1 00:00:00,120 --> 00:00:03,000 Speaker 1: Hello everyone, and welcome to the latest episode from the 2 00:00:03,040 --> 00:00:06,840 Speaker 1: midweek edition of the coin bureau podcast. Every week, I 3 00:00:06,920 --> 00:00:09,559 Speaker 1: pick out two of my favorite videos from coin bureaus 4 00:00:09,560 --> 00:00:13,039 Speaker 1: YouTube channel to present to you in podcast form. The 5 00:00:13,080 --> 00:00:15,960 Speaker 1: audio you're about to hear is from those videos I've 6 00:00:16,040 --> 00:00:18,880 Speaker 1: chosen this week, many of you have been in touch 7 00:00:18,920 --> 00:00:21,160 Speaker 1: to ask whether it's possible to listen to our videos 8 00:00:21,200 --> 00:00:25,639 Speaker 1: in podcast format, and so voila for your delectation. This week, 9 00:00:25,720 --> 00:00:29,080 Speaker 1: may I present our videos on the recent controversy surrounding 10 00:00:29,200 --> 00:00:33,720 Speaker 1: some proposed crypto regulations and our deep dive review of 11 00:00:33,880 --> 00:00:37,360 Speaker 1: ap toss, the brand new Layer one blockchain that recently 12 00:00:37,440 --> 00:00:41,560 Speaker 1: launched to some controversy of its own. Sam Bankman Freed 13 00:00:41,960 --> 00:00:44,839 Speaker 1: is the CEO of FTX, one of the biggest and 14 00:00:44,960 --> 00:00:49,199 Speaker 1: most influential crypto companies in the industry. He's well connected 15 00:00:49,200 --> 00:00:51,800 Speaker 1: to those in power and has been a prominent figure 16 00:00:51,800 --> 00:00:54,800 Speaker 1: in Washington in recent months giving his input into how 17 00:00:54,880 --> 00:00:58,720 Speaker 1: future crypto regulations might look. He recently published some of 18 00:00:58,800 --> 00:01:01,240 Speaker 1: his thoughts on this press matter on the ft X 19 00:01:01,320 --> 00:01:05,080 Speaker 1: website and on Twitter, and it's no exaggeration to say 20 00:01:05,120 --> 00:01:09,200 Speaker 1: that they stirred up some rather heated debate crypto regulations 21 00:01:09,280 --> 00:01:11,559 Speaker 1: are a hot button issue at the moment, and sam 22 00:01:11,680 --> 00:01:14,880 Speaker 1: suggestions on how they might look were intended to spark 23 00:01:15,000 --> 00:01:18,760 Speaker 1: further conversation among the crypto community. They did that and 24 00:01:18,800 --> 00:01:21,399 Speaker 1: then some, and in the first part of today's episode 25 00:01:21,440 --> 00:01:24,800 Speaker 1: you'll hear what those suggestions were and what we and 26 00:01:24,959 --> 00:01:27,800 Speaker 1: others made of them. Then, a couple of weeks ago, 27 00:01:27,959 --> 00:01:30,640 Speaker 1: we saw the launch of a brand spanking new crypto 28 00:01:30,680 --> 00:01:33,840 Speaker 1: project called app Toss. This has been brought to us 29 00:01:33,880 --> 00:01:37,280 Speaker 1: by the folks behind Facebook's ill fated d M project, 30 00:01:37,520 --> 00:01:41,600 Speaker 1: which coincidentally opened the crypto space up to massive regulatory 31 00:01:41,600 --> 00:01:44,880 Speaker 1: scrutiny when it first appeared a few years ago. So 32 00:01:45,080 --> 00:01:48,640 Speaker 1: ap Toss has some pretty serious backing and some cutting 33 00:01:48,720 --> 00:01:52,040 Speaker 1: edge tech. But what's it all about? Is it any good? 34 00:01:52,320 --> 00:01:54,080 Speaker 1: Does it have a worthwhile role to play in the 35 00:01:54,120 --> 00:01:57,320 Speaker 1: crypto industry? And is it a project to get excited about. 36 00:01:57,520 --> 00:01:59,520 Speaker 1: It's been a while since we had a new crypto 37 00:01:59,520 --> 00:02:02,200 Speaker 1: project review on the channel, so you can be sure 38 00:02:02,320 --> 00:02:05,200 Speaker 1: we got thoroughly stuck into this one. I hope you 39 00:02:05,280 --> 00:02:07,600 Speaker 1: enjoy listening to these two pieces, and I'll be back 40 00:02:07,640 --> 00:02:10,079 Speaker 1: talking crypto with Mike very soon, so be sure to 41 00:02:10,120 --> 00:02:12,960 Speaker 1: stay tuned, and if you want even more content from 42 00:02:12,960 --> 00:02:15,880 Speaker 1: coin Bureau, be sure to subscribe to our YouTube channel 43 00:02:16,120 --> 00:02:39,160 Speaker 1: and visit us on social media too. F t X 44 00:02:39,360 --> 00:02:42,079 Speaker 1: is known for being one of the most influential companies 45 00:02:42,120 --> 00:02:45,600 Speaker 1: in cryptocurrency. This is due in large part to founder 46 00:02:45,639 --> 00:02:49,520 Speaker 1: and CEO Sam Bankman Freed, who has lots of friends 47 00:02:49,560 --> 00:02:53,679 Speaker 1: on Wall Street and in Washington, d C. That's why 48 00:02:53,880 --> 00:02:59,480 Speaker 1: Sam's recent crypto regulation recommendations were taken so seriously. Sam 49 00:02:59,520 --> 00:03:03,840 Speaker 1: and t X have the power to influence actual crypto policy, 50 00:03:03,880 --> 00:03:07,079 Speaker 1: and not everyone is a fan of what they're recommending. 51 00:03:07,760 --> 00:03:12,360 Speaker 1: So today I'm going to summarize Sam's recent cryptoregulation recommendations, 52 00:03:12,520 --> 00:03:15,800 Speaker 1: analyze each one, and tell you what effects they could 53 00:03:15,800 --> 00:03:20,640 Speaker 1: have on crypto if they become law. The post detailing 54 00:03:20,720 --> 00:03:24,359 Speaker 1: Sam's cryptoregulation recommendations can be found on the f t 55 00:03:24,639 --> 00:03:30,440 Speaker 1: X policy website. It's titled Quote Possible Digital Asset Industry Standards, 56 00:03:30,560 --> 00:03:32,640 Speaker 1: and I'll leave a link to the full post in 57 00:03:32,680 --> 00:03:36,880 Speaker 1: the description if you're interested. Now, I'll start by highlighting 58 00:03:36,920 --> 00:03:40,200 Speaker 1: something that's mentioned in the very first paragraph of the post. 59 00:03:41,000 --> 00:03:44,040 Speaker 1: That's that what Sam is proposing is intended to be 60 00:03:44,120 --> 00:03:49,000 Speaker 1: a draft that's meant to stimulate discussion about possible cryptoregulations. 61 00:03:49,240 --> 00:03:53,800 Speaker 1: I mean, it's literally in the title. In other words, 62 00:03:53,960 --> 00:03:56,640 Speaker 1: what SAM is suggesting is not the be all and 63 00:03:56,840 --> 00:03:59,840 Speaker 1: end all of what cryptoregulations in the United States and 64 00:04:00,080 --> 00:04:04,040 Speaker 1: elsewhere will be. To be clear, SAM and f t 65 00:04:04,280 --> 00:04:08,080 Speaker 1: X do in fact have significant influence over crypto policy, 66 00:04:08,200 --> 00:04:10,800 Speaker 1: but they are by no means the only entities with 67 00:04:10,840 --> 00:04:14,000 Speaker 1: this kind of influence. It's also worth pointing out that 68 00:04:14,040 --> 00:04:16,760 Speaker 1: this isn't exactly the first time that SAM and f 69 00:04:16,880 --> 00:04:21,080 Speaker 1: t X have put out crypto regulation recommendations. SAM and 70 00:04:21,160 --> 00:04:24,000 Speaker 1: ft X also aren't the only entities that have been 71 00:04:24,040 --> 00:04:28,520 Speaker 1: making these sorts of recommendations. Finance and coin Base basically 72 00:04:28,560 --> 00:04:32,440 Speaker 1: did the same earlier this year. If you're wondering which 73 00:04:32,560 --> 00:04:36,120 Speaker 1: other entities in crypto are influencing crypto regulations, you can 74 00:04:36,160 --> 00:04:39,279 Speaker 1: watch our video about crypto lobbying that will be in 75 00:04:39,320 --> 00:04:45,479 Speaker 1: the description. I digress. So the first set of recommendations 76 00:04:45,600 --> 00:04:51,640 Speaker 1: relates to sanctions, allow lists, and blocklists. These recommendations seem 77 00:04:51,720 --> 00:04:55,719 Speaker 1: to be the ones that generated the most backlash. Now 78 00:04:55,760 --> 00:04:59,320 Speaker 1: that's because SAM is in favor of blocklists, i e. 79 00:04:59,600 --> 00:05:03,400 Speaker 1: Blocking certain wallet addresses from interacting with the rest of 80 00:05:03,480 --> 00:05:07,720 Speaker 1: the crypto ecosystem. In theory, this is a good idea, 81 00:05:07,839 --> 00:05:12,600 Speaker 1: but in practice it ain't. In theory, blocklists would be 82 00:05:12,720 --> 00:05:17,880 Speaker 1: used to rightfully restrict bad actors in cryptocurrency. In practice, however, 83 00:05:18,240 --> 00:05:21,600 Speaker 1: blocklists would be used to restrict anyone who opposes the 84 00:05:21,720 --> 00:05:27,120 Speaker 1: entity that's in charge of determining which wallet addresses are blocked. Now. 85 00:05:27,120 --> 00:05:30,040 Speaker 1: In this case, Sam believes that the Office of Foreign 86 00:05:30,120 --> 00:05:33,320 Speaker 1: Assets Control or oh FHAG, should be the entity that 87 00:05:33,440 --> 00:05:37,400 Speaker 1: oversees the crypto blocklist. This is a problem because oh 88 00:05:37,480 --> 00:05:41,000 Speaker 1: FHAG is part of the U S government, specifically the 89 00:05:41,120 --> 00:05:44,239 Speaker 1: U S Department of the Treasury. It's safe to say 90 00:05:44,440 --> 00:05:49,320 Speaker 1: that could get ugly very quickly. To Sam's credit, he 91 00:05:49,400 --> 00:05:52,400 Speaker 1: does note that the task of maintaining this list could 92 00:05:52,400 --> 00:05:57,239 Speaker 1: be given to a quote responsible actor. Unfortunately, that opens 93 00:05:57,320 --> 00:05:59,880 Speaker 1: another can of worms, as it would be arguably imp 94 00:06:00,000 --> 00:06:03,200 Speaker 1: possible to agree which entity should have the power to 95 00:06:03,320 --> 00:06:07,880 Speaker 1: block people from the crypto ecosystem. There's also the issue 96 00:06:08,040 --> 00:06:11,400 Speaker 1: of dusting, which is when a sanctioned wallet address sends 97 00:06:11,400 --> 00:06:14,960 Speaker 1: crypto to other wallet addresses that haven't engaged in any 98 00:06:15,000 --> 00:06:20,279 Speaker 1: illicit activity. This became an issue after opak sanctioned Tornado Cash, 99 00:06:20,400 --> 00:06:24,159 Speaker 1: and it's an issue that Sam also acknowledges in his post. 100 00:06:25,200 --> 00:06:29,480 Speaker 1: In addition to a blocklist, Sam also suggests creating a 101 00:06:29,520 --> 00:06:34,360 Speaker 1: standardized database of crypto wallet addresses suspected of being associated 102 00:06:34,440 --> 00:06:38,840 Speaker 1: with illicit activity. These would be shared with other centralized 103 00:06:38,960 --> 00:06:43,840 Speaker 1: entities in cryptocurrency. Note that these wallets would not be blocked, 104 00:06:44,080 --> 00:06:48,960 Speaker 1: just very closely watched. Yikes. As a cherry on top, 105 00:06:49,400 --> 00:06:53,760 Speaker 1: Sam seems to suggest that blocklists should be enforced on chain. 