1 00:00:00,160 --> 00:00:16,600 Speaker 1: Hi, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:16,920 --> 00:00:19,120 Speaker 1: My name is Mike Reagan, and I'm a senior market 3 00:00:19,120 --> 00:00:22,280 Speaker 1: seditor at Bloomberg. This week on the show, well, I'm 4 00:00:22,280 --> 00:00:24,600 Speaker 1: actually down at the Jersey shore, trying my best not 5 00:00:24,640 --> 00:00:27,560 Speaker 1: to get sunburned and worse than my melanoma. So we 6 00:00:27,600 --> 00:00:30,640 Speaker 1: actually recorded this podcast a week in advance, and therefore 7 00:00:30,720 --> 00:00:33,680 Speaker 1: apologies to anyone who notices that are crazy things are 8 00:00:33,920 --> 00:00:36,159 Speaker 1: a little out of date. But that's not the only 9 00:00:36,200 --> 00:00:39,599 Speaker 1: thing different this week now. Regular listeners will know that 10 00:00:39,640 --> 00:00:42,879 Speaker 1: this show tends to focus on the old fashioned investment 11 00:00:42,880 --> 00:00:46,800 Speaker 1: assets like stocks and bonds and currencies. We don't dabble 12 00:00:46,920 --> 00:00:51,519 Speaker 1: much into cryptocurrencies and decentralized finance investments. But I think 13 00:00:51,560 --> 00:00:53,840 Speaker 1: we can all agree this new fagult stuff is just 14 00:00:53,880 --> 00:00:58,440 Speaker 1: so fascinating that we'd all be foolish to ignore it completely. Recently, 15 00:00:58,480 --> 00:01:01,880 Speaker 1: I wrote about really some fascinating developments in the DeFi 16 00:01:02,000 --> 00:01:05,119 Speaker 1: space that kind of falls squarely into our wheelhouse here 17 00:01:05,160 --> 00:01:09,560 Speaker 1: on this show. Equities, or at least synthetic equities trading 18 00:01:09,600 --> 00:01:12,760 Speaker 1: on the blockchains without the ownership of any actual stocks 19 00:01:12,800 --> 00:01:15,600 Speaker 1: being involved. So I'm happy to bring onto the show 20 00:01:15,640 --> 00:01:18,399 Speaker 1: one of the innovators behind these tokens who's nice enough 21 00:01:18,440 --> 00:01:20,600 Speaker 1: to answer I don't know about a million questions I 22 00:01:20,640 --> 00:01:23,120 Speaker 1: had for that story. And he's also brought with him 23 00:01:23,160 --> 00:01:26,679 Speaker 1: one of his collaborators in the DeFi space, so let's 24 00:01:26,680 --> 00:01:29,080 Speaker 1: meet them. Their names are do Quan. He's the co 25 00:01:29,200 --> 00:01:33,600 Speaker 1: founder and CEO of Terraform Labs and Zachy Mannion. He's 26 00:01:33,600 --> 00:01:37,120 Speaker 1: the co founder of Eclusion and the son Lia protocol. 27 00:01:37,840 --> 00:01:39,880 Speaker 1: Doan Zachi, Welcome to the show. Thanks so much for 28 00:01:39,920 --> 00:01:42,319 Speaker 1: your time. It's great to be head's great to be here. 29 00:01:42,959 --> 00:01:45,080 Speaker 1: So I wanted to start with you now. I know 30 00:01:45,880 --> 00:01:48,760 Speaker 1: you talk a lot about these projects and in in 31 00:01:48,880 --> 00:01:52,160 Speaker 1: depth sort of nuts and bolts of it for our listeners, though, 32 00:01:52,160 --> 00:01:54,360 Speaker 1: I was hoping you could kind of start with some 33 00:01:54,520 --> 00:01:58,640 Speaker 1: of the basics and especially the notion two things that 34 00:01:58,720 --> 00:02:01,840 Speaker 1: I think are really kind of at the center of 35 00:02:01,880 --> 00:02:04,680 Speaker 1: these type of products, and what is the notion of 36 00:02:04,720 --> 00:02:09,239 Speaker 1: just staking in the cryptocurrency and defy world, and also 37 00:02:09,280 --> 00:02:12,679 Speaker 1: the notion of stable coins, especially if you can start 38 00:02:12,720 --> 00:02:16,360 Speaker 1: with staking um Especially to me, I think what is 39 00:02:16,400 --> 00:02:20,400 Speaker 1: fascinating in your project is how crypto can be staked 40 00:02:20,520 --> 00:02:23,640 Speaker 1: as sort of a way to govern the protocol that 41 00:02:23,720 --> 00:02:26,080 Speaker 1: runs everything. You know, you use them to vote or 42 00:02:26,200 --> 00:02:30,040 Speaker 1: propose changes to the protocol. But walk us through, you know, 43 00:02:30,120 --> 00:02:33,320 Speaker 1: kind of briefly that the idea behind staking. You know, 44 00:02:33,360 --> 00:02:35,880 Speaker 1: what are some of the motivations, some of the incentives 45 00:02:36,120 --> 00:02:39,360 Speaker 1: to get people to stake their tokens and especially that 46 00:02:39,440 --> 00:02:43,720 Speaker 1: notion uh in their use in governing the actual terror 47 00:02:43,760 --> 00:02:47,760 Speaker 1: form or rather Terra blockchain and the mirror protocol where 48 00:02:47,800 --> 00:02:52,680 Speaker 1: these synthetic assets are trading. Yeah. So the most general 49 00:02:52,760 --> 00:02:56,040 Speaker 1: definition of the word staking means that you put your 50 00:02:56,120 --> 00:02:59,760 Speaker 1: money at stake in order to make important decisions within 51 00:02:59,800 --> 00:03:04,160 Speaker 1: that work. So traditional you know, like in most crypto networks, 52 00:03:04,160 --> 00:03:06,919 Speaker 1: you have a token that can be used to govern 53 00:03:07,000 --> 00:03:10,080 Speaker 1: the network or to set important decisions, and to stake 54 00:03:10,120 --> 00:03:13,560 Speaker 1: the token means that you lock up these tokens in 55 00:03:13,560 --> 00:03:15,840 Speaker 1: the blockchain. And then if you make a decision that 56 00:03:15,960 --> 00:03:20,120 Speaker 1: is adversarial or counterproductive to the network, then um, you 57 00:03:20,120 --> 00:03:23,840 Speaker 1: you incur a penalty against that steak. Um. You know. 58 00:03:23,919 --> 00:03:25,840 Speaker 1: The good thing about this is is about us. The 59 00:03:25,880 --> 00:03:28,840 Speaker 1: network grows, the amount of capital or the amount of 60 00:03:28,880 --> 00:03:31,800 Speaker 1: tokens at stake increases as well, so you have this 61 00:03:32,120 --> 00:03:36,120 Speaker 1: nice linearity with the growth of the network and the 62 00:03:36,120 --> 00:03:38,720 Speaker 1: amount of money at stake, and talk us a little 63 00:03:38,720 --> 00:03:40,480 Speaker 1: bit again. And I think this will be important for 64 00:03:40,640 --> 00:03:43,240 Speaker 1: listeners who aren't familiar with the space to kind of 65 00:03:43,600 --> 00:03:47,320 Speaker 1: understand what's coming next. But talk to us about stable coins. 