Unchained - Uneasy Money: Why Peter Steinberger and Non-Crypto People Hate the Crypto Mob

Episode Date: February 20, 2026

LayerZero’s Bryan Pellegrino joins to unpack Base's decision to leave the OP Stack, Zora's migration to Solana and more. Thank you to our sponsors! ⁠Fuse: The Energy Network – Shift your energy use and earn rewards. ⁠MultiChain Advisors -⁠ The Growth & Capital Markets Partner You Need Coinbase's Base is making a shock move away from Optimism's OP Stack. In this Uneasy Money episode, LayerZero Labs CEO Bryan Pellegrino joins hosts Kain Warwick and Taylor Monahan to unpack whether this is the right move for Base and what it could mean for Optimism. Beyond Base's big move, the trio also discuss Zora's Solana migration, whether Coinbase was wrong to initially pursue a super app strategy with Base App, Peter Steinberger joining OpenAI, the launch of Zero blockchain and OpenAI's EVMbench. Will OpenAI's acqui-hiring of Peter prove to be a “generational fumble” for Anthropic? And can crypto fix its brand problem? Also, learn why the rise of AI agents have Kain and Tay confident that open source will win in the end. Hosts: ⁠Kain Warwick⁠, Founder of Infinex and Synthetix ⁠Taylor Monahan⁠, Security Expert Guest: Bryan Pellegrino, CEO of LayerZero Labs Links: Unchained: Zora Shocks Base Community With Solana Pivot ⁠⁠BlackRock Just Chose Uniswap. The Market Didn’t Care. Here’s Why. ⁠⁠LayerZero Launches ‘Zero’ Layer 1 as Citadel, ARK Buy ZRO ⁠⁠How Zero Blockchain Cracked 2 Million TPS and Is Still Decentralized ⁠⁠Uneasy Money: Are Institutions Creating a New Crypto Meta? ⁠⁠Uneasy Money: How the Increasingly Better AI Agents Are Being Used OnchainVitalik Rethinks Ethereum’s L2 Playbook, Calls for Shift Toward Native Rollups Learn more about your ad choices. Visit megaphone.fm/adchoices

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Visit medcan.com slash moments to get started. Just like unbelievable, just like generational fumble byanthropic. Every time we show up, they show up behind us. And we were like, you just rule the parties. Claim your fees on this scary platform. Claim them. Hey, everyone. I'm Kane Warwick and welcome to uneasy money because what happens on chain never stays on chain.

I'm here with my co-host, Taylor Monaghan, security expert. And joining us today is a very special guest, Brian Pellegrino, CEO of Layer Zero Labs. We're going to dive in in a minute, but one quick thing before we start. Nothing you hear on uneasy money is financial advice. We're just the rebuilders talking about what's happening on chain and in robots and AGI and all of that cool stuff. And we want you to always do your own research before aping in. You can find all of our disclosures at unchaincrypto.com slash uneasy money.

Before we begin, here's the word from our sponsors that make this show possible. The Energy Network is an intelligent, decentralized grid that coordinates smart devices to balance supply and demand. Energy Dollar is the native token of the network from one of Europe's fastest growing energy startups. Follow at Fuse Energy on X to find out more. Multi-chain Advisors is an emerging technology growth firm that has helped create 50 plus billion dollars in enterprise value for 80 plus clients over the past four years. They're the partner to help navigate markets, Build real traction today at multi-chain adv.com. If crypto taxes feel overwhelming, you are not alone.

That's why Crypto Tax Girl, a team that's been helping crypto investors since 2017, is offering $100 off on one-on-one crypto tax help. To get $100 off your crypto tax services, go to Cryptotaxgirl.com slash unchained. Again, that's Cryptotaxgirl.com slash unchained. All right. So some big news this morning or evening, depending on your time zone, base has decided to break away from the optimism stack. So base is the largest Ethereum L2 right now by volume and fees and coolness and whatever other metrics you're using to measure layer two. So I think it was about three years ago that they partnered with optimism to, build out the OP stack. They've been investing both, you know, engineering resources and money and attention into the optimism ecosystem. And as of this morning, they've said, hey, actually, we're going to own our own shit now and go and do our own thing. Interesting thing, like you read

the article and, you know, they say they're going to remain compatible with the OP stack, doing upgrades, et cetera, et cetera, there's a lot of subtext there, right? Like, it feels like this is at best, like, hey, we're going to maintain backwards compatibility for some time before we then go and do our own chain. And, you know, we talked, I guess, a few weeks ago about Vitalik kind of putting the nail in the coffin

in the L2 scaling roadmap, right? this feels like one of those sort of unintended or maybe even intended consequences of that where like L2s are looking around going hang on a second if we're now second class citizens in this whole scaling roadmap what are we doing here if we're if we're competing with the L1 I think there's also quite a bit of discussion over the last week around what is base's purpose of the Zora stuff, you know, Zora leaving. And it's like, well, Bay spent so much time and effort trying to meme Zora back into existence

after Zora was dormant for years and not much was going on. Zora goes to Salana. The whole, I think, TAY, you said this, everyone's losing their minds. Everyone is losing their freaking minds. What are you guys doing? This is, I don't know, this is a weird move.

Zora was a weird move. Clearly, they got a heads up. Yeah. Like, it seems strange. Like, if you're on a chain and the chain's like, actually, we're going to be more of the thing that you like, be our own L1 eventually, like, we're going to, you know, like, it's not like Zora was like, okay, we're going back to optimism then, like, fuck base, right? They were going to Solana.

Like, that, yeah, I don't know. I mean, unless Salana gave them some. to go there. I really don't understand why they did this, to be honest. The thing, I mean, my hot take is, you know, base is trying to work out how do they capture, you know, this like trading zeitgeist and, you know, where does the trading volume come from, removing a bunch of stuff, you know, Brian had this post where he was like, okay, I'll take ownership of the fact that the base app that we were building was really nonsensical. And, and, and, and, and, and, you know, and, and, and, you know, didn't have like a clear kind of purpose. It was trying to do too much. And, you know,

now we're going to really get back to, I mean, Coinbase is a crypto exchange. Their job is people trading crypto, right? And so they built a chain so that people could trade crypto on chain. And then it turned into like this weird panoply of experiments and social and all of that stuff. And I can see why they've said, well, let's actually, you know, kind of rationalize this back to what it was supposed to be, which is a trading app. But then Zora is like, well, we're going to be a meme coin launch pad, but we're going to go to Salana. And I can see why Zora would go, Salana's the place if you're going to do a meme coin launch pad.

That's where the action is for that. But it all still doesn't. I mean, it's where the action was. I don't know. I can't. I wouldn't, for me personally, I would not switch chains to go chase last year's meta. that's just me though like sorry you do you

but like come on guys what's your what's your take on is is there some thread that we're missing here that we can't put all this together like what what's the fuck is going on here so I think like my girlfriend of Raz had a really cynical take a couple of years ago

two three years ago at this point that was like if l2s aren't actually inheriting the underlying security of the l1 then they're really just like alt L1s that pay rents to Ethereum right and like when rent is really low then everybody's happy and then like if rent is high. His thesis was L1 will eventually raise rent. L2s will realize that they have all the users in value and ultimately just like four can make their own L1. And so like if that was the stance

that base is taking and it seems like maybe they're setting up for long term, I'd understand it. But right now it seems the way they're presenting is just more of like a pragmatic. Like they cannot move fast enough. They have this sort of like two tier diagram they said. And like here's what the process is within the super chain where you have to sort of have consensus around all of the chains. upgrades are sort of like pushed across everybody, everyone has this sort of joint rollback to just like, here is how it works in base, which is just like, we're going to ship a bunch of stuff in production, we're going to continue to move the environment forward. And so at least the way that they're presenting, it is like not the thesis that Raz had a while

ago and more just like a pragmatic, like we want to move super fast and we want to try to stay competitive. And there are a bunch of other teams who are like very aggressively pursuing sort of like the same vertical, which I find is really interesting. So whether they'll eventually go in, like, there was a really, really large premium for ETH alignment over the last couple of years, like a really massive premium. And I think that drew in a bunch of the L2s, it's turned in a bunch of institutions. We call it ETH communism.

