a set of smart contracts. People, and I think what really happened is that there was probably a snowball in that the first person who decided, okay, we're going to block reads and rights to the contract. The next person to act looks at that as like, oh, wait, was that what we're supposed to do? I was just to block reads and rights to the contract?

Oh, sure. Because if we don't do this, people will look at us and be like, like, wait, they did it. Why didn't you do it? And it's a little bit of an outrun. You don't have to outrun the bearer. You just have to outrun, you know, the last person running from the bearer mentality. Exactly, exactly. Now, in the case of Tether, look, I mean, I tend to, I tend to think that Tether got this one right,

which is that the way that you deal with sanctioned addresses is that you don't, the way you deal with illegal activity generally is that you don't let them cash out. So who caches people out? The answer is exchanges cash people out. And, of course, the stable coin issuers, themselves cash people out, right? But you don't cash out by just transferring tokens, right? There are a lot of tokens that don't ever get cashed out because they're like, look, you can't pass KYC or like you've done some really shady looking stuff. I'm not going to, you know,

I'm not going to turn your tether back into dollars for you. But stopping tether in circulation, like in some way that's kind of forcing every single layer of the financial stack to enforce sanctions, which we don't do. Yeah. We don't do that in the normal system, right? In the normal system, that's right. Swift is not enforced sanctions. your bank enforces sanctions, right? We don't tell the SWIFT network, which is an international and supposed to be, you know, kind of apolitical system.

Yeah. We don't tell SWIFT to enforce sanctions. We also don't tell your browser to enforce sanctions, right? So when your browser can tell, oh, you're sending stuff to a sanction entity, your browser doesn't try to figure that out, and, you know, nobody tries to go sue Google Chrome because, oh, you let the sanction person interact with a browser

to do banking stuff, right? We realize that it's stupid and counterproductive to try to enforce sanctions at all of these layers. You pick one that is the right layer which to enforce sanctions and you leave everything else alone. So I agree with all that. But at the same time, I can also totally empathize with people who are running companies, who have fiduciary duties to their investors to make sure that the company can still keep running and doing business and maybe its largest market in the United States. And also who on a personal level are like, shit, OFAC, like, 30 years in prison, like,

really, you know, as much as I believe in the space, like, really not trying to do that. OFAC is not going to put an RPCN point into prison for 30 years. Like, okay, you were... Like, that's such a ridiculous, like, no, I'm going to push back on this, right? That's bullshit. OFAC might fine you, like, you know, $5,000, $10,000 because, like, oh, you should have done this, but you don't know. We don't know.

We don't know. Either scan, ether scan, okay? EtherScan still lets you read the Trinator Cash contract. Okay? Inferra won't let you read it. In Fearer won't even let you look at it. You want to ask what is the state of tornado cash contract? If you're saying, fuck off.

We can talk about like the layers of overcompliance here because I agree. I think that there are layers of overcompliance. But if that's true for inferior, why is it not also true for Ether scan? Ether scan lets you read. It also lets you write. You can go connect your Web3 endpoint in EtherScan and interact with a contract. Different comfort levels with the risk that you're taking. Again, that's not just about facing potentially three.

years of prison time, although, let's be honest. I mean, Jeremy Allaire, the CEO of Circle, like, called that out directly in his tweet thread about this. Right. Like, that is a real consideration. I think if you're Jeremy Aller, it's a very different story than if you're an RPC employee. Sure. But it is also about, like, your business model and your considerations to your board, to your investors, all of these things. And I don't know much about the business around EtherScan itself. But, like, knowing what I do know about EtherScan doesn't surprise me that there would be very different considerations and very different line drawn

about the comfort level versus is infuriate U.S. domiciled company? They are, yeah. Yeah. That, you know, has a very real substantial business model around them that I know has sort of like professional investors.