66 00:03:47,320 --> 00:03:52,160 Speaker 1: In other words, the idea that a cryptocurrency can basically 67 00:03:52,200 --> 00:03:56,640 Speaker 1: track the dollar or another currency once you want to 68 00:03:56,720 --> 00:04:01,200 Speaker 1: as closely as possible. And the Terra stable coin UH 69 00:04:01,680 --> 00:04:05,120 Speaker 1: known as the Tara dollar us T being sort of 70 00:04:05,160 --> 00:04:07,960 Speaker 1: the lynch pin of of many of these projects on 71 00:04:08,000 --> 00:04:12,080 Speaker 1: your platform. Give us a little, you know, sort of 72 00:04:12,240 --> 00:04:18,200 Speaker 1: freshman level education on stable coins. Yeah. So stable coins 73 00:04:18,200 --> 00:04:22,960 Speaker 1: are cryptocurrencies similar to bitcoiner etherium, but the key differences 74 00:04:23,160 --> 00:04:27,000 Speaker 1: is that they're designed to track the price of something 75 00:04:27,040 --> 00:04:29,039 Speaker 1: that's a little bit more stable, like the US dollar, 76 00:04:29,320 --> 00:04:32,159 Speaker 1: like the Korean one, the Hong Kong dollar. And the 77 00:04:32,200 --> 00:04:35,320 Speaker 1: idea is that if you have cryptocurrencies that are pegged 78 00:04:35,360 --> 00:04:40,200 Speaker 1: to stable assets, then you retain all them benefits of 79 00:04:40,279 --> 00:04:44,039 Speaker 1: Bitcoin and etherium, like permissionlessness, you can build apps on 80 00:04:44,080 --> 00:04:47,600 Speaker 1: top of it, it's easier to cross borders. Um well, 81 00:04:47,600 --> 00:04:51,320 Speaker 1: at the same time, you have, you know, a token 82 00:04:51,360 --> 00:04:55,560 Speaker 1: whose value tracks the price of something that you can 83 00:04:55,640 --> 00:04:59,160 Speaker 1: use for actual currencies, so it's easier to weave into 84 00:04:59,160 --> 00:05:04,440 Speaker 1: things like fintech and other types of applications. Right now, So, uh, 85 00:05:04,480 --> 00:05:07,920 Speaker 1: with the Mirror protocol and correct me if I get 86 00:05:07,920 --> 00:05:11,120 Speaker 1: any of this wrong. But basically, say I want to 87 00:05:11,160 --> 00:05:14,520 Speaker 1: create a synthetic stock to trade on the Mirror protocol, 88 00:05:14,560 --> 00:05:17,760 Speaker 1: so I will stake some of some us t or no, 89 00:05:17,880 --> 00:05:21,880 Speaker 1: it's actually the Mirror token. I guess the Mirror protocol token, 90 00:05:22,080 --> 00:05:24,719 Speaker 1: which is not a stable coin that that fluctuates in value. 91 00:05:25,320 --> 00:05:28,480 Speaker 1: I will stake some and suggest to the community, Okay, 92 00:05:28,520 --> 00:05:32,080 Speaker 1: I want let's say Walmart, I want to synthetic Walmart 93 00:05:32,160 --> 00:05:35,039 Speaker 1: stock to trade, So I'll put up a certain amount 94 00:05:35,160 --> 00:05:38,200 Speaker 1: of the Mirror token, and then everyone else votes with 95 00:05:38,240 --> 00:05:41,080 Speaker 1: their tokens right to to decide whether yeah, we we 96 00:05:41,120 --> 00:05:43,919 Speaker 1: do want a synthetic Walmart. Is that that's the gist 97 00:05:43,920 --> 00:05:47,840 Speaker 1: of it, right, Yeah, that's right right? And then so 98 00:05:47,960 --> 00:05:51,480 Speaker 1: as a kind of a trader or participated in this network, 99 00:05:51,720 --> 00:05:55,599 Speaker 1: I'll then say, okay, someone needs to create the Walmart token, 100 00:05:55,720 --> 00:06:00,760 Speaker 1: so I'll I'll put up some collateral um to create 101 00:06:01,320 --> 00:06:04,440 Speaker 1: a certain number of synthetic shares of Walmart and walk 102 00:06:04,520 --> 00:06:08,719 Speaker 1: us through what happens next. Sure, So, um, you know, 103 00:06:08,839 --> 00:06:13,080 Speaker 1: anybody can lock up some collateral. Let's say it could 104 00:06:13,120 --> 00:06:16,800 Speaker 1: be terror USD, it could be another cryptocurrency, it could 105 00:06:16,800 --> 00:06:22,280 Speaker 1: be you know, uh, derivative, cryptocurrency derivative. So anyways, you 106 00:06:22,560 --> 00:06:26,640 Speaker 1: lock up some type of cryptotoken whose value exceeds the 107 00:06:26,680 --> 00:06:29,480 Speaker 1: amount of the synthetic that you're about the issue. So, 108 00:06:29,520 --> 00:06:31,799 Speaker 1: for example, if you lock up a hundred and fifty 109 00:06:31,800 --> 00:06:35,560 Speaker 1: dollars worth of some collateral, you get to mint you know, 110 00:06:35,680 --> 00:06:38,800 Speaker 1: let's say a hundred dollars worth of some token that 111 00:06:38,920 --> 00:06:42,280 Speaker 1: tracks the price of whatever has been just listed, let's 112 00:06:42,279 --> 00:06:45,360 Speaker 1: say Walmart. So in that case, you can trade the synthetics, 113 00:06:45,400 --> 00:06:47,240 Speaker 1: you can hold them, you can do whatever you want. 114 00:06:47,480 --> 00:06:48,960 Speaker 1: But the idea is that you have this, you know, 115 00:06:49,080 --> 00:06:53,640 Speaker 1: purely decentralized peer to peer exchange of value between many 116 00:06:54,120 --> 00:06:57,000 Speaker 1: participants across the world globally. Right, and how many do 117 00:06:57,000 --> 00:07:00,080 Speaker 1: you suppose there's I've seen some estimates. Uh it's a 118 00:07:00,120 --> 00:07:06,200 Speaker 1: few thousand regular traders, right, Yeah, So it actually fluctuates 119 00:07:06,279 --> 00:07:10,480 Speaker 1: quite a bit. So in crypto, usership really changes depending 120 00:07:10,520 --> 00:07:14,480 Speaker 1: on how well the price of cryptocurrencies are doing. So 121 00:07:14,680 --> 00:07:17,400 Speaker 1: these days we're seeing about you know, anywhere between three 122 00:07:17,440 --> 00:07:20,600 Speaker 1: thousands to six thousand daily active users. Um, you know, 123 00:07:21,000 --> 00:07:27,920 Speaker 1: like um, but during let's say February March, um, you know, 124 00:07:28,040 --> 00:07:30,200 Speaker 1: sort of peak markets and crypto, we were seeing about 125 00:07:30,800 --> 00:07:33,080 Speaker 1: I remember the daily but on a monthly basis, we 126 00:07:33,080 --> 00:07:36,800 Speaker 1: were seeing about a hundred and fifty monthly active months. Act. 127 00:07:36,880 --> 00:07:39,680 Speaker 1: That's amazing. That's uh, in a pretty short time, right. 128 00:07:39,720 --> 00:07:43,480 Speaker 1: I mean this all launched what's the end of last year, right, 129 00:07:43,600 --> 00:07:46,840 Speaker 1: and a lot of it was you know, purely by accident. 130 00:07:47,160 --> 00:07:50,200 Speaker 1: So um, you know around the plane when we first 131 00:07:50,280 --> 00:07:54,240 Speaker 1: launched Mirror, Wall Street That's was making like a big 132 00:07:54,920 --> 00:07:57,760 Speaker 1: what was making big waves? And then um, you know, 133 00:07:57,800 --> 00:08:00,520 Speaker 1: the community you know, tried to vote in things gmc, 134 00:08:01,280 --> 00:08:05,040 Speaker 1: GM and AMC, which were really popular assets of the 135 00:08:05,040 --> 00:08:07,920 Speaker 1: Wall Street That's movement. Yeah, and then a bunch of 136 00:08:08,240 --> 00:08:11,960 Speaker 1: Twitter celebrities that were following that movement started to talk 137 00:08:12,000 --> 00:08:14,400 Speaker 1: about Mirror as like an alternative to robin Hood that 138 00:08:14,440 --> 00:08:19,160 Speaker 1: can't be censored, is entirely transparent, and I think that 139 00:08:19,320 --> 00:08:22,000 Speaker 1: was probably the catalyst that that led Mirror to take off. 140 00:08:22,800 --> 00:08:27,440 Speaker 1: I think what it all adds up to is, um, well, 141 00:08:27,640 --> 00:08:30,560 Speaker 1: there must be traders around the world salivating at this 142 00:08:30,640 --> 00:08:36,959 Speaker 1: stuff UM, especially sort of your algorithmic based traders writing programs. 