106 00:06:54,760 --> 00:06:58,080 Speaker 1: This means that crypto wallets would automatically be frozen the 107 00:06:58,120 --> 00:07:01,760 Speaker 1: moment that oh FHAK or whichever other entity is doing 108 00:07:01,800 --> 00:07:06,760 Speaker 1: the overseeing determines they've done something sufficiently naughty. This is 109 00:07:06,800 --> 00:07:10,119 Speaker 1: something that was picked up by Unbanked podcast host Ryan 110 00:07:10,200 --> 00:07:13,600 Speaker 1: Sean Adams, who blasted Sam for suggesting that the freezing 111 00:07:13,680 --> 00:07:17,600 Speaker 1: of crypto on chain should be normalized. He also criticized 112 00:07:17,640 --> 00:07:22,320 Speaker 1: Sam for suggesting defy applications must comply with blocklists. It 113 00:07:22,440 --> 00:07:27,760 Speaker 1: looks like Sam has since removed that suggestion. The second 114 00:07:27,760 --> 00:07:32,440 Speaker 1: set of Sam's recommendations relates to crypto hacks and accountability. 115 00:07:32,440 --> 00:07:36,160 Speaker 1: I who is responsible when a crypto protocol or project 116 00:07:36,320 --> 00:07:40,200 Speaker 1: is hacked. Sam again suggests creating a list of crypto 117 00:07:40,240 --> 00:07:43,000 Speaker 1: wallets that are associated with these hacks so that they 118 00:07:43,000 --> 00:07:47,560 Speaker 1: can be blocked by centralized and decentralized services. Regarding the 119 00:07:47,600 --> 00:07:50,640 Speaker 1: retrieval of funds from a hack, Sam notes that there 120 00:07:50,640 --> 00:07:54,239 Speaker 1: are often negotiations between the hacker and the affected crypto 121 00:07:54,280 --> 00:07:58,040 Speaker 1: protocol or platform. Sam also points out that it's not 122 00:07:58,240 --> 00:08:02,760 Speaker 1: always clear whether the hack did anything legally wrong nor 123 00:08:03,000 --> 00:08:06,840 Speaker 1: how much money they ought to return. For context, a 124 00:08:06,920 --> 00:08:10,120 Speaker 1: lot of the big hacks in crypto have actually been 125 00:08:10,360 --> 00:08:13,480 Speaker 1: flash loans. Now, if you've watched any of our videos 126 00:08:13,520 --> 00:08:17,400 Speaker 1: about r you'll know that a flash loan involves borrowing 127 00:08:17,520 --> 00:08:21,360 Speaker 1: a large amount of crypto to execute an arbitrage trade 128 00:08:21,960 --> 00:08:24,920 Speaker 1: by a token for a low price in one protocol 129 00:08:25,000 --> 00:08:28,280 Speaker 1: and sell it at a higher price in another instantly. 130 00:08:29,520 --> 00:08:32,520 Speaker 1: Depending on the quality of the protocol, a flash loan 131 00:08:32,720 --> 00:08:37,240 Speaker 1: can be extremely damaging. Some have resulted in millions of 132 00:08:37,280 --> 00:08:40,839 Speaker 1: dollars in losses, and the cause is almost always an 133 00:08:40,880 --> 00:08:44,080 Speaker 1: issue related to the oracle the protocol is using to 134 00:08:44,200 --> 00:08:48,479 Speaker 1: keep track of crypto prices. Is this kind of arbitrage 135 00:08:48,600 --> 00:08:54,640 Speaker 1: legal well, apparently not in Canada. Now. What Sam proposes 136 00:08:54,880 --> 00:08:58,240 Speaker 1: is an admittedly complex formula of how the hacker should 137 00:08:58,240 --> 00:09:02,200 Speaker 1: be compensated. The shore explanation is that the users of 138 00:09:02,240 --> 00:09:05,240 Speaker 1: the crypto protocol or platform that was hacked should be 139 00:09:05,320 --> 00:09:09,640 Speaker 1: made whole i have their crypto returned. Assuming the hacker 140 00:09:09,760 --> 00:09:13,120 Speaker 1: didn't do anything that was clearly illegal and was cooperating 141 00:09:13,120 --> 00:09:16,000 Speaker 1: with the affected protocol or platform to return the funds, 142 00:09:16,320 --> 00:09:18,880 Speaker 1: then he or she would get five percent of the 143 00:09:18,880 --> 00:09:21,760 Speaker 1: assets they took as a de facto bug bounty for 144 00:09:21,920 --> 00:09:25,920 Speaker 1: discovering the exploit in the code. Besides being cooperative, the 145 00:09:25,960 --> 00:09:29,640 Speaker 1: hacker must also return the funds within twenty four hours. 146 00:09:29,960 --> 00:09:32,240 Speaker 1: If the hacker tries to take his or her time 147 00:09:32,559 --> 00:09:35,520 Speaker 1: returning the stolen crypto or tries to keep more than 148 00:09:35,600 --> 00:09:38,880 Speaker 1: five percent of what was taken, then it's no more Mr. 149 00:09:38,960 --> 00:09:42,000 Speaker 1: Nice guy. The hacker will be deemed a bad actor 150 00:09:42,120 --> 00:09:46,120 Speaker 1: and authorities would get involved. Now. Sam's reasoning here is 151 00:09:46,160 --> 00:09:49,520 Speaker 1: that this so called five five standard would have reduced 152 00:09:49,640 --> 00:09:55,040 Speaker 1: the severity of previous crypto hacks by He emphasizes that 153 00:09:55,120 --> 00:09:58,280 Speaker 1: he's open to suggestions on this front, given that crypto 154 00:09:58,360 --> 00:10:01,560 Speaker 1: hacks aren't always clear cut, and the right course of 155 00:10:01,559 --> 00:10:06,560 Speaker 1: action is likewise often unclear. Now call me crazy, but 156 00:10:06,840 --> 00:10:10,600 Speaker 1: in the absence of any other legal clarity, I tend 157 00:10:10,760 --> 00:10:14,240 Speaker 1: to lean more towards the idea that code is law. 158 00:10:15,240 --> 00:10:18,640 Speaker 1: If a crypto project, protocol, or program is hacked because 159 00:10:18,640 --> 00:10:21,520 Speaker 1: of a bug in the code, then it's the developers 160 00:10:21,600 --> 00:10:24,640 Speaker 1: that should be held accountable, especially if it's a bug 161 00:10:24,679 --> 00:10:28,400 Speaker 1: that they were already aware of. There have been cases 162 00:10:28,440 --> 00:10:33,720 Speaker 1: like this, again, though, these situations are not always clear cut, 163 00:10:33,840 --> 00:10:36,360 Speaker 1: and there is something to be said about what hackers 164 00:10:36,400 --> 00:10:39,600 Speaker 1: do with funds that are stolen. Remember that many of 165 00:10:39,720 --> 00:10:42,160 Speaker 1: the cross chain bridge hacks we've seen since the start 166 00:10:42,160 --> 00:10:45,880 Speaker 1: of the year were perpetrated by North Korea. I think 167 00:10:45,920 --> 00:10:50,680 Speaker 1: we can all agree that is very, very bad. Now. 168 00:10:50,800 --> 00:10:54,960 Speaker 1: The third set of recommendations relates to the classification of 169 00:10:55,000 --> 00:11:00,480 Speaker 1: cryptocurrencies as securities or commodities. For reference, securities are assets 170 00:11:00,520 --> 00:11:03,680 Speaker 1: like a stock in a company and are heavily regulated. 171 00:11:04,280 --> 00:11:07,920 Speaker 1: By contrast, commodities are assets like oil and are not 172 00:11:08,160 --> 00:11:13,480 Speaker 1: subject to extensive regulations. Since the seventeen crypto bull market, 173 00:11:13,640 --> 00:11:16,920 Speaker 1: there has been lots of debate about which cryptos are 174 00:11:17,000 --> 00:11:22,120 Speaker 1: securities and which ones are commodities. So far, only bitcoins 175 00:11:22,120 --> 00:11:26,839 Speaker 1: BTC has been concretely classified as a commodity. Comments by 176 00:11:26,880 --> 00:11:30,880 Speaker 1: a former SEC official suggest that ethereums eth is also 177 00:11:31,040 --> 00:11:34,880 Speaker 1: a commodity, but that is not official. As we've seen, 178 00:11:35,080 --> 00:11:39,520 Speaker 1: any cryptocurrency that's classified as a security gets delisted from 179 00:11:39,559 --> 00:11:43,160 Speaker 1: crypto exchanges in the United States and is made inaccessible 180 00:11:43,280 --> 00:11:47,760 Speaker 1: to American investors. Given that most crypto investors are in 181 00:11:47,880 --> 00:11:51,880 Speaker 1: the United States, a securities designation is a devastating blow 182 00:11:52,080 --> 00:11:56,080 Speaker 1: to any coin or token. Now, as far as SAM 183 00:11:56,120 --> 00:11:59,640 Speaker 1: is concerned, it's up to policymakers to decide which bucket 184 00:11:59,720 --> 00:12:03,079 Speaker 1: each crypto falls into. In the interim, f t x 185 00:12:03,240 --> 00:12:05,920 Speaker 1: S U s M will have its legal team assess 186 00:12:06,080 --> 00:12:09,880 Speaker 1: coins and tokens to determine whether they satisfy the criteria 187 00:12:10,000 --> 00:12:13,560 Speaker 1: of the Howe test. For those unfamiliar, the Howie test 188 00:12:13,679 --> 00:12:17,240 Speaker 1: consists of four criteria which must be met for an 189 00:12:17,240 --> 00:12:20,680 Speaker 1: asset to be classified as a security. In the case 190 00:12:20,720 --> 00:12:24,679 Speaker 1: of cryptocurrency, the most important criterion is the fourth, the 191 00:12:24,760 --> 00:12:28,000 Speaker 1: expectation of profit from buying that coin or token is 192 00:12:28,040 --> 00:12:32,880 Speaker 1: coming from an identifiable third party. SAM notes that f 193 00:12:33,000 --> 00:12:36,600 Speaker 1: t x U s will delist any cryptocurrencies that meet 194 00:12:36,640 --> 00:12:39,720 Speaker 1: all four criteria of the Howe test, which is really 195 00:12:39,880 --> 00:12:44,320 Speaker 1: just the fourth criterion. Any crypto that does not meet 196 00:12:44,440 --> 00:12:47,560 Speaker 1: that fourth criterion will be treated as commodities by f 197 00:12:47,679 --> 00:12:51,440 Speaker 1: t X US unless the SEC comes out and says otherwise. 198 00:12:52,120 --> 00:12:55,600 Speaker 1: This is a bit annoying because the SEC hasn't exactly 199 00:12:55,600 --> 00:12:59,320 Speaker 1: been using the Howie test to determine which cryptos are securities. 200 00:13:00,000 --> 00:13:02,200 Speaker 1: If you've watched any of our recent videos about the 201 00:13:02,240 --> 00:13:05,240 Speaker 1: infamous regulator, you'll know that it really does just seem 202 00:13:05,280 --> 00:13:08,400 Speaker 1: to be picking and choosing which crypto projects to go after. 