I'm sorry, Ethiscan also does business in the U.S., of course, because we're on a massive market and a lot of customers here. But, I mean, look, if you, the difference in the primary difference, I mean, obviously one difference might be where they're domiciled. Another big difference is that one has a friend and the other.

a dozen. Yeah. One is API-based. I mean, I mean, EtherScan also has an API, but mostly we think

of it as a front-end web application. To me, this is like a distinction without a difference. Like, at the end of the day, both of them let you read and write to smart

contracts, right? If you tell EtherScan, hey, why are you guys allowing people to see the front end of Tornado Cash when all these other people have complied, right? All these other people

understand the precedent that we've all set as an industry just that you pretend tornado cache doesn't exist. Somebody sends you something about Torn-a-Cash. you drop it. Doesn't even matter. You're, you are complicit because of the fact that you facilitated the transaction by forwarding it along to the Memple or just reporting even the state

of the Traneo Cash contract. Right. Like to me, that's a crazy interpretation of all this stuff. And so this brings us also to Eric Wall. So Eric Wall brought up the idea, which is, you know, the ether mine thing. So ether mine has started to block, you know, OFax restricted things. And there was, there's funny, a long time ago, there was a Bitcoin mining, um, company, what was a company? Marathon? It was Marathon that proudly announced that they were starting to do OFAC compliant, compliance. Oh gosh, I'd forgotten this. That's right. That's right. So there was a presser of it. And then they backed off from it because they were like, wow, that was stupid. Never mind. We're not going to do that. This is not a cool marketing move.

Yeah, exactly. Nobody, nobody's excited about us now. Welcome back now. So, so Ethermind was the first to start, Ethermind, I think they're European, right? They're not. Yeah, I believe they're European. I believe they're European mining firm, or a mining pool. So Ethermind was the first to start blocking internal cash addresses in their pools. And as we're moving into the transition to Prove a Steak, which is coming up very soon, the question started to get asked, okay, are there going to be now OFAC compliant validators? That the validators will themselves start blocking transactions from people interacting with OFAC sanctioned addresses slash contracts.

Now, we've not seen that before. right that's a totally new concept that you would start enforcing the natural idea behind blockchain is that they're censorship resistant meaning that even if there is one minor out there somewhere that's willing to include your transactions that you will eventually get into a block yeah you might not get into the first block because maybe the next person who mines is OFAC compliant but you know the fifth sixth seventh person who mines a block they're in Tanzania or something and they'll mine a block so in in proof of stake land what we seen is that there's a huge amount of concentration of the stake in a small number players,

right? So Lido, obviously, which is a consortium, there are a bunch of underlying miners there, or validators there. Of course, Coinbase is going to be huge, finance is going to be huge, Cracken is going to be huge. And there's maybe good reason to believe that these validators will think, like, look, I definitely cannot be violating OFAC. The question is, is including a transaction into a block violating OFACS. Am I facilitating the, you know, violation of sanctions by including things into a block. So Brian Armstrong came out and said, look, we're not going to do this. If our lawyers told us that there was no way to run a validator without violating OFAC restrictions,

we'd have to censor. We would either not run a validator at all. Yeah. Or we would find some other, we'd find some other solution, right? So he's kind of vague about what that might mean, but, okay, maybe there's some way to outsource or something. It seems like, so, so Eric Wall brought up this notion that I think people hadn't been talking about so much. about, okay, well, how do you actually enforce this norm? How do you enforce the norm of the idea that, hey,

businesses by default are going to be risk-averse because they have a lot to lose, right? They're scared of jail time. They're scared of fines, whatever. And so for them, it's like, look, it's not like I really care whether or not I include tornado cash transactions. Like, there's not a lot of money in that.

So I would much rather take 99% of the reward and take 0% of the risk and just be OFAC compliant. That is the game theoretic equilibrium. Is to just say, okay, well, of course, and everyone becomes O-Fact compliant. And the question is, how do you stop that as a community, as a culture? And Eric Wall's answer to that is like, well, we have this concept that we haven't touched in a very long time of what's called social slashing. It's basically the idea is that we decide to hard fork the network and delete this person's stake because they were doing something that is not in line with Ethereum principles.

