AI Cracked ColdCard in 8 Minutes ($100M Gone) - The Chopping Block

Transcript

The reason why volatility is so high in AI is that nobody can predict anything. People keep getting surprised. You see like half a trillion dollar deltas in the open and closes on these markets where like Amazon and Apple are getting repriced 15% on a day. Like these things are trading like shitcoins. And why is it happening? It's happening because nobody can predict anything. >> Not a dividend. It's a tale of two fun. >> Now your losses are on someone else's balance sheet. >> Generally speaking, airdrops are kind of pointless anyways. >> Unnamed trading firms who are very involved. Solic is the ultimate >> DeFi protocols are the antidote to this problem.

>> Hello everybody. Welcome to the chopping block. Every couple weeks the four of us get together and give the industry insiders perspective on the crypto topics of the day. Quick intro. First we got Tom the DeFi maven and master of memes. >> Hello everyone. >> Next we got Tarun the gigabrain and grand puba at gauntlet. >> Yo. >> Next we got Robert the cryptoconnoisseur and zar of superstate. >> Good evening. And I am a Steve the head hype man at Dragonfly. We are early stage investors in crypto. I want to caveat that nothing we say here is investment advice, legal advice, or even life advice. Please see blocks at XYZ for more disclosures.

>> So boys, it's good to have you all back together. We have an interesting docket this week. Starting off with bad news cuz that's how we always like to do the show. Always. >> First bad news. First bad news of the week is a exploit in crypto of a wallet called Cold Card. Now, I have not heard of cold card up until this exploit. >> That means you don't follow enough Bitcoin maxi. >> Yeah. You're not a Bitcoin maxi. It's a Bitcoin maxi. It's a Bitcoin maxi. >> Have you guys heard of it? Have you guys heard of it? >> Yeah. Yeah. Yeah. >> Yeah. You heard? >> I heard of it this week. >> Yeah. Oh, no. No. I heard >> Okay. So, so Robert and I both first heard of it this week. Tom and Tun have heard of it before.

>> Do you remember this guy NVK? >> Like this Bitcoin Maxi account from like 10 years ago. Very popular. That's the person who made cold co. >> Okay. All right. >> Started the company. Yeah. >> So, Cold Card very unfortunately. So, Cold Card is a is a very minority vendor in the wallet space. They only do Bitcoin wallets. So, most of the you know, if you think of like Ledger or Treasure, usually these are like multi-chain wallets. Cold card, Bitcoin only. So, it's really appealing to Bitcoin maxis. Judging from the numbers that they have published, it's probably something like 1 to 2% market share of the Bitcoin wallet ecosystem. So, it's a it's a pretty minority vendor. their their their whole thing is that they're open source and they're Bitcoin only.

Now, they suffered unfortunately a very massive exploit. It looks like so far there's been almost a hundred million dollars in Bitcoin that's been drained from cold card wallets. Now, these are cold wallets or sorry, not not cold wallets, these are hardware wallets. So, this means that the key should have been generated on device and only stored in the hardware. Therefore, the only time it should ever have access to the internet is when you plug it into a machine and do a transaction. So, how are these machines all getting hacked? Well, it was discovered that there's a vulnerability in the random number generation on these devices. Okay. Now, this vulnerability was introduced 5 years ago in a firmware change that some developer basically like just changed some, you know, random macros or

definitions in some C++ code seemingly to just like get some code to compile and they didn't really seem to understand what was going on. They wrote a one-word commit on the code change that led to this massive bug. And basically, it went from a hardware wallet that's normally using very robust ondevice RNG or random number generation, which is the entropy that's used to generate the key, and instead fell back to some very weak softwarebased random number generation, which is very easy to crack. So these insecure keys were getting generated for the last five years until this weekend it was discovered that this vulnerability was getting exploited.

Presumably somebody pointed their lasers of you know their their AI agents looking at this code trying to find out what could have been going wrong that caused all these keys from the same vendor to get hacked. And reportedly somebody used quad code to look at this code and found the vulnerability in eight minutes. Now, this vulnerability that was found through cloud code, people were saying, "Oh, this might have been um contamination because maybe it was searching the web." Uh, and so somebody else took GLM 5.2 in open model, gave it no internet access, and was able to find this bug in 20 minutes.

Now, I was able to go back and do a little bit of math. 20 minutes of GLM 5.2 cost about $2. Meaning that this team, whoever they were, I obviously don't know them. It did not seem they did almost anything with respect to using AI to monitor their own code for vulnerabilities and kind of harden the code that they were writing which kind of at this point given where we are in the ecosystem seems incredibly delinquent. So obviously this is a tragedy very unfortunate for the people whose money was stolen because it's very difficult to get Bitcoin back once it presumably it was it was hacked by sophisticated people. They they did ship a firmware upgrade over the weekend.

