Unchained - Why These DeFi Builders Are Betting It All on Coinbase’s L2, Base - Ep. 894

Episode Date: August 29, 2025

Subscribe to the new Bits + Bips channels! 📺 YouTube  🎧 Podcast → Apple Podcasts, Spotify, Pocket Casts, Fountain 🐦 X / Twitter  Coinbase’s L2 Base is quickly becoming the most powerful distribution funnel in crypto — and two builders are betting everything on it.  In this episode, Aerodrome’s Alex Cutler and Moonwell’s Luke Youngblood explain why they aligned early with Base, how Coinbase’s strategy could transform token launches by offering “one-click distribution” to 100M+ users, and why they believe Coinbase is set to become the world’s largest “crypto bank.”  They also debate whether exchanges should decide which assets people can trade, how DeFi must evolve to reward token holders sustainably, and whether Uniswap’s push to keep liquidity fragmented is a moat or a weakness.  Finally, they unpack the future of sequencing — and why Flashbots could deliver Solana-level speed while making trading fairer for everyone. Thank you to our sponsors! Walrus Guests: Alexander Cutler, Co-founder of Aerodrome Finance Luke Youngblood, founder of Moonwell Finance Links: Unchained: Companies Are Competing to Bring Crypto to the Masses. Who Is Best Positioned? Crypto Firms, Fintechs and Banks Hope to Dominate Stablecoins. Who Will Win? Moonwell stats Aerodrome stats Timestamps: 🎬 0:00 Intro 👥 2:56 Why Alex and Luke aligned early with Base, and how their backgrounds shapes that decision 📢 6:32 How Coinbase is positioning itself as the distribution partner of the onchain economy ⚖️ 21:12 Whether exchanges should be the ones deciding what assets people can trade 🌱 33:15 How DeFi needs to evolve to reward token holders sustainably and focus on long-term growth 💧 41:32 Whether liquidity fragmentation is actually a feature, not a bug, for Uniswap 💸 57:50 How  Moonwell and Aerodrome justify issuing more incentives than they currently earn in revenue Learn more about your ad choices. Visit megaphone.fm/adchoices

What differentiates aerodrome and moonwall days, we are based focus. We've been based focused in the line for over two years now. And we just know that eventually Coinbase is going to be the biggest on-chain economy in the world. The Defi 2.0 protocols like aerodoms and moonwalls and hyperliquits of the world will succeed because they actually accrue real value back to token holders in a way that is not just snapshot voting. I think any protocol that has a sustainable flywheel associated with it is far more sustainable than the traditional cell, tokens allocate them to themselves. Incentivize insiders so you can, I guess,

LARP about being sustainable on the outside. With Coinbase's transition to having a defy mullet underway, I thought it would be a good idea to catch up with some base defy builders. Alex Cutler of Aerodrome and Luke Youngblood of Moonwell talked about why they see so much opportunity to be building defy on base when it seems like this next phase of crypto adoption will be about distribution, which means that C-Fi and DFI mashups will be how DeFi builders access users. They talked about the benefits of building on base with automatic token listings on Coinbase, plus liquidity benefits, as well as a big advantage in accessing

a user base of more than 100 million people. They also threw some shade on Uniswap, plus made some other digs at other centralized exchanges, including defunct ones, whose balance sheets were propped up by their own coins. All of that makes this a spicy episode, but it also gives a lot of insight into how builders are preparing for the latest and probably the most competitive phase that we've seen in crypto thus far. I hope you enjoy it. At Unchained, we believe the future should be decentralized, and that includes our data. That's why we use Walrus, the fast, dynamic, verifiable data layer. Learn more about the platform that's powering our future at walrus.xyZ. Hands up, everyone. We've got exciting news. Bits and Biffs, our Macro Meets Crypto Show,

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spelled BIPS, on YouTube X and wherever you get your podcasts. Welcome, Alex and Luke. Thank you so much for having us. Thanks for having us, Laura. Great to be here. Yeah, excited to chat. So why don't we start with some. brief intros and background on each of you and your projects. Alex, do you want to start? Yeah, you bet. So I got into Defi in 2020, 2021, Defi Summer. Caught the Defy bug prior to that, I spent some time working in politics, worked in tech for a period of time and consulting. And basically, once I got that defy bug, quit my job, went full-time crypto, didn't

really know exactly what I was going to do, but met some other smart people, found my way to becoming kind of an accidental founder and builder in the space, first with Belladrome Finance, which is on OPM Mainet and the top exchange of the optimism super chain, and then, of course, with Aerodrome on base. And Luke, what about you? Yeah, so quick background. I've been here before. Thanks for having me back again. I started full time in crypto about seven years ago working on staking at Coinbase, and I wrote a patent in 2019 for method of delegating from cold storage.

So I came to Coinbase on a mission to launch staking, starting with Tesos and Cosmos, and eventually in 2020, I helped Coinbase launch the beacon chain. That product now that I left after I left in 2022 is part of their subscription services. So it's actually generating about estimated $800,900 million run rate for Coinbase's bottom line. That was on their latest filings.

And that's out of a $2 billion total, subscription services bucket. It's hard to know exactly how big staking is because they don't break it out. But that also includes things like base sequence of revenue. So that was where I started my career was coming to Coinbase really early. I think when I left in early 2020 to launch Moonwell, the Ethereum staking business had just launched. We'd gone through the successful beacon chain launch. We launched Salonostaking, Cosmos, Dezips, and others. And then it was about a $250 million run rate in early 2022. That was right before Bear Market. Now that I've left and I've been building Minwell for three and a half years, Minwell is an open lending app on base.

When Jesse told me about base launching in early 2023, I decided that we should pivot from Pocateod, which was, we thought would be a good ecosystem, but it's kind of a dying ecosystem now just to be transparent. We pivoted from Pocod to base and we were there day one, August 9th, 2023, about a few weeks before Alex. But the interesting thing about us and Aeroom is that when I heard about Aeroom launch, on base just a few weeks after we had launched on base and we were the two sort of base native leading protocols and dex protocols because we were the first ones that saw the value in base we were there before any of the big players we were there before you know you know unostops and obvious of the world we actually built real organic communities there and we built the the both the top category leaders not in terms of tvl but in terms of what actually matters users what people are doing how people are earning fees and revenue and we can talk about that and all ultimately what is actually the productive youth gap is happening on base? Because there's a lot of protocols I don't want to name too many names that are spread across a dozen or 20 or 30 L1L2 ecosystems. They're not base focused.

And what differentiates aerodrome and moonwell, and I love to talk to you about that today is we are base focus. We've been base focused in the line for over two years now. And we just know that eventually Coinbase is going to be the biggest on-chain economy in the world. Excited to be here. Thanks for having me. Yeah, yeah. We're going to talk more about base.

But before we do that, I want to just zoom out and just talk about what I think of as this inflection point where crypto's at, where we're seeing this mashup between C-Fi and D-Fi. So obviously, base and Coinbase is like an obvious example. But other similar ones would be like Robin Hood, launching Robin Hood chain, Stripe working on tempo. You could even put in that bucket things like hyperliquid, which, you know, is like, I don't know, L1, L2, L3, something, but is, It's obviously much more centralized than most other chains.

Polymarket might be another example, maybe even Pump Fun. So I just wondered like how you thought about this era that we're in right now, like how you're seeing these two worlds converge and what you think is going to, you know, happen during this period. And either one of you can start. I'll let Alex go first on this one because he's clearly been the deepest in the medodex narrative. But then I'll add on to that because I have some, I have a lot of thoughts. I've thought about these protocols.

you just mentioned a lot, and we were patterned after some of them. We learned a lot over the last three years. Let's say that. And go ahead, Alex. I was going to say what I think has been very orienting for us is something that Brian Armstrong shared on one of the past earning calls, which is that, you know, Coinbase's point of view is that, and I believe this is right, I can't remember the exact it. It's like in the next five years, they believe, you know, about 10% of global GDP is coming

on chain. And if you think about how big of a number that is, it's orders of magnitude larger than we are now. And we know kind of the case for why this happens, right? D-5 is better, right? You can provide institutional level scale products, services. They can be real time. They can be instant. They can be always on.

They can distribute globally to everybody in totally permissionless ways. But if that's sort of the bet, right, that the space is going to grow by orders of magnitude, and that much of GDP is coming on chain, that means everything's coming on chain. That means things like global FX is coming on chain. That means real world assets are coming on chain. That means we're going to see a whole bunch of new, interesting primitives and products that begin on chain and then are distributed outwards to the world. And when you think about, you know, the two verticals in which I think like Luke and I sit, right, of the exchange level infrastructure of this new on-chain economy that is servicing, you know, 10% of global GDP, sort of lending, borrowing aspect of it, these are two core verticals of the on-chain economy and really essential race, right?

This is essential infrastructure for this economy. And so, you know, as an exchange, we want. to be the best possible rails for all of these types of assets. And I think to your question, Laura, this sort of like melding of defy and tradfi, there's no better example of this right now than like what Coinbase is doing with their defy mullet strategy, right? If they believe 10% of global GDP is coming on-chain, they want to be the distribution arm of this new on-chain economy, right? Basically, servicing, products and services that were previously unimaginable in traditional worlds or would require so much cost, so much weight to be able to create or distribute, create so much like legal regulatory

overhead to distribute or to manage. They want to be able to do this seamlessly. So the first example here, of course, is the amazing product with Coinbase offering loans on Bitcoin via Coinbase.com and you see the charts of adoption on that product and it's basically a straight line and you know what we've heard of course from Coinbase is that the demand for that product for their from their customers is so high that you know it's mainly just scaling up all the defy liquidity and infrastructure to support it you know they can't keep up with demand and functionally that is just them distributing Morpho Moonwell and of course Air drone play a very important role in being sure that there's enough liquidity for liquidations or things like that.