143 00:08:37,760 --> 00:08:41,839 Speaker 1: One thing I find fascinating is you pull in from 144 00:08:41,880 --> 00:08:46,320 Speaker 1: what's called an oracle um prices of the actual stocks 145 00:08:46,360 --> 00:08:50,160 Speaker 1: in the market about every thirty seconds. So for one 146 00:08:50,160 --> 00:08:53,080 Speaker 1: of these sort of low latency you know, trade on 147 00:08:53,120 --> 00:08:56,760 Speaker 1: the micro second type of trade algorithmic trader, that this 148 00:08:56,840 --> 00:08:59,200 Speaker 1: has got to be in a very appealing I would 149 00:08:59,240 --> 00:09:02,080 Speaker 1: think opportunity for people like that are you are you 150 00:09:02,120 --> 00:09:06,600 Speaker 1: finding that sort of participant yet, you know, really um 151 00:09:06,640 --> 00:09:11,160 Speaker 1: automated traders not not exactly just people sitting there trading 152 00:09:11,200 --> 00:09:16,320 Speaker 1: by hand. I think that there's a very uh interesting 153 00:09:16,800 --> 00:09:20,480 Speaker 1: you know, the confluence of having these trading platforms that 154 00:09:20,559 --> 00:09:24,640 Speaker 1: exists only on chain has created like real opportunities to 155 00:09:24,720 --> 00:09:29,800 Speaker 1: sort of interweave the consensus process and the trading process 156 00:09:29,840 --> 00:09:33,480 Speaker 1: of the same sort of core infrastructure. And so you're 157 00:09:33,480 --> 00:09:36,800 Speaker 1: seeing a lot of innovation there among trading firms as 158 00:09:36,840 --> 00:09:40,440 Speaker 1: they try and figure out how all these pieces uh 159 00:09:40,440 --> 00:09:43,439 Speaker 1: fit together. I think that there's a lot of that. 160 00:09:43,679 --> 00:09:46,920 Speaker 1: You know, we've never really had like open markets where 161 00:09:46,920 --> 00:09:50,040 Speaker 1: the where the matchmaking production was transparent and open like this, 162 00:09:50,520 --> 00:09:52,120 Speaker 1: and so what like what does it mean to be 163 00:09:52,200 --> 00:09:55,280 Speaker 1: close to the market? Is like, is very different in 164 00:09:55,320 --> 00:09:58,559 Speaker 1: a decentralized world that it is the old centralized world 165 00:09:58,600 --> 00:10:00,720 Speaker 1: where it was all about you know, there isn't you 166 00:10:00,760 --> 00:10:02,720 Speaker 1: know mas dec has a data center somewhere, and it's 167 00:10:02,760 --> 00:10:06,760 Speaker 1: all about being as closed as possible to it, right, right, 168 00:10:06,960 --> 00:10:09,000 Speaker 1: And I should point out, you know, due to the 169 00:10:09,120 --> 00:10:13,360 Speaker 1: nature of this, this type of UM project, you really 170 00:10:13,360 --> 00:10:16,360 Speaker 1: don't know who's trading what. It's all anonymous more or less. 171 00:10:16,440 --> 00:10:20,960 Speaker 1: Right kind of yeah, kind of brings uh, you know, 172 00:10:21,160 --> 00:10:23,080 Speaker 1: us to the some of the issues covered in the 173 00:10:23,120 --> 00:10:26,120 Speaker 1: story and that um, you know, you've got to wonder 174 00:10:26,160 --> 00:10:29,199 Speaker 1: how regulators, you know, the equity market around the world 175 00:10:29,280 --> 00:10:33,040 Speaker 1: is so tightly regulated. Um. Every year it seems like 176 00:10:33,080 --> 00:10:36,080 Speaker 1: there's a few hundred more pages of regulations added to 177 00:10:36,720 --> 00:10:40,120 Speaker 1: to you know, the national market system in the US, 178 00:10:40,200 --> 00:10:45,320 Speaker 1: for example, or the rules governing broker dealers. Um. That 179 00:10:45,520 --> 00:10:49,200 Speaker 1: you know, you must wonder how, you know, do you 180 00:10:49,240 --> 00:10:51,560 Speaker 1: feel like a shoe is going to drop from regulators 181 00:10:51,559 --> 00:10:57,280 Speaker 1: eventually on this Well, so I I sort of think about, um, 182 00:10:57,320 --> 00:11:00,400 Speaker 1: you know, the protocols as no different and from the 183 00:11:00,440 --> 00:11:03,559 Speaker 1: protocols that governed the internet, right, So in the beginning, 184 00:11:03,640 --> 00:11:07,520 Speaker 1: when things like email or like telegram or encryptive phones 185 00:11:07,600 --> 00:11:11,160 Speaker 1: first came out, the regulatory responses always you know, at 186 00:11:11,160 --> 00:11:14,160 Speaker 1: a backdoor or you know, these protocols are bad for 187 00:11:14,200 --> 00:11:17,160 Speaker 1: the economy or whatever it is that there's always a 188 00:11:18,440 --> 00:11:22,079 Speaker 1: backlash at the beginning, I guess, yeah, But I think 189 00:11:22,120 --> 00:11:24,600 Speaker 1: what's important is that what can be regulated and what 190 00:11:24,679 --> 00:11:28,280 Speaker 1: can be governed. It's it's just basically, these protocols changed 191 00:11:28,360 --> 00:11:31,600 Speaker 1: the natural law of how human beings interact with each other, 192 00:11:32,120 --> 00:11:33,800 Speaker 1: right And at the end of the day, if it's 193 00:11:33,800 --> 00:11:37,000 Speaker 1: sort of like a decentralized shift in natural laws, that 194 00:11:37,080 --> 00:11:40,079 Speaker 1: regulators find a way to work around it. So, for example, 195 00:11:40,120 --> 00:11:42,760 Speaker 1: when email and telegram and those things came out, these 196 00:11:42,760 --> 00:11:47,040 Speaker 1: are still challenges that regulators overcome, but they've adopted other 197 00:11:47,080 --> 00:11:50,679 Speaker 1: ways to make sure that, you know, regulatory enforcement is 198 00:11:50,679 --> 00:11:54,160 Speaker 1: still possible. Right. So for these decentralized protocols, even if 199 00:11:54,160 --> 00:11:58,040 Speaker 1: you can't prevent these protocols from existing, which which really 200 00:11:58,080 --> 00:12:00,640 Speaker 1: can be done, right, what what what they can do 201 00:12:00,920 --> 00:12:02,840 Speaker 1: is to sort of try to regulate the vendors that 202 00:12:02,920 --> 00:12:08,360 Speaker 1: interact with these protocols. And I think it's it's um 203 00:12:08,480 --> 00:12:11,280 Speaker 1: very possible to be able to do that. So I 204 00:12:11,320 --> 00:12:13,360 Speaker 1: just want to comment on this a little bit, which 205 00:12:13,559 --> 00:12:18,040 Speaker 1: is that I break it into three things. So I 206 00:12:18,080 --> 00:12:21,280 Speaker 1: think the one theme is what dough is talking about, 207 00:12:21,320 --> 00:12:25,560 Speaker 1: which is what we've essentially done is made like UH 208 00:12:25,800 --> 00:12:29,760 Speaker 1: defy UH an inherent property of the Internet. Like if 209 00:12:29,760 --> 00:12:32,480 Speaker 1: you're gonna have the Internet, you're gonna have defied. UM. 210 00:12:32,640 --> 00:12:34,439 Speaker 1: It's really hard to at this point to have one 211 00:12:34,480 --> 00:12:37,000 Speaker 1: without the other. UM. So that's one aspect of it. 212 00:12:37,400 --> 00:12:40,600 Speaker 1: The second aspect of it is there's the regulation, But 213 00:12:40,640 --> 00:12:43,160 Speaker 1: then there's the aims of the regulation. And the aims 214 00:12:43,200 --> 00:12:48,319 Speaker 1: of the regulation is to have fair, transparent, effective markets 215 00:12:48,320 --> 00:12:52,839 Speaker 1: and effective right discovery UH and an effective finance running 216 00:12:52,880 --> 00:12:57,840 Speaker 1: society and UM. And I think blockchain protocols have done 217 00:12:57,840 --> 00:13:01,440 Speaker 1: a really good job of starting to incorporate those things 218 00:13:01,800 --> 00:13:05,160 Speaker 1: directly into the software UM. And I think the extent 219 00:13:05,160 --> 00:13:09,920 Speaker 1: to which regulators are fighting defy while not embracing our 220 00:13:09,960 --> 00:13:12,080 Speaker 1: ability to put these things directly in software, they're giving 221 00:13:12,160 --> 00:13:16,360 Speaker 1: up a huge opportunity to make the world a better place. UM. 222 00:13:16,440 --> 00:13:18,480 Speaker 1: And Then I think the last thing is composed ability. 