Obviously, too little too late. If you have a key that was generated on one of these uh during this period of time, doesn't really matter. You have to go and regenerate the key and go move to a new address if you want to keep your funds secure. Uh but probably anybody who's vulnerable, very likely you you've already been swept. But my understanding is that there were three waves. First wave was big accounts, second wave was smaller accounts. Oh, there's a fourth one now. There may be a fourth wave of people just gathering up dust or something. And and obviously it's possible that these are not the same attacker. Once over the weekend, it was confirmed that this was going on. Anybody can do this. This is very trivial to do if you have a weak RNG. So a lot of people were saying this is the

death of self-custody. I think Nicaro was out there saying this is the death of Bitcoin maximalism. What what are we calling the death? Obviously it's probably the death of cold card. What is this the death of if anything responses? >> It's the death of two things. one cold card as they should, right? People ridiculed them as being a fivep person company, you know, rolling their own, you know, security, all of these things, right? Building hardware is extremely tough, right? All sorts of things. How could anyone trust that again? I think, you know, cold card, this will be a learning experience for everybody. I hope that it's the death of open-source projects not being audited by white hats

first with all the tooling that's available. Right? To your point, how could they not have pointed the candidate themselves, right? That's crazy, right? any open source project at this point, whether it's a smart contract, you know, running a D5 protocol, whether it's some other open source, anything, it doesn't hurt to train the security budget on yourself or on a friend's project or whatever. You know, it's hilarious that we got to this point where, you know, such a core bug that compromised randomness basically based on >> the main thing, your only job as a hardware wallet. main job of a hardware wallet based on like a broken if

statement. It was like if you know this like we're good otherwise fall back to this horrible library. It's like turns out we weren't making secure hardware wallets for 5 years. Fine, whatever. Hopefully it's the death of people not taking the time to audit open source things. Hopefully this like inspires people, not the black hats, but the white hats and people maintaining projects and building open source things. To your point, all of this is open source. There's incredible models now. Run everything you have open source through the models.

>> The death of apathy. How do you react? >> That's the word. Death of apathy. >> Death of apathy. >> I mean I I assume they had this moderate and whatnot. I mean I agree. >> I I mean I would be shocked if they had zero. >> Yeah. But are humans gonna find this issue right? I actually think there is a thing about the Bitcoin maxi developer community where they don't believe in a lot of, you know, it's like it's like the seed oil thing. It's like it's like they're they're like the RFK of security practices. >> You think they're getting seed oil? >> They don't get they don't getated. I remember I remember there were a bunch of exchange hacks for bad entropy generation historically and there were all like these like Bitcoin only exchanges that didn't have to do entropy generation for multiple different types

of key pairs and different signatures and stuff. So like they weren't as careful as like someone who knows can has shot themselves in the foot. And I think that Maxis is always there's a sort of like this almost they they overmed themselves into this uh you know verify don't trust thing where they like were like well we verified once you know like the the idea that they have to do it again and it wasn't perpetual is like something that I think is like a especially the Bitcoin developers obviously Bitcoin development basically is non-existent nowadays but the the people who kind of stopped a lot of the development like the miners and large

holders in some sense are the in part of the problem here because I feel like there were a lot of people trying to make upgrades make changes and it was like nope no bitcoin doesn't need to be changed we're done we're oified forever and that like even applied to users wallets whatever so I'm not as surprised cuz I remember like for instance like when a bunch of L1s launched with BLS signatures where you need way more entropy than like a normal ECDS SA or kind of stuff like that. There were like exchanges that were doing crazy ass entropy ceremonies, right, where they would like have like five different laptops not connect to the internet brand new generating entropy and then they would like smash them with a hammer and record the video

of that as proof of like destruction or whatever. And I'm like the amount of entropy that my TI83 has, you know? It's like all right, this is more an incompetence thing also a little bit, right? because like there was there's a little bit of hubris in the Bitcoin maxi wallet community in my opinion. >> Yeah, I mean fair enough. I think uh it does remind me of like the uh vanity um address generator bug in in sort of Ethereum land from a couple years ago where it's like >> Yeah, exactly. It's very >> core that you don't think about it like when people think of sort of attack services. I mean, as you've even sort of seen recently, it's like, hey, does this transaction hash that I'm signing actually, you know, end up on on the device? Am I can I see sort of the