But the next big proof point here is they are now making it possible that every asset that trades on Aerodrome, that trades on base, is now tradable in the Coinbase interface, right? And for those who have access, right, and it's only about 10% of Coinbase users right now, it's virtually indistinguishable. if you go in there and trade an asset on base from trading an asset that Coinbase has listed. And if you think about what this means for Coinbase, they are now able to grow by orders of magnitude the number of assets that they're distributing. And they're able to distribute them in virtual real time to their customers. So that could be a meme coin that has like a 48 hour lifecycle, right? They don't have to call the whole team in, you know, like they did with Trump over the weekend to try to get this thing listed and do all those reviews for real world assets and things that, you know, they might have never been able to surface or distribute.

They're now able to go from like thousands of tokens to millions of tokens. And they're able to do that at no additional marginal cost. And the crazy thing about it, too, that I like to emphasize because I think often the question we get is, like, well, aren't they undercutting their core business as a centralized exchange? They can charge functioning the same rate on the front end that they do on any trade that happens for a centralized listing, which, again, was a very expensive, risky proposition for them to list. But now they can list everything, take the same fee. And if that trade is happening on base, they're also getting an additional fee in the sequence of revenue

that they generate. And if that trade is happening on Aerodrome, they own a large stake of locked Aero Token's that they went on the market and bought. And because our protocol redistributes 100% of the revenue, it creates back to locked token users, voters each week. There are also earning a percentage of all the flow that they direct to us. So I think it's really, really compelling for any triad Thai institution. And I think Coinbase is obviously the leader here to be this sort of distribution arm of this new on-chain economy. And rather than it like undercutting their margin or undercutting the sort of core of how they make money, instead they're growing massively what they can distribute and perhaps even growing their margin on each item that they are distributing.

So it's very compelling. I think it's why we'll see a lot of people try to do what Coinbase's. is doing, I think it's kind of a big open question. If it will be something, people will be able to replicate anytime soon. So I don't think people quite appreciate the amount of like risk that Coinbase takes on and like leading the charge here. I don't think they quite appreciate the complexity of some of what they've done. But they are certainly writing the playbook here. And, you know, we want to be kind of the essential infrastructure on the exchange side for this playbook. If I can build on what you said, Alex, first I agree with 100% of what you just said. And that

is a big part of the reason why we've been so base focused for the last two plus years. Why I've been so personally based focused on my career. I mean, I came from Amazon Web Services. I was a principal engineer there. I was in Web 2 for two decades. Before I even got into this crypto stuff, I was just a guy that liked to mine Bitcoin. I didn't even know I would be doing this for a profession 10 years ago. Ten years ago, I was helping Verizon figure out how to migrate their Oracle databases to cloud, but what I learned is what I learned. I know it's funny where you end up, I just thought back to 2015, but anyways, what I learned, what's important about Coinbase is all, I'll present the retail perspective.

So early crypto users like us are not Coinbase's target audience. Now, I had a Coinbase account back when I first mine Bitcoin, but I didn't actually use Coinbase because Mount Gox worked better, but then Mount Gox got hacked. And I learned in 2013, the reason why Coinbase was safer than any other exchange, this is over 10 years ago was because Brian Armstrong cared about not getting hacked and no other exchange in the world did. And that's what early Bitcoiners learned. But that's also what the banks learned in the last, I don't know, decade plus that Brian's been out there talking to the banks. And most people don't even appreciate that like, I didn't even appreciate that until I came to Columbus in 2019 and Crypto Winner.

I was a brand new employee. I had just been aquired because I wrote this little tiny piece of technology that helped the Tesos Foundation launch their network. And then they just somehow acquired me because Arthur and Kathleen and the founders of Tesla's, we're like, go hire Luke if you want to launch shaking. He's good at that he knows AWS and how the cloud hardware security markets work. So what Coinbase is going to do, they're not going to help the 10,000 defy natives like me and Alex figure out how to earn 1% more on our yield. Nobody cares about that. But what do people care? Like people like your family members and friends that are like, hey, I heard Bitcoin is going to be pretty good during the next five years because there might be a lot of inflation and money printing

globally. Like forget what country you live in. These are people that are coming. to all of us every day that work in crypto and saying, how do I buy Bitcoin or not even Bitcoin or Ethereum, but maybe I want to buy some real world assets. I heard these yield bearing stables like Athena are interesting. How do I buy those? Those 100 million monthly active users that are on the Coinbase retail app now have full access to every asset on base today. And now there's only 1% of them that they rolled it out to. And this is what I tell my team that you have to caveat this because Coinbase is very careful. Now keep in mind they're cusseting probably I don't know what they're costing today because I haven't worked there for three years,

but it's probably hundreds of billions of dollars of the biggest traditional finance players in the world. It's the Black Rocks. It's the Franklin Templeton's, it's the Wisnbury. So on the Tradfai side, the BlackRock's of the world, Larry Fink will only trust Brian Armstrong. And that's just the reality. And I think there's very few people that can go talk to Jamie Diamond who kind of controls, he's a systemically important financial institution. He's probably more important than anyone in the world. You can go talk to him and have a meeting with him. try to explain to him why Coinbase is three years ahead of JPMorgan, even though JPMorgan has trillions of dollars of assets. And then if you think about that from the institutional perspective, which what Alex just talked about,

there's $100 trillion in U.S. capital markets. Even if Coinbase is competing with all the other players, because eventually the banks will figure it out, the Schwabs and the chases of the world, they'll have their own exchanges where you can buy, maybe you can buy Bitcoin five years from now. Five years from now, if Coinbase just has 1% of all the trading volume, of every RWA, every RWA that's going to come on chain, every tokenized stock that's going to come on chain, every tokenized real world asset, treasury bills,

you know, this will allow people, you can't even imagine these cases like now your mom can go by $100 of Nvidia with through the Coinbase app because Coinbase is applying for a banking charter as we speak. And the difference, what makes base so unique and just to kind of sum it up and then we can build on this because I have a lot of thoughts, what makes base different than Chase's or Bank of America's private ledger

because banks all have a ledger. I worked at the banks. They all have a ledger, and it's typically like an Oracle database running on a Sun server and some data standard that we hope that never goes down because every time it goes down,

we lose a billion dollars. And I was the guy that would replace the parts because when one half of it was down, if the other half went down at the same time, then they really lost a billion dollars. I was the one that had a four-hour slate to replace the part so that the second half didn't go down so the bank didn't have an instant report.

So I saw how they operate, and I really appreciated your guest last week, Austin Campbell, sorry for being long-witted. Two weeks ago, I think he had him on the show and he presented a perspective that most people don't even know about. Because when the banks want to come on chain, they don't care about what early crypto people care about like us.

They don't care about decentralization and censorship resistance. In fact, those are bugs, not features. They care about like what happens, like the easy analogy, I really love Dawson's analogy. What happens to a mortgage, tokenized mortgage gets taken over by DPRK? In no world can North Korea own grandma's mortgage. And Coinbase is going to make it so that we can tokenize mortgages on chain. It might take five or 10 years for them to get. there, but eventually some people that want to build a basket of like, you know,

base may be a healthier basket that's priced in real time that lets people buy mortgage back securities on chain and like a decade from now when that's finally illegal, they'll be able to do it on base in a way that the bank, all the banks know that Coinbase is going to be a neutral third party because every other ecosystem wants to own the entire stack. If you look at all the other, I don't want to name names, but all the other L1 L2 ecosystems, they have full vertical integration. And this is the traditional finance, perspective. Of course, Chase is going to have their own stack. Of course, Bank of America is going to have their own stack. But Coinbase has the only one you can read and write to with an Ethereum wallet.

And that's why Alex and I came to base two years ago, because we realized Coinbase is going to be the biggest crypto bank. They may not be the biggest bank. In fact, they're tiny compared to Chase. But they're going to be the biggest crypto bank that has all the assets and anyone in the world, including you and me and Jamie Diamond, if he wants to, can read and write to that internal banking ledger with an Ethereum wallet and a private key. And I've been dreaming about this moment for about 10 years than I've been in the Ethereum ecosystem. I think Alex shares that vision.

That's what's unique about Coinbase. No other bank in the world will let you read and write to their ledger within Ethereum private key. And now Coinbase lets you do that. Now you can argue about centralization. Let's talk about that. But no other bank, Bank of America doesn't let you do that. Chase doesn't let you do that.

Coinbase will be a bank next year, my prediction. And they'll let you do that. That's fine. All right. Well, yeah, I mean, I was going to ask you guys specifically about Coinbase and Base, but you naturally went there. So first we're going to just hear from the sponsors to make this show possible, but after that we're going to talk a little bit about this transition.

Your apps are going under. At Unchained, we care about the future of decentralization. So it only made sense for our media content to be decentralized. That's why we use Walrus. It's the fast, dynamic, and verifiable data layer for on-chain builders. And it's not just data management, while risk ties directly into smart contracts, unlocking new possibilities for programmable content,

delivery, subscriptions, and community engagement. So as we imagine what decentralized media can become, Walrus is the tech we trust to help build it. Learn more at walrus.xy-Z. Back to my conversation with Luke and Alex. So, you know, we alluded to this in the beginning. The whole crypto space is in a transition, obviously with, you know, Trump being elected and the new administration being much more friendly to crypto than the previous one. But also, of course, your apps are in a transition period because base is going to be, or it's not really base. Coinbase is integrating all of the base decentralized exchanges directly into the Coinbase app. And I wondered if you could eliminate how it is you're thinking about this transition.