And this kind of started up this conversation about, hey, maybe this is the only tool that, the community really has to change the dynamic such that the default doesn't become Ethereum is OFAC compliant by default. What do you guys think about this idea? I think that this is, okay, firstly, I think that the idea of social slashing itself is problematic because, okay, well, then how do you get to consensus on who the bad guys are here? Like, the thing that gets missed, and I think that this goes to your point around Pocket Network and, you know, all of these other sort of, like, decentralized systems that are like, oh, now you're censoring stuff.

Like, a decentralized system doesn't mean, like, nobody controls it, and now it's just running out there. And, like, you know, it cannot be censored. And all of these things that we want to believe it means, all it means is that there's a network of nodes coming to consensus about what reality and the source of truth is. And you wind up at the same quagmire if you institute something like social slashing because you again have to come to consensus about, okay, well, then who's getting slashed? How do we fork this? And so on and so forth. So I think that it's problematic on that level. I also just think that this is just classic case of like technologists wanting to technologize. It's like, how do we actually approach this? as an industry? How do we actually solve this problem? Well, we go in and we make sure that lawmakers and folks in Congress, staffers on the Hill, we make sure that Treasury Department, all of these folks are educated about what is tech stack and what is sort of, you know, equivalent of like a swift-like system here, just running, processing a payments network versus what has, I think the word is like

specific intent behind it to enable, you know, things like money laundering. And like, we're going to have to figure out as an industry sort of where exactly that line gets drawn. But I think that it's pretty clear that things like running nodes should be in the category of like, this is tech stack. This should not be touched by financial regulation and enforcement. And there are all kinds of other areas like the on and off ramps of the front ends. And so I guess that's where kind of my sort of in the background, my like eye rolls over here. But how do you stop that, right? So like we're already there now.

Like we could have argued about this. Are we? I mean, we're already there in the sense that, okay, ether mine is leaving transactions out of their blocks. But there have been valid. But once Coinbase is like the single biggest miner or validator on Ethereum, what do you think is going to happen? I mean, maybe I'm naive, but I back. maybe not Brian himself, but, you know, the legal team around him to do that engagement and to, you know, find this kind of vague solution. The merge is in two weeks.

Something tells me that Treasury is not going to give them an answer within two weeks. For sure. And do you think, so is your position that in two weeks' time they're going to be leaving tornado cash transactions out? I would just have this whole conversation. Very high likelihood. Because like, I would think the other side of that. I just give you the calculus, right? Like, why you're a public company.

Yeah. You know, they're not, they're not just, they're not buying it. But we also just have this whole conversation about overcompliance and, you know, the tether approach and so and so forth. I mean, Coinbase is like the good boy of our industry. They weren't always. Yes, in the very early days. I like to think they still got some of that DNA in them.

They're the only public company in crypto. Of course they are going to, you know, they're going to respect OFAC restrictions when they're mining blocks, right? Because like, they're literally, I mean, when you're valid. a block, that means you're literally getting paid by the person who is violating sanctions, right? They are sending you fees. So if there's anything that you can argue, this thing is, you know, violating- Would that be your position on it? I'm really surprised to do that. Again, I would say, this is tech stack, this is neutral. I agree with that. I agree with that.