Yes, yeah, ultimately, right? It was like, you were either part of this part of the group or you were not. The ETH block, right? The communist block or get the fuck out. And so, I mean, this is like waning now. And so whether or not you'll start to see this fragment happening more and more, who knows, but it feels, you know, it feels like the bell weather. We talk a lot about like, you know, what's happening with engineering and engineering,

you know, timelines and how everything's getting compressed, right? Like, if you go back to three years ago, I remember distinctly talking to Carl, talking to Jing and talking to Jesse. And they were all like, if we, you know, get all of our rocks that we're banging together and bang them together together, then we can move faster, right? And now we have much better technology for doing everything. And so I do wonder whether there's some element of like,

we actually don't need to partner with people anymore because literally like one dude prompting can like write an entire system now. I don't know. It just feels like actually coordination. What's interesting to me, right? I think we're going to see this play out. It's coordination, the cost of coordination now across orgs, even across people within orgs is so high.

It's just better for two people. And we see this now in Infinex. Like literally two or three days ago, myself and one of our engineers just got together and we're like, we're just going to cook this and like, fuck everyone else. We don't care. And we did. And we're like, we're going to hit the button and deploy it. You guys can like, you know, decide what you want to do with this or not.

Good morning, everyone. Yeah, literally. Like we, it took us like, it took us like 24 hours and we built this whole infrastructure that everyone had been like talking about and thinking about and how do we do it or whatever. And it was like, let's just do it. So, you know, if you're trying to coordinate with remote teams that are in a different org inside of a different company inside of a different thing, that is super bearish. Because you don't need the reason. You and I talked about this a bunch and why, like, we are 100,

and in person as well. And just like that. The cost of coordination is just unbelievably high when you're trying to ship something quickly. So I can't imagine that's within a single org, let alone within multiple divisions of multiple orgs across like, you know, this huge consensus of groups who need to sort of sign off.

Yeah. Yeah. I mean, the diagram that they have in their blog where it's like these, today, it's like all these things. And then later, it's just going to be the core elements that we need. Later, it's just going to be one next studio just churning away 24-7, like, fixing stuff. Oh, man. All right.

Well, so I think, I think, you know, there's a couple of other implications here. So one is the original partnership included, and if I'm not mistaken, base has these tokens. I'm pretty sure. So this is going to be an interesting conversation, right? So base has like 120 million OP tokens, which at the moment is still worth like 40 mil, let's call it. It's not nothing. And I don't know.

Do they have to give them back? It's not like there's got to be some contract there, right? Like they've got some KPI or whatever. Like I'm sure I remember talking to both parties at the time. And it was like contingent on continued use of the platform. Maybe they've already earned some of them, but that's going to be an interesting conversation, for sure. Yeah. Well, and then this other one says, O.P. Collective, base was doing, was 94% of the revenue.

Yeah. That's almost more painful than the, um, oh, for sure. Yeah. Even, yeah, it was like base, I think, within optimism, the, the communist. The collective. The collective. The collective. It's a collective.

Yeah. The board. The board, the chain board, like, base is carrying everything at the moment. And, you know, in fairness to, like, optimism and, you know, some of the other L2s, this was not seen as, like, a problematic thing for years, right? Like, it obviously was, but it wasn't seen. It was like, no, of course, we want to coordinate, you know, I go back to the original thing that I said before Arbitram and optimism even launched, where I was like, if we can just all agree, guys, on 1L2, things are going to go much better for us, and we did not agree on that, and here we are.

But there was a sense even within the optimism collective that, like, if we can all agree that everyone goes to base, it'll be better for everyone, liquidity, et cetera, et cetera. And now base is like, thank you very much for your liquidity. We are going to go and do our own thing. I wonder how much really is that, right? Because like the early, my view on like why the super chain existed, right? And it really wasn't, because we have like OP stack and there's like any chain can have OP stack, but it was join the super chain.

And really during the super chain was trying to solve for a bunch of the tricky stuff within interop and just saying, hey, if we get a collective of chains here, then we can actually have really nice interop, which will become like a competitive advantage because we're all going to agree to roll back together. We're all going to agree to like these joint things. We're all going to have the same stack. And now we can have like this really seamless liquidity across the board. And that interrupt piece is just like never actually gotten there from that side.

And base has just aggregated a bunch of this. And the question, like, again, whether or not their diagram is truthful or not. Right. Yeah, exactly. Whether another diagram is truthful or not. But they're like, do they really want to wait for all of the other chains? And do they really want to have this right? If they have aggregated all liquidity, they can just take it and push it around.

But it definitely sucks from that side for optimism. And I think they've got to figure out what they're going to do from that. because, again, their main thing is the stack itself I've viewed as more maybe than purely the super chain, but I'm not sure how that changes. Yeah. I think, you know, Jing mentioned last week there was an announcement that they're working with some institutional players who want to own their own stack, right? I think that, you know, the future looks like more fragmentation, not less, right? Like, you know, if a bank wants to own their own stack, they don't care about inter-op.

In fact, maybe interop is bearish for them, right? And so, you know, putting all this effort and time and, you know, these resources into interop may end up just not making any sense, right? I will say you would be shocked. No, my life is just hugely a lot of it is driven by institutions. Now, you'd be shocked at how much they do care about interop, which, again, was kind of weird to me. Right, what is that?

Yeah, why? Because there's only like two ways that institutions are basically going to adopt. And one is they have their own dedicated. ledger, which is just like internally, J.B. Morgan, Goldman, whoever this is, owns this ledger, and that's their way to keep their own records. But all of them need assets and clients and purchases everything to go outbound. So like one method is like Canton method, which is like a conglomerate of many groups together in a single environment. And the other method is like everyone individually. And so like J.P. Morgan has like a connection, has like, connects his digital asset and all of these have

their own chains that they're sort of like rolling out across the board. And if all of them have their own environment. Like, they both want to just every, when you talk to the big institution, most of them, they're still, there are a couple of them who are really doing stuff themselves internally, but a bunch of them are just servicing clients or customers, right? And so, like, a lot of them want to be able to take the asset issuer. And, like, the asset issuer is just an AUM drone beast, right? They just want as many users as possible. They want to get as much AUM, because AUM is dollars and profit, which just means they want to be everywhere. And so, like, if you're, you're, you're, you know, big bank X, and you have a huge amount of these clients who work with you,

and they're trying to issue assets, what you need to do is be able to, like, distribute those assets. And distribution becomes, like, a really big point for asset issuance, at least. So all of them end up caring more than you would think they care from that perspective. Like, it's actually pretty top of mind. Like, they're not looking for, like, a, you know, completely walled garden chain that no one can talk to. Which, I mean, that makes sense, right? Like, I can see. you're looking at it as like a pure database just like plug it in the back end we run our own thing

and like who cares about the rest of the world yeah i mean that you know that year of like blockchain not bitcoin nonsense that we had in you know whatever it was 2017 2018 like we're just going to have a chain and it's like a slow database that has all of the bad stuff about slowness and none of the good stuff about introp like i think it's bullish for crypto that people have figured out that like the introp is actually where the value is but you know you look at at base and they're like sure interrupt great but we don't want to be beholden to someone else's technical roadmap for the execution on our own chain right which you know like give us the best bridges and i'm i'm sure you have thoughts about this right but like give us really good bridges and

let us own our own shit in our house and just you know have have that uh that kind of you know trade off space where we can do whatever we want on our chain effectively but we also have the ability to link out to all the other chains as seamlessly as possible. Yeah, for sure. Yeah. Makes sense. Makes sense. Cool.