How do you think about the scaling of it? Like what are some of the other considerations that you need to ensure a smooth rollout? even, you know, things like obviously this week, we saw a little bit of an uproar about Jesse working with Sahil or Sahil, I'm not sure how to say his name, who is a known rug puller who claimed he was going to be onboarding British boxer Tyson Fury to create a creator coin on Zora. And, you know, I do think that just there is a little bit of attention of being like a smaller startup that's part of a bigger organization. So, you know, What are the considerations that you're thinking of and how are you working to make this a smooth transition for everyone?

Can I go first? I have the perspective from Coinbase having worked there. So I would say that the interesting thing about some of the controversy about greater coins, and I know Alex has a lot of thoughts here because we're in this private group where we chat with some of the top base leaders. It's a very exclusive group with only like 20 of us. But we talk about the trends happening and whether creator coins are good or bad. And we've had some really interesting discussion. At first I was negative on them, but I changed my point of view. And I think Alex had a similar transition, but probably different.

And it made me think back to when I was a brand new employee in 2019. I just rolled up to Coinbase HQ. I was excited about crypto because I was an early Bitcoiner in Ethereum. And I kind of expected everyone to be using crypto, but I was surprised to learn that like half the employees didn't because they were not crypto people. They were like, you know, accountants and lawyers and like, you know, really nice meeting people. But like most accountants and lawyers and, you know, tax specialists, the people that you actually

need to build Coinbase that I didn't even, wasn't aware of, aren't crypto people. They have to be taught. And so what I learned that Brian had a unique perspective. You can imagine people like Paul Grewell in the room. Who's one of the most brilliant legal minds that I admire. And he's one of the few, he was a district court judge, but he's now the chief legal officer. He's one of the few, not only is he, was he a federal judge, which is unique. He was an amazing attorney, but he's only in a few people that can even talk about

crypto in a meaningfully intelligent way as someone has used crypto. And I've talked to lots of attorneys that are a crypto specialists, or security law specialists. They don't even know how crypto works. And so what Brian said, and this was controversial in 2019, was he wanted to list every asset that was legally available to be listed. And at the time, there was a lot of, frankly, I didn't consider Dogecoin in 2019 to be a legitimate asset. I was an early Bitcoiner. So I thought Dogecoin was just a meme. I was like, isn't that like that thing in Bitcoin talk? I don't know if you remember it, Laura, but there was a Bitcoin talk and people could tick with Doge. I'm like, isn't that like just a meme? It's like a game.

Why would Coinbase list that? That doesn't seem like something Coinbase, list. And I feel like 90% of the employees, including crypto-native people like me who are a bit of Congress, we shouldn't list Doge. That's a meme coin. But luckily, I think now that it's like six years in the future, people have come around to the realization that like we're no longer in this world. And this is what changed, I think, the last five years. This is why Brian is so early on so many things. We didn't give them credit back then. But we're giving them credit now that like, hey, maybe these, a group of people at the SEC that changes every four years when a new administration comes in, shouldn't be the ones picking and choosing which assets are available to everyone in the world

because people are going to find ways to buy them. They'll buy them on non-U.S. Exchanges anyways. And that volume will just go to places where people lose their money all the time. There's a long history. I don't want to name names, but there's a long history of basically every non-U.S exchange that's unregulated has been hacked at one time or another except for CoinBase, because it's regulated and it's safe and it has to be safe because I pulled storage. Or it was a fraud. Or it was a fraud. Like outright fraud. Like let's just admit FTCS was outright fraud and let's move on and I hope you never

experienced that again as an industry. But I don't think people appreciate that what Coinbase has done over the last six years, they've not only gotten legal precedent that, like, hey, the SEC can no longer choose which assets to block or deny. Now, Coinbase CFi has to be more careful because there are real CIFI risks that people aren't even aware of. Like, what happens if you have a team of Anans and, I don't know, somewhere in the world and they just pull all liquidity off the exchange. That could cost bad outcomes from retail. But on the Dex side, they don't have to worry about that because it's decentralized. And that is kind of, I think this hybrid world of like, it's the defymeilat that the best analogy

you, defy the mollet, you have C-Fi in the front, defy in the back. If you want to be in a non-team from Asia and you want to launch a meme coin, go for it. But then people should know that like that thing might go to zero. And it probably will go to zero because everything that's a non-goose to zero in the space, let's admit it. But if you want to launch a whole project. Except for Bitcoin. I mean, the Bitcoin is unique. And Ethereum is not is also decentralized, but it's also unique. It has real research, People that have been building, the Ethereum Foundation have been building for 10 years, ignore all the noise. They're the most legit. They're the only world computer.

There are people that aspire to be the world computer, but Ethereum is the only one. So whether you're buying Bitcoin or Ethereum or any of the other spectrum of DFI projects like ours, you know, I think the thing that people don't appreciate is like Arrow and Moonwell. Like, we've been around for years now. And in fact, Alex has been around for three plus years on the Velodrome side, which is also on the super chain. People might not even be aware. I learned of his team before they even launched on base because of Velodrome. And I watched that video and I was inspired by it. But anyways, what I would say is that why should basically,

to summarize, why should the SEC choose what you get to buy or sell? People should just be informed that if you're buying a project because you think it's the future of finance, you should research that, do your own research. But if you're buying a meme coin, it's probably going to zero. You're gambling. You're not investing. You're gambling, basically. And why should Coinbus choose?

Why should the SEC choose? Why should any government authority in any country have the ability to choose? It's decentralization at the retail level. It's not, but it's centralization at the safety level, if that makes sense. Coinbase is there to make sure it's safe and nobody steals your coins out of your wallet. They're not there to pick which coins you have,

if that makes sense. Yeah, and you know, to your question, Laura, like what are some of the main challenges? I mean, for us right now, it's just stealing up with the demand. Because if you think about this, right, for most of the history of crypto and DFI, if you were launching a token, right? It could be a governance token,

It could be a derivative of some sort. It could be a meme coin. One of the singular goals that people would have would be to get listed on a centralized exchange, get that sort of massive global distribution. And sometimes it's for a bit of nefarious reasons, but for some, it's just that signal of, you know, you've reached a certain level of adoption.

And now you have access to these hundreds of millions, of users of centralized exchanges across all of these markets, who are folks who are probably never going to, you know, come on chain. And what Coinbase is done by saying that, you know, any token that trades on something like Aerodrome is going to be live on Coinbase.com is they've given to anybody who just clicks the deploy button, right, or just migrates their liquidity, you know, the same basic status. as what a listing previously did. And by the way, there are still exchanges right now who will charge projects a bunch of their token supply in order to be listed. Even for the ones who don't charge,

you're probably going to have to give some money or tokens over to a market maker in order to support those markets. And these are all like taxes on projects. There's overhead there. And Coinbase has just said, hey, if you come deploy the base, you will be distributed to all all of our users and it will be just like a Coinbase listing.

And if you think about one click distribution to, you know, over 100 million centralized exchange users, the rate at which the inbound interest has gone up is like unlike anything we've, we've ever seen. Tocons from basically every ecosystem, you know, Ethel1, other EFL2s, all L1s, everybody seeing, very, very interested in ensuring that they have a presence on base as soon as possible. New tokens looking to deploy, you know, probably in the first week or two after this went live,

the number of tokens that said, hey, we're going to go, we were planning on deploying to Solana or to Ethel 1 or something like that first, but now we want to be live on base day one. We want to launch. We don't have to pay anybody. We don't have to pay a market maker. we can go live launch and trade on Coinbase right away. Has just shifted, I think, the paradigm significantly for anybody who has a token strategy. And I think for us and everybody in the base ecosystem, it's just about keeping up with the demand right now because this is a level of distribution.

Nobody else can currently offer. It's truly, truly unprecedented. And, you know, again, we're only at 10% distribution to Coinbase users right now. And there's a lot more Coinbase's cooking, you know, to make sure that all of these assets that are Dex assets are, you know, prominent in the UI. But like to the, you know, question on Jesse, you know, I think it's so funny that the paradigm has shifted because, you know, when Luke and I were early believers betting on base. And again, the thesis for us is pretty easy. This is one of the most successful consumer crypto companies saying they want to bring their business on chain. And by the way, it's one of the most well capitalized entities in crypto as well.

And their treasury isn't denominated in their shit coin. Their treasury is denominated on post-tax US dollars. So when they say they're going to do this, take them seriously. But few people did. And they figured, hey, this is going to be a Fed chain. you know, they're going to censor it. They're going to play to corporate. And for now, the backlash against Jesse,

and he's the first to admit he'll get some things right. He'll get some things wrong. But I would much prefer to have Jesse always leaning towards the end of pushing too far on the permission list, on the ethos basis for everybody in trying to drive all these sorts of new stuff, then I would have him be like kind of a typical corporate, you know, very careful, legally mandated. I can say this, can't say that. And it's so opposite

to the original, I guess, argument against base. It's almost funny that now people are too critical of Jesse of being too open and too permissive. And yeah, that will always come with mistakes. I mean, if you've been in the space long enough, you know, you've probably gotten interested in a token that ended up being a bad token. You've probably missed some details. you know, like it's, it happens. But the whole idea is this system is supposed to be permissionless. It's all supposed to be available. And as long as base is leaning into sort of that maximal distribution, maximal sort of, you know,

basis for everybody, I think that's the right impulse. And occasionally things will go wrong if you're operating in that way, but it's the right impulse because that's the ethos of the space fundamentally. And yeah, it's just crazy that now like every, everybody wants to be on base and they want to be on base as fast as possible to tap into that distribution. Yeah. Yeah. I did some shows recently where we were talking about how it feels like distribution is going to be one of the make or break factors over at least the next few years, I would say.