223 00:13:18,520 --> 00:13:21,000 Speaker 1: I think the most things that has been like the 224 00:13:21,040 --> 00:13:24,559 Speaker 1: most exciting thing about like why would you bring equities 225 00:13:24,600 --> 00:13:27,959 Speaker 1: to defy Like, what's the point? Um? And the point 226 00:13:28,080 --> 00:13:32,000 Speaker 1: is that like these protocols are composable in ways UM 227 00:13:32,040 --> 00:13:35,680 Speaker 1: that like traditional equities are not that you can't build, uh, 228 00:13:35,720 --> 00:13:39,760 Speaker 1: you know, software that on top of your robin Hood account, 229 00:13:39,760 --> 00:13:41,719 Speaker 1: the way you can build software on top of your 230 00:13:41,760 --> 00:13:45,640 Speaker 1: mirror assets. UM. And that's really I think a big 231 00:13:45,720 --> 00:13:49,559 Speaker 1: piece of this that's very exciting. UM. And like why 232 00:13:49,920 --> 00:13:53,120 Speaker 1: again this is important, UM? And why I think it 233 00:13:53,200 --> 00:13:56,600 Speaker 1: is Uh, it is a mistake to move too quickly directly. 234 00:14:04,840 --> 00:14:07,199 Speaker 1: So you made the point in some of the comments 235 00:14:07,240 --> 00:14:09,240 Speaker 1: to me and Zach you maybe you have some thoughts 236 00:14:09,240 --> 00:14:12,720 Speaker 1: on this about how, you know, not everyone is able 237 00:14:12,760 --> 00:14:15,880 Speaker 1: to trade the stock market, um, for whatever reason, you know, 238 00:14:17,000 --> 00:14:20,160 Speaker 1: whether you're in a country uh that has some kind 239 00:14:20,160 --> 00:14:22,080 Speaker 1: of controls that will not let you open a prefuge 240 00:14:22,120 --> 00:14:24,840 Speaker 1: account or it's prohibitively expensive. Talk to me a little 241 00:14:24,880 --> 00:14:27,840 Speaker 1: bit about that notion. Who are some of the the 242 00:14:28,480 --> 00:14:30,760 Speaker 1: people who are kind of locked out from traditional stock 243 00:14:30,800 --> 00:14:34,800 Speaker 1: markets that could benefit from this type of program. Yeah, 244 00:14:34,880 --> 00:14:38,120 Speaker 1: so it's it's kind of you know, hard to imagine 245 00:14:38,160 --> 00:14:42,240 Speaker 1: this in the West, but you know, uh, I think 246 00:14:42,320 --> 00:14:45,560 Speaker 1: the equities market in some some countries are more exciting 247 00:14:45,600 --> 00:14:48,960 Speaker 1: than others, right. So, um, for example, uh, the U 248 00:14:49,000 --> 00:14:51,960 Speaker 1: S stock market is appealing. The U S companies lead 249 00:14:52,240 --> 00:14:56,440 Speaker 1: industries in lots of different sectors, and therefore their their 250 00:14:56,440 --> 00:14:59,560 Speaker 1: equities are really compelling. But there are lots of places 251 00:14:59,600 --> 00:15:02,960 Speaker 1: where it's difficult to gain access to asset classes that 252 00:15:03,000 --> 00:15:06,720 Speaker 1: are outside of the country. So or in some cases 253 00:15:06,920 --> 00:15:10,840 Speaker 1: there are adversarial rules and roadblocks that are set up 254 00:15:10,960 --> 00:15:14,560 Speaker 1: to make it difficult to invest. So for example, um, 255 00:15:14,600 --> 00:15:16,720 Speaker 1: you know in Korea, in Japan, you know, capital gains 256 00:15:16,760 --> 00:15:22,800 Speaker 1: tax on foreign equities single stocks is whereas uh, you know, 257 00:15:22,840 --> 00:15:27,080 Speaker 1: on domestic equities is like zero. So and then whenever 258 00:15:27,760 --> 00:15:30,640 Speaker 1: you know, retail interest in investing in foreign equities goes up, 259 00:15:31,040 --> 00:15:34,080 Speaker 1: they make an announcement saying, hey, if you if you 260 00:15:34,080 --> 00:15:37,520 Speaker 1: guys keep investing in use equities, will just keep raising texts. Right. 261 00:15:37,560 --> 00:15:40,920 Speaker 1: So they're they're purposefully designed to prevent capital flight and 262 00:15:40,960 --> 00:15:43,920 Speaker 1: to keep as much money in domestic equities markets as possible. 263 00:15:44,680 --> 00:15:47,720 Speaker 1: Or there are places like let's say China or Malaysia 264 00:15:48,120 --> 00:15:51,560 Speaker 1: where it's just in general very difficult to get access 265 00:15:51,560 --> 00:15:55,760 Speaker 1: to equities outside of the country. Um, so what's you know, 266 00:15:56,480 --> 00:15:58,840 Speaker 1: like a surface level, like the very simple problem that 267 00:15:58,840 --> 00:16:01,920 Speaker 1: these synthetic equities saw us that it allows global access 268 00:16:01,920 --> 00:16:04,680 Speaker 1: to any asset class that is determined by the community, 269 00:16:04,720 --> 00:16:07,880 Speaker 1: and that that alone is really exciting, right, And I 270 00:16:07,880 --> 00:16:10,240 Speaker 1: think that's an important point. I mean, we're talking, you know, 271 00:16:10,640 --> 00:16:13,520 Speaker 1: talking about Mirrord equities because that's kind of the first 272 00:16:13,960 --> 00:16:18,880 Speaker 1: uh iteration of this. There's some mirrored ETFs two. What 273 00:16:18,880 --> 00:16:21,880 Speaker 1: what else you know could we Obviously, I guess you 274 00:16:21,880 --> 00:16:24,440 Speaker 1: could probably try to do anything right Mirrord commodities and 275 00:16:24,480 --> 00:16:26,360 Speaker 1: oil and gold and all that I mean is that 276 00:16:26,560 --> 00:16:30,520 Speaker 1: something you think is coming in the pipeline, Anything fungible 277 00:16:30,600 --> 00:16:32,960 Speaker 1: that shades in the market can can be made into 278 00:16:33,520 --> 00:16:36,680 Speaker 1: a Mirrord asset, you know. To me, the I guess 279 00:16:36,920 --> 00:16:39,000 Speaker 1: you know, and I'll admit it to you guys. I'm 280 00:16:39,000 --> 00:16:40,920 Speaker 1: a I'm a worried word at heart, you know, I'm 281 00:16:40,920 --> 00:16:43,320 Speaker 1: always worried about what could possibly go wrong. So when 282 00:16:43,360 --> 00:16:44,920 Speaker 1: I looked at this, one of the things I worry 283 00:16:44,920 --> 00:16:49,200 Speaker 1: about is stable coins itself, you know. Um, and uh, 284 00:16:49,800 --> 00:16:51,640 Speaker 1: maybe you guys can explain a little bit about this. 285 00:16:51,720 --> 00:16:54,400 Speaker 1: There's you know, two ways to do a stable coin. 286 00:16:54,440 --> 00:16:56,440 Speaker 1: You do. Let let's other type of thing where you're 287 00:16:56,440 --> 00:16:59,960 Speaker 1: actually you know, backing the stable coin with with US 288 00:17:00,120 --> 00:17:04,040 Speaker 1: dollars or you know, I'm guessing there's other currency back 289 00:17:04,080 --> 00:17:07,520 Speaker 1: stable coins out there UM, or you can do it algorithmically, 290 00:17:08,800 --> 00:17:11,639 Speaker 1: which I understand is what us T does. Can you 291 00:17:11,680 --> 00:17:15,320 Speaker 1: give us, and you know, with the acknowledgement that we're 292 00:17:15,320 --> 00:17:17,639 Speaker 1: not all computer scientists out here, but can you give 293 00:17:17,720 --> 00:17:22,000 Speaker 1: us an idea of how that algorithmic backing of a 294 00:17:22,040 --> 00:17:27,000 Speaker 1: stable coin works. So basically, the idea is that without 295 00:17:27,080 --> 00:17:30,159 Speaker 1: having explicit collaboral you can set up a set of 296 00:17:30,160 --> 00:17:35,720 Speaker 1: incentives to make it make it attractive for players to 297 00:17:36,440 --> 00:17:40,280 Speaker 1: um you know, keep the price of the stable coin pay. So, 298 00:17:40,359 --> 00:17:44,439 Speaker 1: for example, in the para system, you have two levers, 299 00:17:44,520 --> 00:17:48,240 Speaker 1: let you pull essentially like akin to uh, you know, 300 00:17:48,320 --> 00:17:50,920 Speaker 1: bone pure policies of central banks. And the idea is 301 00:17:50,960 --> 00:17:53,480 Speaker 1: that at any given time, you can trade in one 302 00:17:53,520 --> 00:17:57,280 Speaker 1: dollar's worth of tar usc for one dollar's worth of luna. 303 00:17:57,480 --> 00:18:01,719 Speaker 1: So for example, if TARA us these trading in nineties cents, 304 00:18:01,840 --> 00:18:05,040 Speaker 1: you can you can buy from the market, uh you know, 305 00:18:05,119 --> 00:18:07,360 Speaker 1: trade it for one dollar's worth of luna and sell 306 00:18:07,440 --> 00:18:10,400 Speaker 1: that and capture a temp person organstras so Whenever Para 307 00:18:10,600 --> 00:18:13,920 Speaker 1: is shading at a discount market, participants have an incentive 308 00:18:14,000 --> 00:18:16,439 Speaker 1: to keep buying up the asset until shading at parody. 