203 00:13:09,080 --> 00:13:13,520 Speaker 1: More importantly, SEC chairman Gary Gensler believes that centralized stable 204 00:13:13,559 --> 00:13:18,320 Speaker 1: coins are securities. Now, this makes zero sense, since there's 205 00:13:18,400 --> 00:13:21,120 Speaker 1: no expectation of profit to be had for an asset 206 00:13:21,280 --> 00:13:26,360 Speaker 1: that maintains a stable value. This begs the question of 207 00:13:26,400 --> 00:13:29,120 Speaker 1: what f t X would do if circles U s 208 00:13:29,200 --> 00:13:32,680 Speaker 1: DC is determined to be a security. In any case, 209 00:13:32,880 --> 00:13:35,280 Speaker 1: Sam reveals at the end of this section that he 210 00:13:35,440 --> 00:13:38,400 Speaker 1: and f t X are working closely with regulators to 211 00:13:38,559 --> 00:13:43,400 Speaker 1: establish a framework for cryptocurrencies that count as securities. Something 212 00:13:43,440 --> 00:13:46,200 Speaker 1: tells me that these frameworks will be kind to the 213 00:13:46,240 --> 00:13:49,360 Speaker 1: coins and tokens f t X has invested in, but 214 00:13:49,440 --> 00:13:54,160 Speaker 1: that's just my speculation. The fourth set of recommendations relates 215 00:13:54,200 --> 00:13:58,320 Speaker 1: to tokenized equities, that is, tokenized stocks. Some of you 216 00:13:58,360 --> 00:14:01,320 Speaker 1: may know that some crypto exchange just started offering token 217 00:14:01,320 --> 00:14:04,440 Speaker 1: ized stocks last year. Some of you may also know 218 00:14:04,760 --> 00:14:07,480 Speaker 1: that exchangees got in a lot of trouble for doing that, 219 00:14:07,640 --> 00:14:12,360 Speaker 1: particularly Binance. This is unfortunate because token ized stocks are 220 00:14:12,440 --> 00:14:16,200 Speaker 1: the ideal way to access these assets. This is something 221 00:14:16,240 --> 00:14:19,040 Speaker 1: that Sam is hyper aware of, which is why he 222 00:14:19,120 --> 00:14:22,640 Speaker 1: is advocating for replacing the half dozen middlemen involved in 223 00:14:22,760 --> 00:14:27,360 Speaker 1: every stock trade with transparent, decentralized blockchains that offer near 224 00:14:27,440 --> 00:14:32,040 Speaker 1: instant settlement. This fourth set of recommendations is interesting because 225 00:14:32,120 --> 00:14:35,840 Speaker 1: f t X is heavily invested in Slana. Those of 226 00:14:35,880 --> 00:14:38,280 Speaker 1: you who are familiar with Solana will know that the 227 00:14:38,280 --> 00:14:42,360 Speaker 1: project's endgame is to become an alternative to centralize stock 228 00:14:42,400 --> 00:14:46,520 Speaker 1: exchanges like the NASDAK. This is why it's odd that 229 00:14:46,720 --> 00:14:50,400 Speaker 1: Sam told What Bitcoin Did podcast host Peter McCormack that 230 00:14:50,520 --> 00:14:53,840 Speaker 1: these recommendations are not what's best for f t X, 231 00:14:54,080 --> 00:14:57,600 Speaker 1: but rather what's best for the industry. From where I'm standing, 232 00:14:57,920 --> 00:15:00,560 Speaker 1: f t X clearly stands to ben if it from 233 00:15:00,600 --> 00:15:05,440 Speaker 1: some of these recommendations if they are implemented. Regardless, Sam's 234 00:15:05,480 --> 00:15:08,320 Speaker 1: focus on token ized stocks can therefore be taken as 235 00:15:08,320 --> 00:15:11,960 Speaker 1: a bullish sign for Salana. From what I've seen, Sam 236 00:15:12,000 --> 00:15:15,120 Speaker 1: and FTX have been pushing for token ized stocks for months, 237 00:15:15,240 --> 00:15:19,280 Speaker 1: if not longer. If they succeed in getting some regulation past, 238 00:15:19,760 --> 00:15:24,480 Speaker 1: Soul could seriously benefit. That is, if Salana can stay online. 239 00:15:24,520 --> 00:15:27,640 Speaker 1: Of course, more about Salana in the description. And yes, 240 00:15:27,760 --> 00:15:30,560 Speaker 1: I hold Soul as part of my personal portfolio, not 241 00:15:30,680 --> 00:15:34,480 Speaker 1: financial advice. You know the drill. Now. The fifth set 242 00:15:34,480 --> 00:15:39,440 Speaker 1: of recommendations relates to consumer protection and disclosures by crypto 243 00:15:39,480 --> 00:15:43,240 Speaker 1: companies and projects. Sam starts with a common sense suggestion, 244 00:15:43,600 --> 00:15:47,160 Speaker 1: and that's to ensure that crypto projects and companies properly 245 00:15:47,200 --> 00:15:51,440 Speaker 1: disclose what they do and get punished if they mislead investors. 246 00:15:52,400 --> 00:15:56,400 Speaker 1: Sam then proposes something a bit more contentious, and that's 247 00:15:56,440 --> 00:15:59,960 Speaker 1: that retail investors should be prevented from taking on x 248 00:16:00,040 --> 00:16:05,200 Speaker 1: sessive amounts of debt when investing in cryptocurrency. This is 249 00:16:05,280 --> 00:16:08,400 Speaker 1: another slippery slope, which we touched on in our video 250 00:16:08,480 --> 00:16:13,280 Speaker 1: about the upcoming retail crypto investing ban. Perhaps Sam was 251 00:16:13,400 --> 00:16:17,360 Speaker 1: inspired by that video because he essentially calls for setting 252 00:16:17,440 --> 00:16:22,160 Speaker 1: limits on crypto investing for retail traders for what it's worth. 253 00:16:22,480 --> 00:16:25,120 Speaker 1: Sam doesn't believe that these limits should be determined by 254 00:16:25,240 --> 00:16:27,960 Speaker 1: the net worth of the trader, as is currently the 255 00:16:27,960 --> 00:16:32,760 Speaker 1: case with accredited investors. Instead, Sam believes that each crypto 256 00:16:32,800 --> 00:16:35,760 Speaker 1: platform should have a test that retail investors will have 257 00:16:35,880 --> 00:16:39,520 Speaker 1: to pass if they want to access certain cryptocurrencies or 258 00:16:39,720 --> 00:16:44,200 Speaker 1: methods of investing. I reckon that most crypto exchanges have 259 00:16:44,320 --> 00:16:48,440 Speaker 1: small tutorials and disclaimers to that end already, but these 260 00:16:48,520 --> 00:16:51,320 Speaker 1: could be improved. In fact, I would go one step 261 00:16:51,360 --> 00:16:54,760 Speaker 1: further and say that defied protocols should all have tutorials 262 00:16:54,760 --> 00:16:58,640 Speaker 1: and disclaimers as well. This doesn't necessarily need to be 263 00:16:58,720 --> 00:17:02,200 Speaker 1: enforced by law, but setting this kind of standard would 264 00:17:02,200 --> 00:17:06,879 Speaker 1: hopefully help protect defied protocols from unwarranted scrutiny when something 265 00:17:06,920 --> 00:17:11,440 Speaker 1: goes wrong. Speaking of DEFY, the sixth set of recommendations 266 00:17:11,480 --> 00:17:14,600 Speaker 1: relates to just that. Here, Sam begins by saying that 267 00:17:14,680 --> 00:17:18,160 Speaker 1: it's hard to quote think about DEFY in the context 268 00:17:18,240 --> 00:17:22,760 Speaker 1: of existing financial regulations. I would say that DEFY should 269 00:17:22,840 --> 00:17:25,520 Speaker 1: not be subject to a new set of regulations, as 270 00:17:25,600 --> 00:17:28,440 Speaker 1: it will otherwise just become a part of trad Five. 271 00:17:28,760 --> 00:17:32,880 Speaker 1: It appears that Sam disagrees with creating new regulations for 272 00:17:32,920 --> 00:17:36,000 Speaker 1: a new kind of technology, as he calls for regulating 273 00:17:36,040 --> 00:17:39,719 Speaker 1: defied protocols that offer financial services which exist in the 274 00:17:39,760 --> 00:17:44,280 Speaker 1: traditional financial system. This is something that Ryan also blasted 275 00:17:44,320 --> 00:17:47,480 Speaker 1: Sam for, but it looks like Sam didn't backtrack on 276 00:17:47,520 --> 00:17:51,359 Speaker 1: this suggestion. The specific bullet point that Ryan took issue 277 00:17:51,480 --> 00:17:55,359 Speaker 1: with was the following quote. If you host a website 278 00:17:55,440 --> 00:17:57,879 Speaker 1: that makes it easy for US retail to connect to 279 00:17:58,000 --> 00:18:00,600 Speaker 1: and trade on a decks, you would likely have to 280 00:18:00,680 --> 00:18:04,200 Speaker 1: register it as something like a broker dealer slash, FCM, slash, 281 00:18:04,240 --> 00:18:07,760 Speaker 1: et cetera. You would also potentially have k y C 282 00:18:08,040 --> 00:18:13,400 Speaker 1: obligations put Differently, defied protocols with centralized front ends would 283 00:18:13,400 --> 00:18:16,239 Speaker 1: have to register with regulators in the United States and 284 00:18:16,320 --> 00:18:19,680 Speaker 1: collect k y C from their users. This would make 285 00:18:19,800 --> 00:18:23,840 Speaker 1: such defied protocols no different from centralized exchanges in my book, 286 00:18:24,200 --> 00:18:28,280 Speaker 1: and perhaps that's the purpose of such regulations big think 287 00:18:29,119 --> 00:18:32,359 Speaker 1: conspiracies aside. The defy related bullet point that caught my 288 00:18:32,480 --> 00:18:36,480 Speaker 1: eye was quote dows with purely on chain activity do 289 00:18:36,560 --> 00:18:41,080 Speaker 1: not require licenses similar to individuals. However, a DOW that 290 00:18:41,200 --> 00:18:44,200 Speaker 1: e g. Controls are centralized g U I or markets 291 00:18:44,200 --> 00:18:49,120 Speaker 1: to US retail might This suggestion is concerning because it's 292 00:18:49,160 --> 00:18:53,120 Speaker 1: not clear what Sam means by markets to US retail 293 00:18:53,840 --> 00:18:56,920 Speaker 1: using the SEC standards. If a website of a DOW 294 00:18:57,080 --> 00:19:00,080 Speaker 1: lists the price of the governance token, that would be 295 00:19:00,160 --> 00:19:03,919 Speaker 1: considered a form of marketing. This kind of threshold could 296 00:19:03,960 --> 00:19:09,040 Speaker 1: seriously stunt this promising crypto niche. Sam finishes off this 297 00:19:09,119 --> 00:19:12,200 Speaker 1: section by reiterating that nothing he's saying here is set 298 00:19:12,240 --> 00:19:15,360 Speaker 1: in stone. It's just a series of suggestions that's meant 299 00:19:15,400 --> 00:19:18,840 Speaker 1: to get the ball rolling on cryptoregulations. This would be 300 00:19:18,920 --> 00:19:21,520 Speaker 1: great were it not for the fact that Sam seems 301 00:19:21,560 --> 00:19:24,719 Speaker 1: to be fixed on forcing defy to fit into the 302 00:19:24,760 --> 00:19:30,280 Speaker 1: existing financial system hard pass. Now, the seventh and final 303 00:19:30,359 --> 00:19:34,240 Speaker 1: set of recommendations relates to stable coins. In short, Sam 304 00:19:34,280 --> 00:19:37,040 Speaker 1: believes all stable coins should be backed by an equivalent 305 00:19:37,080 --> 00:19:40,200 Speaker 1: amount of the fiat currency they represent or the government 306 00:19:40,240 --> 00:19:43,440 Speaker 1: debt of the country or countries which use the currency. 307 00:19:43,880 --> 00:19:46,560 Speaker 1: This is not surprising given that ft X seems to 308 00:19:46,560 --> 00:19:50,479 Speaker 1: have a close relationship with Circle. If you watched our 309 00:19:50,520 --> 00:19:54,920 Speaker 1: recent video about Europe's upcoming cryptoregulations, you'll know that Circle 310 00:19:55,040 --> 00:19:58,439 Speaker 1: appears to be pushing for strict reserve requirements for stable 311 00:19:58,480 --> 00:20:01,960 Speaker 1: coins as a way of keeping decentralized stable coins down. 312 00:20:02,920 --> 00:20:05,800 Speaker 1: Another thing that SAM and Circle have in common is 313 00:20:05,840 --> 00:20:08,399 Speaker 1: that both entities don't want k y C to be 314 00:20:08,440 --> 00:20:12,440 Speaker 1: applied to all stable coin transactions. This is because ky 315 00:20:12,480 --> 00:20:16,880 Speaker 1: C would negatively affect stable coin adoption. All they want 316 00:20:17,080 --> 00:20:18,960 Speaker 1: is for k y C to be applied to on 317 00:20:19,240 --> 00:20:22,280 Speaker 1: and off ramps for stable coins, which makes sense to me. 318 00:20:22,920 --> 00:20:25,520 Speaker 1: By the way, you should know that applying k y 319 00:20:25,640 --> 00:20:29,720 Speaker 1: C to all stable coin transactions isn't even necessary. That's 320 00:20:29,760 --> 00:20:35,359 Speaker 1: because blockchain companies like chain Analysis already track all crypto transactions. 