But I think at a certain point, yeah, well, I think at a certain point that will change. You know, one other thing I wanted to ask you both about, because obviously you're both working in Defi is just we have this kind of of issue with liquidity being fragmented in Defi. And I wondered if you guys had thoughts on how to resolve those issues. I have a lot of thoughts. Maybe let me jump in here because I've been working, many people don't know like the Minwell Foundation, which is the steward of the Minowel Protocol. And I think Eridorm has a similar foundation.

I'm not as familiar with it, but I'm deep in the weeds on basically the way to think about it for those of you that are new to Midwell is my company Lunar Labs is basically the Unosalk Labs to Minwell Foundation. just like UNICEF Labs is to UNICEF foundation. That's a good way to think about it in simple terms, but we're much smaller than NSOP, obviously. But we have the same governance structure. Maybe we're in a different, we're in Cayman Islands.

But the thing I think about really carefully is that we've been trying to kind of build this, if you would call it regulatory compliant to DFI, but also do it in such a way that we can accrue value back to token holders. And that is a very hard problem to solve. And it's taken us years but solve it. But because DFI didn't have that,

It was basically like, well, we want to turn on a fee switch eventually. That was like the late 2010s, DFI, MakerDAO, ABE, you know, stuff, all of the big ones. We want to turn off a fee switch, but the VCs won't let us because it's regulatory risk. So what the Medidex and the even the Moonwell model, we just figured out over the last few years, let's go talk to really expensive attorneys and figure out how to turn revenue value approval back to token holders that vote in governance and stake and make sure protocols are governed by hundreds of thousands of actual token holders and not by like a few VCs. I don't want to name names because I hope to get. in the future, but this is a better model because it's like you get revenue from Aerodrome,

you get revenue from Moodwell now. And most people don't know about this. We just turned it on four months ago and we've accrued a million dollars back to token holders. If you vote in governance and you're an active participant, which since we turned that on, we now have 10x of governance participation. We're now reaching 10x quorum on all proposals. And over 20% of our total supply is voting and staking. And I think Aerodom is even better. They've had it on for two years and something like 80 or 90% of the circling supply is actually locked and voted and staked. And that's what many people miss when they think about aerodrome. They're like, oh, there's so much emissions, but actually something like 90% of it is locked in voting and staking forever because they're value aligned.

And this, like, Alex, I'm probably preaching to the choir here, Alex, but this is why we first met you. And I'm like, I want a partner because I, this is the thing that most people don't understand. And this is why I admire what hyperliquid built. And sorry for, sorry for kind of circling back too early, But Hyperliquid that you mentioned earlier, they built the most beautiful Perks program in all of Defi. They don't compete with either of us. But the beautiful thing about Hyper Liquid, you might go, they gave out a 50% air drop. Why is they gave away half their supply? Well, why did people buy it and why is it the best perks program and why is it generating, I don't know, a million dollar plus in fees every day?

It's because they had a plan. Team was locked for some months. So everyone knew Team and VCs couldn't sell their tokens. That's a different model. That is the Aerodrome model. Like Moonwell launched three and a half years ago and like VCs did buy our token. but you know, we learned a lot in three years, and those same lead DCs still have their tokens.

They're really proud of the fact that we're in the money, if you know what that means. But more importantly, we figured out, hey, we can't just like turn on the fee switch. That was the three-year learning lessons. Like I thought in 2021 when I first envisioned, meanwhile, I was like the path to DeFi 1.0 success is turning on the fee switch. I realized that, no, you have to just build DeFi 2.0.

And the DeFi 2.0 is the hyperlocers of the world, giving out 50% of their supply and aerrops, but they're generating a million dollars in fees, and they're buying back the hype tokens, and they bought back 13% of the total supply. That's why hyperliquid is tens of billions of dollars. I haven't even checked the market cap. And I wanted to build something similar for Moonwell,

but I couldn't because we have a US Labco. We're not in Asia. So they told me I can't buy back and burn. For some reason, the legal teams on both Cayman Council and Onshore Council that I spent millions of dollars with last year just to figure out how we could eventually do this if things happened in the way we thought they would play out in the next administration.

And then the meta point I would just bring this back to is that, I think crypto work, if you're in crypto Twitter, like we're all perpetually online, everyone that watches your show right now, I mean, in the future, more people will watch your show, I hope, like all the normies that we try to help. Most people, crypto narratives move on a week by week timeline. Like this week, it's something different. Last summer, last fall it was meme coins. In the late fall, it was AI agent coins.

And they had their moment. Now they're having their moment again. But like it's you go through the gardener hype cycle, which is like the peak, the peak, you go through that hype cycle. every month in crypto. Like, you know, the things go to a bubble and then they crash and then five years later, everyone's like, why is this a thing?

I thought it was dead. And basically, Defi did that same thing in Defy Summer in 2021. And the thing that is that Coinbase is building not just for what's, Coinbase is too slow, they're a battleship. So the things that I was building at Coinbase in 2019 when we launched Tesla, it was like a $16 million

run rate product in 2019. And I felt so proud of my first product shipping a year after I, or less than a year after I joined, But I saw the future that, and nobody believed me except for maybe Emily Choi, because she was the one that ACRA hired me. And she was like, I believe we have so many billions of dollars of Ethon platform. And if we just stake it, it'll be a billion dollar run rate business. And now it is a billion dollar run rate business. But six years later, and I've already moved on or seven years later, I've already moved on to building the next thing.

And I know, and I tell my team this because many people join crypto, people that are new to crypto. They're just joining the cycle. I'm hiring so many brilliant AI engineers that are just joining the cycle. Never been through a crypto cycle. Or maybe they're AI and crypto engineers, but this is their first cycle or they joined in 22 at the end of the last cycle. So you can work in crypto for three years

and you can think you're gonna get rich in six months. But the reality is nothing is built. Brian is building Coinbase for over a decade and now it's finally successful. Now, stable coins are finally illegal 10 years later. And so Coinbase is building for that future 10 years from now. They're building for 2035, not 2026. And once you understand that,

you kind of understand how they operate. That's why they're not concerned about listing all the coins now because maybe we have an administration that's friendly, they're thinking about who's going to be elected in 2028, and it might not be a friendly administration. So we want to make sure we do things on a bug board so that when the administration changes, which it eventually will, it's just inevitable. Things going back and forth, those of us that know politics, it's like, sure, left might win one time, but then right wins. It usually in real world, it's not like everything shifts every week like meme coin narratives or whatever.

It's things shift on decades-long timelines. And Kremus is building for a future, like 10 or 20 years from now, where everything is tokenized, everything is on chain. And to tie it back to why Moonwell saw the value in Aerodrome and why we were one of the first, like you might ask yourself, why was Moonwell one of the first partners? I think I even moved from my founder tokens

just over from our initial network, I bridge them over using Whomhole, just to provide that initial liquidity now that we're native base, so we don't have to bridge it as a hole. Why would I do that? It's because now we have tens of millions of dollars of well-eath liquidity on Aerodrome,

and the Moonwell community has been able to capture almost 2% of the total voting power. And why would we do that in Moonwell? We're a lending protocol. It's because I saw the future of five to 10 years for now. I want Moonwell to have at least 1%. Now, I were traditionally have 5%. Moonwell had 5%.

People don't know this, of the voting power, meaning the feed capture on Arrowrome. And I don't think we'll be able to keep that because we've been diluted. There's big whales now. This is before Coinbase even bought Arrow. Now, Coinbase actually accrues value because they probably have more than we do.

But I just wanted Moonwell in the future, maybe 10 years from now to kind of do whatever they can to hold onto 1% of the voting power of aerodrome because that means that in 2050 the moonwill community might might and I don't want to speculate might have barely 1% of all the fee capture on the entire base network and maybe that's just a small but maybe it's trillions of dollars and I'm building for that feature it might even be quadrillions of dollars by 2050 who knows and so that's exciting to me and that's why I think people don't understand that Corombus is building for the 2035 they're not building for 2020 That's the bigger point.

Sorry. Yeah. And it's interesting because connecting that back a bit to your question, Laura, on liquidity fragmentation, it really comes to like what are the incentives, right? Because from the standpoint of a coin base, right, if they want to be that front door, that distribution layer for the on-chain economy, liquidity fragmentation doesn't matter much to them, right? There's some degree of additional like overhead on engineering. plugging into aggregators, different Dex's on different chains if they want to aggregate all of that.