But what do you think, like, that is what I guarantee you their lawyers will be telling them. We are accepting payments from people who are violating sanctions. That's what their lawyers will telling them. We cannot do that. We'll see. I'll take the other side of that. I want to follow up into. Okay. We'll follow up to. Yeah. Come back on the show. I think of it a little bit sort of like in analogs. I can think about, you know, sort of comping it to tour, right? And it's like if you run a tour exit node, you know, you might get rated by the police at some point because someone's accessing some illegal content or whatever off of your node. But you're not liable for that, right? And why is that the case? It's because you literally cannot inspect the content that you're relaying

and the request that you're relaying, it's completely private. And so, you know, speaking of, like, technologists, I think, like, that might be a more constructive use of, like, people's energy and time is, like, speaking to Miss Espresso here, I think it's, like, looking for, you know, better scalable solutions for private transactions. And I think privacy here, again, you know, privacy has had this, like, really long, difficult journey in crypto of, I mean, if they go through through the entire history, but it's always had this difficult part where people don't want to pay for privacy. And, you know, it's like, you know, privacy from whom generally in the past has been, you know, other people

looking at your, your transactions on chain. Maybe the story here is, hey, if the compliance burden for, you know, these validators starts to get so high, the privacy is almost like a requirement in order to get your transaction mind, period. It's not that some transactions need this, some transactions don't. But it's just like, yeah, if you're coming from a particular IP, if you're trying to interact with a particular address, like, I can see sort of this, this bar continuing to get higher for what is a valid transaction and what's not. And maybe the only solution now is just, like, completely remove that, that even censorship ability by making the validers not able to think about, you know, what is a valid transaction.

Thank you for bringing us back to constructive territory there, because we're about to get into, yeah, fisticuffs over what's maybe going to happen with Coinbase in two weeks. And, yeah, I do have a tendency to sort of kind of. go off on like, these are all human problems. But I do think that you're right, that there are constructive ways to think about technological solutions to some of this. I don't think it's going to solve, you know, what's happening here specifically with Ethereum, with the merge in a couple of weeks' time. But I do think longer term, I mean, something that has just become super obvious to me over the course of the last few weeks with all of this fallout is the

importance of not only transactional privacy, but also the importance of application layer privacy. And this is something that, you know, we've been talking about espresso now for like a year and a half. It's something that the folks at ALEO have really spearheaded as well. Like, we're not the only ones working on this. The concept is called decentralized private computation. Howard Wu and company out of Berkeley primarily. And again, working on Aalio now kind of spearheaded this with their work on Zexi, and we've built off of that as espresso. What it does is it enables you to achieve, again, not only transaction level privacy, which you could achieve, obviously, on Ethereum with something like Tornado Cash, where, you know,

nodes and validators and the general public wouldn't be able to go and see who you're sending to whom. But it would also mean that actually what applications are being called, what smart contracts are being called will also be obfuscated and obfuscated even from validators. And look, I think that what you're painting is kind of a worst case scenario here of Ethereum is just fucked because Coinbase decides to go with, what are people calling it, USA chain instead of, you know, ethomane chain. And we wind up with this crazy fork of realities.

But in a way, it's also, ironically, perhaps, the, future that we are kind of building for, or at least a possibility that we're kind of building for with espresso and with, again, DPC or decentralized private computation, the ability to mask what applications are being called. And I think that that's what the next generation of blockchains are going to look like. I think that, you know, Ethereum is going to have to find these types of solutions at some point down the line, because I agree, Tom. Like, plausible deniability is, I think, the best defense in all of these cases. Now, do I also hope and think that we will be able to fight the good fight and keep nodes and validators on the tech stack side

of things, at least for the foreseeable future? Yes, for sure. But I think it's important that we also have that, yeah, that more constructive and, I think, realistic conversation outside of social slashing about the technological. It seems like the tornado OFAC restrictions, they've definitely struck fear in the hearts of a lot of privacy builders that I've been chatting with. Oh, for sure. Where people are just like, okay, well, what? So a tornado is illegal, even though it's fully decentralized. Not to mention the guy who got arrested in the Netherlands.

That's right. That's right. You know, by the way, who they extended his, exactly, no charges. They extended his holding period for another 90 days, which is insane. Yeah. So it's scary. A lot of privacy folks I know are scared because they're just like, what are the rules? Are you saying privacy is illegal?