result of and state changes from what I'm signing? But like thinking that, yeah, you're using the wrong RNG feels like so kind of kind of past it. But I am also kind of surprised by the how small the hack is actually like 100 mil and cold storage like these days. I mean, it is a lot of money obviously in terms. >> Yeah. But uh I don't know, maybe that's just uh the way the industry is right now. I mean, there were some heartbreaking messages that were getting shared on social media of, you know, people who are like, "Look, you know, I've been spending the last five years scrimping and scraping to get my three Bitcoin and now they're gone and I'm just like, I'm done. I can't do this again." You know, like I thought I did all the right things. I was listening to

what the high priests were telling you to self custody. Don't trust exchanges. Don't buy the ETF. And you know, now my Bitcoin, like I wake up and my Bitcoin's gone. And that is brutal. That is absolutely brutal. Anytime we have a story like this where we're dunking on some company for doing stupid [ __ ] the reality is that there's real people who are just have their lives destroyed by something like this. And it is it is it is heartbreaking. >> The reality, I think, >> do the right thing by getting the niche Bitcoin maximalist hardware wallet, right? that's like the best thing you can do as opposed to getting, you know, Ledger or something that supports all the shitcoin chains and blah blah blah.

Like people thought that that was the right move and they listened to people in the community. >> I think Nick Carter's point actually on that part resonated for me is that the idea that there's like this this virtue coming from Bitcoin maximalists that if you follow them, you'll be okay. I feel like that's really gone away. I think it's very hard to believe that these days that with everything changing in the world that Bitcoin maximalists are going to be able to guide you in the direction of what you should do with your life. Are >> they still stuck in a volcano in El Salvador? Like do that [laughter] [clears throat] the other thing the other thing that I think connects to this is that like the economics of AI and of cyber security are making everything really change. And

one of the obvious things that changes is that like humans are not doing this anymore. There's it's not humans on either side, right? Like Robert, you said the word white hats. There are no white hats in the sense that like there's no humans who are going and looking at this and being good Samaritans anymore. The good Samaritan is like a a dev who, you know, looks at some code and is like, "Hey, you know, let me let me chuck this into my opus and see what it thinks after looking for like 3 minutes." Um, and if it says it looks fine, then I'll I'll use it. Right? And so they're using a couple dollars of compute at most to just verify like, hey, does this look sanity check this, right? And if if there's an attack that requires $50 of compute or $100 of compute, they're not going to

find it. Nobody's going to spend $100 of compute on some random, you know, open source thing that they're just taking a look at or that they're a vendor of, they expect the company to do that. And then, of course, the attacker is going to spend $1,000 of compute, $5,000 of compute, you know, hundreds of thousands of compute if they think the prize is potentially hundred million dollars worth of Bitcoin. So the only party that's really able like it used to be the economics of open source was that oh well with open source you have all these humans looking at your code and that means that your code is going to be more secure because all the good people are looking at it are going to outweigh the bad people are looking at it. But in AI I wrote a whole thread about this is that in in the world of AI the AIs

themselves are much less diverse than humans are. AIS are very similar to each other and people are mostly using the same models. So if everyone's using the same models, then every good person, every good Samaritan, quote unquote, who's going to point $10 of compute at your code is going to find is basically going to do the exact same thing. They're going to be duplicating the same work, which means that they actually don't add any security. They're kind of just treading the exact same loop uh and going down the exact same investigative grooves, but North Korea or whoever did this attack is going to spend a lot more money. And the only way you're going to be able to counteract that is the company spending $1,000, $10,000, $50,000 of AI hardening on their software. So it means that open-source no longer is the protection that it once

was. Open source in a way is protection against a nefarious developer, but it's not protection against a nefarious third party, which I think is once the way that we cognized open source. So it it it does kind of change things, right? Really, at this point, when it's AI, it's all about money. It's just how much money are you spending on a frontier model trying to find attacks against this thing and fixing them all. And if you didn't do that, North Korea will, you know, it's as simple as that. >> I mean, I I think agreed. I mean obviously there's other nice things about open source too but even like there's I think like Salana I kind of point to as being you know sort of this this closed source ecosystem but like

obviously we've seen also how good AI is at decompiling and yeah and then obviously making by code or code that it can read it doesn't even really you need to be human readable which is always the issue when you do decompilation so it's like I I don't really know what you know the answer is here and it sort of goes back to what was that open founder from a couple months ago saying get all your money out out of DeFi. But it's like, you know, I think we're like reaching the precipice of like either the code is is 100% airtight or, you know, the leaks are going to get found in the immediate future. >> Yeah. On some level, it sort of doesn't matter whether it's open or closed, right? Because to your point, it can get disassembled very easily by an AI. So, it just increases the fixed cost by $10,

you know, or I don't know, whatever it costs to disassemble your code and like figure out what the original source code was. And then once it's there, it's just, you know, how motivated is the attacker? And the attacker's motivation is going to come from your AUM. It's not going to come from if there was an extra decompilation step. They're already spending way more than $10 trying to break these things. So yeah, I I I really think that the norms that we've had historically about where security comes from are just wrong now. And it feels like the world is not adapting. And it's going to take a few more of these before people do start to adapt. And ultimately what it means is consolidation.