But the fragmentation is kind of invisible to its users. But where it does really matter is at the level of the Defi exchange. And for the exchange itself, right, for somebody like Arodrome, it does matter that liquidity is fragmented. across Dex's, fragmented across different chains. And the question is, I think, what are the incentives for different exchanges here? Because I think one very interesting thing, somebody posted on Twitter recently is post

the Coinbase announcement of Dex integrations. We didn't see a single tweet out of Uniswap or anybody Uniswap aligned highlighting the fact that they too are now distributed, their pools, are distributed via Coinbase. Why did you not see any sort of hype about this moment, which is frankly a pivotal moment for Defi? Because Uniswap has actually positioned themselves

as a competitive coin base. They have a competitive wallet product. They have a fee, which is the only fee that their labs entity makes, the only direct revenue source that the labs entity has. And so they actually have an interest in liquidity remaining fragmented so that they can be the only distribution layer, so that they can be that front door for the ecosystem. Because fundamentally, their incentives align with that. And one of the most interesting things about this, because we know, like, each uniswap deployment on each chain is basically like a standalone deployment.

you know, they're functionally separate, is that in launching UniV4, you know, they had choices, right? They had choices to either move into something that was less fragmented, more composable, more easy for everybody to plug in and to distribute, basically focus on we're going to have the best rails, and we want everybody from Coinbase and Robin Hood and whoever to leverage the best rails. or we're going to make it more difficult. And Unity V4 is functionally breaking the composability of their system even further. So it's not just the fragmentation of Un-swap across chains or across V2 pools, V3 pools,

V4 pools. But if you add custom logic into V4 hook, you're breaking the composability such that each new aggregator integration has to be custom. It's harder for folks like Coinbase to plug it in without some engineering work. So they've broken the composability even further because their incentive is to try to be the only person

who can overcome this further fragmentation so that their front end is the place that they go trade. And I think these are like two fundamentally different philosophies born just frankly of the incentive structures of how they organize themselves. But I think like our mission is definitely to solve the fragmentation. Like, it is to ensure that the best liquidity infrastructure exists everywhere, that all of the productive value of the protocol flows back entirely to users of the system.

There's no value extraction via front-end fees. There's no subsidies, you know, via token with no real utility. And that makes something like an aerodrome kind of the essential rails of these fortunate. 500s and I think Luke is so right, right? Everyone's going to come on chain. And if they want to distribute on chain, they will just have to use the best rails. And yeah, I think that's a big incentive for us. Anywhere the Metadex model, which is what we describe

aerodrome as and Velodrome as competes against uniswap. You know, it takes about 60, 70% of the market share. And on the Velodrome side, we've been making it increasingly interoperable. You know, we have super swaps now where if you go to the front end and this is an open system, anybody can plug into it, you will swap and get the best execution on any chain and it's giving better execution even than many bridge aggregators. And that's because our incentive is to be the best rails. And I do think like, you know, to be the best rails, we need to be anywhere there is the steep liquidity and connect it all together and solve for this fragmentation issue.

was trying to like fragment it further so that we can, you know, in theory, compete with Brian and his billions and his hundreds of millions of users to be like the front end of this ecosystem. Can I add something? Oh, sure. My little comment there is throw down. But anyway, go ahead, Luke. Yeah, so I realized I didn't really answer the original question in the short term. I was answering the five to 10 year term. But the short term, here's what's going to happen because we've actually been talking to all the big players in the space.

And basically, and this is what I tell my team, you want to be aligned with the trifecta, which is basically the unisops of the world, even though I know Alex might disagree with me on that. The Unisop Labs and Hayden built X times Y equals K that all of the dexes are built on. He's a brilliant engineer and his team brings, and then you want to align with Paradigms

and Coinbase and Opel Labs. Actually, it's more like a four-legged still than a trifecta. Because now Paradigm actually hired a bunch of really intelligent researchers like Dan Robinson and the entire team that are building Reth. And so from an infrastructure level, What they're building, I mean, I guess I would tie it back to just to simplify it.

There are two different approaches to blockchain development. How do you build a fast layer one or layer two today? Just talk about the layer one level. Solana has a monolithic approach, which is basically what Ethereum was in 2014, which is, hey, we're about, you know, we have 12 second block times instead of 10 minute block times. So we're basically like, you know, hundreds of times faster than Bitcoin. That's basically what Vitalik was, I want hundreds of times faster than Bitcoin, world secret computer here.

And I want to run smart contracts. I don't want just immutable. digital gold. And Vitolik actually wanted to build, it was called color coins. You probably remember this on Bitcoin, but the Bitcoiners, to their credit, I think Bitcoin might want to stay immutable. There's good reasons for that. But if Batalik wanted to build in 2014 or even earlier than that before the launch of Ethereum, he wanted to build Bitcoin, he thought he could add smart contracts, but they wouldn't let him. So he's like, okay, I'll build Ethereum and I'll use the same signing curve, right? So what was Ethereum? Aetherin was a 100x,000 X, whatever, faster version of Bitcoin with smart contracts. But then eventually in 2017, when CryptoKati, he said, came out, we figured that, we figured out that wouldn't scale. And all of a sudden, all the of a COs happened. And all of a sudden, Ethereum costs like hundreds of dollars to use and nobody could use it. And the wallets and exchanges were crashing every day. I mean, if you tried to use Coinbase in 2017, good luck, right? The reality. And then Brian and everyone learned from these experiences, since that's why we got the Ethereum Sharding roadmap. Sharding didn't turn out to be

the best use case. So they shifted directions, but basically the layer two scalability road map. Let me just break it down for you really simply. Okay. FlashBots, the Mev Research team. I was actually an early contributor to Flashbotts, but I know the team really well. And I was a contributor while I was at Coinbase, I had to leave when I launched me well because I'm too busy. But what I learned is that you might think

all of these people are trying to sandwich trades. They're not. They're trying to learn how bad actors sandwich trades like Jared from somebody.eathe so they can build systems with paradigm, with Uniswap, with Coinbase, with Optimism Labs, with the people building the wholesome version of crypto and not the like Nev Casino. I don't want to, you know,

Salon, it's fast. Let's get that. straight. It's amazing. They've built some real innovation, but ultimately, Salana will need a sharding roadmap or a scaling roadmap or a layer two roadmap. It can handle a lot of transactions today, but if Wall Street wants to move onto it, they want to know it can go to trillions of TPS because it's not just visa volume. It's all the global equity markets, which is $100 trillion in the US alone and probably orders a magnitude more. I think it's 500 trillion if you count all global real estate and assets. And that can't just move to Solana. It has to move to some version of a

charted ecosystem or something that can scale horizontally. For those of you, the bit distributed systems. And so why is Super Chain, which was supposed to launch this summer, but it's been delayed it again. Actually, it was supposed to launch at DevCon in Bangkok last fall. But the reason why it was delayed was, and I'll just give you the inside baseball, because the guy that hired me at Coinbase seven years ago, his name is Sam McInvill. You can watch a video of us talking at East Denver last February, Google it on the stage

of the optimism inside event. Why did they hire the CEO of Coinbase Custody, who is my first boss? at Coinbase, who I worked with seven years ago, because he wanted to come in and work directly at Optimism Labs and figure out how to make it interoperable in a way that traditional finance can use it. And the reason why is because Sam had seven years or he had three or four years at Coinbase. He left Launch Turnkey. He has been in the space for almost a decade, but he was in traditional finance before that and he's younger than me. He is a brilliant trad-fi guy and I loved working for him. He was my favorite boss at Coinbase. I don't want to name names, but he was my favorite one.

He's my first boss. And the reason why him and I are still working together is because he knows that I built something and he wants to work on the super chain. And what is the super chain? It's basically in the future. It won't be now, but it'll be maybe a year or two from now. You already have 200 middle second flash blocks. That's twice as fast as Solana.

So even today, I was at Heath Pragba. Just Friday, or a week ago Friday, you had Hayden Adams on stage. You can watch the video with Phil Dian, who is the founder of FlashBots, who I know personally. And Phil and Hayden are friends. And he's interviewing and much respect to you, Alex, but we have to acknowledge Hayden came first and your products are built on PolkSakers, which let's be honest, you've built a better tokenomics model,

but it's all based on Unity B2 and Univ3, which is a brilliant protocol. There's nothing wrong with that. Lego builds on sure, but here's what is coming. Sorry for the long way of response, because I just wanted to lay the groundwork. You have 200 million flash blocks today on both base and Unichene, but those are fragmented environments.

So if you're a retail user and you just want to trade all the assets on Unichene, you can download the Uniswap wallet to, today in the app store and Google Play Store, and you can start trading anything on unit chain, twice as fast as Solana. And the retail experience is sick. They showed it on chain. I hadn't seen trades. It literally Hayden was testing the app on Friday because it launched like the day of each program at East New York. You might have been there, Laura. I didn't see you, but I was only there for a few days. And then that was only one day event. But then what's coming next year,

it was going to come in July, but it got delayed. The reason I can reveal this now is because there's a public test in it. I couldn't even reveal this under NDA, a few people. months ago, but now there's a public test net where you can go try this out. What's coming is OP Mainnet. There's OP Sepolia. For those of you know, the test net on Optimism Mean Net is Sepolia. And this is why people ask us, why are you on, and they probably ask Alex the same thing, why are you on OPMay net, a small compared to base?

Because that's where all the new technology gets deployed. So if we want to build the future of the super chain, we have to test it on OPMainnet. Even though we only have $40 million of TVL versus like a billion or whatever total market size on base, we want to test it first. We want to know it doesn't break when it comes to base. And that's also why it's going to come to date right away because Quimus has $10 billion in TVL now. They'll probably have a trillion dollars in a couple of years. Jesse has to make sure it doesn't break when they launched the shared sequencer,

which is what I'm really excited about because the shared sequencer, the first version of it. And the only reason I can reveal this to your audience is because you can go play with the test net now. So it's kind of public knowledge, but only for nerds like us that play with test nets. If you go load up Unichane Sepolia and OP Sepolia, you can now transfer tokens. This is the first thing. Transfer tokens. is you can transfer OPE, it's the only token. And I think the other one is UST-Zero, which is layer of zero-wrap tether.