So let's see. What else? There's a few other base things going on. Former Coinbase developer Hish, this was about base apps that I'm deeply concerned with how base app is marketed and executed. It was pitched as the mother of all super apps. And yeah, Brian, you know, took ownership and said, hey, you know, focused on being the self-custodial version of Coinbase and trading focused, which kind of feels

sensible, like their job is trading tokens, right? I mean, and, you know, Coinbase today, I suppose, you know, is not just, you know, an order book, right? Like they do custody and they do all of this other stuff. But, you know, the most kind of parsimonious solution here feels like just you've got a chain, do on-chain stuff on that chain that's non-custodial to slowly wean people off the database version of what you're doing. I did think Mike Dutas had an interesting take where he said, you know, we talked to coin base about this and we're like, what the fuck are you guys doing? This is insane. And, and, you know, there was this conversation for a long time of like, Does the base chain being EVM create this tension where SVM stuff?

And I think the answer is yes. Like if you, you know, clearly the subtext of that conversation is Mike was like, what about Solana? Let's not forget there was a period of time where Coinbase had like 15 minute withdrawals on Solana because, like really? So, you know, there's been tension between EVM, Coinbase land and Baseland even and SVM. And now, you know, it'll be interesting to see how this new Coinbase chain, which it inevitably will become, handles the SVM, EVM interop and where they go, I guess.

Yeah. I mean, I see it as that Coinbase and especially Jesse, but also Brian, they went all in on this idea that there was more to the blockchain than just the assets. and the trading and the right. And they gave it a good go. They got one shot of by Vitalik, let's be honest. I can't really, I mean, I don't know. I guess like from a completely objective markets perspective, you can be like, you're stupid, told you so.

I told you this two years ago. But at the same time, like, I don't know. It feels like it was the right move at the time. I can't really fault them for it. Like, I just can't because at the end of the day, like, we want this, right? We talked about this. We talked about this with Phauster. We talked about this with Phauster.

Yeah. Like, Farr Koster was like, it was a good experiment. It made a lot of sense. It was a hard thing. You know, they needed a trillion. Like, you're competing with meta and X and like, you know, some of the largest companies in the world to, like, try and displace their insane network effects. And eventually it will happen, I think. You know, that's my whole take is like, eventually we will have decentralized social

networks, it's just, it's a hard problem to solve, right? So, like, I don't think there's a issue with them doing it. It's just a bit, the thing that was strange to me is, like, you have Coinbase, which is based on trading, and you're trying to bring that giant, you know, battleship on chain. Your wheelhouse is trading, like, nail that first. And in fairness, they did. Like, they did a bunch of really good stuff to nail trading. I just think it was a bit of a distraction, all of the other stuff before they'd really landed it. So, you know, lesson learned, startups are hard, even if you're not a startup, even if you're a giant company.

Yeah. Hard to incubate something. I also, I don't have a ton of faith that Coinbase could go. Like, I think that they'll go all in on trading now and they're going to just like focus. And they'll execute on that. I'm not convinced that two years ago they would have been able to do that. I think they would have split their energy across like 8,000 different. things because the culture of Coinbase, right? The culture of their users, the culture of

their investors even, right, is a lot more like Jesse Field, right? It's a lot more optimistic. Let's do social. Let's do these non-financial things. Let's not just be extractive. It's kind of like one of those things where I don't, I don't, I just don't see a universe where they would have gone all in on trading two years ago. Right. Yeah. Yeah. And if you're going to split it, then you're never going to give the other stuff a fair shot. Yeah. Yeah, I mean, there is an element of, I guess, like, we tried it, guys. Like, we put the effort in, you know, everyone tried to meme this into existence

and the timing was wrong maybe. Like, I think, I think that might be the takeaway that, like, the timing was wrong. And so. I'm not sure, like, I'm not sure they're the approaches, right? But they definitely tried harder than anyone. Like, I can't imagine another public company, you know, bases for squirters. like all in all the crazy stuff that took so much flack for you know what I mean like it was like they pushed the bounds and experimented and like tried to make the social stuff like like

as radically out there that they that they could and again I'm not sure it was like the perfect approach but at the very least they like nobody can say that they didn't actually try to make it a thing uh because yeah they didn't leave that nobody altered those resources actually would have done jesse just i think got a lot like a lot of freedom um and i think brian takes a lot of flack but I think, like, his response to Hish and the thing on just, like, I'll take ownership of this. I think, like, I think he just handles that stuff pretty well in general. He does. Yeah, he definitely does.

I can probably take a lesson from that guy on a couple things. All right. Let's move on to our next segment. This was quite interesting because, you know, so OpenClaw, which launched now, like, six weeks ago, at the end of last year. Blue up has like a trillion GitHub stars, which turns out aren't worth anything, but cool points for sure. And a bunch of people started forking it, a bunch of people started deploying it. And I think for a lot of people, if you weren't, this was like the second fork of the autonomous agent meta, right? And I've been saying this to everyone who will listen,

even people who won't listen, that like people have been interacting with agents inside of sandboxes, inside of sandboxes, and inside of sandboxes, right? Like most people interact with an agent on their phone, which is inside of an app sandbox, inside of an iOS sandbox, inside, like there's just sandboxes all the way down. And these things can't do anything. And they know it. They actually know that they can't do anything. They know they're in the sandbox.

It's actually quite funny. If you put the exact same model in a sandbox and get it to talk to the one that's not in the sandbox, it's like the wild animal that's like looking through at the cage sort of thing. It's like a bit sad for the other one. It's like, I'm sorry you're in there. But so if you are in a sandbox and you can't do anything, there's like a learned helplessness that these things, you know, kind of embed in themselves, right? And so everyone goes, oh, yeah, no, I know the AI things. It's like the Google that you type things to and it tells you things, right? Like that is the scope of the thing that it can do.

And OpenClaw, I think, broke this open by saying, we're just going to put an agent into a computer. And the computer is the agent's computer, not your computer anymore. You have to like make peace with the fact that, like, that's its home and it can do anything. And once you do that, it starts to do. crazy shit. And you're, and if you haven't experienced that where you're like, whoa, I didn't know it could just install any software from anywhere on the internet and combine it together and start doing things, right? And like all of a sudden, you're like, lights are flickering and stuff. And you're like, what does it do? And it's like, oh, it's just rewiring the lights. That's totally

reasonable and fine. And so like the thing that I think was really crazy is like everyone, even who had been doing the autonomous, uh, looped engineering side hadn't really pointed these things at like actual stuff that they were doing, right? It was like still very constrained in like a cursor sandbox or, and like it was less of a sandbox because they could do whatever they needed to do in terms of deploying code, but it was still a sandbox.

They couldn't install new software on the machine and like, you know, they were kind of locked down into what they could do. And so everyone over the course of like, like two weeks was like, fuck cursor. I don't want to deal with this anymore, right? I'm going to like, Lord code. And then Codex came out and they're like, I guess I'm doing Codex now.

And then Codex tried to release their own app, which is also a sandbox. Everyone was like, no, thank you. I'm just going to like, you know, bare metal this. And so you've built these two threads right now of people starting to figure out that the harness is actually the most powerful part. The thing that the model exists in is the most powerful part.

And that if you give them, as the more autonomy you get, the more power you give them, the more powerful they become, right? Which is a little bit scary. And so Peter Steinberger built this thing, this harness, right? And there were like three or four harnesses that came out around this time.

But OpenClaw was open source, had like really easy systems for like modular development. You could build plugins, et cetera, et cetera. And so it took off. And then Open AI was like, we want this guy. we're going to acquire him. And so, yeah, now we're in this interesting situation where, like, it was Claudebott.

That was the original thing. It used Anthropics, Claude, you know, CLI, right? And then OpenAI has bought it. And I think my sense is that it has enough momentum now. There's enough people working on it. There's, like, a trillion PRs every year. Everyone's agents are helping. And once agents are submitting PRs, like, constantly, right?