What it means is that like minority little okay here's like this passion project crypto wallet like it's just like those are going to just become impossible to trust because like how much money are they spending on securing this thing I don't know you know how much what are their quarterly sales what what could their budget be how much they raise from VCs how much can they actually afford to spend on every release those are the questions you have to ask yourself and if it's very hard to ask that for coldart or one of these minority vendors it's a lot easier to ask that for Ledger or you know one of these venturebacked ones that that have real meaningful capital. But I think you're going to see this everywhere, right? It's happen it's like with exchanges, with hardware wallets, with smart contracts. Like it's the same

thing happening with smart contracts is that last month we saw actually a very low number of total dollars hacked in DeFi. Actually, over the last two months since April, total dollars hacked in DeFi has been very low. But the number of incidents in DeFi, both two months in a row of all-time highs. So very low numbers of dollars hacked, very high number of hacks, which means most of these hacks are happening on tiny protocols. There's a there's a there's basically like a bloodbath of like 5 million FTV protocol or 5 million TVL protocols that are just getting rated left and right across DeFi. And it's kind of the same thing with Colart, right? Cocart is this tiny player. They have almost no market share. It's like this times a thousand. And you're going

to see this everywhere. When we talked about this AI apocalypse, I think people assumed it was going to be the big guys who are getting hacked, but it's I think it's actually the opposite. I think you'll continue to see this over the next couple years. >> I mean, nothing that we haven't already said. I mean, I think the only thing is um you know, I think open source will have a comeback, but it's going to take a couple years, right? Like it's a little bit like everyone is going to get hacked. I actually think that the closed source people though are like way too overconfident in that they found all their bugs and whereas I feel like in the open source and I think the open source is going to take the bludgeoning first whether it's crypto which is incentivized open source or pure open

source but I think the closed source stuff is actually going to end up having the bigger catastrophe is my bet is that like if I had to bet on like economic damage due to AI tax between open source closed source in terms of largest dollar amount lost. My bet in a fiveyear horizon is the closed source losses will be higher. >> You know, I think to Tom's point it just doesn't matter anymore because AI can just disassemble >> binaries. I think point is maybe like they've had some sort of immunity from a lot of attack so far because it's you know all SQL obviously harder to sort of you know reverse engineer the closed source >> saying open source is going to have more damage right

>> no no no no I'm saying closed source has more damage I'm saying open source takes it up front because it's like easy >> oh I see what you're saying relatively hard but I but I think the longer term in five years if you look at like if I bucketed them in two and say like which had more damage I think it will be closer. >> Got it. >> That's like that's sort of my prediction is that there's a lot there's a lot more you don't you're like in a less adversarial environment in closed source. Obviously the Pareto frontier changing means that like for open source the notion of the adversary has changed a lot. So it's like much harder. But for closed source I just still feel like people's best practices kind of are not very good on this type of stuff. even mission critical close. I just like

still think about how the US Federal Reserve almost wired $1 billion to North Korea off like very minimal like social engineering plus tiny exploit. It's like that was like a billion dollar wire that would have cleared and like Swift would not have done anything to prevent it and they got very lucky on and I'm just like you're telling me the Fed you're telling me the Fed is not going to get hacked? I kind of believe like some central bank is going to get hacked and that's going to be the bigger thing than kind of >> Robert you want to jump in. >> Yeah. I mean we're starting to beat a dead horse but open source is going to be more vulnerable in the short term but because it's more exposed closed source bigger projects the Fed closed source

right like all of these things are huge systems that >> people are complacent because they can't easily see the code. They've been running stuff for 30 years. It's been evolving with just garbage on ancient computers. I mean, it's a mess and it will get wrecked in a much more horrific fashion than the open source things. Eventually, I think open source in general is going to go full circle and feel like early DeFi again, which is like, oh, if it's open source, that's how you know it's safe because every agent out there will analyze it in 0.01 seconds of it being created and prove that it's safe or prove that it's unsafe. And if it exists at all, it's safe, right? And it will become a badge of honor again, but not for a while. Not

until all code is just so thoroughly hardened through its development. >> Yeah. >> I like to say don't trust any code before 2026, period. >> Or like hasn't had >> That's an interesting way to put it. Yeah. Yeah. No, but I think I think that's actually well said is that like in the same way like people like the AI companies will not ingest any data after 2023 because it's just all been polluted by LLMs. In the same way, it's kind of like okay, maybe you shouldn't trust any code written before 2026 because it was all written in such a totally different environment.