309 00:18:16,440 --> 00:18:19,240 Speaker 1: With the vice versa, if it's shading at one point 310 00:18:19,240 --> 00:18:22,200 Speaker 1: one dollars, users now have an incentive to buy a 311 00:18:22,280 --> 00:18:25,119 Speaker 1: dollar's worth of Luna, swap that to one pair of 312 00:18:25,200 --> 00:18:28,399 Speaker 1: USD and then sell that to capture temperson artistraws the 313 00:18:28,440 --> 00:18:31,679 Speaker 1: other way. So, Zachie, let's let's hear what you're up 314 00:18:31,720 --> 00:18:34,400 Speaker 1: to these days. How how did your projects fit in 315 00:18:34,760 --> 00:18:38,840 Speaker 1: with Terra and what dough is doing. So, you know, 316 00:18:39,080 --> 00:18:42,000 Speaker 1: I've been building a lot of the infrastructure that Terra 317 00:18:42,200 --> 00:18:46,000 Speaker 1: uses for like the last seven years, um so, a 318 00:18:46,040 --> 00:18:48,880 Speaker 1: lot of a lot of the sort of core software 319 00:18:48,880 --> 00:18:51,200 Speaker 1: infrastructure that Terra is built upon is built on a 320 00:18:51,320 --> 00:18:56,760 Speaker 1: project called Cosmos um and so like we've been working 321 00:18:56,840 --> 00:18:59,680 Speaker 1: very closely with the Terra and the Dover for many 322 00:18:59,720 --> 00:19:02,000 Speaker 1: years a um as they as they've been building out 323 00:19:02,000 --> 00:19:05,600 Speaker 1: on our ecosystem. Um I'm working on a project called Similia, 324 00:19:05,840 --> 00:19:08,760 Speaker 1: which is very focused on this sort of unique role 325 00:19:08,920 --> 00:19:12,040 Speaker 1: of liquidity providers. Um SO. One of the things that 326 00:19:12,200 --> 00:19:15,680 Speaker 1: is like very cool about these new crypto defied markets um, 327 00:19:15,760 --> 00:19:18,280 Speaker 1: is that anyone can be a market maker. Um. It's 328 00:19:18,280 --> 00:19:23,360 Speaker 1: not this elitist, but like we need better tools. Um. 329 00:19:23,440 --> 00:19:25,879 Speaker 1: And so what Samlia is focused on doing is building 330 00:19:25,920 --> 00:19:29,000 Speaker 1: better tools for market makers, uh in in markets like 331 00:19:29,119 --> 00:19:32,120 Speaker 1: terrace swamp and unit swap and all of these uh 332 00:19:32,359 --> 00:19:35,200 Speaker 1: defy exchanges. And it was really focused on and sort 333 00:19:35,200 --> 00:19:38,199 Speaker 1: of democratized access to being a market maker. Yeah, and 334 00:19:38,320 --> 00:19:41,879 Speaker 1: I'm glad you brought that up. UM, terror swap and 335 00:19:42,000 --> 00:19:47,520 Speaker 1: unit swap. Uh sort of a different, vastly different sort 336 00:19:47,520 --> 00:19:51,240 Speaker 1: of model than your coin based or your binance. UM. 337 00:19:51,359 --> 00:19:53,680 Speaker 1: Walk us what you guys could walk us through how 338 00:19:53,680 --> 00:19:57,080 Speaker 1: a defy exchange like that works. I mean, I guess 339 00:19:57,119 --> 00:19:59,479 Speaker 1: the the ultimate goal is no middlemen at all, right, 340 00:19:59,520 --> 00:20:03,159 Speaker 1: you just users to be able to trade with each other, um, 341 00:20:03,640 --> 00:20:07,479 Speaker 1: which just the blockchain serving as sort of the you know, 342 00:20:07,640 --> 00:20:10,639 Speaker 1: the the the exchange itself. Is that Is that a 343 00:20:10,880 --> 00:20:13,000 Speaker 1: I mean it might be an oversimplified explanation, but is 344 00:20:13,000 --> 00:20:16,879 Speaker 1: that basically it? Okay, So there's there's a couple of things. 345 00:20:16,880 --> 00:20:20,280 Speaker 1: So basically there's this, there's there's this. There's this idea 346 00:20:20,359 --> 00:20:23,960 Speaker 1: called a constant function market maker, where there's a very simple, 347 00:20:24,520 --> 00:20:29,680 Speaker 1: frequently very simple algorithm that that uh uh looks at 348 00:20:30,400 --> 00:20:34,480 Speaker 1: the value of two reserves uh and computer price um, 349 00:20:34,520 --> 00:20:39,240 Speaker 1: and then someone can uh swap through that reserve. So 350 00:20:39,400 --> 00:20:41,560 Speaker 1: what why why do we want to have systems that 351 00:20:41,640 --> 00:20:45,600 Speaker 1: have reserves rather than having systems that um that you know, 352 00:20:45,720 --> 00:20:49,040 Speaker 1: just match buyers and sellers and converge on a price um. 353 00:20:49,080 --> 00:20:51,719 Speaker 1: Which is actually you know, we've tried with you know, 354 00:20:51,760 --> 00:20:55,440 Speaker 1: over the history of cryptocurrencies and in this space, we've 355 00:20:55,480 --> 00:20:57,960 Speaker 1: tried all kinds of different market architectures, but the one 356 00:20:57,960 --> 00:21:00,080 Speaker 1: that has really taken off is this terrot swapping a 357 00:21:00,080 --> 00:21:03,520 Speaker 1: swap constant lunching market maker with this reserve. And the 358 00:21:03,560 --> 00:21:07,280 Speaker 1: reserve is provided by liquidity providers who which is who 359 00:21:07,440 --> 00:21:11,600 Speaker 1: uh familier is trying to serve um And why is this? 360 00:21:11,880 --> 00:21:16,560 Speaker 1: Why is the soul so powerful? Is it's actually really 361 00:21:16,640 --> 00:21:20,720 Speaker 1: quite powerful in terms of this composability feature to be 362 00:21:20,720 --> 00:21:23,360 Speaker 1: able to know that there is going to be liquidity 363 00:21:23,400 --> 00:21:27,120 Speaker 1: at any price um uh, you know, at any time, 364 00:21:27,160 --> 00:21:29,960 Speaker 1: at any price, being able to access liquidity and swap 365 00:21:30,119 --> 00:21:34,800 Speaker 1: on it like in a block uh and sometimes compose alone, 366 00:21:35,160 --> 00:21:41,200 Speaker 1: swap something else into a single into into a single block. UH. 367 00:21:41,200 --> 00:21:45,840 Speaker 1: So it all happens atomically. Like you know, imagine if 368 00:21:45,880 --> 00:21:49,840 Speaker 1: you could like literally take out like a lock on 369 00:21:49,880 --> 00:21:52,760 Speaker 1: the New York Stock Exchange SAM going to sell stock, 370 00:21:53,800 --> 00:21:56,240 Speaker 1: use that the cash from that to take a leverage 371 00:21:56,240 --> 00:22:00,199 Speaker 1: position in another asset and maybe uh look at the 372 00:22:00,200 --> 00:22:02,919 Speaker 1: price change there and then sell that asset and like 373 00:22:03,000 --> 00:22:05,719 Speaker 1: no one else could trade at the time. UM. And 374 00:22:05,880 --> 00:22:09,080 Speaker 1: cryptocurrency has allowed us to build stuff like that. UM. 375 00:22:09,359 --> 00:22:11,879 Speaker 1: And so this is why the unit swap style that 376 00:22:12,040 --> 00:22:15,359 Speaker 1: the sort of unit swap style constant function market maker 377 00:22:15,480 --> 00:22:19,040 Speaker 1: structure has like sort of dominate, has