321 00:20:35,800 --> 00:20:39,080 Speaker 1: This makes it easy for them to identify which crypto 322 00:20:39,119 --> 00:20:42,280 Speaker 1: wallets you own and where the crypto in your wallet 323 00:20:42,359 --> 00:20:46,200 Speaker 1: came from. Spooky I know, just in time for Halloween too. 324 00:20:47,119 --> 00:20:49,919 Speaker 1: Lame jokes aside. You should also know that the bulk 325 00:20:49,960 --> 00:20:54,119 Speaker 1: of SAM stable coin recommendations actually aren't in this particular post. 326 00:20:54,480 --> 00:20:57,000 Speaker 1: These recommendations can be found in another post on the 327 00:20:57,040 --> 00:21:00,440 Speaker 1: ft X policy website from way back in October past year. 328 00:21:00,720 --> 00:21:02,399 Speaker 1: I'll leave a link to it in the description if 329 00:21:02,440 --> 00:21:06,240 Speaker 1: you're interested. The TLDR there is that SAM and ft 330 00:21:06,480 --> 00:21:08,760 Speaker 1: X view a stable coin as being a token that 331 00:21:08,920 --> 00:21:11,520 Speaker 1: is backed by the fiat currency it represents, or the 332 00:21:11,560 --> 00:21:14,640 Speaker 1: government debt of the country that uses that currency. This 333 00:21:14,800 --> 00:21:17,880 Speaker 1: is significant because this definition of a stable coin once 334 00:21:17,920 --> 00:21:23,320 Speaker 1: again excludes decentralized alternatives. That said, the stable coin post 335 00:21:23,440 --> 00:21:26,640 Speaker 1: seems to include the possibility of stable coins being collateralized 336 00:21:26,680 --> 00:21:30,480 Speaker 1: by other assets. It specifically mentions a U S dollar 337 00:21:30,520 --> 00:21:33,640 Speaker 1: stable coin being collateralized by a large amount of BTC, 338 00:21:34,280 --> 00:21:38,120 Speaker 1: something that Terror tried doing with us T shortly after 339 00:21:38,280 --> 00:21:42,080 Speaker 1: the post was published. Too bad, they didn't fully collateralize 340 00:21:42,160 --> 00:21:47,240 Speaker 1: ust painful memories. Aside, the stable coin post contains a 341 00:21:47,280 --> 00:21:51,320 Speaker 1: handful of reasonable recommendations such as regulatory oversight of stable 342 00:21:51,359 --> 00:21:55,600 Speaker 1: coin issuers, transparency and reporting of reserves, audits of reserves, 343 00:21:55,760 --> 00:21:59,720 Speaker 1: sufficient reserves, and other logical stuff that also conveniently cuts 344 00:21:59,760 --> 00:22:05,159 Speaker 1: out decentralized stable coins. So this brings me to the 345 00:22:05,160 --> 00:22:09,480 Speaker 1: big question, and that's what effect Sam's crypto regulation recommendations 346 00:22:09,520 --> 00:22:13,040 Speaker 1: could have on the crypto market if they became law. 347 00:22:13,640 --> 00:22:16,679 Speaker 1: Let me reiterate that Sam's post was intended to be 348 00:22:16,720 --> 00:22:22,240 Speaker 1: a starting point for discussions around cryptoregulations and standards. Sam's 349 00:22:22,280 --> 00:22:25,760 Speaker 1: apparent editing of the post after receiving feedback reveals that 350 00:22:25,800 --> 00:22:29,560 Speaker 1: he and FTX are taking the crypto community seriously here, 351 00:22:29,560 --> 00:22:33,200 Speaker 1: and that's a very good sign in my book. Sam's 352 00:22:33,240 --> 00:22:37,240 Speaker 1: openness to feedback could result in very pro crypto regulations 353 00:22:37,359 --> 00:22:39,880 Speaker 1: if he's able to rally the rest of the industry 354 00:22:39,960 --> 00:22:43,720 Speaker 1: behind him. The thing is that Sam is likely to 355 00:22:43,800 --> 00:22:46,320 Speaker 1: have a hard time doing that if he's truly trying 356 00:22:46,359 --> 00:22:50,680 Speaker 1: to turn crypto into another arm of the existing financial system. 357 00:22:50,840 --> 00:22:54,840 Speaker 1: Don't get me wrong, there are definitely some projects, platforms, 358 00:22:54,880 --> 00:22:58,399 Speaker 1: and protocols that belong there. There are others that fall 359 00:22:58,440 --> 00:23:02,280 Speaker 1: in the middle as well. However, the projects, platforms, and 360 00:23:02,320 --> 00:23:07,159 Speaker 1: protocols that are decentralized, permissionless and trust less should not 361 00:23:07,400 --> 00:23:12,440 Speaker 1: be lumped in with their more centralized, permissioned and trusted counterparts. 362 00:23:13,080 --> 00:23:16,600 Speaker 1: Now I can't say I know where exactly that line is, 363 00:23:16,800 --> 00:23:20,440 Speaker 1: but it exists somewhere, and crossing it means the end 364 00:23:20,600 --> 00:23:25,000 Speaker 1: of financial freedom. Now. This is something that shape Shift 365 00:23:25,080 --> 00:23:29,200 Speaker 1: founder Eric Vorhees noted in his lengthy response to Sam's post, 366 00:23:29,440 --> 00:23:32,119 Speaker 1: which is well worth reading if you have the time, 367 00:23:33,280 --> 00:23:36,800 Speaker 1: and another big takeaway from that for me was the 368 00:23:36,840 --> 00:23:43,359 Speaker 1: difference between regulations and standards. So, in Eric's own words, quote. 369 00:23:43,880 --> 00:23:48,480 Speaker 1: Regulations are rules enforced coercively by the state. You probably 370 00:23:48,520 --> 00:23:51,560 Speaker 1: agree with some and disagree with others, but they are 371 00:23:51,680 --> 00:23:56,000 Speaker 1: fundamentally unique in that they rely on violence, not consent 372 00:23:56,440 --> 00:24:01,800 Speaker 1: end quote. By contrast, standards are voluntary and often determined 373 00:24:01,840 --> 00:24:06,080 Speaker 1: by free market forces. Many of the crypto regulation recommendations 374 00:24:06,080 --> 00:24:10,080 Speaker 1: Sam made would be better off as standards. An easy 375 00:24:10,080 --> 00:24:13,520 Speaker 1: example here is stable coin collateral. I reckon that the 376 00:24:13,600 --> 00:24:18,200 Speaker 1: quality of stable coin collateral would increase regardless of regulations 377 00:24:18,520 --> 00:24:21,920 Speaker 1: due to stable coin competition, and I would say that 378 00:24:21,960 --> 00:24:27,560 Speaker 1: this is happening already. Other cryptoregulation recommendations Sam made would 379 00:24:27,560 --> 00:24:32,479 Speaker 1: in fact be better off as regulations. Which ones should 380 00:24:32,480 --> 00:24:36,040 Speaker 1: be regulations would naturally vary depending on who you ask. 381 00:24:36,560 --> 00:24:39,960 Speaker 1: If you ask me, though, I think that disclosures should 382 00:24:39,960 --> 00:24:44,639 Speaker 1: be regulated for some crypto projects, platforms, and protocols. That said, 383 00:24:44,880 --> 00:24:49,080 Speaker 1: Eric and many others would disagree, and I understand why 384 00:24:49,440 --> 00:24:54,040 Speaker 1: disclosure requirements could be made extremely high by influential crypto 385 00:24:54,160 --> 00:24:57,840 Speaker 1: entities to keep competition out, something that's being done with 386 00:24:57,960 --> 00:25:03,360 Speaker 1: Europe's aforementioned upcoming crypto regulations. Similarly, I'm sure Sam and 387 00:25:03,480 --> 00:25:06,719 Speaker 1: many others would disagree with my opinion. On having stable 388 00:25:06,760 --> 00:25:11,879 Speaker 1: coin collateral standards rather than regulations. That's simply because standards 389 00:25:11,920 --> 00:25:15,760 Speaker 1: aren't exactly enforceable, and they're typically set by the largest 390 00:25:15,920 --> 00:25:19,159 Speaker 1: entity in any given industry, which is not always good. 391 00:25:20,000 --> 00:25:21,960 Speaker 1: At the end of the day, it's a trade off. 392 00:25:22,240 --> 00:25:25,800 Speaker 1: Regulations and standards both have their pros and cons. It's 393 00:25:25,800 --> 00:25:28,800 Speaker 1: going to say lots of time and money to figure 394 00:25:28,800 --> 00:25:31,920 Speaker 1: out which elements of crypto should be regulated and which 395 00:25:31,960 --> 00:25:36,760 Speaker 1: ones should be standardized, but it will happen eventually. Let's 396 00:25:36,800 --> 00:25:39,960 Speaker 1: just hope that the regulations and standards aren't designed to 397 00:25:40,000 --> 00:25:44,160 Speaker 1: turn crypto into a dystopian CBDC type system. Some would 398 00:25:44,160 --> 00:25:47,720 Speaker 1: say we're dangerously close to this outcome already thanks to 399 00:25:47,760 --> 00:25:52,120 Speaker 1: those blockchain tracking companies and centralized stable coin issuers. More 400 00:25:52,160 --> 00:26:00,760 Speaker 1: about that in the description. Last week, the main net 401 00:26:00,960 --> 00:26:05,200 Speaker 1: for ap toss, the so called Salana Killer, officially went live. 402 00:26:05,960 --> 00:26:10,760 Speaker 1: It's apt coin listed on every major crypto exchange shortly afterwards, 403 00:26:10,760 --> 00:26:14,840 Speaker 1: and this sent its price soaring for days on end. However, 404 00:26:15,280 --> 00:26:18,480 Speaker 1: the crypto project's close connections to big tech, it's heavy 405 00:26:18,560 --> 00:26:21,960 Speaker 1: venture capital backing, and it's messy main net launch have 406 00:26:22,119 --> 00:26:27,119 Speaker 1: left many in the crypto community questioning aptoss is end game. Today, 407 00:26:27,160 --> 00:26:29,320 Speaker 1: I'm going to tell you everything you need to know 408 00:26:29,359 --> 00:26:32,479 Speaker 1: about aptos, including where it came from, who made it, 409 00:26:32,720 --> 00:26:37,119 Speaker 1: how it works, the tokenomics of apt and whether this 410 00:26:37,200 --> 00:26:42,000 Speaker 1: crypto project has any potential. Okay, I'll start by saying 411 00:26:42,080 --> 00:26:44,960 Speaker 1: that nothing in this video is financial advice. It's an 412 00:26:45,000 --> 00:26:48,800 Speaker 1: analysis of a crypto project based on publicly available information 413 00:26:49,160 --> 00:26:54,280 Speaker 1: and intended for educational purposes. Note that this information may 414 00:26:54,400 --> 00:26:58,360 Speaker 1: change given that aptos is brand new. A few resources 415 00:26:58,400 --> 00:27:02,040 Speaker 1: will be in the description if you're a trusted now. 416 00:27:02,280 --> 00:27:05,159 Speaker 1: As some of you will know, the history of aptoss 417 00:27:05,280 --> 00:27:10,280 Speaker 1: begins with DM. For those unfamiliar, DM was Facebook's now 418 00:27:10,480 --> 00:27:16,119 Speaker 1: metters failed digital currency project. Facebook's blockchain arm started working 419 00:27:16,200 --> 00:27:20,240 Speaker 1: on d M in back then, d M was known 420 00:27:20,320 --> 00:27:23,919 Speaker 1: as