If you're not, what are you saying? So you see actually FTX, so Aztec, which is a privacy layer two, FTCS started blocking Aztec, which Aztec, I mean, basically it's not a mixer by any meaningful sense. It's just like a private pool of the same way that Zcash might be. That also allows you interact with DFI. So how are you guys thinking about that, given the stance that OFAC is taken against, at least nominally against the notion of privacy as being something that you're allowed to engage in? Yeah, no, totally.

So we have one product that's in market only on Ethereum's TestNet. And so in a way, we are in a privileged position that at least, you know, sort of while our development time is, you know, getting us towards main net, we can start to work out some of this and some of where we, again, as a company with shareholders and all of these considerations, and I as someone who's living in the United States and what have you, you know, where we're going to be comfortable drawing the line. I don't envy the companies that have these live products that are now facing this storm in real time with my senses pretty limited communications from these really important like kingmakers and gatekeepers, you know, these exchanges and whatnot that are just sort of, it seems like arbitrarily blocking them. But the way that we're thinking about it and the way that we've been approaching privacy from the outset is to say, all right, we want to deliver to developers and to deliver to end users the tools to be able to choose what stays private to whom and under what circumstances. And so I think the best kind of example to explain this that I often turn to is let's say you're a stable coin provider, right? And let's say

you're one of these risk-averse stable coin providers. You're not tether who's happy again to kind of play a little fast and loose and I think the industry needs that too. But you're a relatively risk-averse stable coin provider, you want to start enabling, you know, merchant payments and B-to-B payroll and supply chain payments and all of these types of things. And in order to do that, in order to just meet basic user needs, you need to implement some level of privacy for them, right? Now, those types of players are obviously not, by and large, looking for sort of government level privacy, right? They're totally comfortable with, whether it's Circle or another stable coin provider, Paxos, whatever, still having insight into their transactions. They just don't want

all of their competitors to know about all of this stuff. And so you as the stable coin provider can then build that into either a wrapper for your existing year C20 token or a brand new token contract and say, okay, you know, we can see everything that's going on with these payments. no one else can see anything that's going on. You can get more granular than that. You can say, okay, above $3,000, which I think is the travel rule threshold, which is this guidance around, like, you know, at what point you have to start reporting KIC information and stuff. Above $3,000, we can see everything that's going on for like more de minimis payments. Nobody can see anything, blah, blah, blah, blah. And get into having all of these kind of granular fine-tuned controls. Now, my personal kind of philosophy around all of this, and a lot of people hear that to be clear, and they're like, you're building back doors, you're a frickin' narc, like, you know, why are you doing this? Well, that's still much better privacy than you can get on the Ethereum main chain today, right? Like, that's still a huge improvement if you do care about privacy. Again, my personal philosophy on this is that we should be building more

privacy tools in general, is that commercialization is a big part of the fight. And for keeping privacy as something that, you know, we can all have as a protected right, that being able to demonstrate, like, look, there are legit uses going on here of this technology in general and of privacy approaches to it. I think all of that helps, and I think it helps move the Overton window away from where we are today, which is that everything needs to be transparent to everyone all the time. But being in the trenches of... of like how to actually roll that out and implement it in these circumstances where everything is so uncertain is a very scary thing.

And, you know, I mean, we, our code base is open source. Like, you know, I've had engineers on the team ping me, mostly thankfully ping our general council, not me, asking like, I have no control over, you know, this is zero knowledge, privacy tech. I have no control over whether someone copies and past some of this and goes and implements it in a way that, like, we are totally not comfortable with it. And, you know, how is that going to come back on me? So, yeah, it is a very scary time. It's very uncertain. But I think that, again, I think that in a way we are in a more comfortable position, not only because we're only on test net right now, although main net coming soon, but also because we are taking this more kind of

I think, nuanced approach to privacy as opposed to having positioned ourselves and kind of backed ourselves into this corner of like, we believe in all private, all the time, and then having to walk back from that. I think that's a really hard place to be right now. It is. And it's where a lot of the kind of Gen 1 privacy coins and like kind of the more cypherpunk original ethos was in crypto, so you look like the Moneros and the Zcash. They're like, no, screw you guys, come and take it, kind of energy. and it does feel like that's not going to age well in the era of OFAC restrictions. Yeah.