taken a dominant 378 00:22:19,160 --> 00:22:24,240 Speaker 1: position across the cryptic furrency world. UM. And what this 379 00:22:24,320 --> 00:22:27,800 Speaker 1: has what the next implication of this is that this 380 00:22:27,880 --> 00:22:29,959 Speaker 1: is all open source software and so you just expect 381 00:22:29,960 --> 00:22:34,560 Speaker 1: this functionality to be everywhere. Um Uh Again, it just 382 00:22:34,720 --> 00:22:38,120 Speaker 1: has a marketplace, just becomes a function of the Internet 383 00:22:38,160 --> 00:22:40,880 Speaker 1: where you can basically swap any asset wherever you are 384 00:22:41,440 --> 00:22:43,719 Speaker 1: UM at a click of a button and always know 385 00:22:43,760 --> 00:22:46,000 Speaker 1: that you're gonna be able to find uh a liquidity 386 00:22:46,080 --> 00:22:49,119 Speaker 1: on the other side to take that position. And so 387 00:22:49,200 --> 00:22:53,600 Speaker 1: my understanding uh for the mirror protocol is that um, 388 00:22:54,560 --> 00:22:58,160 Speaker 1: there are trading fees associated UM, but they're all sort 389 00:22:58,160 --> 00:23:02,880 Speaker 1: of recycled back into the community itself that the liquidity providers, 390 00:23:03,400 --> 00:23:06,159 Speaker 1: you know, get a cut of fees and and and 391 00:23:06,200 --> 00:23:09,920 Speaker 1: that sort of thing, which I think causes a lot 392 00:23:09,920 --> 00:23:11,919 Speaker 1: of people to say, well, what's the what's in it 393 00:23:12,000 --> 00:23:15,919 Speaker 1: for dough and terror form labs? Um? And my understanding 394 00:23:16,000 --> 00:23:21,879 Speaker 1: is that um, your your other cryptocurrency, Luna plays a 395 00:23:22,000 --> 00:23:24,680 Speaker 1: role in in all this. Can you sort of walk 396 00:23:24,760 --> 00:23:27,840 Speaker 1: us through sort of what your your company and your 397 00:23:27,880 --> 00:23:33,520 Speaker 1: personal incentives are for the success of Mirror? Yeah, so, um, 398 00:23:33,560 --> 00:23:35,440 Speaker 1: you know a lot of people think that we get 399 00:23:35,920 --> 00:23:39,960 Speaker 1: uh sort of you know, indirect benefits from running Mirrors. 400 00:23:40,000 --> 00:23:43,040 Speaker 1: So like there's no direct benefits, right, we don't take 401 00:23:43,040 --> 00:23:47,560 Speaker 1: any trading fees. It's decentralized, there's no tokens that we 402 00:23:47,680 --> 00:23:51,240 Speaker 1: pre mind ourselves. So ultimately there's no direct incentive for 403 00:23:51,320 --> 00:23:54,240 Speaker 1: doing it now. But you know, like one of the 404 00:23:54,280 --> 00:23:58,600 Speaker 1: benefits of having run Pair is that I'm like pretty 405 00:23:58,680 --> 00:24:03,679 Speaker 1: much shareholder. There's no investors that whole equity and performed lamps, 406 00:24:03,720 --> 00:24:05,960 Speaker 1: so you can be a little bit flexible of not 407 00:24:05,960 --> 00:24:08,840 Speaker 1: not everything that you do needs to be profitable, right, 408 00:24:08,920 --> 00:24:12,440 Speaker 1: so we do a bunch of different things, Uh, for example, 409 00:24:12,480 --> 00:24:15,520 Speaker 1: like I I found in a payments company that raised 410 00:24:15,520 --> 00:24:18,080 Speaker 1: close to a hundred million dollars by seft bank um, 411 00:24:18,400 --> 00:24:21,600 Speaker 1: you know, so we work on you know, savings. SDK 412 00:24:21,760 --> 00:24:24,800 Speaker 1: is like anchor and different things like that. So think 413 00:24:24,800 --> 00:24:26,960 Speaker 1: about Mirror as like one of those things that we 414 00:24:27,000 --> 00:24:31,280 Speaker 1: did and a gift we gave to the world. So 415 00:24:32,000 --> 00:24:34,760 Speaker 1: and just you know, to give it the there's those 416 00:24:34,800 --> 00:24:37,159 Speaker 1: old books, you know, Staking for Dummies, you know, or 417 00:24:37,200 --> 00:24:40,399 Speaker 1: the Complete Idiot's Guide Mistaking. So say I wanted to 418 00:24:40,840 --> 00:24:44,600 Speaker 1: put something stupid into the Mirror protocol, like tokenized baseball 419 00:24:44,680 --> 00:24:47,440 Speaker 1: cards or I don't know whatever, and so I would 420 00:24:47,480 --> 00:24:51,080 Speaker 1: put up a certain amount of M I R token 421 00:24:51,960 --> 00:24:55,520 Speaker 1: and say, let's vote on this. Here's the here's x 422 00:24:55,840 --> 00:24:59,280 Speaker 1: number of Mirror tokens, m I R tokens, and everyone 423 00:24:59,280 --> 00:25:02,639 Speaker 1: else who wants to I guess or can vote and 424 00:25:02,920 --> 00:25:05,159 Speaker 1: they put they stake their tokens as well, right, So 425 00:25:05,200 --> 00:25:08,080 Speaker 1: if they say that's a bad idea and and it 426 00:25:08,200 --> 00:25:10,800 Speaker 1: gets voted down, then I lose the steak I put up. 427 00:25:11,520 --> 00:25:32,680 Speaker 1: And does everyone who voted get back their tokens? Then yes. So, guys, 428 00:25:32,720 --> 00:25:36,480 Speaker 1: if I'm gonna play Devil's advocate for a bit and say, uh, 429 00:25:36,560 --> 00:25:39,320 Speaker 1: mirror equities, these are gonna just be a plaything of 430 00:25:39,520 --> 00:25:44,080 Speaker 1: insider traders, tax dodgers, money launders, on and on and on. 431 00:25:44,600 --> 00:25:48,399 Speaker 1: How do you respond to that? I think, Um, you know, 432 00:25:48,600 --> 00:25:52,000 Speaker 1: for tax dodgers and insider traders, if you're going to 433 00:25:52,320 --> 00:25:56,719 Speaker 1: be doing insider treating, putting the record of that on 434 00:25:56,760 --> 00:26:00,080 Speaker 1: a public ledger that is viewable in perpetuity is the 435 00:26:00,119 --> 00:26:05,600 Speaker 1: worst idea ever. Fair enough? Fair enough? Yeah? Yeah? So, um, Well, generally, 436 00:26:05,600 --> 00:26:09,920 Speaker 1: as you know, analytic systems for blockchains improve. Um, It's 437 00:26:09,960 --> 00:26:13,320 Speaker 1: actually like, if you're trying to do something that is 438 00:26:13,359 --> 00:26:16,160 Speaker 1: against the law, it's actually against your interests to put 439 00:26:16,200 --> 00:26:19,080 Speaker 1: it on the blockchain because it never goes away. Right. 440 00:26:19,480 --> 00:26:23,840 Speaker 1: So while the traders are anonymous, um, you know, someone 441 00:26:23,880 --> 00:26:25,840 Speaker 1: with a badge and a gun who wants to find 442 00:26:25,880 --> 00:26:27,520 Speaker 1: out who they are will be able to I guess, 443 00:26:28,200 --> 00:26:32,879 Speaker 1: is the bottom line? Right? Yeah? Stand clear of the 444 00:26:33,000 --> 00:26:37,280 Speaker 1: craziest things we saw in markets this week. Alright, Uh, 445 00:26:37,600 --> 00:26:39,960 Speaker 1: great conversation, guys. I gotta tell you that we have 446 00:26:39,960 --> 00:26:43,200 Speaker 1: a tradition on this show where we take turns discussing 447 00:26:43,200 --> 00:26:45,560 Speaker 1: the craziest thing we saw in markets this week. So 448 00:26:46,119 --> 00:26:48,040 Speaker 1: I have a feeling in the defied space. You guys 449 00:26:48,040 --> 00:26:51,399 Speaker 1: have seen some crazy things. Anything stand out down Zaki, 450 00:26:51,480 --> 00:26:55,520 Speaker 1: any crazy things you've you've witnessed recently? I would say 451 00:26:55,520 --> 00:26:58,080 Speaker 1: the most interesting thing that has been happening is just 452 00:26:58,119 --> 00:27:00,520 Speaker 1: like to me, is like the acceleration of the liquid 453 00:27:00,560 --> 00:27:04,720 Speaker 1: staking space. Um so, I think Go commented on it briefly, 454 00:27:05,240 --> 00:27:07,280 Speaker 1: and there's a project that where we both collaborate on 455 00:27:07,320 --> 00:27:10,040 Speaker 1: called light oh um that makes sort of what they're 456 00:27:10,040 --> 00:27:14,679 Speaker 1: called staking derivatives, so derivatives from your steak gasset um 457 00:27:14,760 --> 00:27:18,240 Speaker 1: and these things have just exploded, like um point five 458 00:27:18,280 --> 00:27:21,960 Speaker 1: percent of all eight is all is now in staking derivative, 459 00:27:22,800 --> 00:27:25,840 Speaker 1: which is just my boggle. That is pretty mind boggling. 