Libra, which might ring a bell now. In contrast 421 00:27:23,960 --> 00:27:27,800 Speaker 1: to actual cryptocurrencies, Libra was going to be a centralized 422 00:27:27,800 --> 00:27:32,600 Speaker 1: blockchain controlled by Facebook and its constituents. The Libra coin 423 00:27:32,800 --> 00:27:35,360 Speaker 1: itself was going to be a stable coin backed by 424 00:27:35,440 --> 00:27:39,840 Speaker 1: a basket of Fiat currencies. What's interesting is that Libra 425 00:27:40,080 --> 00:27:44,480 Speaker 1: was actually supposed to decentralize after five years now. When 426 00:27:44,680 --> 00:27:48,359 Speaker 1: Libra was revealed to the public in t governments around 427 00:27:48,400 --> 00:27:51,919 Speaker 1: the world went into crisis mode. The idea of a 428 00:27:51,960 --> 00:27:55,360 Speaker 1: big tech company with billions of users rolling out its 429 00:27:55,400 --> 00:27:59,480 Speaker 1: own digital currency terrified them. If you watched any of 430 00:27:59,520 --> 00:28:02,640 Speaker 1: our video is about crypto regulations, you'll know they were 431 00:28:02,720 --> 00:28:07,800 Speaker 1: largely inspired by Libra. So the regulators cracked down on 432 00:28:07,880 --> 00:28:11,200 Speaker 1: Libra harder than the asteroid that killed all the dinosaurs 433 00:28:11,240 --> 00:28:15,639 Speaker 1: sixty six million years ago. Libra tried ditching its plans 434 00:28:15,680 --> 00:28:18,600 Speaker 1: to decentralized, tried to bow to the global banks, and 435 00:28:18,680 --> 00:28:21,640 Speaker 1: even tried rebranding to d M to get through all 436 00:28:21,680 --> 00:28:24,960 Speaker 1: the red tape. It didn't work, and d M died 437 00:28:25,119 --> 00:28:29,760 Speaker 1: in January this year. However, that didn't stop some of 438 00:28:29,880 --> 00:28:33,960 Speaker 1: d m's developers from starting their own crypto projects. To 439 00:28:34,040 --> 00:28:37,240 Speaker 1: my knowledge, there are two. The first is Aptoss and 440 00:28:37,280 --> 00:28:41,600 Speaker 1: the second is Sue. Sue recently raised three hundred million 441 00:28:41,640 --> 00:28:44,560 Speaker 1: dollars from crypto vcs but has yet to launch its 442 00:28:44,600 --> 00:28:47,640 Speaker 1: main net. We will cover Suy once it's up and running. 443 00:28:48,280 --> 00:28:52,040 Speaker 1: As for Aptoss, it was founded in late As a 444 00:28:52,080 --> 00:28:55,560 Speaker 1: fun fact, Aptos is the name of an unincorporated town 445 00:28:55,640 --> 00:28:59,880 Speaker 1: on the coast of California. Aptos reportedly means for the 446 00:29:00,040 --> 00:29:03,240 Speaker 1: people in the indigenous language of the area, but some 447 00:29:03,280 --> 00:29:08,240 Speaker 1: sources suggest it means meeting of two waters. In any case, 448 00:29:08,480 --> 00:29:11,800 Speaker 1: being named after a coastal area of California is one 449 00:29:11,840 --> 00:29:16,200 Speaker 1: of the many similarities Aptoss shares with Salana. For context, 450 00:29:16,280 --> 00:29:19,680 Speaker 1: Salana was named after a Californian beach town that's about 451 00:29:19,760 --> 00:29:23,760 Speaker 1: thirty minutes north of San Diego. Not surprisingly, the teams 452 00:29:23,800 --> 00:29:29,240 Speaker 1: behind both Salana and Aptos are based in Silicon Valley. Anyways, 453 00:29:29,520 --> 00:29:34,240 Speaker 1: Aptos was founded by Mohammed Sheik and Avery Ching. Mohammad 454 00:29:34,400 --> 00:29:37,560 Speaker 1: holds a master's in business administration, and his previous work 455 00:29:37,600 --> 00:29:42,160 Speaker 1: experience is as impressive as it is terrifying. His resume 456 00:29:42,320 --> 00:29:46,400 Speaker 1: includes black Rock, the Boston Consulting Group, Ethereum, Builder, Consensus, 457 00:29:46,720 --> 00:29:50,840 Speaker 1: and of course Meta. Avery meanwhile, holds a PhD in 458 00:29:50,880 --> 00:29:53,720 Speaker 1: computer science and has spent most of his career working 459 00:29:53,760 --> 00:29:57,360 Speaker 1: as a principal software engineer at Facebook, one of the 460 00:29:57,440 --> 00:30:00,800 Speaker 1: highest positions in the company. I all so couldn't help 461 00:30:00,840 --> 00:30:04,160 Speaker 1: but notice that Avery briefly worked at the Los Alamos 462 00:30:04,200 --> 00:30:08,400 Speaker 1: Laboratory in Nevada, a facility famous for its military research. 463 00:30:09,400 --> 00:30:12,880 Speaker 1: Now what's odd is that Aptos reportedly has over three 464 00:30:12,960 --> 00:30:16,480 Speaker 1: hundred and fifty developers working on its blockchain, yet only 465 00:30:16,520 --> 00:30:19,520 Speaker 1: Mohammad and Avery are noted as being part of the 466 00:30:19,560 --> 00:30:23,920 Speaker 1: aptoss Labs team on the company's website. The aptoss Labs 467 00:30:23,960 --> 00:30:27,120 Speaker 1: linked in also has a low number, with just seventy 468 00:30:27,160 --> 00:30:30,880 Speaker 1: eight employees at the company. What's even more odd is 469 00:30:30,920 --> 00:30:34,640 Speaker 1: that there isn't any information about the Aptos Foundation, which 470 00:30:34,720 --> 00:30:39,440 Speaker 1: oversees the crypto project's development, nor its members. The terms 471 00:30:39,480 --> 00:30:42,800 Speaker 1: and conditions of the website revealed that the Aptos Foundation 472 00:30:42,960 --> 00:30:46,200 Speaker 1: is based in the Cayman Islands. Recall that aptos Labs 473 00:30:46,360 --> 00:30:51,000 Speaker 1: is based in the USA. Despite these peculiarities, Aptos managed 474 00:30:51,040 --> 00:30:54,280 Speaker 1: to raise three hundred and fifty million dollars from various 475 00:30:54,360 --> 00:30:58,240 Speaker 1: crypto vcs across two funding rounds. The first funding round 476 00:30:58,520 --> 00:31:01,120 Speaker 1: was for two hundred million dollars in March this year, 477 00:31:01,360 --> 00:31:04,320 Speaker 1: and the second was for one fifty million dollars in 478 00:31:04,480 --> 00:31:11,880 Speaker 1: July this year. The aptoss white paper was published in August. Now, 479 00:31:11,960 --> 00:31:16,360 Speaker 1: Aptos's second funding round was especially significant because it was 480 00:31:16,480 --> 00:31:19,560 Speaker 1: led by f t X Ventures. It looks like f 481 00:31:19,680 --> 00:31:22,440 Speaker 1: t X is one of the largest, if not the largest, 482 00:31:22,520 --> 00:31:26,560 Speaker 1: investor in Aptos. Heavy investment from f t X is 483 00:31:26,600 --> 00:31:30,520 Speaker 1: another thing that Salana and aptos have in common. F 484 00:31:30,680 --> 00:31:33,080 Speaker 1: t x is investments in Aptos seemed to have either 485 00:31:33,160 --> 00:31:37,600 Speaker 1: made Binance nervous or just more bullish. That's because Finance 486 00:31:37,600 --> 00:31:41,560 Speaker 1: announced it had invested an additional undisclosed amount in aptos 487 00:31:41,640 --> 00:31:45,320 Speaker 1: labs in September. Some have taken this as a sign 488 00:31:45,400 --> 00:31:50,240 Speaker 1: that aptos has serious potential. The VC battle makes sense 489 00:31:50,360 --> 00:31:54,240 Speaker 1: when you realize that aptos uses a proof of steak blockchain. 490 00:31:54,720 --> 00:31:58,360 Speaker 1: This means whichever entity owns the most apt has the 491 00:31:58,400 --> 00:32:01,920 Speaker 1: greatest influence over the block chain. In aptoss is case, 492 00:32:02,120 --> 00:32:06,160 Speaker 1: this investor influence is especially acute due to aptoss is 493 00:32:06,320 --> 00:32:10,680 Speaker 1: upcoming on chain governance now. It's also important to note 494 00:32:10,760 --> 00:32:14,719 Speaker 1: that one of the largest investors in Aptos's first funding 495 00:32:14,800 --> 00:32:19,480 Speaker 1: round was Three Arrows Capital, the infamous crypto hedge fund 496 00:32:19,680 --> 00:32:23,719 Speaker 1: that went bankrupt earlier this year. What's concerning is that 497 00:32:23,800 --> 00:32:27,840 Speaker 1: aptos has since removed all references to three A C 498 00:32:28,400 --> 00:32:31,440 Speaker 1: from its blog posts. You can learn about how Three 499 00:32:31,480 --> 00:32:34,720 Speaker 1: Arrows Capital collapse using the link in the description. Anyways, 500 00:32:34,880 --> 00:32:40,160 Speaker 1: on with the show now. Whereas d M was essentially 501 00:32:40,240 --> 00:32:43,800 Speaker 1: a centralized shit coin, aptoss aims to be what Libra 502 00:32:44,040 --> 00:32:47,160 Speaker 1: was supposed to be at the end of its original roadmap, 503 00:32:47,240 --> 00:32:52,760 Speaker 1: a decentralized cryptocurrency. That said, aptoss seems to have a 504 00:32:52,840 --> 00:32:55,720 Speaker 1: lot more in common with DM than it does with say, 505 00:32:55,840 --> 00:33:00,520 Speaker 1: Bitcoin or ethereum. Maybe it's just me, but the way 506 00:33:00,520 --> 00:33:03,400 Speaker 1: that Mohammad and Avery have spoken about aptos in the 507 00:33:03,480 --> 00:33:06,840 Speaker 1: few interviews they've given makes it sound like the project 508 00:33:06,880 --> 00:33:11,320 Speaker 1: is a covert continuation of d M case and point. 509 00:33:11,560 --> 00:33:15,240 Speaker 1: Aptoss is mission is to unite Web two and Web three, 510 00:33:15,400 --> 00:33:19,160 Speaker 1: and it is working uncomfortably closely with Google in order 511 00:33:19,200 --> 00:33:22,720 Speaker 1: to do this. There is more evidence under the hood. 512 00:33:23,600 --> 00:33:27,960 Speaker 1: Aptoss uses a delegated proof of state blockchain. Like many 513 00:33:28,120 --> 00:33:32,520 Speaker 1: modern cryptocurrencies, the team behind aptos claims its blockchain is 514 00:33:32,680 --> 00:33:38,520 Speaker 1: simultaneously scalable I fast, decentralized, and secure, something that's logically 515 00:33:38,600 --> 00:33:42,920 Speaker 1: impossible due to the blockchain trial lemma. To quickly recap 516 00:33:43,040 --> 00:33:46,480 Speaker 1: the blockchain trial lemma states that a cryptocurrency can only 517 00:33:46,520 --> 00:33:52,040 Speaker 1: be decentralized and scalable, scalable and secure, or secure and decentralized. 518 00:33:52,800 --> 00:33:56,880 Speaker 1: Every crypto project ultimately makes a trade off of some kind. 519 00:33:57,480 --> 00:34:01,560 Speaker 1: In Bitcoin's case, for instance, it trades scalability for robust 520 00:34:01,600 --> 00:34:06,800 Speaker 1: security and decentralization. In aptoss is case, it not so 521 00:34:06,840 --> 00:34:13,000 Speaker 1: subtly trades decentralization for scalability and security. Although the app 522 00:34:13,080 --> 00:34:16,799 Speaker 1: toss blockchain boasts tens of thousands of full nodes, it 523 00:34:16,960 --> 00:34:20,960 Speaker 1: only has one hundred and two validators. What's annoying is 524 00:34:21,040 --> 00:34:23,600 Speaker 1: that the number of full nodes on apptos does not 525 00:34:23,719 --> 00:34:27,799 Speaker 1: appear to be noted on any of its blockchain explorers. 