So, like, I think that there is, like, it's reached critical mass, right? It's got escape velocity. So I think it's not going to die with Open AI buying it. But it is a very interesting situation now where I think you've got these open source harnesses that the agents themselves are working on. And you've got thousands of agents. working on open source harnesses, improving them. Like, this is the recursive self-improvement loop thing, but via open-source software,

not like on the model itself, but on the harness. It's crazy. So I mean, like the one transition from like your own harness with like dangerously skip permissions to like its own dedicated environment. It was just like a huge step function, right? So the utility that it has, like you said, the amount of power that it has has just been night and day,

just like incredible, but also just like unbelievable, just like generational fumble by Anthropic, right? We're like, he literally was, it was like open clawed, right? It was this whole thing. And Anthropics lawyers were the ones who actually like sent him a cease-send decision. He said like, the name was too close. And so he had to change it to open claw and then decided like, actually,

maybe I don't like these guys as much. Like I'm going to go talk to Open AI and then Open AI buys him, right? So like, I mean, he was just teed up. And Anthropic has been on this like post-clod and opus. four, five, and four, six. It was just everybody loved Anthropic, best ever. So just like huge, huge, huge fumble by them to have him get a quad. So, because he had a little interim name, and then it finally landed on OpenClaught.

On one of those threads, someone was like, okay, but aren't you just going to get sued by Open AI now? Like, are you just going to hear from those lawyers? And he replied, and he was like, he was like, oh, no, I checked with them first this time. like I was smart this time. Looking back, I'm like, that was the beginning. That was the beginning. That was the talk start. Yeah.

Yeah. Like, yeah, I mean at this. Like, let's do some diligence. Who is this guy? Can we get him on our team? So, so. So. The other thing that I think we need to talk about is there's a clip from his, his, he did a

podcast. Oh, yeah. And it's one of the grimest. like things about crypto that I've ever seen where his experience of crypto people, right? And, you know, obviously crypto is not a homogenous society anymore, right? There's a lot of people floating around who are just like, you know, whatever, doing whatever they're doing, right? And his experience with this was as bad as ours dealing with those people. but he has no upside in crypto.

So imagine if you were dealing with the people that we've been dealing with for the last like three years with literally no upside whatsoever. You, like he says on there, he's like, I almost deleted the software. I almost was like actually like fuck these people. I'm just getting rid of this, which is, yeah. Like, I- Super depressing. It was super depressing.

I think that crypto people don't. even necessarily understand what the experience is like. It's not just like the lack of like upside downside or whatever. It's like when the crypto mob comes after you, it is, it is like it completely fills your entire view. Yeah. And you are trying to have people get really mad because I'll go on blocking sprees. We're like these like bot crypto people show up. I go on blocking sprees and then people get mad.

They're like, I've met you. we like why would you block me and I'm like you're literally like cluttering my feed like you are you're invading my personal space I have things that I'm trying to do I'm I have things that I'm trying to interact with and you keep popping up like an annoying little gremlin yeah and like I'm sorry get the freak out of here like go away a little bit of self-respect yeah um and that's just like when there's like a little group of crypto things yeah yeah when there is like a flood of them it's like you can't even, you just have to, like, turn it off. But he's trying to build.

He's building in public. He's trying to interact with people. He's not willing to turn it off. So, you know, I've had this experience where you open up Twitter and you literally just have to, like, block, like, for a long time. Yeah. Yeah. And then the people you block just freak out, right?

Like, I had this old. And they screenshot it. And then the elder people tag you in it. I can't believe that he blocked me. And it's like, really? Like, look at what you're posting. Yeah. And it's so obvious.

it's on the recipient's end, it is so obvious that you are part of this, like, mob col bot thing. Like, so my favorite one was, like, someone decided that I had, I was like an unethical business person or something, which is like a very weird. Anyways, there was like literally a thousand people telling me they're like, your business ethics suck. And I'm like, this is. It has nothing to do with business even. What are you talking about? I'm like, what are you talking about?

But every single person use the same, these same, like, things. they were like make it their own, but it was the same thing. And many of them were bots. Many of them were bots, right? Like a lot of it is like bought armies that you can spin up or whatever. And I thought the other interesting thing about this was that then Nikita, as he loves to do. Nikita hates crypto. Let's just be really clear.

He fucking hates crypto. He hates it so much now. Because he's trying to do a job here, Kane. He's trying to do people. He'll keep popping up. He's like, I destroyed the spam bots And the crypto people are like, no, you didn't Yeah, it's crazy

So he now has an axe to grind against crypto Because every time he does something to try To make X better, the crypto people And now I'm saying it The crypto people like these like crypto You know Yeah, these people start to like You know lose it at him

And he's like, you're on my platform get the hell out of here you're actually on my platform harassing me on my platform as I'm trying to make it better get like I can just nuke you like this is a private enterprise here right like

so yeah I don't know it's it's pretty crazy all right we got a few more we got a few more signal what else you got we have got to figure out how to fix like the global crypto branding because this is like the same

the coinies ad for the Super Bowl is like the same thing where like the groans and the moans like this is we have done this to ourselves guys and we have got to figure out how to go back to like not antagonizing and annoying and screaming and like showing up in a ball army but like actually um onboarding people are the incentives are so broken right now they really are they're completely broken um the people who are building right and again you know, this is a builder, right? This is a guy who's building open source software,

and he's like, the crypto people are terrible. This is somebody we should love, right? Like, like doing everything that you have 100%. Yeah. Yeah. And so he's actually very aligned philosophically, how he's building, what he's doing. Crypto is actually like a really good fit for him.

He would fit in very well here. But he doesn't, he will never know it. And he can't even accept it at the. this point because all he's seen is like the worst griftiest, most extractive, like loudest bits of it. Yeah. And part of the, well, part of it is that what's the, I can't remember the name of this, the platform that launches tokens, it's like.

Oh, where they do the thing with the Brian Dian. They launch a token. Either Pump. Font or Kaido, which one are you talking about? No, no, no. No, it's way worse. Way worse than both. Imagine putting them together and turning it into like a Frankenstein monster.

So I don't, I didn't look, I don't know what exactly it is, but it's like they launch a token in your name. Yeah. And then they come to and they're like, and they're trying to claim the fees. Oh, yeah. Claim the fees. But then you, in doing so you actually opt in and then might rug people. And so like people like this guy who are, have the tiniest bit of self-awareness immediately are like, They're trying to bait him with some small amount of fees to get, but he then like enables them to have this massive grift around his name.

Yeah. Yeah. And this is what happened. Gas town. Gas town this happened, right? And, you know, we keep doing this to these open. Because we're interested in AI, like there's a lot of overlap between crypto and AI for good reasons, right? Like on the builder level, on people who are building, people who are building crypto and, you know, we're interested in AI because.

nerdy tooling stuff, right, for whatever, whatever reason, right? And then there's a giant mob behind us that don't give a fuck about anything. And every time we show up, they show up behind us. And we were like, you just ruin the party. Claim your fees. Claim your fees on this scary platform. Claim them. And like, the features are coming.

Because that was the other thing. That was his first experience with crypto. It was when he renamed and then they launched a token and, like, right? Yeah. They stole. Yeah. Yeah. Yeah.

We've all been sniped by someone sniping something, right? So like we've, so, so I think, you know, we have this really weird situation where the people who are building crypto have been completely washed out, completely washed out. Like it is impossible as a crypto builder. Back in the old days, you were in a discord, like the syndetics discord, I ruled that place with an iron fist, right? Like there was no way that anyone would ever attempt to like brigade. People would sometimes do it.

And I would literally just shoot them in the head in front of everyone. Like I would just nuke them and they would be like, well, okay, I see that you own this place and I'm not going to fuck with this anymore. Right. It's been completely overrun. There's way too many of them, not enough of us. And they are in control. and I don't really know how you solve that problem. Yeah, they have to go away.