The idea that, okay, well, tornado sanctioned by default, if you interact with it, you're a bad, bad dude. Yeah, totally. And the interesting thing now, you mentioned about the secondary, which I didn't know, the front ends that start blocking you if you're one hop removed or two hops removed from tornado. Is that going back in history, by the way? Like, is that?

I think it's like a post-sanction. Post-sinction. Okay, I'm like, do I? Can I not access my IDX? Because Vitalik would be blocked, right? Because Vitalik had reacted with Traynor. But of course, like, it opens, I mean, it's such an obviously broken concept because it opens up the ability to grief anybody.

Because anybody can just go put 0.1 Ethan Trinternich cash, send it to anyone. Yeah. And now that person can't use anything in DRA. Yeah. Because the whole point of Traynor is that you can't tell who sent it, right? Like, it breaks the link. So somebody who's using Traynor Cash to launder money looks identical to somebody who's getting grieved by getting sent.

It is funny how it brings out all of these, like, potentially fundamental flaws. Like, we have not really given any thought, I feel like, on a product front as an industry, to the fact that you can just send. And there's no sort of notion of, like, was it Grin that had the whole thing where, like, you have to actively receive it? Yeah, that's true. That's true. Which is a very bad U.S. Because you have to be online.

Totally, yeah. No, it was a terrible U.S. But it is interesting. But having, like, an inbox of UTXOs that you can decide to. And UTF model makes it cleaner because then it's like, okay, this one, this is the money I got sent for termed cash. I will leave that over there. I'm not going to use it. In Ethereum, right, it's all just one big pile of ether that looks all the same, you know.

So it's, we also don't have a standardized way. Like, let's say you do get grieved. So it does send you 0.1. ETH. How do you be like, no, no, no, no, that's not mine? I'm deleted. Like, do you burn 0.1Eth? And then does, like, does TRM pick that up?

Does chain analysis pick that up? Yeah. Do you send it to a different address? Does TRM understand that? Like, you know, it's like, we don't know what you're supposed to do. There's no playbook. Totally. So Treasury just jumped all this stuff on us, probably had no idea how the industry was going to react.

And now we're all setting these stupid precedence that everyone else is copying because they're like, oh, well, if Inferior did that, they probably better lawyers than I do. So I'll just do whatever inferior did. Yeah. And as a result, we end up in this moronic equilibrium. Yeah. And now we have to talk about social slashing, which is why, to be clear. Bring it back to social slashing. Okay, bring it back to social slashing.

I tend to agree with Eric. I tend to agree with Eric. That I think at some point you need like a sort of revolt of the public so that people know Ethereum is not run by corporations. It feels like it is. It certainly seems like it is. It seems like EtherScan and Fura and Coinbase have the real say over what happens, right? And like I feel like Ethereum has not really had that Segwit moment.

When you realize like, wait, no. That was a very apt comparison that he drew to the second moment. Absolutely. Users matter. Users matter. And the users are very clear and unanimous in what they believe, which is that Ethereum should not censor. Are they? Do you think there's...

I don't know. I genuinely don't know. Like, certainly the loudest voices on Twitter are very anti-bats. I mean, who do you think on Ethereum is pro-O-FAC restrictions in Ethereum itself? I think that there are a lot of people who use this stuff as speculative asset as like a fun, cool new way to like walk around on the internet and like, you know, using playing around with NFTs is the same way that I played around with neopets when whatever back in the 90s. Like I think that there are all of these sort of like emergent ecosystems of end users who don't give a shit about the cyberpunk libertarian like censorship resistance. Most people don't care. But the question is, do they want the restrictions?