So because UTC is really dominant on base, but tether is actually more larger globally. And so optimism foundation to their credit and optimism labs, there are two different orgs. They saw the utility. And why can't we have tether on the super chain? We should have tether. It's even though Circle has other qualities like payments that make it better, tether's bigger globally. Let's acknowledge it.

Like there's a world where tether exists, where U.S.D coin exists, where Eurocoin exists, where Athena exists. There's going to be a million stable coins. So there's Bank of American coin, Chase coin. All those are coming. And they should all be on base. It shouldn't just be circle. As much as I love Circle.

And full disclosure, I might even have some Circle shares. I just want to circle back to these. But I acknowledge that like Athena is better. So yield bearing stable, it's not legal in three years. But then all this, just to tie it back, I know to close this topic off. So what will think, I don't know when this will land because it got delayed again.

Now it's maybe this fall, maybe it's next year. They want to get it right because there's many teams and all of them have to audit the code. Coringus has to audit the code. Unisop has to audit the code. You have paradigm researches auditing the code. You have flashbots. What flashbots are doing is they're figuring out

how to make fair ordering sequencers so that even if Citadel gets payment for order flow from Robin Hood, and by the way, your listeners might know that they don't even have to sandwich the trades. All they have to do is execute a counter trade on a darknet because that's the way Tradify does. It's all darknets. And Citadel can profit off of Robin Hood payment for order flow

without even sandwiching users like Jared from somebody But what they're building is the future where you can trade twice as fast as Solana. You can scale horizontally with any, by just adding layer 2s, you have base and OP mainnet and unit chain and Sonium. And pretty soon you'll probably have Chase and you'll have Bank of America and you'll have Black Rock and you'll have all these layer 2s. Every bank will have their own layer 2 later. But they can all transfer value between them next block, which is two seconds, not 12 seconds,

not seven days like you have today, two seconds. And then not only tokens, but the next thing that's also coming is call data. So here, what does this allow you to do as a user? Because I want to type back to user. Now I no longer have the liquidity fragmentation. Right now, today, if I'm a defyfrienture, it's horrible. I have $100 USDC on OP Mainnet. I have $50 USDC on base. I have $50 USDC on Unichain. I don't even know, I want to deposit $200 into some, into a Moonwall flagship ball. How do I do that?

Well, we've been building this feature for the last expense. We haven't even launched yet because we're waiting for UniteChain to launch called Beam. I should just see, I have $200 of USC in my wallet. This is like the early internet, really, seriously. I've been, I used the early internet. And like if you're on one university shell account, like I had to like figure out how do I transfer my files to like from University of Utah to like Stanford?

Because University of Utah, invented the first GPU, I couldn't figure out how to transfer files as a college student in the 90s. And like this is the early internet. Or you're on AOL, your friend was on CompiServe, or you're on Verizon, you were a friend was on IT&T, but nothing's just work.

You just use Instagram and you send pictures to your friends. And that is what's coming, but it's gonna be sending value and it's going to be trading any asset on the super chain. And it will look just like Salon, about 200 millisecond flash blocks. And the flashbots people are building it in on chain options that are visible. So you don't have the MEV boost, the dark nets where Jared from somebody

dot Eath is stealing tens of millions of dollars of value from retail or in the sloan ecosystems where 80 to 90% of values being extracted from retail. Because I think this is what the future that people don't understand that listen to all the crypto fraud or narratives is that, you know, UNISOP and Paradox, I am and all the member researchers and flashbots and Coinbase and Open OfficeLams, they're not building for the future of like, how do we get 80 or 90% more value out of retail? Like that's what they're building in the meme coin casinos in many ecosystems, not just so I hate to single them out, but also other line U.S., you know, big L1s.

I don't want to name names because they might list us someday. But Coinbase is building and all these people are building for a future where there is no payment for overflow because it's technically impossible. They want to create tradfai, but without Citadel. sandwiching all your trades because they're counter trading on a dark man. Does that make sense? Yeah. Yeah. Okay. So last question here is just about, you know, both of your applications have been using token incentives to drive volume. And like when I looked at Defi Lama, it looks like both projects are at a loss. When you look at the income statements, the earnings are in the red.

And, you know, this is an issue that we've been dealing with in crypto for a long time. And I wondered How you thought about how to sustain volumes without token incentives? Happy to take this one first. So it's interesting because, I mean, there's lots of examples of this in the space where the terminology and the language we use for things is a bit imprecise. And so I think usually when we talk about token incentives, you know, we're thinking about something like the sushi swap vampire attack of uniswap, right? where they showed up, they added some token incentives on top and what was fundamentally just a

worthless token and an additional incentive on top of 100% fee take. And they were able to take, you know, 50% of Uniswap's TVL in a single week. And I think when we look at what the nature of most of the industry is, right? About 90% of the top 50 tokens have zero value accrual. What's And you might have many people point to many of those projects and say, well, hey, there's no token incentives on top of these. So maybe these are not passing on any yield in any way, but there's something fundamentally more sustainable about it. I think the right way to think about it is that these are all fundamentally very, very subsidized and incentivized protocols. It's just a matter of who is being incentivized, who is getting, you know, this additional incentive of value. And so just

because it's an easy contrast here, Uniswap is one famously people like to say, well, there's no incentives right on top of it. How, you know, aren't you guys, you know, emitting all this additional value in tokens versus, you know, Uniswap, people just show up and they earn those fees. Well, the only reason why Uniswap can give 100% of the fees, the product, call generates to liquidity providers is because they are subsidizing their costs in other ways. You know, last time I checked, you know, between Uniswap Labs and Foundation, they probably employ a few hundred people. They are very expensive. They've got legal costs. They've got HR costs. They are hiring engineers job listing recently. It was like actually just the U.X designers, like 250K, 300K a year.

So there is a ton of cost in that system, right? And you remove all of those people. And there are no audits for Uniswap v4. There's no marketing. There's no sponsorship of bankless. There's no pop-up events in New York with Uniswap trading cards that they probably paid an agency an ungodly amount of money to do. And so it is subsidized. And so where's the subsidy coming, right? Because if they could not pay these people via other mechanisms, they would have to be taking a percentage of those fees away from LPs. So they're subsidizing the 100% LP stake by dumping Uniswap tokens. The foundation just went back. I mean, I think it's like close to 200 million now they've requested this year. They just went back to request more to pay taxes for the foundation in the onshoreing. So Uniswap is actually like deeply, deeply subsidized. And that's to say nothing of the vesting tokens, you know, individual team members have gotten. So if you actually look at Uniswap, it's like the ratio is billions of dollars worth of unlocked uni flowing primarily to insiders to subsidize costs such that they can return 100% of the fee take to LPs.

And absent those incentives, token incentives that are going to insiders, they would have had to have dropped that fee take down significantly so they could pay their operations or they would have just gone flat broke prior. So I think if you're taking any token like a Moonwell token or an Arrow token and you're comping it to 90% of the top 50 tokens, we look like some of the least subsidized protocols. in all of crypto. The difference is just that we incentivize users and we redistribute all value to users. It's on the aerodrome side and even the entities that support protocols are not privileged stakeholders. We're just token lockers and users, just like Luke is,

just like Coinbase Ventures is, so we're equal participants in it. So the degree to which there's incentives, it's just a redistribution of a token that is maximum useful that can be used to direct 100% of the economic value of the protocol, can capture back 100% of the economic value of the protocol, but there's no outsized costs, right? We actually don't know how much Uniswap labs spends each year because it's a private company, but we know they spend a ton of money because they employ a bunch of Luke's point and insanely intelligent and insanely smart people.

I worked in the agency world when I see a brand activation. I do my map on how much in token holder value they had to dump for token holders who have never gotten a dollar of yield. So I actually think any model that is actively redistributing, like control of a token that is actually useful, should be thought of as like an incentive in the traditional way, it's basically just redistributing ownership of a network, right? And that could be a network, you know, like Ethereum or Bitcoin, which, you know, emits out, you know, tokens and it's redistributing that. And then those tokens are like maximally useful on the back end. It actually represents something. But again, like, I think if you think about incentives, any token right now, and again, top 50, 90% do nothing, that is returning something back is a less incentivized protocol than one like Uniswap where it's been. and billions of tokens dumped on the market to subsidize their own costs, their own incentives,

such that they can say that this is a completely sustainable thing without that being the case. And I mean, I'm very curious. This is why, like, you know, anytime people talk about Uniswap fee switch, I get very, very excited because the Uniswop fee switch would just be cutting LP yields in order to give like stakers of the token, you know, likely single-digit APRs. And if they do that, they are already struggling to compete with Medadex's. Again, Metadex's beat Uniswap, head-to-head anywhere. It's the first Dex infrastructure that has shown an ability to beat Uniswap anywhere

their head-to-head. If they cut LP yields to return something to the token, it's just going to make them even less competitive against us. By the way, their own Dow researchers wrote a report on this, so you don't have to take my word for it. You can go find that. But yeah, I think any protocol that has a sustainable flywheel associated with it is far more sustainable than the traditional cell tokens allocate them to themselves. Incentivize insiders so you can, I guess, LARP about being sustainable on the outside. But yeah, sorry, Luke.