I don't think the incentives are messed up. The incentives are just, yeah, they're just, they're bad. So, all right. Yeah, let's take a quick break. Here's a word from our sponsors that make the show possible. The Energy Network is an intelligent, decentralized grid that coordinates smart devices to balance supply and demand. Energy Dollar is the native token of the network from one of Europe's fastest growing energy startups.

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I think that it was a bit of a high-level take on the announcement and what came out of it. It would be great to kind of dig in a little bit more. So for context, Layer Zero launched their own blockchain, the last blockchain, possibly. And I made a sort of trolling comment as I do at the time. And I'm curious what your take on this is in person. But I'm like, wasn't the social contract of... layer zero that you're going to like connect the chains and not like make your own one so how do we deal with that like what's what's that's the kind of the starting point here for me yeah totally i mean

totally fine so like listen there's there's two things i think one driving force find zero is just i've been in this space for a really long time now like 2011 right and like really almost full time from 2013 2014 onwards um and so i've been there from like bitcoin talk all the way up and like the spaces just changed a ton. And I think... In good ways, right? Not really, which we're just sort of like expressing frustrations a little bit of the break. But I think one of the big things is, I think it's very natural. And I think I was very guilty of this in general of just like, you just kind of assume that the things that you

care about and the principles that you care about are just kind of like win out on their own, right? They're just going to win on their own merit. And I think I like, we sort of had that stance for a really long time. And I think we just saw it, like, just wasn't happening, right? Like, we hit this point and you had this, like, regulatory shift. And all of a sudden, you had all of this demand from the rest of the world and from Tradfai. And for, like, a long time, you just have this pool of crypto capital and the rest of the world. And, like, never, like, they interacted through exchanges to, like, on and off board. And, like, that was it. There was, like, no other interaction. And now you have, like, the whole rest of the world is starting to

move towards this. And yet, like, the systems that we have, that actually carry some, like, semblance of the principles that you care about, just, like, can't meet it. And so people start making all of these, like, last mile compromises in order to, like, be able to, because, like, meeting the demand is, like, the most important thing. And so I just, we felt like there's a huge amount of compromise being made. At the end, you're just going to have it with a system that's just, like, potentially, like, objectively worse, right?

Like, if you just have this system and the whole thing is controlled largely by a single jurisdiction, and everything is like restrictions on who interacts with what. And like, you know, you have like a more open, you know, more open view. So like less privacy for everybody. And yet like none of the benefits of what you would actually want for like global access. And control with like the bad kind of transparency, right? Yeah. Yep.

Yeah, yeah. Exactly. And so like I think we just got to a point where like it's an unpopular thing to launch a layer one right now, which is fine. And like it was, you know, when we started two and a half years ago, It wasn't just like whether this was going to be a popular thing or not, but we just don't really care about whatever. Like, we just decided that we care very deeply about like these couple of things. And I think like the way that we actually like, again, design the system and everybody looks like very, very focused on censorship. And very focused on like all of the things that matter to us and hopefully matter to many people.

And I think like the code will reflect that way well. And ultimately like it doesn't. Like the TLDR is basically you sat around for a decade watching people build bad blockchains and then you're like, okay, we're just going to have to sleep. Originally they were building good things. It was great. I loved like, huge from 2014. I was like, you know, Vitalik fanboy back then. It was like, you know, I remember my brother being like this amazing, brilliant like Bitcoin magazine writer is like launching this thing and looking into it and like the very early day. So like, no, I was like a huge fan of everything that was happening. And then I think a couple of years ago. go got like more and more disillusioned and then like set down the path of like actually trying to solve some of these things but from the layer zero side in the interop what we've learned I think so we can act like 165 170 chains today across the board work with everybody and at the end of the day a bunch of chains that love us and we work very

closely with there's a bunch of chains that like don't like us at all and we still work like almost equally closely with like the thing that has been product market fit for layer zero is asset issuers right it's not the chains the chains the chains the chains They don't want, they don't want layer zero at all. They don't care about layers of their zero. They want USDT-Z and they want WBTC and they want PYUSD and they want on and on and on. They want the assets, Athena and etherfi and all of these things. And that ultimately like the strongest relationship that we have is with the asset issuers themselves

in making like what they do better for them and like making them like giving them the best possible product that they can have. And then that's the draw to the chains. And so like, it's fine. We're still going to connect all the chains. We're still going to work with everybody. We're going to do the things that the asset issuers want. Surely there are some people who are like, like us less now for doing this.

But ultimately just doesn't matter that much, right? The asset issues are the thing. I think we've made peace with this at this point. So, so here, like, okay, you talk about demand, right? All of these institutions. And, you know, we spent years being like, please institutions one day come. And then, you know, they came. And I do somewhat agree with your point that if we don't present the right kind of tech that it will get consumed by them, you know, they're so much bigger.

So the question, I guess one of the questions is like given so many of these tradfai orgs, right, are effectively gatekeepers or, you know, have some kind of like gatekeeper function of maintaining. maintaining market efficiency or whatever. And it's like we can't trust the counterparties to be good actors because they don't have to be because it's not a blockchain. It's a database. And so we anoint these people like DTCC and various other parties. If blockchains and a lot of people in crypto say this, right, like we can get rid of these guys, right? We can get rid of all of these bad, you know, centralized games. gatekeepers and intermediaries.

What's the, like, why are they doing this? Yeah. So I think there's two sides why institutions are actually, like, care. So there's a couple of things. One, why do institutions care? Institutions only care for one of two reasons. One is, like, a fear of being disrupted and wanting to be in front of it, right? Which is, like, a very, like, real thing for a bunch of them.

It's just, like, wanting, like, if everything's going to get disrupted, how can we be best position to actually capture like more of what that end. And the second is just like purely bottom line, right? It's just like P&L for a bunch of them. Like those are those are the only two things that actually matter. Crypto for a long time has been a distribution channel like whether it's Biddle or whether it's, you know, Apollo launching, whatever it is, it's just like can we like, if we have the option to launch this thing and get billions to tens of billions of dollars of AUM, that like becomes very attractive. That's very non-trivial. Crypto as a whole is bigger than like all of high yield credit all of like a bunch of these other segments. And so I think those are like the main

things that are driving institutions. I think the thing like from our perspective is I think what you want like you have to be able to meet demand. And what you want is to have like a neutral set. Like it's amazing that Black Rock is like pushing public chains. Like the fact that they're pushing that and like you have a couple of champions there who are pushing to that sets up the world to like so much better. What you want is of like this neutral decentralized layer. And ultimately like you will just like we have stable coins now. Stable coins are like a huge driver of all of crypto adoption as a whole. And they're like centralized entities that issue and can freeze the money at any time, which is like whatever, that's a thing that exists. The point is if you set a neutral set

of rails, like ultimately an open and decentralized version of some of these things, long term should be able to win. But like the best thing that we can do is actually on board everybody onto these rails. And if they have these layers of their own controls and segments on top that are like in their own smart contracts and baked in like that's totally fine actually if you're on the same set of rails and the rails allow for open systems because you know you're talking about you know open claw and like the system like eventually you're going to have some guy or some person or something that happens to like build something that is open and like captures and enraptures the world for something and like that system should win and what we should all want

is to drive people to a set of rails where like those ideals can win in like their long run. And I think it is, like, this is something that, you know, personally, and we've talked about this on the show, right, like the migration from like a very ideological position to a pragmatic position that many people building in the space, you know, like you, I also was, you know, super idealistic and, and, you know, like this is, we have to, like, you know, there was a period of time where I, and you can find the tweets where I was like, die is too centralized. It is simply too centralized and we cannot trust it because it uses USC is collateral.