526 00:34:27,840 --> 00:34:32,760 Speaker 1: But don't let the term full node fool you. Aptoss 527 00:34:32,840 --> 00:34:37,040 Speaker 1: is documentation suggests it's blockchain only stores the current state 528 00:34:37,160 --> 00:34:41,759 Speaker 1: of the ledger i e. Account balances and transactions. This 529 00:34:41,920 --> 00:34:45,720 Speaker 1: is similar to another cryptoproject called mina protocol, which stores 530 00:34:45,800 --> 00:34:49,560 Speaker 1: the current state of its blockchain in a small digital snapshot. 531 00:34:50,320 --> 00:34:54,040 Speaker 1: Like MINA protocol, aptoss has a series of nodes which 532 00:34:54,080 --> 00:34:57,920 Speaker 1: store its historical blockchain data on a quote single version 533 00:34:58,000 --> 00:35:02,359 Speaker 1: distributed database. Then, number of nodes storing aptos is full 534 00:35:02,360 --> 00:35:07,440 Speaker 1: transaction history here is unknown. The documentation suggests it's the 535 00:35:07,480 --> 00:35:11,959 Speaker 1: one two validata nodes, but they aren't obligated to store 536 00:35:12,000 --> 00:35:16,120 Speaker 1: it now. If you watched our video about cryptocurrency decentralization, 537 00:35:16,280 --> 00:35:20,160 Speaker 1: you'll know that storage of a cryptocurrency's long term transaction 538 00:35:20,239 --> 00:35:25,799 Speaker 1: history is an important part of decentralization. Without this information, 539 00:35:25,840 --> 00:35:30,280 Speaker 1: a cryptocurrency could be easily corrupted over time or manipulated 540 00:35:30,280 --> 00:35:34,560 Speaker 1: by malicious nodes. This is why I was seriously saddened 541 00:35:34,600 --> 00:35:37,800 Speaker 1: to hear that Slana had started using Google Big Table 542 00:35:38,000 --> 00:35:40,719 Speaker 1: to store its data in lieu of our weave, which 543 00:35:40,800 --> 00:35:45,040 Speaker 1: is a decentralized storage cryptocurrency. It wouldn't surprise me at 544 00:35:45,080 --> 00:35:48,400 Speaker 1: all if it turns out that Aptos is doing something similar, 545 00:35:48,600 --> 00:35:53,240 Speaker 1: especially since its blockchain is growing quickly too. The relative 546 00:35:53,280 --> 00:35:56,680 Speaker 1: centralization of the aptoss blockchain makes it possible for it 547 00:35:56,719 --> 00:36:00,160 Speaker 1: to process up to forty transactions per second, with a 548 00:36:00,239 --> 00:36:04,839 Speaker 1: theoretical maximum of one hundred and sixty thousand transactions per second. 549 00:36:05,239 --> 00:36:08,640 Speaker 1: Current and maximum TPS scores for major cryptos can be 550 00:36:08,719 --> 00:36:12,239 Speaker 1: seen here courtesy of f t x. Note how it 551 00:36:12,400 --> 00:36:17,200 Speaker 1: chills Salana. Now. What's impressive is that aptos is current 552 00:36:18,200 --> 00:36:23,120 Speaker 1: TPS also applies to more complex smart contract transactions. This 553 00:36:23,239 --> 00:36:26,360 Speaker 1: is one of the reasons Binance gave for its additional 554 00:36:26,400 --> 00:36:30,560 Speaker 1: investment into Aptos, which was again probably also motivated by 555 00:36:30,680 --> 00:36:34,160 Speaker 1: f t x is own additional investment during the second 556 00:36:34,239 --> 00:36:38,320 Speaker 1: funding round. Another reason why Finance invested so much in 557 00:36:38,400 --> 00:36:42,160 Speaker 1: aptoss is because of its novel coding language and new 558 00:36:42,320 --> 00:36:46,600 Speaker 1: virtual machine. Everything on aptoss is coded in Move, a 559 00:36:46,680 --> 00:36:50,320 Speaker 1: programming language based on Rust that was invented by d 560 00:36:50,600 --> 00:36:55,640 Speaker 1: MS developers. Aptos uses its own Move virtual machine for 561 00:36:55,680 --> 00:37:00,120 Speaker 1: smart contracts. So three things to note here. The first 562 00:37:00,239 --> 00:37:03,800 Speaker 1: is that Move isn't the only thing that DMS developers invented. 563 00:37:04,400 --> 00:37:07,759 Speaker 1: In an interview, Mohammad explained that d M basically had 564 00:37:07,800 --> 00:37:12,680 Speaker 1: access to unlimited resources for research and development. As a result, 565 00:37:12,960 --> 00:37:16,960 Speaker 1: Aptoss uses cutting edge tech that I am barely scratching 566 00:37:17,000 --> 00:37:20,400 Speaker 1: the surface of here. What's cool is that aptoss Labs 567 00:37:20,480 --> 00:37:24,120 Speaker 1: actually has a research papers page that looks eerily similar 568 00:37:24,280 --> 00:37:27,640 Speaker 1: to the research papers library page of Cardano builder I 569 00:37:27,840 --> 00:37:31,759 Speaker 1: O h K. Aptoss is cutting edge research and development. 570 00:37:31,920 --> 00:37:34,520 Speaker 1: Might be why the company behind it is keeping the 571 00:37:34,560 --> 00:37:38,480 Speaker 1: details of its developers under wraps. After all, the last 572 00:37:38,520 --> 00:37:41,040 Speaker 1: thing the project wants is to lose its top talent 573 00:37:41,200 --> 00:37:44,799 Speaker 1: to equally well capitalized competitors. And this relates to the 574 00:37:44,920 --> 00:37:49,400 Speaker 1: second thing to note. It's very rare that a cryptoproject 575 00:37:49,520 --> 00:37:53,279 Speaker 1: comes up with its own virtual machine for smart contracts. 576 00:37:53,880 --> 00:37:58,799 Speaker 1: Almost all of the vms are variants of ethereums Virtual machine. 577 00:37:59,239 --> 00:38:02,480 Speaker 1: Believe it or not, but it's aptoss is move M 578 00:38:02,600 --> 00:38:06,600 Speaker 1: that makes it a Salana killer, by Salana's own admission. 579 00:38:07,280 --> 00:38:10,719 Speaker 1: In a panel discussion earlier this year, Salana founder Anatolely 580 00:38:10,760 --> 00:38:15,440 Speaker 1: Yakovenko tacitly admitted that the Salana team is extremely nervous 581 00:38:15,640 --> 00:38:19,920 Speaker 1: about the introduction of a competing execution layer for smart contracts. 582 00:38:20,400 --> 00:38:24,400 Speaker 1: Anatoly is also hyper aware of how developer friendly the 583 00:38:24,520 --> 00:38:29,200 Speaker 1: Move programming language is. This is in stark contrast to 584 00:38:29,280 --> 00:38:33,040 Speaker 1: the developer experience on Salana, which Anatotlely has likened to 585 00:38:33,200 --> 00:38:37,720 Speaker 1: quote eating glass to make things worse, Salana is coded 586 00:38:37,800 --> 00:38:41,360 Speaker 1: in Rust and your recall move is based on Rust. 587 00:38:42,160 --> 00:38:45,520 Speaker 1: This makes it easy for developers from Salana's ecosystem to 588 00:38:45,640 --> 00:38:49,520 Speaker 1: migrate to aptoss is. The same applies for developers working 589 00:38:49,560 --> 00:38:54,080 Speaker 1: on near protocol and Polka Dot. However, the cryptoproject that's 590 00:38:54,160 --> 00:38:57,360 Speaker 1: most of risk of being killed by aptoss is actually Flow. 591 00:38:58,160 --> 00:39:01,640 Speaker 1: That's because Flow is coded in Cadence, which is based 592 00:39:01,760 --> 00:39:04,959 Speaker 1: on MOVE. If you watched our video about Flow, you'll 593 00:39:04,960 --> 00:39:07,840 Speaker 1: know that it actually worked with d MS developers to 594 00:39:07,960 --> 00:39:12,279 Speaker 1: develop Cadence. You'll also know that flow uses a multinode 595 00:39:12,400 --> 00:39:17,319 Speaker 1: architecture that separates the collection, ordering, processing, and verification of 596 00:39:17,400 --> 00:39:21,960 Speaker 1: transactions on its blockchain for efficiency. As it so happens, 597 00:39:22,080 --> 00:39:25,760 Speaker 1: app toss does something similar with its own transaction process, 598 00:39:26,080 --> 00:39:29,000 Speaker 1: which is outside the scope of this video. Now, I'll 599 00:39:29,040 --> 00:39:31,759 Speaker 1: just mention the third thing to note, and that's the 600 00:39:32,000 --> 00:39:35,320 Speaker 1: tokens on the app toss blockchain, which are called coins 601 00:39:35,360 --> 00:39:38,920 Speaker 1: for some reason, are apparently controlled by the entity that 602 00:39:39,000 --> 00:39:42,160 Speaker 1: issues them. What this means is that any token on 603 00:39:42,239 --> 00:39:45,000 Speaker 1: the ap toss blockchain can be frozen, burned, and or 604 00:39:45,120 --> 00:39:48,920 Speaker 1: minted at will by whoever created it. This seems to 605 00:39:48,960 --> 00:39:52,279 Speaker 1: be an intentional design choice, as Mohammed mentioned in an 606 00:39:52,280 --> 00:39:55,520 Speaker 1: October panel discussion, that the app toss blockchain can be 607 00:39:55,520 --> 00:40:00,120 Speaker 1: compliant with regulations just like DM Make of that what 608 00:40:00,239 --> 00:40:05,720 Speaker 1: you will. Now, when it comes to tokenomics, nobody actually 609 00:40:05,840 --> 00:40:09,200 Speaker 1: knew what the tokenomics of apt would look like until 610 00:40:09,320 --> 00:40:13,560 Speaker 1: shortly before it started trading. This was perhaps the biggest 611 00:40:13,680 --> 00:40:17,200 Speaker 1: red flag for the crypto community, who questioned how crypto 612 00:40:17,280 --> 00:40:21,000 Speaker 1: exchanges could possibly list a coin that had just published 613 00:40:21,040 --> 00:40:25,480 Speaker 1: it's tokenomics. So apt is used to pay for transaction 614 00:40:25,520 --> 00:40:28,799 Speaker 1: fees on the aptos blockchain, apt is also used for 615 00:40:28,880 --> 00:40:31,840 Speaker 1: staking and is used for on chain governance of the 616 00:40:31,880 --> 00:40:36,120 Speaker 1: app toss. Blockchain governance is currently limited to validators, but 617 00:40:36,239 --> 00:40:40,400 Speaker 1: will eventually be expanded to delegators as well. The apt 618 00:40:40,600 --> 00:40:45,000 Speaker 1: coin had an initial supply of one billion. Around thirteen 619 00:40:45,000 --> 00:40:48,000 Speaker 1: point five percent of this initial supply was allocated to 620 00:40:48,120 --> 00:40:52,040 Speaker 1: early investors, sixteen point five percent was allocated to the 621 00:40:52,080 --> 00:40:57,760 Speaker 1: aptos foundation was allocated to core contributors, which presumably means 622 00:40:57,800 --> 00:41:02,439 Speaker 1: ap toss labs. The remain was set aside for the 623 00:41:02,600 --> 00:41:07,200 Speaker 1: app toss community. The vesting schedules for these entities can 624 00:41:07,239 --> 00:41:10,840 Speaker 1: be seen here For those just listening in. The apt 625 00:41:11,000 --> 00:41:14,719 Speaker 1: allocated to core contributors and investors will only begin investing 626 00:41:14,840 --> 00:41:19,480 Speaker 1: after one year. This means the only APT in circulation 627 00:41:19,520 --> 00:41:22,200 Speaker 1: for the first year will come from that allocated to 628 00:41:22,400 --> 00:41:26,680 Speaker 1: the aptss community. According to the ap toss Explorer, around 629 00:41:26,760 --> 00:41:30,640 Speaker 1: one hundred and eighty million apt coins are currently in circulation. 