Is there anybody who wants the restrictions? I think that there are a lot of folks, both within the Ethereum user base right now, and also who could be within the Ethereum user base, but are not, because they're uncomfortable with some of these dynamics around, like, there's a... Even people who are, like, very sophisticated and spend all day on this stuff, many have the misunderstanding, rather, that like if I deposit funds into tornado cash, I might be withdrawing like North Korean funds. Like, I'm uncomfortable with that.

Or like, I'm contributing to the privacy pool for North Korea. If you put money in uniswap, you might also trade with North Korea. Totally. Like, nothing in crypto defensive. To be clear, that's not even true with tornado cash. Like, if I deposit in tornado cash, I can only pull out my own deposit. This feels to me like something you solve with education, not with, enforcing sanctions at the network level.

Yeah. It seems like, to me, this seems like, look, Segwit as well, right? Segwit, most people didn't care. Most people didn't even know what Segwit means. Right? Seguer was just like a big rallying cry for people to fight on Twitter, right? Most people have no clue. I remember spending hours trying to educate myself as to what Segward was. Like, it just seemed like the cool thing to be fighting about.

You're supposed to care. You're supposed to have an opinion about this very technical question of whether segregated witnesses in Bitcoin and whether the block size will do this or that. And like, you know, look, in retrospect, it was a philosophical and political and religious battle. Yeah. That was ultimately being waged in Bitcoin. And we have not had that in Ethereum. No.

Since the Dauphorke, which was a long time ago. Yeah. And this feels to me like as close as you can get to the spirit of what blockchains are about, which is that is there a monopoly by one country's interest, which, look, I'm an American. I love America. I think America is awesome. I think I think the, the, the old fact restrictions on Traneiro are stupid. but I think the restrictions on the other things that they've sanctioned make total sense. You probably should sanction the Lazarus Group.

The difference being that they sanction the actual. Sanction the average. And we've talked to adenosium about why we think it's a bad idea. Even if you think that, look, if you sanction tornado cash, it may be reasonable for exchanges and kind of be off ramps and things like that to prevent people from cashing out with the tornado cash. All that aside, should the network basically be ingratiated to Treasury and to OFAC? I think the answer is no.

The network should be distinct from that the same way that the internet does not enforce U.S. sanctions. Which is why we need to go and educate policymakers. I agree with that. But this is happening now. It's happening in two weeks from now. There's not enough time to educate people. Like at some point, Ethereum can't rely on waiting for American lawmakers to figure out. Just don't over comply, folks.

I agree with it, but no one's listening to me. Look, at the point of which people have already overcomplied, like how do you stop someone for overcomplying? The answer is that there needs to be a stick. There's only carrot for overcompliance, right? Which is that there's no risk. Nothing bad happens, and I don't lose any revenue. There is a stick.

You need to make it. What's the stick? I mean, Brian Armstrong acknowledged it, I think. He said something on Twitter. What does that mean? I mean, let's see what happens in two weeks. You got this wry smile going on. No, I agree.

I think ultimately it's like the market will speak. You know, there's nothing stopping anyone for making Fed chain today or a year ago or anything like that, but there's not that pressure. I just like, you know, also kind of running a little bit of the ETH proof of work for. It's like, yeah, I guess you could do that. Will anyone use it? Will the market respond to it? Maybe, I don't know.

I think, you know, it's sort of on- As happened with the Dowell back in 2016. Yes, yes, yes. And so I think it's like, sure, you maybe you could employ social slashing, but it's sort of on you to convince the people who matter in the market that like this is the way to go forward. But look, I think even the conversation. scares people, right?

Because if you're like, look, if there's a 20% chance that our eth gets slat, we have a lot of eth at Coinbase, that is a much bigger risk to our business than that we don't run staking and make a little bit of yield or whatever, we outsource it to some other party, right? Or we just put in defy and get some other yield.