460 00:27:26,560 --> 00:27:30,639 Speaker 1: How about you, dog, have you seen anything crazy this week? Uh? No, 461 00:27:30,800 --> 00:27:34,000 Speaker 1: markets are pretty boring in crypto right now, and if 462 00:27:34,000 --> 00:27:38,760 Speaker 1: they're not mirrored, I don't trade stocks. So well, I 463 00:27:38,800 --> 00:27:41,840 Speaker 1: was gonna say, maybe the craziest thing is that it 464 00:27:41,840 --> 00:27:43,879 Speaker 1: seems like the volatility has calmed down, you know, at 465 00:27:43,960 --> 00:27:46,680 Speaker 1: least you know I'm looking at bitcoin, it's it's kind 466 00:27:46,680 --> 00:27:49,960 Speaker 1: of been stuck in this range, you know. Um, I 467 00:27:50,000 --> 00:27:51,720 Speaker 1: don't know what do you guys think is that? Is 468 00:27:51,760 --> 00:27:55,400 Speaker 1: that bound to is the volatility bounder erupt again there's 469 00:27:55,640 --> 00:27:57,320 Speaker 1: or is this kind of a new normal for for 470 00:27:57,359 --> 00:27:59,879 Speaker 1: bitcoin and and other the other big cryptos to kind 471 00:27:59,880 --> 00:28:05,720 Speaker 1: of kind of be sort of boring. Oh no, I mean, 472 00:28:06,440 --> 00:28:08,800 Speaker 1: like as I've been doing this for six years, like 473 00:28:08,920 --> 00:28:14,080 Speaker 1: there's there's the volatility is our friend, and I don't 474 00:28:14,320 --> 00:28:18,399 Speaker 1: I never think he's gone for long and he's always there. 475 00:28:18,880 --> 00:28:20,400 Speaker 1: Just when you thought it was safe to go back 476 00:28:20,400 --> 00:28:22,800 Speaker 1: in the water, you know, it's found it's about to 477 00:28:22,800 --> 00:28:26,120 Speaker 1: come back, like like the you know, Jason and those 478 00:28:26,119 --> 00:28:28,880 Speaker 1: old Halloween movies. All right, Well, I got a crazy thing, 479 00:28:29,119 --> 00:28:32,080 Speaker 1: and uh it's tailored to you two guys, because I 480 00:28:32,119 --> 00:28:34,760 Speaker 1: wanna sort of bring you into the conversation on it. 481 00:28:34,760 --> 00:28:37,920 Speaker 1: It's a it's a bloomberg story about sort of all 482 00:28:37,960 --> 00:28:41,440 Speaker 1: the scams going on in the crypto world. And I 483 00:28:41,480 --> 00:28:44,880 Speaker 1: love you know the Again, I'm a novice to all 484 00:28:44,880 --> 00:28:46,800 Speaker 1: this stuff, so I'm just learning of the term rug 485 00:28:46,840 --> 00:28:49,160 Speaker 1: pull and getting rugged, which I find to be just 486 00:28:49,200 --> 00:28:53,000 Speaker 1: the hilarious concept of hilarious term and and Honey Potts 487 00:28:53,560 --> 00:28:55,920 Speaker 1: and we had this big, long feature story about some 488 00:28:56,080 --> 00:28:58,600 Speaker 1: of the these big scams and this site out there 489 00:28:58,640 --> 00:29:01,800 Speaker 1: called Token sniff or Um, which I guess is an 490 00:29:01,800 --> 00:29:05,880 Speaker 1: attempt to try to weed out the real scams in crypto. 491 00:29:06,280 --> 00:29:09,040 Speaker 1: You know, they have a name UM that I probably 492 00:29:09,040 --> 00:29:12,000 Speaker 1: can't say on a family podcast. It starts when with 493 00:29:12,040 --> 00:29:14,640 Speaker 1: an S rhymes with bitcoin. And you guys know what 494 00:29:14,640 --> 00:29:21,040 Speaker 1: I'm talking about. But to me, you know, it's got 495 00:29:21,040 --> 00:29:23,320 Speaker 1: to be frustrating to guys like you. Like here, you 496 00:29:23,320 --> 00:29:25,080 Speaker 1: guys are and I don't want to make you blush. 497 00:29:25,080 --> 00:29:26,640 Speaker 1: I don't want to flatter you, but two guys who 498 00:29:26,680 --> 00:29:30,840 Speaker 1: are obviously super smart. You know, Uh, Dough, you went 499 00:29:30,920 --> 00:29:35,320 Speaker 1: to Stanford, You've got a resume that includes time at Microsoft. 500 00:29:35,360 --> 00:29:39,840 Speaker 1: I mean, you know you're in this for legitimate purposes, 501 00:29:39,880 --> 00:29:42,720 Speaker 1: but you know, all around you guys are you know, 502 00:29:42,760 --> 00:29:47,400 Speaker 1: for every Dough and ZACKI out there doing innovative uh 503 00:29:47,680 --> 00:29:50,719 Speaker 1: you know, real world stuff, there's a million scam artists. 504 00:29:50,720 --> 00:29:53,160 Speaker 1: And I just wonder, does it it must be frustrating, 505 00:29:53,200 --> 00:29:56,040 Speaker 1: And is it's in some way aheadwinds what you're trying 506 00:29:56,040 --> 00:30:00,240 Speaker 1: to accomplish, and and to two greater adoption of the 507 00:30:00,240 --> 00:30:04,760 Speaker 1: projects that you're working on. I'll say this though, uh, 508 00:30:04,840 --> 00:30:08,360 Speaker 1: you know, so like I spend all of my time 509 00:30:08,560 --> 00:30:12,200 Speaker 1: thinking about security, like how these protocols were survived and 510 00:30:12,240 --> 00:30:15,040 Speaker 1: the most adverse in the worst of circumstances. You know, 511 00:30:15,400 --> 00:30:19,240 Speaker 1: you spend your time preparing for the worst. And if 512 00:30:19,240 --> 00:30:21,640 Speaker 1: there were there were no adversaries out there, if there 513 00:30:21,720 --> 00:30:24,360 Speaker 1: was nobody, if there was nobody trying, if there were 514 00:30:24,400 --> 00:30:27,560 Speaker 1: no scams, if there were no um, we wouldn't actually 515 00:30:27,560 --> 00:30:30,800 Speaker 1: really know if any of the stuff works. Um. Uh 516 00:30:30,840 --> 00:30:34,239 Speaker 1: and uh, So you know, I do a little bit 517 00:30:34,280 --> 00:30:38,080 Speaker 1: embrace the the adversarial nature of crypto the fact, and 518 00:30:38,400 --> 00:30:41,479 Speaker 1: you know that you just assume that every every message 519 00:30:41,480 --> 00:30:43,600 Speaker 1: that you get in your telegram, every email you get, 520 00:30:43,680 --> 00:30:46,960 Speaker 1: somebody's probably trying to trick you for some reason. Um. 521 00:30:47,040 --> 00:30:49,840 Speaker 1: And uh, it's not It's not the worst way to live. 522 00:30:51,760 --> 00:30:53,800 Speaker 1: How about your dough How do you react to all this? 523 00:30:53,840 --> 00:30:55,440 Speaker 1: I mean, I guess part of it is, you know, 524 00:30:55,560 --> 00:30:57,120 Speaker 1: I know you do a lot of podcasts, you do 525 00:30:57,160 --> 00:30:59,000 Speaker 1: a lot of interviews. Is that part of it just 526 00:30:59,040 --> 00:31:03,000 Speaker 1: getting yourself out an explaining your story and what you're 527 00:31:03,000 --> 00:31:06,680 Speaker 1: doing and trying to educate people that way. Yeah, I mean, 528 00:31:08,240 --> 00:31:11,560 Speaker 1: you know, I think a large part of what makes 529 00:31:11,600 --> 00:31:14,480 Speaker 1: these protocol stick is sort of like a common philosophy 530 00:31:14,520 --> 00:31:18,440 Speaker 1: that stitches people from diverse blackgrounds together