630 00:41:31,400 --> 00:41:34,320 Speaker 1: This is significantly fewer than the one hundred and thirty 631 00:41:34,320 --> 00:41:37,560 Speaker 1: million apt noted by coin market Cap and coin geck. 632 00:41:38,560 --> 00:41:41,879 Speaker 1: Then again, it's not clear whether all the one eighty 633 00:41:41,920 --> 00:41:46,399 Speaker 1: million apt coins not being staked are in circulation. From 634 00:41:46,440 --> 00:41:48,800 Speaker 1: what I can tell. Coin market Cap and coin Gecko 635 00:41:48,960 --> 00:41:52,120 Speaker 1: got the details about apt s initial supply from the 636 00:41:52,160 --> 00:41:56,319 Speaker 1: tokenomics post by the aptos Foundation. It notes that one 637 00:41:57,160 --> 00:42:00,640 Speaker 1: five million APT were made immediately available to the community 638 00:42:00,920 --> 00:42:04,920 Speaker 1: and five million APT were made immediately available to the foundation. 639 00:42:05,719 --> 00:42:08,200 Speaker 1: Of the one and twenty five million APT that was 640 00:42:08,239 --> 00:42:11,279 Speaker 1: allocated to the community, twenty million was air dropped to 641 00:42:11,320 --> 00:42:15,200 Speaker 1: early test net users after apt started trading the rest 642 00:42:15,960 --> 00:42:19,920 Speaker 1: who knows. What's more is that apt has a seven 643 00:42:19,960 --> 00:42:23,680 Speaker 1: percent inflation rate with no maximum supply, and it looks 644 00:42:23,719 --> 00:42:28,160 Speaker 1: like APT supply has already increased by over two million. 645 00:42:29,000 --> 00:42:31,640 Speaker 1: This is because of the roughly eight hundred and twenty 646 00:42:31,640 --> 00:42:35,200 Speaker 1: million staked APT that I alluded to a few moments ago. 647 00:42:35,640 --> 00:42:39,200 Speaker 1: What's scary is that the aptoss Foundation notes that staking 648 00:42:39,239 --> 00:42:44,160 Speaker 1: rewards are quote not subject to restrictions on distribution. This 649 00:42:44,280 --> 00:42:47,879 Speaker 1: means the early investors, the team, and the foundation can 650 00:42:47,960 --> 00:42:52,160 Speaker 1: sell their staking rewards. Did I mention that the aptoss 651 00:42:52,200 --> 00:42:57,080 Speaker 1: Foundation and aptoss Labs custody the apt allocated to the 652 00:42:57,120 --> 00:43:02,160 Speaker 1: aptss community. That's more than of the initial supply, and 653 00:43:02,200 --> 00:43:06,320 Speaker 1: it looks like they're staking this APT two. That is 654 00:43:06,360 --> 00:43:09,080 Speaker 1: a lot of money when you do the maths. On 655 00:43:09,120 --> 00:43:12,400 Speaker 1: the bright side, all transaction fees are burned and apt 656 00:43:12,520 --> 00:43:16,240 Speaker 1: S inflation will decline by one point five annually until 657 00:43:16,280 --> 00:43:19,200 Speaker 1: it hits three point to five, which is estimated to 658 00:43:19,239 --> 00:43:24,000 Speaker 1: take fifty years. Meanwhile, the APT initially allocated to the team, 659 00:43:24,120 --> 00:43:27,720 Speaker 1: early investors, the foundation, and the community will finish festing 660 00:43:27,840 --> 00:43:31,680 Speaker 1: in late two. Now the timeline to be on the 661 00:43:31,680 --> 00:43:35,680 Speaker 1: lookout for is late three. This is when the big 662 00:43:35,800 --> 00:43:39,120 Speaker 1: vesting cliffs will begin. The worst of them will happen 663 00:43:39,200 --> 00:43:43,040 Speaker 1: in four, which is coincidentally around the time the next 664 00:43:43,080 --> 00:43:46,520 Speaker 1: crypto bull run should begin. You can find out how 665 00:43:46,560 --> 00:43:49,680 Speaker 1: bad the current bear market could get using the link 666 00:43:49,760 --> 00:43:53,000 Speaker 1: in the description. In terms of price action, there isn't 667 00:43:53,080 --> 00:43:55,920 Speaker 1: much I can say about APT just yet because it's 668 00:43:55,920 --> 00:43:59,520 Speaker 1: a brand new cryptocurrency. Even so, at first glance, ap 669 00:43:59,600 --> 00:44:03,319 Speaker 1: toss looks grossly overvalued, a market cap of over one 670 00:44:03,360 --> 00:44:06,720 Speaker 1: billion and a fully diluted market cap of over nine billion. 671 00:44:07,120 --> 00:44:11,280 Speaker 1: Upon closer examination, however, it does look like some fundamentals 672 00:44:11,320 --> 00:44:14,760 Speaker 1: are starting to form. According to the app toss explorer, 673 00:44:14,880 --> 00:44:18,080 Speaker 1: there are over one point seven million wallet addresses, and 674 00:44:18,200 --> 00:44:21,239 Speaker 1: chances are that number will be over two million by 675 00:44:21,239 --> 00:44:24,280 Speaker 1: the time you see this video. To put things into perspective, 676 00:44:24,480 --> 00:44:28,440 Speaker 1: Cardarno has around two point three million wallet addresses according 677 00:44:28,480 --> 00:44:31,800 Speaker 1: to the Aida stat Explorer. This means that ap toss 678 00:44:31,960 --> 00:44:35,080 Speaker 1: is on track to surpass Cardano by number of users 679 00:44:35,440 --> 00:44:38,839 Speaker 1: within two weeks of launch. Cardano's main net went live 680 00:44:38,960 --> 00:44:43,080 Speaker 1: over five years ago. That is some serious adoption. The 681 00:44:43,160 --> 00:44:45,680 Speaker 1: thing is that the number of wallet addresses on app 682 00:44:45,719 --> 00:44:50,759 Speaker 1: toss doesn't necessarily correspond to the number of users. That's 683 00:44:50,760 --> 00:44:53,520 Speaker 1: why I prefer to look at downloads of any web 684 00:44:53,600 --> 00:44:57,200 Speaker 1: or mobile wallets associated with a crypto. In this case, 685 00:44:57,239 --> 00:45:00,520 Speaker 1: app tosses, Petra and Martian wallets have of a one 686 00:45:00,560 --> 00:45:04,879 Speaker 1: million downloads combined on Chrome alone. This would be an 687 00:45:04,880 --> 00:45:07,680 Speaker 1: impressive statistic were it not for the fact that defy 688 00:45:07,800 --> 00:45:11,760 Speaker 1: lama suggests that's only around seventeen million dollars of total 689 00:45:11,840 --> 00:45:16,239 Speaker 1: value locked in aptoss is dozen defy protocols. What's frustrating 690 00:45:16,360 --> 00:45:20,160 Speaker 1: is that defy lama statistics are also inconsistent with the 691 00:45:20,239 --> 00:45:24,000 Speaker 1: stats on the website of the aptoss DAPs. For example, 692 00:45:24,239 --> 00:45:29,000 Speaker 1: liquid apt staking protocol Tortuga has nearly three billion dollars 693 00:45:29,040 --> 00:45:31,680 Speaker 1: in total value locked with over three hundred and thirty 694 00:45:31,719 --> 00:45:37,320 Speaker 1: million apt deposited. This suggests that some early Investors, team members, 695 00:45:37,360 --> 00:45:41,840 Speaker 1: and maybe even the aptoss Foundation are secretly liquid staking. 696 00:45:42,480 --> 00:45:46,960 Speaker 1: This detail isn't noted in apt s tokenomics. If this 697 00:45:47,080 --> 00:45:50,120 Speaker 1: is true, then it means you probably can't trust the 698 00:45:50,200 --> 00:45:53,359 Speaker 1: tv L on any defied protocol on ap toss which 699 00:45:53,400 --> 00:45:58,000 Speaker 1: supports Tortuga's liquid staked APT. That's because it would be 700 00:45:58,160 --> 00:46:01,600 Speaker 1: very easy for early Investors, team members or the aptos 701 00:46:01,640 --> 00:46:05,640 Speaker 1: Foundation to fake a high TVL using their liquid staked 702 00:46:05,719 --> 00:46:10,560 Speaker 1: APT spooky stuff. On that note, Tortuga seems to be 703 00:46:10,640 --> 00:46:15,000 Speaker 1: the only way that APT holders can currently delegate to validators. 704 00:46:15,160 --> 00:46:19,080 Speaker 1: This begs the question of which validators Tortuga is delegating to. 705 00:46:19,920 --> 00:46:22,960 Speaker 1: It also begs the question of who is running the 706 00:46:23,040 --> 00:46:28,160 Speaker 1: largest validators, given that they're staking almost identical amounts of APT. 707 00:46:29,160 --> 00:46:32,520 Speaker 1: What I'm wondering is what the minimum and maximum steak 708 00:46:32,640 --> 00:46:37,080 Speaker 1: for validators is. Ap toss is documentation is unclear on this, 709 00:46:37,239 --> 00:46:41,359 Speaker 1: along with the locking and unlocking time for the APT coin. 710 00:46:42,120 --> 00:46:45,000 Speaker 1: What is clear is that there is no slashing risk 711 00:46:45,040 --> 00:46:47,560 Speaker 1: for misbehavior, so at least all the vcs won't have 712 00:46:47,600 --> 00:46:51,120 Speaker 1: to worry about losing their precious apt It would also 713 00:46:51,160 --> 00:46:53,879 Speaker 1: be nice to know exactly how many DAPs there are 714 00:46:54,000 --> 00:46:57,760 Speaker 1: on ap toss and how many unique wallets are actually 715 00:46:57,840 --> 00:47:02,280 Speaker 1: using them. Dap Radar hasn't started tracking Aptoss dabs yet, 716 00:47:02,320 --> 00:47:05,480 Speaker 1: but the dab list in the Martian Wallet suggests there 717 00:47:05,520 --> 00:47:08,759 Speaker 1: are at least twenty up and running, not bad for 718 00:47:08,800 --> 00:47:13,319 Speaker 1: a brand new crypto project. Unfortunately, this doesn't change the 719 00:47:13,360 --> 00:47:15,360 Speaker 1: fact that we are in the middle of a crypto 720 00:47:15,440 --> 00:47:18,600 Speaker 1: bear market that's likely to last for at least another year. 721 00:47:19,360 --> 00:47:22,520 Speaker 1: The harsh reality is that almost all apt s price 722 00:47:22,560 --> 00:47:32,920 Speaker 1: action has so far been driven by speculation, not organic adoption. Luckily, 723 00:47:33,120 --> 00:47:37,680 Speaker 1: Aptoss has lots of milestones ahead of it. The closest 724 00:47:37,680 --> 00:47:40,440 Speaker 1: thing Aptoss has to a roadmap is a blog post 725 00:47:40,520 --> 00:47:44,600 Speaker 1: from March this year titled quote the Aptoss Vision. The 726 00:47:44,680 --> 00:47:47,080 Speaker 1: t l d R is that aptoss wants to scale 727 00:47:47,080 --> 00:47:50,319 Speaker 1: to support billions of users and every use case you 728 00:47:50,360 --> 00:47:53,920 Speaker 1: can think of, just like every other new crypto. The 729 00:47:53,960 --> 00:47:57,440 Speaker 1: difference is that Aptoss actually has the tech to do it. 730 00:47:58,160 --> 00:48:01,839 Speaker 1: That doesn't mean Aptoss will scare ail overnight. However, the 731 00:48:01,840 --> 00:48:05,680 Speaker 1: team and founders mentioned many times that aptos would be 732 00:48:05,719 --> 00:48:09,120 Speaker 1: incomplete out of the gates, I reckon most of the 733 00:48:09,200 --> 00:48:12,520 Speaker 1: issues I've identified so far can be attributed to the 734 00:48:12,560 --> 00:48:16,160 Speaker 1: fact that aptos is still