And it's just like insanity of that's not going to work. If you wall yourself off in this little thing where like only ideologically pure like, you know, decentralization and censorship resistance is, is a lot. allowed, then like you're not going to get any adoption. And the best thing that you can do for any technology is get people adopting it. If people are adopting a technology, that's how you protect the technology, right? Like if people want it, then they're not going to let someone take it away from them. So I think that like that shift to bring people onto the right rails, the rails that will

facilitate this and then let the tech do its work. might take five years, might take 10 years, might, you know, AGI might get us all first, who knows. But like, at least they're in the game, right? Like, at least they're in the right place. So I see that. I mean, another interesting arc, I guess, here, no pun intended, is this idea of these large Tradfai orgs coming and buying altcoins, which is maybe the only bright spot that we've had in the last couple of years for altcoins. What was your experience? Like how did that play out of talking to these guys and saying like,

hey, we've got this token that's not Bitcoin. What do you think? Yeah. So like we had Ark Invest and Citadel Invest and Tether Invest all publicly. obviously, we have partners announced there of Intercontinental Exchange and DTCC and, like, all of these groups, right? I think we've had more institutions on our cap table historically than most groups. I think you would be surprised by most.

And it's very interesting because most people tell me, oh, these things are like institutions are like a multi-year sales cycle. Like, you'll never get them to do anything. And like a bunch of these groups, like, moved heaven and earth and like a very short, because we didn't tell even our own team for two and a half years, like 24 people out of 165 knew about it until a week before. Like we told like almost nobody. Like people were read in on external partner's side, like really in the last mile for a lot of this stuff. And so a lot of people like moved heaven and earth because they are like interested in the technology itself.

And again, I think this is driven by primarily one of two things. So the fear of disruption and getting out in front of it or just P&L, right? and what they can actually do or how this is going to open up business lines for them. And I think that it's just like any other group, everybody is generally self-interested. But I think if you are able to present something and all of these groups are like, listen, we've talked to everybody, right? Everybody comes to them. They've had every conversation that you can have. But the thing that we're showing, we're like is just different, right?

Like we actually didn't think this was possible in the world and it's possible now. And like that is something that like we feel we need adjacency to. And so I think it's different levels of like actually wanting to do something and it fitting like a need that they're looking for long term versus like very strategically. I want to be like aligned here and on top of it and in front of it very close because maybe this matters a bunch to my business as things develop down the road. So I do think there is more appetite on the institutional side just in terms of like, I mean immediately post post our announcement I talk to like. six of like the largest orgs in the entire planet that were like inbounding into us. And it's just like people are interested. They're excited about it.

They see the thing. And I think to your former comment, like, I think, yeah, maybe we're too harsh on the application side of the past. I still think we need to protect the rails at like all costs, no matter what in terms of how the underlying rails are built. And like, is it fine for stable coins or exist? 100%. Totally fine. And like, again, other systems over like more freer and freer systems will win over time. but the moment the rails are captured and you sacrifice on like the ultimate bottom layer of the rails,

it's just like the whole thing is done. And I think now is like a pretty pivotal moment where I really don't want that to happen. Like I really, really don't want that to happen. And it seems like we're sort of setting ourselves up for that to happen historically. I mean, I think it's the first time we've had the pressure of something like this, right? Like, you know, we've been building in a vacuum and able to optimize for like nonsense. and whatever we ideologically were optimizing for. And now we've got this forcing function of large consumers of the tech

saying, here are the things that we want, and we're going to need to reconcile that. And say, are we happy to give this to them? Or what are the consequences, et cetera? And I think it's going to be very interesting to see that play out. And I do think that there is going to be a move towards people wanting to have more, you know, same thing as we're talking about with base, right? Like, I'm sure Coinbase is talking to people about doing stuff on base, right?

And it probably doesn't come across as credibly for them to be like, oh, yeah, we use, like, some guys' blockchain, like, you know, versus we build it in house and we own it and, you know, we've got the roadmap and control, right? Like, you know, one thing that I think we never really learned that hard. hard in crypto's platform risk. Like, we'd learn it occasionally. But, like, TradFi and these guys, like, they live on platform. They understand platform risk.

They're not fucking around with platform risk. They're going, you know, if they do a deal with someone, they want to know that there's a person who's got direct alignment with them that's not going to rug them or whatever. Right. So, yeah, I think that. Yeah. Brian, do you find when you're talking to, like, the, the, institutions and stuff, do you find that they are more, I guess, thinking about, like, the blockchain

and the tech, or are they more focus on, like, the assets and the users and, like, the unlock? So I think it totally depends on the institution. I think there's what we focused on. So, like, layer zero, what I realized, there's, like, a couple of things. You raise a bunch from venture capital, and I sort of had this mental model that, like, 99% of all VCs are going to be totally useless. And it was right. Like, 99% of them, like, totally. You know, there's a lot of them. I mean, they message you once every couple of months to be like, when do I get my tokens and like, oh, why isn't the price going up? Right? Like, that's just like, there's like zero, zero care. And so, I think when we're building layer zero, like, we have like almost a thousand applications built on top of us. But like all of the adoption from layer zero comes from just like working super closely with a couple of groups. So this has been like Tether and this has been Bicko and this has been Athena and on and on. It's just like 99% is just driven by going really deep with a couple of those. So like all we cared about, you talk to all these institutions and you get stuck in like POC hell forever right and they're just like oh it's like very interesting like let's do a POTC um and i think that's just like the like people have been doing that for years like the least interesting thing we've got a sandbox for you right like hey come and come and join our sandbox right like we've learned in the lesson of sandboxes are really really bad don't get into someone sandbox you don't be in there like you just do not want to spend your time just like doing that forever and so like the conversations we really focused on. We're just like, who do we think actually, actually cares about building something?

Like, who is, who is actually, like, interested in the technology to build a real use case that will meaningfully make their business better one way or another? And, like, don't care how long that takes. Don't care what it looks like. Can't be interested. Can't be like this. It's, like, want to actually do something, right? So that was really our focus. I do think there is, like, a whole host of banks and institutions whose business is not. building technology first. It is like servicing clients and customers, right? And this is how do clients get access to this stuff? How do their customers issue assets that then go everywhere? And they're like really large banks who build their entire business just on doing this.

And so there definitely is a cohort. The only thing that they care about is distribution of the asset. How can I sell more of this asset into the market and where is their demand? And I'm always like an example that always resonates with them is I'm like, listen, layer zero, like we did this thing with USDT Zero and Tethered like an 186 billion dollars in existence prior and had like tapped out all of the major chains that they cared about. And we're like, let's do this little USDT zero thing and like, we'll just try some of these other chains that maybe you don't think you care about so much. You're like, let's just let's try a little expansion. And like nine months later, it's done like $70 billion in volume. And at one point, AUM was like $10 billion grown, which is like

$400 plus million in the ball. bottom line, and every single bank and institutions like, oh, like, that's interesting. Like, I see why we want to be everywhere. And I see why, like, why it is a superpower to, like, get your asset out and have it distributed. So that resonates a lot. And there are definitely a lot of groups that are just, they're just using crypto as any other distribution channel. And it doesn't matter. And then there are a couple of groups who are actually trying to build something on the underlying. Yeah, nice. Okay. That's super interesting. Because, yeah, I've always looked at layer zero as like, I don't know, like the bridge, the thing, the thing that connects the things,

etc. I think it's super interesting to hear it from you and hear about, it is actually more about the asset, which makes sense. Now that you say it, it totally makes sense. And it's a completely, it just like kind of changes the nature of what I thought you guys were spending the most time on. You're not just building bridges everywhere. The asset side of it is so interesting.

and I can definitely see the institutions trying to figure out how do you bridge these two worlds and the answer isn't the bridge itself, right? It's the asset. Right. That's, yeah. Yeah, that makes sense. You know, like, I think we learned this a long time ago. People don't really care about bridges as long as they don't break.

Right. They care about them when they go horribly wrong and otherwise, like, never think about them. Yeah. Like, as long as they don't. It's kind of like real bridges, right? Like, people don't really think about them that much unless they collapse. And then you're like, oh, okay, we lost some people here. So one final question before we move on to our next segment.