Get in there, man. Good. You're good. time. So I'll try to make this three minutes, but it might be five. I'll try to be quick. But when I first joined the space, first I was entering the Bitcoiner, just mine and mine Ethereum. I wasn't a defy person until 2019 or 2020. So I didn't even know about some of the cool things that MakerDAO was building in 2015 or whatever. And I didn't even know what Heathland was until I learned about defy through compound V2 in that launch. But what I noticed after,

and I learned a lot in just, while I was a coin base, I was on CFi products, but I learned a lot. I was a defy yield farmer and it grew the $100,000, I bridged my $100,000 of Bitcoin over and grew it from a six-figure portfolio to an eight-figure portfolio in like a year during D-Py summer. And what I learned was like this from that experience. And people asked me, how did you do it? I had the coin with Slack channel. Everyone was like, what's the alpha? What, what OMFork were we aping into on Avalanche today or whatever?

It was literally that. And it was literally like, I used this protocol called Badger Down. I had doubled my Bitcoin stack in 90 days. And it's like, people are like, how did you do that? I was getting three digit API for just supplying Bitcoin on curve. And like, people are like, can I do that today? No, probably not because it was like a Gartner Harch cycle. And I don't want to give financial advice, but this is the way I would describe it.

There's a Garner hype cycle and the DFI protocols that all launched in 2018, 2019, in 2020, that we were farming while we're in COVID lockdown because we had nothing better to do. Basically there were thousands of people at Coinbase trying to withstand a bull market launching staking at the same year the DFI summer kicked off in 2020. And then 2021, Coinbase went public and we had grown from like 1,000 people to 5,000 people remote. We had a code red for hiring. It was that crazy. We were hiring people remote that we'd never met in person, which is something Coinbase would never do. They'd be too worried about losing funds.

But we somehow managed. So it was in Skronner hype cycle where these projects all went to like tens or hundreds of billions of market cap. And so if you were one of like a few hundred defy wells at Coinbase that could even figure this out, like most people couldn't even figure this out. They were coming into this channel going, how do I claim my $10,000 un-dollar unit, AirDrop. And I, most of us got $600 so they didn't trade a lot. I was a farmer. I was in a compounded with a trader. But there were people that were like, oh, I've been a market maker on in Unisop and somehow I got a million dollars I'm going to pay off my house. Like,

there were these crazy stories. But what did that? So the reasons why you, and I was like, why would you even do liquidity incentives? Why would you even do an air drop? Why would you even do token cells to non-US through a, you know, Reg D or Regal S offering, which is what all these protocols do. They do it through an SEC compliant offering, but it's all through, you know, on K. YC non-US, right? Or to big VCs. Why would you do it? Because you want distribution. You ultimately don't want a few big VCs holding the tokens and then they all vote no on the fee switch because that looks too centralized. So what you do is you do an air drop to millions of people. This is just the model I learned about. I didn't even know about this when I launched.

Meanwhile, other than I knew that yes, air drops are generally good, but why would I give away tokens? Oh, because you want distribution. You don't want like three big VCs voting. Yes, no, like no, don't turn on its fee switch because our lawyers told us it's risky because we're American VCs. a million people all over the world, non-U.S., preferably, because then you can be really decentralized. It's not just a few big, rich people like me in U.S. like me and OXA that live in America. It's like people that have $10 of Uniswop in Asia or people that have $5 inosoph in North and Africa. Like you want those people voting governance. But what did all these protocols build that the only one that really built real governance was compound, I think.

Everyone else is fake governance. It's snapshot voting. And for those of you know that what snapshot voting is versus real governance, Arodrome and Moonwell have real governance. We both have been, Arodon has millions of token holders. We have over 100,000 token holders. We're not as big as Arodrome. We're not a Dex.

So then, you know, and we're struggling to, nobody knows about us, right? Everyone knows about it. But what they might not know about us is we have over 100,000 token holders voting in governance and in just the first, we worked with legal teams both onshore council to turn on that fee switch in a safe way, not a fee switch because it can't be a fee switch. But if you vote in governance, if you backstop the protocol and it,

it's close to, it's 20% of our total supply, but close to 30% of our circling supply. Now is ensuring against shortfall events, just like the Avey Safety Module, we forked a four-year-old version of Avey Safety module to build this, just like we forked a six-year-old version of Compound V2 because those things are battle-tested. But we built all this based on battle-tested infrastructure, but what Alex and I built, Alex on top of Curb and Uniswop, and me on top of compound and Avey, was a better system, a DFI by 2.0 system where now it's not just like, hey, all the founders left and they're fully invested six years ago. Now we're past that, Alex and I launched in the peak, you know, that

trough of disillusionment. We all launched in the 2023 bear market. We launched right after FDX collapse. And I can't tell you how depressing it was to raise funds at a 90 billion valuation and have, you know, Katie Hahn and, you know, Michael Arrington and some of the biggest species in space put millions of dollars into our protocol. And then at a 90 million dollar valuation, that was too high. That was 20 million. that was before Tarulina and then all of a sudden you're like sub 10 million market cap and everyone and all your co-founders quit because they're like crypto's dead i think it's illegal and like maybe ftx they're going to shut everything down like that was literally like half all my co-founders left

and probably Alex i know your story you launched belladrome in that market and probably half your co-founders left too because some of them were just like i was like half of them were a coin base and they're like i have my coin sock i don't even need to work in crypto and by the way this really good security guy i don't want to name his name because he pretends prefers to be a non He's one of the best security guys at Coinbase. He helped us build systems that have kept user funds safe for over four years with no loss of funds, no loss of user funds in four years. And I'm really proud of that. And I think Alex, you have a similar story.

You're very proud of the fact that you guys are secure, but you also transact billions of dollars. We're tinyer than him. But what kept those funds safe was that we built better governance systems where it's not just governed a few defy wells or a few VCs. It's governed by actual token holders. And then those token holders, and it took me three and a half years to figure out how to do this legally. And they finally let us turn it on like four months ago. And it's already returned a million dollars in the last four months. And that's real revenue because my thesis was like,

we can't compete with the big boys on now that all their token emissions have happened. Like they all happened here. And a few Defy Whales and VCs got all of them. And like people like me and I sold all of them in the last cycle. And now, you know, bought a house or whatever. Like, yay, whatever. But then, but that didn't help retail. Now, and how are those tokens distributed?

They're in the hands of a few. But we actually launched in the best. very market and that's why I was I was literally farming Arrow at like two cents because I had a thesis that if I farmed it at two cents it might be worth $20 someday and it's honestly not financial advice please don't go buy tokens because of what I said that's just the way I think about it please don't do your own research and then now that we're finally rising out of this trough of disillusionment the defy 2.0 protocols like aerodoms and moonwalls and hyperliquids of the world just because I got a lot of inspiration from them too will succeed because they actually accrue real value back to token holders in a way that is

not just snapshot voting. It's like real on-chain governance. Maybe High Hooker doesn't have that yet, but I'm sure they'll figure it out. They have enough resources. But we figured out the only way the lawyers would let us do it, both onshore and offshore council. We initially wanted to do this through OTC buybacks. They're like, can you do it on chain? And Alex probably heard the same thing from his attorneys. Can you do it on chain? And Alex was like, we'll use solidly. I know what solidly is, but very few people do. And I was like, we'll develop a new novel smart contract system. And that was why I was working really hard with MoMA contributors in 2024 because I didn't know how the election was going to turn out.

In fact, I thought it was going to go a different way, but I knew that if it went a certain way, I wanted the legal opinions on both on-term offshore counsel from Mineral Foundation and Lunar Labs telling me it was okay to do this, but we had to do it through on-chain auctions of excess protocol revenue to buyback well. We couldn't just do buy-back and burn like some people that are non-US can. And there's a lot of legal reasons. I don't even understand all the reasons why. But I have spent millions of dollars, and the Minimwell Foundation has spent millions of dollars on really expensive attorneys that I occasionally meet with all the directors and stuff, just to talk about, are we doing this in a safe way?

And we had that ready. And I don't think many people appreciate how hard that was to build with a limited team in 2023. Like people don't appreciate this is why building the bear market matters. And Brian, just to close off here, Brian said building during the bare market matters, because those that build built during 2019 and 2020 during COVID lockdown during the crypto winner of 2019, that's how Coinbase came out the other side with like products like what you have launching today. And that's also how protocols like Arrogham and Munoil came out the other side with the only two Dexon lending on any ecosystem that I'm aware of were value crews back to token holders that vote in governance and, you know, basically are long-term committed to the future of the protocol. And I don't think, just to close up, I don't think there's any other than hyperliquid that basically has that.

And that's the purpose protocol. That's not Dexon lending. Yeah. And I'll just put one final note in here, which is that as the industry evolves, the only moat to any protocol. or builder is going to have is going to be maximal value redistribution to users of the protocol. And anybody who leaks value to insiders, to private entities, who takes permission flows out, that sells tokens, that value that could be redistributed to users and is fundamentally a bounty on their share of the market. Because it doesn't have to leak, it can all be redistributed within the system.

That's what we all came here to build is protocols and projects that maximally redistribute value and reward participation. And I think the next few years will be defined by the top 50 tokens, not looking like 90% don't redistribute value. I think there's going to be a very, very fast reordering because there's a bounty up right now on a ton of billion dollar protocols that are leaking value. And I think that is a bounty that folks like Luke and us are very, very happy to take. And yeah, I think we'll have succeeded if Laura, we jump on again next year and we're looking at it's like, you know, 25%, 40% of the top 50 are now protocols that are maximally redistributing value to users. Can I give you a specific day, Alex, to close out? I think you should actually thank Hayden Adams because him and FlashBots are building a system that will allow you to actually capture all. all their volume in a way that there is no value leakage.