very much in development, so 735 00:48:16,520 --> 00:48:21,000 Speaker 1: don't take them all too seriously. The first major upgrade 736 00:48:21,000 --> 00:48:23,880 Speaker 1: to aptos is expected to happen later this year or 737 00:48:23,960 --> 00:48:27,320 Speaker 1: in the first quarter of next year. This is consistent 738 00:48:27,400 --> 00:48:30,759 Speaker 1: with a note in aptoss is documentation which implies that 739 00:48:30,840 --> 00:48:35,040 Speaker 1: the validata requirements will be increased significantly at the start 740 00:48:35,080 --> 00:48:39,120 Speaker 1: of three and it suggests that aptoss is speed will 741 00:48:39,239 --> 00:48:44,040 Speaker 1: increase significantly now. Additional aptoss milestones can be found in 742 00:48:44,280 --> 00:48:47,200 Speaker 1: a m as and interviews with the aptos team and 743 00:48:47,280 --> 00:48:50,319 Speaker 1: its founders. I'll reiterate that these a m as and 744 00:48:50,520 --> 00:48:54,360 Speaker 1: interviews are few in number and surprisingly difficult to find. 745 00:48:55,440 --> 00:48:58,720 Speaker 1: These a m as were on limited non English language 746 00:48:58,719 --> 00:49:03,000 Speaker 1: YouTube channels because is no official ap toss channel. In 747 00:49:03,040 --> 00:49:05,840 Speaker 1: an a m A from April, the aptoss team revealed 748 00:49:05,880 --> 00:49:08,479 Speaker 1: that the project is looking to partner with other big 749 00:49:08,520 --> 00:49:12,040 Speaker 1: tech companies besides Google. At the same time, the aptoss 750 00:49:12,080 --> 00:49:15,719 Speaker 1: team revealed that it wants to implement privacy preserving technologies 751 00:49:15,719 --> 00:49:19,200 Speaker 1: to its blockchain in the future. I reckon it's one 752 00:49:19,440 --> 00:49:24,120 Speaker 1: or the other. In September, Avery explained that aptos will 753 00:49:24,200 --> 00:49:27,600 Speaker 1: eventually have a unique fee market for each DAP and 754 00:49:27,840 --> 00:49:31,239 Speaker 1: use case on ap toss. This is very cool and 755 00:49:31,400 --> 00:49:34,680 Speaker 1: very logical because it will allow aptos to remain resilient 756 00:49:34,800 --> 00:49:38,440 Speaker 1: to the kinds of didos attacks that have taken Salana offline, 757 00:49:38,680 --> 00:49:44,760 Speaker 1: while simultaneously keeping transaction fees low. In October, Avery explained 758 00:49:44,800 --> 00:49:47,960 Speaker 1: that aptoss will have a major upgrade every four to 759 00:49:48,080 --> 00:49:51,279 Speaker 1: six months. This is to ensure that the blockchain will 760 00:49:51,320 --> 00:49:55,759 Speaker 1: remain future proof. Avery also explained that aptoss will start 761 00:49:55,880 --> 00:49:58,760 Speaker 1: sharding its blockchain once it starts to become to bloat. 762 00:49:58,800 --> 00:50:02,239 Speaker 1: It's something that Ethereum is also planning now. I was 763 00:50:02,280 --> 00:50:06,040 Speaker 1: hoping to find a few more milestones in Aptos's governance forum, 764 00:50:06,160 --> 00:50:10,719 Speaker 1: but there was nothing about aptoss is improvement proposals. Funnily enough, 765 00:50:11,040 --> 00:50:13,960 Speaker 1: I somehow managed to find a link to Aptoss's governance 766 00:50:14,000 --> 00:50:18,480 Speaker 1: portal for validators. There was only one governance proposal to 767 00:50:18,800 --> 00:50:23,200 Speaker 1: reduce voting power. So this brings me to the concerns 768 00:50:23,320 --> 00:50:26,000 Speaker 1: I have about aptos, and by now you'll know that 769 00:50:26,080 --> 00:50:29,680 Speaker 1: I have quite a few. My biggest concern is the 770 00:50:29,800 --> 00:50:33,560 Speaker 1: ridiculous disconnect between the supposed quality of the project and 771 00:50:33,719 --> 00:50:38,439 Speaker 1: its transparency and organization. I mean aptoss has technically been 772 00:50:38,520 --> 00:50:43,480 Speaker 1: in development since seen it had access to unlimited resources 773 00:50:43,480 --> 00:50:47,840 Speaker 1: for research and development for years. It raised three hundred 774 00:50:47,840 --> 00:50:51,960 Speaker 1: and fifty million dollars without a white paper or tokenomics, 775 00:50:51,960 --> 00:50:55,480 Speaker 1: and there are literally three hundred and fifty people working 776 00:50:55,600 --> 00:51:00,560 Speaker 1: for aptoss Labs supposedly. Pardon my French, but how the 777 00:51:00,719 --> 00:51:04,440 Speaker 1: holy hell has aptos still not hammered out the token 778 00:51:04,480 --> 00:51:08,200 Speaker 1: omics of the apt coin. Why did our research team 779 00:51:08,320 --> 00:51:11,480 Speaker 1: have to go digging through every single link and blog 780 00:51:11,520 --> 00:51:14,680 Speaker 1: post to find information that should be on the front 781 00:51:14,760 --> 00:51:19,120 Speaker 1: page of the aptos website. Why is there no YouTube channel? 782 00:51:19,440 --> 00:51:22,800 Speaker 1: Who is running the validator notes? How come you can't 783 00:51:22,840 --> 00:51:25,239 Speaker 1: see the details of the tokens and n f t 784 00:51:25,440 --> 00:51:29,240 Speaker 1: s on the aptos blockchain. Where is the information about 785 00:51:29,280 --> 00:51:33,520 Speaker 1: which crypto wallets belonged to aptos Labs and the Aptos Foundation. 786 00:51:34,600 --> 00:51:39,200 Speaker 1: There's no way apt supply is distributed as equitably as 787 00:51:39,239 --> 00:51:43,640 Speaker 1: the explorer suggests. And don't even get me started about 788 00:51:43,680 --> 00:51:46,960 Speaker 1: the allegations of aptos shutting down its discord channel and 789 00:51:47,080 --> 00:51:50,760 Speaker 1: other socials when people started asking these kinds of questions, 790 00:51:51,280 --> 00:51:53,560 Speaker 1: or about how all the A M A s seemed 791 00:51:53,600 --> 00:51:57,200 Speaker 1: to be restricted to discord and not published anywhere else. 792 00:51:58,600 --> 00:52:02,400 Speaker 1: My second con learn about aptoss is almost as big, 793 00:52:02,480 --> 00:52:06,720 Speaker 1: and that's the crypto project's mission. I still don't quite 794 00:52:06,840 --> 00:52:10,960 Speaker 1: understand what aptoss is endgame is, and it's not just me. 795 00:52:12,040 --> 00:52:16,400 Speaker 1: Massari CEO Ryan Selkiss was asking what krypto niche aptos 796 00:52:16,480 --> 00:52:18,920 Speaker 1: is trying to claim or the angle it's trying to 797 00:52:18,960 --> 00:52:22,480 Speaker 1: take at the recent main Net conference. He didn't really 798 00:52:22,480 --> 00:52:25,840 Speaker 1: get an answer. As far as I can tell, the 799 00:52:25,920 --> 00:52:30,000 Speaker 1: Aptos vision of cryptocurrency is a maximalist one where everything 800 00:52:30,160 --> 00:52:33,799 Speaker 1: is built on the APTOS blockchain. I haven't seen or 801 00:52:33,840 --> 00:52:39,560 Speaker 1: heard any discussion about interoperability with other cryptocurrencies, only interoperability 802 00:52:39,640 --> 00:52:44,200 Speaker 1: with big tech companies and the existing financial system. This 803 00:52:44,320 --> 00:52:47,680 Speaker 1: attitude comes at a time when crypto vcs are betting 804 00:52:47,719 --> 00:52:51,759 Speaker 1: on a multi chain future with projects like Cosmos. That's 805 00:52:51,800 --> 00:52:55,520 Speaker 1: because they know there is no way for everything to 806 00:52:55,520 --> 00:52:59,600 Speaker 1: be built on a single blockchain unless it's extremely centralized, 807 00:52:59,640 --> 00:53:03,160 Speaker 1: and that point you're not dealing with a cryptocurrency anymore. 808 00:53:04,239 --> 00:53:08,080 Speaker 1: From where I'm standing, extreme centralization looks like the path 809 00:53:08,200 --> 00:53:12,440 Speaker 1: that aptoss wants to take. All the talk of decentralization 810 00:53:12,640 --> 00:53:15,280 Speaker 1: just seems to be an attempt to get retail investors 811 00:53:15,280 --> 00:53:18,799 Speaker 1: on board to be blunt. The aptoss team is not 812 00:53:19,000 --> 00:53:22,239 Speaker 1: even good at selling these talking points, and it might 813 00:53:22,280 --> 00:53:26,880 Speaker 1: be because they don't really believe them. This ties into 814 00:53:26,960 --> 00:53:31,239 Speaker 1: my third concern, and that's regulation. D M died a 815 00:53:31,320 --> 00:53:34,200 Speaker 1: brutal death, and if aptoss is in fact a de 816 00:53:34,400 --> 00:53:37,560 Speaker 1: facto continuation of d M, then it is doomed to 817 00:53:37,600 --> 00:53:41,680 Speaker 1: suffer the same fate. Regulators might be biased, but they're 818 00:53:41,680 --> 00:53:45,759 Speaker 1: not stupid. Speaking of which, I am shocked that US 819 00:53:45,840 --> 00:53:49,560 Speaker 1: exchanges like coin Base listed a p T. I am, 820 00:53:49,640 --> 00:53:52,719 Speaker 1: by no means an expert in securities laws, and this 821 00:53:52,880 --> 00:53:56,080 Speaker 1: is purely speculation, but I have been watching the SEC 822 00:53:56,520 --> 00:54:01,080 Speaker 1: for a long time. Apt seems to take every box 823 00:54:01,360 --> 00:54:05,080 Speaker 1: on the SECS target list. The only thing that could 824 00:54:05,120 --> 00:54:08,440 Speaker 1: protect app toss is the unprecedented amount of backing it 825 00:54:08,480 --> 00:54:12,279 Speaker 1: has from both Wall Street aligned crypto vcs and big tech. 826 00:54:12,920 --> 00:54:16,680 Speaker 1: Both parties are powerful lobbyists and they will make sure 827 00:54:16,760 --> 00:54:19,760 Speaker 1: they're golden geese don't get caught in any regulatory nets. 828 00:54:21,000 --> 00:54:23,879 Speaker 1: In some then, I have to say that I'm extremely 829 00:54:23,960 --> 00:54:27,640 Speaker 1: skeptical about app toss. At this point in time, there 830 00:54:27,840 --> 00:54:31,000 Speaker 1: is no question that aptos is on the bleeding edge 831 00:54:31,000 --> 00:54:34,040 Speaker 1: of Web three, but it doesn't seem to be seriously 832 00:54:34,080 --> 00:54:38,440 Speaker 1: interested in the core values of cryptocurrency. If anything, it 833 00:54:38,520 --> 00:54:43,840 Speaker 1: seeks to cement the values of Web two using blockchain technology. 834 00:54:44,239 --> 00:54:47,440 Speaker 1: Thank you so much for listening to the coin Bureau podcast. 835 00:54:47,520 --> 00:54:50,359 Speaker 1: If you'd like to learn more about cryptocurrency, you can 836 00:54:50,440 --> 00:54:53,760 Speaker 1: visit our YouTube channel at YouTube dot com forward slash 837 00:54:53,760 --> 00:54:56,560 Speaker 1: coin Bureau. You can also go to coin bureau dot 838 00:54:56,600 --> 00:54:59,440 Speaker 1: com for loads more information about all things crypto. You 839 00:54:59,440 --> 00:55:02,600 Speaker 1: can follow on Twitter at at coin bureau or one word, 840 00:55:02,960 --> 00:55:16,800 Speaker 1: and I'm also active on TikTok and Instagram too. M