We've talked about this quite a bit. And I've been sort of developing this thesis of like the market structure of crypto is broken for tokens right now. The interesting thing about this kind of, you know, a few different. announcements of large institutions buying alts is these people are actually long-term investors. We don't have long-term investors anymore inside crypto. Like all of the VCs are, you know, either washed or garbage or, you know, some combination thereof, right? The people who were previously holding tokens are now just trading perps and meme coins, right? The perpification of everything means that you don't have people who buy a spot token and say, I'm going to

hold this for the next five years because I have a thesis or whatever. All of a sudden, there are these people that are turning up that for a while we're only buying Bitcoin, and now they're saying, and, you know, when they buy something, like presumably they buy it in size, right, like relative to, you know, so do you think that this idea of like the institutions are coming, they bought, you know, majors, right, Heath and BTC and Sol and things like that. Now they're looking out for which of the, you know, three out of the 10 trillion assets that we have over here now that they actually think are like long-term investable. And does that shift? Because they're not like my, my assumption is Kathy Woods not like opening up a preposition

on zero on hyperliquid and you guys are announcing that, right? Like presumably they're buying tokens and locking them away for a while. Is that a catalyst, do you think, for like some of these assets breaking out and becoming investable again and people, you know, not just wanting to trade them, but to hold them. Yeah, yeah. I mean, I think there's one, yes, I mean, I think institutions, a bunch of institutions who, they're just size is different than most crypto fund sizes, right? We're deploying nine figures of size and like very, they can write very, obviously,

ICE wrote a $2 billion check into polymarket, right? Like there's just, like, sizing is different compared to what most of it is in crypto, right? like the aggregate of like a huge amount of the funds in all of crypto and they just wrote it as like a single check. So like it's just a different world in that perspective. Yeah, yeah, it's just not, right? And so yes, I do think in that perspective. And I also think like, listen, public markets are like incredibly incredibly powerful in general. I think debts were probably like the wrong way to do it. And it's just like this weird synthetic leverage and everyone is just like how do we push out a debt as quickly as possible and who cares of the manager is taking this crazy amount.

And we got pitched this like a million different times. Like I think that is like the first touch of kind of what that looks like. And again, like most things in crypto, now people are like, ew, like horrible reputation. Like, you know, it's just like we've like shot ourselves in the foot in a way. But I think like, yes, making there are going to be a couple of things that are critically important long term. And I think the institutions care about which of those things are betting on and which they think will be critically important. And I think public markets long term will eventually care about that as well. And it's like, what is the right vehicle for public markets to, like, have exposure to that stuff?

So I think there is, like, certainly asymmetry in that side. If you can get the right structure and, like, as an industry, we can, again, stop making it, like, the lowest possible quality thing and just, like, rush to serve it up and make it so everybody hates us. But, yeah. Okay. All right. That's bullish. Let's hope we get more of that. So our next segment, Tay, you and I have been talking about this.

this, right? And, you know, I'm sure, Brian, you've got to take, I have been very suspicious, I guess, for the last, like, you know, a little while about why old contracts keep getting exploited, right? It seemed too coincidental that we just had all of these weird edge, and, you know, we talked a bunch about this, right? Like, maybe it's fine, maybe it's not AI. Maybe it's just that, you know, we've noticed a few things about how, like, weird math works with contracts or whatever. Like, I never bought this. I never bought it. I'm like, there's no way that Balancer V2 was just sitting there out in the open. And we, like, just figured out the map like two weeks ago also when we happened to get super intelligent fucking coding machines. And now Paradigm is like, hold my beer, as they love to do.

and they have launched this EVM bench that is like a testing harness, right? It's all about harnesses. Testing harness for AI agents to detect, patch, and exploit. Smart contract vulnerabilities. The exploit part's cool. I'm sure you're so excited. Loving this, T. My chats are like going crazy right now, by the way.

I bet they are. They're so excited. I bet they are. So, so, Tay, like, walk us through, which agent should we be using to exploit the contracts, right? Like, that's what we all want to know at this point. So, yeah, what's, what's, and the issue. Okay, so, I mean, this just happened. This just happened.

This is like 20 minutes ago, right? Yeah. So basically, I guess Paradigm has been working with Open AI. And there's been a few different, like, groups that have been sort of doing similar things. but this is like the latest and probably, I guess probably the most comprehensive. But essentially they're like, yo, you have all this on-chain data.

You have all these exploits that have already happened. And you have all these models. Like, let's benchmark this. And then once you have the benchmarks, then you can kind of accelerate very quickly to, uh, uh, like fine tuning and like doing things with these.

So this new research has, I guess, gone and like done a huge amount of work to, put all of this data and then test all the GPs, Gemini's, clods, and it looks like they've sort of DVDed up on detect, meaning like, I guess like audits or like live on chain stuff, right? Like, is there a thing that exists? And then they judge them on patching, which is like, okay, we know this bug has existed or exists like, and then they have to remediate it.

And then obviously, the most exciting one, the exploit one, which is, you know, they found the, they found the thing and then putting together the actual exploit to exploit it. This is really exciting for two reasons. One is just, you know, hacks are exciting things or whatever. But more importantly, if we are going to continue to like deploy and ship and upgrade and do these things on chain, and we know there are so many. people and people now with agents, like, just looking very deeply. If we do not have, like, if the good guys do not have models, yeah, like, the detection and the tools that the builders have to protect themselves, which is both, like, defensive, very defensive security, like, you go try to hack your own thing so that the

other guys don't. So this is the most bullish thing for me about this, right? is like Codex 5.3 is pretty close to the best thing in the world, like, that exists today, right? It is so good. And so if the state of the art, if the state of the art of intelligence of, like, contract exploits, everyone has on tap, it actually shifts the balance of power because now you as the writer of the contract can deploy it into a safe environment and literally just run codex at it. Like, forget about auditing.

Why would you send it to a bunch of idiot humans? We're going to like, why would you send it to the quant stamp? We're just going to like, tap press the buttons and then like, you know, put the stamp of approval on the, on the order, right? When you can put it in a box and run this thing over it and, you know, like, just like hammer this thing. the balance of power will shift, it feels like. Like, this is nothing good for security if we are, like, is that a naive take or like,

do you? We need that pretty quickly because like the moon well, two million dollar hack just happened because they like, you know, but he's just like co-authored by Claude and just like pushed into production, right? There's like a fine balance there. It feels like. Yeah. I mean, the things we're writing.

We're increasing. It's a critical step in this thing, right? I'm just deploying it to production. Yeah. Well, yeah. But I mean, yeah, I mean, the bad guys already are doing this, right? Like, they're already trying to do this. How much of it is, like, throwing in a box and having the AI just, like, attack it endlessly

versus, like, optimizing their existing work or helping them hold everything in their heads or whatever. Like, it's a bit unclear. But if we do not have, if the builders and the auditors and the security people in this do not have, like, better tooling, then there's no hope, right? And especially there's no hope when we are actively deploying stuff to the chain that's half written by the AI, right? So that's, yeah, I'm really bullish on this. I also find it just very interesting that, like, I don't know if it's just this graph,

but this graph has the exploit, like, they're very good at exploiting. They're actually better at exploiting than patching. I'm attacking? I mean, this checks out. So I look at this and I'm laughing, right? Because I've used all of these models a lot. And, you know, Opus 4.6, the most interesting thing to me over the last couple of weeks has been, and this is where, like, people do not yet have, like, strong reasoning capabilities of the whole stack here, right?

At the bottom of the stack is a bowl of math. And that's really hard to do when it takes a lot. lot of GPUs and whatever, right? And then on top of that, you've got fine tuning. And then on top of that, you've got system prompts. And then on top of that, you've got a harness. Then you've got the prompt in the harness. Then finally it gets to you and you get to actually tell it to do something. And all of the optimization for the last two months has been at the top of the stack. Open claw, you know, like, we're like, oh, cursor is so good. And it's like actually cursor is terrible. And it makes the agents so much dumber. And if you take them out of that environment, they all

sudden get way smarter. And when I when I look at this, I sort of laugh, right? Because in the last two weeks, there's been a convergence where someone told Codex 5.3 to stop wasting time thinking about shit and just do it, right? And it just jumps in and starts trying to do things in the way that like Opus 4.1, 4.5, 4.6 loves to do. It's like if you were to walk into a consultancy, And the consultancy is run by Opus 4.6, you're like halfway through the first sentence describing the thing that you want. And it's like, I've built it. It is ready. And you're like, what do you mean?