and then in 531 00:31:18,520 --> 00:31:21,160 Speaker 1: order to have that sort of connective tissue, you need 532 00:31:21,200 --> 00:31:23,960 Speaker 1: sort of a common vision and a common story that 533 00:31:24,000 --> 00:31:26,160 Speaker 1: people can believe in. And the best way to be 534 00:31:26,160 --> 00:31:29,880 Speaker 1: doing that UM for Better for Horses, the podcast circuit, 535 00:31:30,040 --> 00:31:33,200 Speaker 1: So which is why I do this UM. In terms 536 00:31:33,240 --> 00:31:35,440 Speaker 1: of scams, though, I think what's interesting is that in 537 00:31:35,440 --> 00:31:38,840 Speaker 1: two thousand seventeen, there there were no projects that were 538 00:31:38,840 --> 00:31:41,760 Speaker 1: being used. So in some in some cases, like you know, 539 00:31:41,880 --> 00:31:44,640 Speaker 1: distinguishing the scams, if you will, from the non scams 540 00:31:44,840 --> 00:31:47,080 Speaker 1: was not possible because none of them had any users 541 00:31:47,080 --> 00:31:49,880 Speaker 1: in the in the first place. So the the only 542 00:31:50,160 --> 00:31:53,640 Speaker 1: real difference was the founder's intentions, which is not possible 543 00:31:53,640 --> 00:31:57,760 Speaker 1: to decipher against the decentralized vertical so that's really hard. 544 00:31:58,160 --> 00:31:59,959 Speaker 1: But today that's kind of different. So if you look at, 545 00:32:00,160 --> 00:32:02,720 Speaker 1: you know, some of the POP assets and uh, you 546 00:32:02,720 --> 00:32:05,320 Speaker 1: know coin market cap, it's the market is still inefficient. 547 00:32:05,800 --> 00:32:09,200 Speaker 1: There are still lots of garbage UM in the CMC 548 00:32:09,280 --> 00:32:12,480 Speaker 1: pop undered, but I would say that's sort of changing 549 00:32:12,520 --> 00:32:17,240 Speaker 1: as the most more used, more useful assets are sort 550 00:32:17,280 --> 00:32:20,000 Speaker 1: of bubbling up to the top, whereas UM assets that 551 00:32:20,040 --> 00:32:22,680 Speaker 1: are not useful are falling down. Yeah, I guess there's 552 00:32:22,680 --> 00:32:24,720 Speaker 1: a bit of you know, Darwinism to it. You know, 553 00:32:24,800 --> 00:32:27,080 Speaker 1: the strong ones will rise to the top and the 554 00:32:27,080 --> 00:32:30,080 Speaker 1: rest will you know, people grow word over, you know, 555 00:32:30,160 --> 00:32:33,480 Speaker 1: the sort of eye popping you know, one day gains 556 00:32:33,520 --> 00:32:37,440 Speaker 1: that you see, we'll stop being as frequent. I suppose 557 00:32:37,480 --> 00:32:42,840 Speaker 1: I don't know who knows really right, Well, guys, uh, 558 00:32:42,920 --> 00:32:45,360 Speaker 1: I'll just say I've been expecting the Doge point story 559 00:32:45,360 --> 00:32:48,680 Speaker 1: to like come to an end for for forever, and 560 00:32:48,680 --> 00:32:52,640 Speaker 1: it's just like never. Ya. How do you explain that, Zachie? 561 00:32:52,680 --> 00:32:55,720 Speaker 1: I mean, is it um you know? To me, it's 562 00:32:55,760 --> 00:32:59,200 Speaker 1: just it's almost like the the humor value of it, 563 00:32:59,240 --> 00:33:02,800 Speaker 1: the meme value, love it. It's just enough to draw 564 00:33:02,880 --> 00:33:05,880 Speaker 1: so many people into it, regardless of the sort of 565 00:33:05,880 --> 00:33:09,280 Speaker 1: the fundamental story behind it. I mean, what's your take 566 00:33:09,320 --> 00:33:12,880 Speaker 1: on that. I have a very distinct take on it, 567 00:33:12,920 --> 00:33:16,160 Speaker 1: so it won't take very long. The the thing about 568 00:33:16,200 --> 00:33:19,760 Speaker 1: the assets that DO and I work on is the 569 00:33:19,840 --> 00:33:24,520 Speaker 1: narratives are complex. There's substance, there's real work on computer 570 00:33:24,640 --> 00:33:27,680 Speaker 1: science and cryptography and stuff like that that's behind this. 571 00:33:28,360 --> 00:33:31,200 Speaker 1: And as a result, if you want to hold those assets, 572 00:33:31,200 --> 00:33:33,760 Speaker 1: participate in those communities like you have to you have 573 00:33:33,800 --> 00:33:36,480 Speaker 1: to sort of become part of that narrative, and the 574 00:33:36,880 --> 00:33:40,920 Speaker 1: barrier to that is very hot. Um And the substancelessness 575 00:33:40,960 --> 00:33:45,240 Speaker 1: of doge and and it's sort of of compatrions is 576 00:33:45,240 --> 00:33:47,800 Speaker 1: a real asset for building sort of a meme driven 577 00:33:47,840 --> 00:33:52,280 Speaker 1: community because there is no narrative, there is no big idea, 578 00:33:52,400 --> 00:33:56,000 Speaker 1: there's there's nothing to it, and so then it really 579 00:33:56,080 --> 00:33:59,800 Speaker 1: is open to everyone. And so like the sort of 580 00:34:00,000 --> 00:34:04,280 Speaker 1: audaism of of these of these cryptocurrency of this kind 581 00:34:04,280 --> 00:34:06,440 Speaker 1: of asset, I sort of starting to figure out why 582 00:34:06,520 --> 00:34:09,600 Speaker 1: it works, um uh. And it seems like it doesn't 583 00:34:09,600 --> 00:34:12,200 Speaker 1: make sense in the very long term, but it's you know, 584 00:34:12,360 --> 00:34:16,200 Speaker 1: for a community driven thing, just like having zero substance 585 00:34:16,320 --> 00:34:21,480 Speaker 1: whatsoever has become something of an asset. Yea ept calories 586 00:34:21,520 --> 00:34:26,040 Speaker 1: like junk food, I guess is always going to be appealing. Well, guys, 587 00:34:26,239 --> 00:34:28,600 Speaker 1: I really appreciate your time. I think that's all the 588 00:34:28,640 --> 00:34:31,200 Speaker 1: time we have for this. So I know it's you're 589 00:34:31,200 --> 00:34:33,440 Speaker 1: in South Korea. I know you got up early for this, 590 00:34:33,520 --> 00:34:35,600 Speaker 1: so I appreciate that. Zaki, I'm not inn sure where 591 00:34:35,680 --> 00:34:40,279 Speaker 1: you are, but Paul, I'll tell Okay, So uh, well, 592 00:34:40,320 --> 00:34:43,120 Speaker 1: I the wonders of zoom We can all meet up 593 00:34:43,760 --> 00:34:46,080 Speaker 1: from all corners of the world like this, and guys 594 00:34:46,120 --> 00:34:49,600 Speaker 1: really appreciate it. And uh, you know, anything new and 595 00:34:49,719 --> 00:34:51,920 Speaker 1: exciting comes along in your space, let you know, and 596 00:34:51,920 --> 00:35:03,640 Speaker 1: maybe we can do it again. Yeah, thank you. What 597 00:35:03,760 --> 00:35:05,920 Speaker 1: Goes Up? We'll be back next week and southern. You 598 00:35:05,920 --> 00:35:08,480 Speaker 1: can find us on the Bloomberg Terminal, website and app 599 00:35:08,640 --> 00:35:11,480 Speaker 1: or wherever you get your podcasts. We don't if you 600 00:35:11,480 --> 00:35:13,440 Speaker 1: took the time to rate and review the show on 601 00:35:13,480 --> 00:35:17,120 Speaker 1: Apple podcast so more listeners can find us, and you 602 00:35:17,160 --> 00:35:19,839 Speaker 1: can find us on Twitter, follow me at Ring Anonymous, 603 00:35:20,160 --> 00:35:24,279 Speaker 1: and also follow Bloomberg Podcasts at podcasts. Thank you to 604 00:35:24,360 --> 00:35:26,359 Speaker 1: Charlie Pelo, Bloomberg Radio and the voice of the New 605 00:35:26,440 --> 00:35:29,400 Speaker 1: York City Subway System. What Comes Up is produced by 606 00:35:29,440 --> 00:35:33,680 Speaker 1: Tofur Foreheads ahead of Bloomberg podcast is Francesca Levie. Thanks 607 00:35:33,680 --> 00:35:38,840 Speaker 1: for listening. See you next time. Than