And they're doing that because they want to build it for Unisop, but ultimately you have better tokenomics in Uniswap, even though we have to respect the technology they built because we're all built on the shoulders of giants. And that's what I would leave you with today. Yeah. Okay. Well, thanks everyone.

Thanks to you both for coming on unchanged. Thank you. Thank you so much, Laura. Hands up, everyone. We've got exciting news. Bits and Bips, our Macro Meets Crypto show, is officially spinning off into its own podcast feed, YouTube channel and X account. If you've been enjoying the deep dives into interest rates,

monetary policy, and how they intersect with the crypto markets, make sure to follow bits and bips wherever you get your podcasts on YouTube and on X. You'll find the links to YouTube, X, and other podcast platforms in the show notes. If you're watching this, there's a QR code on screen. We'll be posting here for a few more weeks, but starting in September, Bits and Bips will launch on its own feed. For now, we will publish longer. clips from the show on those accounts. Remember, go to the show notes now and subscribe to Bits and Bips. That's Bits, plus sign Bips spelled BIPS on YouTube X and wherever you get your podcasts. Welcome to this week's crypto recap. We start in Washington, where the Department of Commerce

has begun releasing official economic statistics directly on chain. The initiative, first previewed earlier this week, marks the first time U.S. macroeconomic data, such as GDP and the PCE price index, are being anchored on-chain. Commerce Secretary Howard Lutnik said the effort makes America's economic statistics immutable and globally accessible, describing President Trump as the crypto president. According to the Commerce Department, the rollout covers nine to ten networks, among them arbitram, avalanche, base, botanics, Ethereum, Linnaeated. mantle, optimism, Sonic, and ZK Sync, using Chainlink and Pithe as oracles, with crypto exchanges, Coinbase, Gemini, and Cracken, helping to facilitate the blockchain postings.

Officials emphasize the blockchain releases are an additional channel, not a replacement for traditional publication. From government adoption, we shift to regulation, where the U.S. Commodity Futures Trading Commission has issued new guidance allowing Americans to legally access foreign crypto exchanges such as Binance, Bybit, and Bichit. The clarification came through an advisory on the agency's Foreign Board of Trade, or FBOT, framework. Acting Chair Caroline Fom said the move provides the clarity needed to legally onshore trading activity that was driven out of the United States during prior years of regulation by enforcement. She added, it gives U.S. traders choice and access to the deepest and most liquid global markets.

under the Biden administration, the CFTC pursued enforcement actions against finance and other firms for not registering as U.S. markets. The new guidance reverses course, allowing registered FBOTS to serve American traders without becoming domestic contract markets. Next to the intersection of politics and business. Trump Media and Technology Group, backed by President Donald Trump, has joined forces with crypto.com to launch a $6.4 billion venture, centered on the Kronos blockchain's native token, CRO.

The new company, Trump Media Group, CRO Strategy Inc, will merge with Yorkville Acquisition Corp, a SPAC, and list on NASDA under the ticker MCGA, short for Make CRO Great Again. As part of the deal, Trump Media will acquire $105 million worth of CRO, about 2% of the token supply, while Crypto.com will invest $50 million in Trump Media stock. This is a historic day for CRO, said Crypto.com, CEO Chris Marsolic, pointing to an additional $200 million in cash and a $5 billion credit line earmarked for future purchases. Following the announcement, CRO surged nearly 30 percent, and Trump media shares gained more than 6 percent, signaling a positive reaction to one of the largest token treasury strategies

tied to a public company, and Solana is also drawing massive institutional bets. Three major fundraising efforts are underway to establish some of the largest Solana-focused treasury firms to date. Pantara Capital is reportedly seeking $1.25 billion by acquiring a NASDAQ listed company and converting it into a Solana Treasury vehicle. The plan would begin with a $500 million raise, followed by $750 million through warrants. Earlier this month, Pantara disclosed it had already deployed $300 million into digital asset treasuries. At the same time, Galaxy Digital, Jump Crypto, and multi-coin capital are working to

raise about $1 billion for a similar vehicle, with Kander Fitzgerald serving as lead banker. Sources told Bloomberg the Salana Foundation has endorsed the initiative, which is expected to close in early September. Meanwhile, medical device maker Sharps Technology announced a $400 million stock sale to build one of the largest Salana Treasuries, positioning its shares as a Salana proxy, while adding crypto-native leaders, Alice and James Zhang, to its board. Turning to Big Tech, Google Cloud is advancing development of its own layer one blockchain, the Google Cloud Universal Ledger,

or G-CUL. The new blockchain will be positioned as neutral infrastructure for global finance. First announced in March in partnership with CME Group, G-CUL is now in private TestNet, with broader trials expected later this year, and a full launch targeted for 2026. Rich Widmon, Google Cloud's head of Web 3 strategy, said the ledger will support Python-based

smart contracts, making it more accessible for developers and financial engineers. Any financial institution can build with GCLL, Widman wrote, noting that companies may hesitate to use blockchains owned by competitors such as Stripe or Circle. CME Group has already completed integration testing, with CEO Terry Duffy calling the project a potential breakthrough for settlement and collateral management. Unlike Stripe's Tempo or Circles Arc, which are closely tied to their ecosystems, Google is promoting G-Sull as a shared, credibly neutral foundation for institutional adoption, but decentralized platforms are facing controversies of their own.

The decentralized exchange hyperliquid is under scrutiny after four whale traders profited nearly $48 million during a sudden rally in plasma blockchain's XPL token. Within minutes, XPL spiked more than 200% to $1.80, wiping out over 80% of open interest and triggering mass liquidations. Blockchain data firm Spot OnChain described it as one of the wildest short squeezes and wealth redistributions we've seen. According to OnChane Aenielst MLN, one whale wallet earned $16 million in a single minute after clearing the entire order book and liquidating everyone. Losses were widespread among smaller traders. Ex-user CBB admitted, I lost $2.5 million, never touching isolated markets again.

The incident comes just days before XPL's official launch and follows a $6.2 million exploit on hyperliquid earlier this year, adding pressure on the platform to address vulnerabilities. Meanwhile, institutions are stepping deeper into decentralized finance. Avey Labs has unveiled Horizon. A new platform designed to let institutions borrow stablecoins against tokenized real-world assets, such as U.S. treasuries, and collateralized loan obligations. The service operates on a permissioned version of AVEV3, with ChainLink providing real-time

asset valuations to ensure loans remain fully collateralized. Qualified investors can post tokenized securities from partners, including Superstate, centrifuge, Circle, Vannack, and Wisdom Tree. borrowers can access stablecoins such as Circles USDC, RELUSD, and AVE's own GHO. Anyone can supply these stable coins to Horizon's markets and earn yield. Horizon is built for the growth of tokenized real-world collateral, enabling lending and borrowing at institutional scale, said AVE founder Stani Kulichov. Centrofuge CEO Paji Illuminati added,

The true potential of RWA's isn't just in tokenization. It's in what you can do once those assets. are on-chain. With $39 billion in total value locked, Avey is positioning Horizon as its institutional gateway to decentralized finance. But not all new tokens have been good news. The debut of YZY, a Solana meme coin promoted by rapper Yee, has turned sour for retail traders. Blockchain data from bubble maps shows more than 70,000 wallets are in the red, with collective losses of around $8.2 million. Over 51,000 addresses lost less. than $1,000, but at least three wallets suffered drawdowns of more than $1 million each.

At the same time, insiders and veteran traders reaped outsized profits. Bubble maps linked infamous Libra promoter Hayden Davis to $12 million in early YZY buys, while the very first purchaser, an experienced trader known as Nassim, flipped an initial $250,000 into more than $1 million, despite supposed anti-sniping protections. Bubble Maps called him an expert sniper with a proven track record from earlier successes in Trump's meme coin. With 70% of YZ supply locked to Yee's corporate entity, and only 20% offered publicly, the uneven distribution fueled skepticism. On the stablecoin front, Tether has announced plans to issue its USDT stablecoin on RGB, a protocol built to support asset issuance directly on Bitcoin. RGB, which launched its main net earlier this year, is designed to enable private, scalable,

and user-controlled transactions beyond Bitcoin's base layer. According to the company, integrating USDT with RGB will allow users to hold and transfer the stable coin alongside Bitcoin in the same wallet, with support for offline transactions. Tether CEO Paolo Ardoino said the move aims to make USDT, lightweight, private, and scalable, within the Bitcoin ecosystem. Finally, to cross-chain governance, where Stargate Dow has voted overwhelmingly to approve a $120 million acquisition

by the Layer Zero Foundation, despite last-minute competition from rivals Wormhole, Axilar, and Across. Nearly 95% of participants supported the deal, which will dissolve Stargate's governance structure and allow holders of its STG token to swap for Layer Zero's ZRO at a fixed ratio of one STG to 0.08634 ZRO,

layer zero revised its original proposal after pushback, offering VSTG stakers half of Stargates revenue for six months before redirecting proceeds to a ZRO buyback program. CEO Brian Pellegrino called the result the highest participation of any vote in Stargate's history, with more than 15,000 wallets taking part. Wormhole attempted to delay the process with an all-cash $120 million counteroffer,

while Axler and a cross signaled interest if the vote were paused. Despite these efforts, Layer Zero, reclaimed control of the cross-chain bridge it first launched in 2022. Unchained is produced by Laura Shin, with help from Matt Pilchard, Juan Oranovich, Margaret Curia, and Pam Majumdar. Thanks for listening.