So just the conversation alone is enough to do a lot of the work to scare people. Because the concept of social slashing obviously is a coherent one. And if people realize, look, the community, the core community, believes this, right?

It won in Bitcoin. It's not too late to say the same thing can win in Ethereum. Now, it's certainly true that it's not true that two forks will be viable. If you have a minority fork in Ethereum, that minority fork will die on arrival, the same way that the HeathPathorak fork will die on arrival. But if there's enough of a movement internally that starts generating pressure, these guys will roll over very quickly if they think that there's real energy there because they can't risk it.

They can't risk getting slashed for that amount of money relative to the relatively small awards. Because most of the staking awards, they pay out to their customers. They don't keep it for themselves. They take a small spread. So to me, that's why I think you can't let this stuff.

You can't just say like, well, okay, let's rely on the blockchain association to like go talk to lawmakers. In the meantime, you know, Ethereum will just do it. I think it's got to be all of the above, right? I think it's important. I agree with that.

I agree with that. I agree with. To come back and be like conciliatory here, but very genuine. too. I do think that it's got to be all of the above. And I think that I think that the conversations that are playing out are important and healthy. I am myself deeply skeptical of like how a social slashing would actually be implemented. And I'm very skeptical of the fact that you just would wind up back at the same problem of like, well, who's creating social consensus around the social

slashing then. But, you know, I'm not against, I'm not against the debate happening. Yeah, the debate, I think, alone does a lot of work. Yeah. And at the end of the day, like, you need, somehow these norms need to be in place. Because they can't just be like, it's kind of like, you know, when Trump came into office and started doing all this crazy stuff that nobody had ever, you kind of expected, like, okay, well, every president before has, like, released their tax returns. And he was like, I'm not going to do it. There's like, wait, what, how do we stop you from doing that? How do we social slash the president?

Yeah, how do we social slash the president? And the answer is, like, there's no social slashing. For the president. Yeah. Well, it's like, okay, well, we know what happens, which is that the, the, the, the, the, the, the, the, the, the, the, the overton window just expands slowly push by push until at certain point we're just like, huh, wait, we're like in this tiny little enclosure now. And Ethereum is just like, compliance itself into becoming this totally different thing than we're started at. I, I just come back to, like, you need to be waging this war on all fronts. Like, you need, you need, you need folks like Tether to be comfortable taking risk.

Yeah. And, like, Coinbase in this. situation to you need Coinbase to be comfortable, taking on a little bit more risk than they might otherwise be comfortable with because there's pressure from the community and all of this. You need to be engaging in Washington and Brussels and wherever else. And I think, you know, to the point around even developing the idea of social slashing, to the point of developing things like decentralized private computations, Zexi, like you do need to be fighting on the technological front. But all of these things, as you say, like they have these very different time frames.

Like, DPC is not coming in the next two weeks, you know, two months even. You know, we're not going to solve the legal thing in the next two weeks either. And so, yeah, I think you need to keep some faith that some of these actors anyway will be down to go risk on. I hope so. I hope so. I hope so. It's, um, it's, it's, hard to be. It's rare that I'm the optimist in the room. I know. I'm impressed. This is a weird. I'm impressed. This is a weird place to be. I'm usually like. Defending the man. Yeah. Defending the man. Which is good. It's a good place. It's a good place. It's a good place. It's a good diplomatic tone for a private protocol. Is that why you separated me all of it? That is. Yeah. Yeah. Yeah. Yeah.

Yeah. That's going to be my intro next time I come on. That's right. I got Jill Gunter. The man. The man. Okay. Well, I think we're up on time. Jill. Thanks so much for coming on. sharing with us your totally wrong views about privacy and compliance. It's been another interesting week in Cryptoland. Thank you to all of you for tuning in, and we'll see you in a couple weeks. Take care, everybody.