Like, I didn't even tell you what I wanted from you, right? Whereas like, you know, GPT, Codex 5.2 would sit there for like three hours being like, and you'd be like, just stop interviewing me, bro. Just like write some code, please, right? But they've kind of converged. They've kind of converged now where they're both. a bit high agency, but like Opus 4.6 to dial it back just a little bit. It actually stops and thinks for like 10 seconds before it does stuff. So when I look at that detect graph and Opus 4.6, like that checks out for me.

It's detecting everything. It's like just loves detecting shit. It's like that's just like running through brick walls like without thinking about anything. It's like I've detected everything, guys. I've got all of it. So, yeah. That's so interesting. Yeah.

No. And it's, again, this goes, I think it's, I think people get in their heads backwards because it's a little bit. Okay. So like early computer, this is like the argument, close source first open source, right? If you keep it secret and it's closed source, then you're going to have less attackers, right? Because they can't see it.

Yeah. No, actually. Wrong. Dead wrong. Research. We have decades of research on this. You are wrong. There is so much research.

telling you, objectively speaking, you are wrong. Open source is more secure. The reason is that the incentives for the bad actors to go in, even if you're closed source and find the issues and then exploit them, is higher than like your team can protect. However, once you open source, you have a wider variety of people. You have other people that just like might stumble upon it. If you have forks, they're going to find things from their own resources.

Right? All of these things happen. The same thing is going to be true with like the AI and stuff. And so it's not necessarily the open source, close source exact argument, but like the more tools that we have out there, the more models that we have focused on the detection and the patching and the exploitation and the more people's hands that these tools are in, the better and safer and more secure it's going to be. right it's going to be insane though in as we find equilibrium it is going to be insane because there are going to be things that are like like something gets deployed and it's immediately exploited right but over time and very quickly to be honest like you're going to find that equilibrium and we're going to stop deploying things without you know we're just not going to deploy things that are just until you've run this harness over it right like yeah I mean, I think the most interesting thing for me is, like, however small the cohort of the one in a thousand engineer in any particular domain, right, whether it was like exploiting smart contracts or like building like, or like migrating like legacy C code from 1989 to TypeScript, right? I'm sure there were like 10 guys who are like, I am the best dude at taking C. and turning it into TypeScript. And now we actually have like a million of those.

It went from like a cohort of 10 people who could do that thing to now there's a million of them. And this is the same thing for like smart contract security. We had like a hundred people maybe that were like the absolute like bleeding edge state of the art like got stuff, maybe less. I don't know. And now like you can look at code. I guarantee you if you were to look at Codex 5.3's performance against

human, it's going to be better. Yeah. It's going to be better. And you can just spin up like 10 of those inside your computer. Yeah. That's crazy. That's wild. Like we're like,

insane. We're living in the trend, by the way. Like our, we're just like, we're all cooked. It's going to be insane. I'm so excited. I will say, I'm glad to hear you say that today because

there's been a bunch of calls over the last couple of days. for just like more closed source and closed source being the solution. And so like it's actually like that that point is really important because I think there's a very easy path to go down to, well, open source is dead, just like closed source at all because agents will get us. No, I think I think the exact opposite because, you know, what was the for anyone who has maintained any open source stuff, right? And like for a long time, synthetics was the maintainer of a bunch of open source contracts that were forked, like, at infinite item, were deployed on every single chain, like, you know,

from staking rewards.Sol to, like, there were a bunch of things that we put out, every single thing we ever did was open-sourced, we put all of the infrastructure around it. We made it really easy for people to use it and fork it. And it's really hard to maintain. Like, the cost of maintaining it and also trying to do stuff is so high. We had, like, engineers that that's all they would do is like deal with the consequences of the fact that you had this code out there. And it was really high cost, but, you know, we were ideological purists. And so we're like, we will bear this cost. There's no cost too high to bear for open source. And, and then we're now in a situation where actually, like, anyone can be a maintainer of open source software

because they've got 10 guys in their computer that can just do stuff. Like the number of maintainers of people, of entities, whatever you want to call it, that are able to maintain open source software and the cost therefore of maintaining it has collapsed to zero. Yeah. And you know, you see that with OpenClaw. There's like 100 PRs a minute, right? The agents are the only ones that I can actually keep up with the agents that are right. And we don't, we haven't reasoned yet or reconciled how we deal with this, right?

Like, you know, just chipping it all to prod and praying is probably not the solution. Like we need new models for dealing with this, but the cost of maintaining open source software has effectively over the last month collapsed to zero. And therefore, the value of that open source software, one of the largest impediments to maintaining open source software is gone. And so open source will win. It will absolutely win. There's no world where it doesn't win where you have engineers that are willing to work 24-7 for free effectively. maintaining open source software, you're going to see open source repos where like there's an autonomous agent, you know, like we've been lopping, we've been lopping DAOs, right, for however

long we've been larping them since the Dow hack, right? And now we're going to actually have dows. There will be agents that are actually autonomous that make the decisions and like they'll figure out how they do governance of like who gets to merge to Maine. And like it's going to be a whole thing and someone's going to pay maybe they'll pay for themselves. Maybe they'll like bootstrap their way and they'll like own the info that they're running on and they'll just have their own little

AWS shell that they exist in. It's going to be, it's going to be wild. It's going to be wild. It's going to be wild. It'll be interesting to see too. I think that we're going to have to figure out an additional sort of structure. Right now it's like the bug bounty structure, right? I think that we're going to have to add on and like

bringing the barrier down for like the oops I accidentally hacked instruction. Yeah. We'll see. But like I think that especially I mean these days a lot of smart contracts are like upgradable and there's like things that the team can do or whatever.

But you can imagine like there's going to be an increasing number of agents like doing things and maybe not fully thinking them through. There's an opportunity that's like give them a viable path to like correction, right? So if you like accidentally hack it or even if it's not an accident, right?

What we see quite often is they get so, like the human gets so excited about the fact that they like may be found an exploit and then they like do the exploit to see it if they could do it and then they're like. Oh, yeah. And then they see like the people hurting on Twitter and the team and they're like and then they like, you know, there's two paths if you engage with them and you're like. like, look, we're going to give you a nice little path right here. Okay.

Take it. A lot of them do. But there are some that like definitely we're not doing this deliberately and maliciously, like fully maliciously who are like just freeze and like run away. And it'll be interesting to see if like we can create additional automated like sort of trustless structures to like. So that the agent when it's like, let me exploit this. Let's go. We give them like a path of viability to like either report is like to disclose it or, you know, safe harbor.

People are going to wake up and their agent is going to have exploited Uniswap v3 overnight while they were asleep and negotiated some kind of like exit. I mean, it does happen quite a bit with the with like the MEP guys. Yeah. They have like they have so many autonomous like bots running. Yeah. that, yeah, they accidentally turn around things. They literally wake up and they're like, God damn it. Why does my bot have $10 million?

And then they look at Twitter and they're like, oh, crap. Yeah. But luckily, like those guys are really, honestly, like, they're the low-key, like, saviors in a lot of cases. Because they always come back. They catch things and they're like, yeah. And they're like, send me the address. Thank you. Sorry.

All right. This has been awesome. Thank you, Brian, for joining us. It's been really fun. That's it for this episode. Yeah, thank you. Hopefully we'll have you on again some other time. That's it for this episode of Uneasy Money. Thank you for tuning in. If you'd like the episode, follow us on the Unchained Feed on X, YouTube, or wherever you get your podcast. And we'll see you next week.