>> Yeah, we should be code agist. >> I' I've thought that too. I mean, you know, you see these um um like, you know, 18-year-old, you know, day zeros that are zero days that are like found in like the Linux kernel and stuff like that. But then I think just today it was like there was some like cloudcoded patch in rsync that like introduced some big bug and so to like roll it back and then like um there was some big um supply chain attack and TV. So there's like oh if you're on the older versions you're fine but if it is 6.0 like issue. So it's like and then even like the open source, you know, repos are also just like locking out. They're like not accepting any new PRs because they're just getting overrun with like random slop. So I I don't really know what the

answer is, but it feels like, you know, the new code also obviously has issues. >> I mean, the new code definitely will always have issues. That said, the fact that somebody init immediately found like, hey, this this new, you know, this new patch that you added introduces a a bug, the kind of thing that used to take years for people to figure out. Now it's like, oh, somebody else figured that out in like the span of a day. So there is I I I think that's probably a sign of progress because like of course bugs are getting introduced into new code. It's just really a question of how long it takes and what's the base rate of those bugs getting through. If something gets added and then removed very quickly, that's incredible. That's not how it used to work. At least that's that's that's that's that that's the

perspective that I would take. And I do think also like the harnesses around secure coding are still pretty nent. There's like a lot of different products out there, a lot of people who are using vanilla cloud code, they're not really orienting it around secure coding. I think within a year, you're going to see best practices change dramatically, right? Of course, there's Mythos in Project Glass last wing, there's Daybreak uh from from OpenAI. Most people even in commercial projects don't have access to any of that stuff. So, I think also when you see that disseminate more widely, if everything that they're doing in some very very important open source repo is running through Daybreak or or or uh Project Glass Wing, I think you'll see practices change and like the quality of code significantly increase.

So, I like we know a lot of people who still are working on open source repos, they don't have access to anything. they're just using, you know, vanilla just kind of cloud subscriptions. So, um, okay. So, security stuff aside, another thing happening in crypto governance land is there's a proposal, a new AIP called EIP 8361, and it has people very mad. So, as is often the case when it comes to uh Ethereum governance, this new proposal proposes to taper the ETH staking yield to zero if more than 50% of ETH is staked. So, this was an EIP issued by Pintail uh as well as Justin Drake uh and a number of other kind of crypto uh Ethereum

governance thinkers. Basically the long story short is that they believe that too much ETH is getting staked the yield is too high and they want to create some kind of pressure function within the protocol to prevent too much ETH getting staked because if too much ETH is staked it leads to some centralization. It leads to validators kind of whatever getting too much ownership. It also leads to tax leakage and it means that solo stakers will likely get pushed out in favor of professionals. So there's all these reasons why you kind of don't want to just keep spewing out tons and tons of ETH. So they make this very rational economic argument that hey it's like optimal to only spend this amount and there's too much demand for staking and so it's kind of like this central bank kind of wonkish perspective that we should make the yield go down as the

amount of stake goes up. Okay, proposal makes sense on paper. Uh everybody is vomiting all over this proposal. And why are they vomiting all over the proposal? Answer largely one nominal yields matter. people really like nominal yield. Tun given that you are you run a business based on nominal yield what is your perspective on the uh the EIP? I mean, I guess like from a philosophical perspective, there's kind of this argument that there's Justin and others have had forever, which is like ETH needs to be harder money like Bitcoin. But there's kind of this inherent thing of like if you constantly change your policy, no matter what, even if you end up at like,

hey, I'm like making the supply go down, you still [ __ ] are not hard money. you're not because no one no one believe there's no confidence that in the future this won't change again right like that so I kind of think like this stuff is like very weird it also like feels like the type of thing that's like not going to get passed [laughter] like much more gradual right like where it's like >> they are um >> like doubling the disinflation right and and they had one in like um at the end of last year too they >> right that that also and they and they tapered it and so like it's interesting they're both happening At the same time, it it does feel like it's also like a very bare market thing for your asset when whenever anyone has to talk about this. I think the interesting thing

though is like the nominal yield from staking like no one gives a [ __ ] about leverage staking anymore, right? Like it's like everything's moved to stable coin yield. Like I arguably the staking yield complex has like really collapsed, but that's why you saw a ton of M&A from staking providers, right, over over the last month. >> Isn't the isn't isn't the TVL and like Lido and Ian layer still enormous? Yeah, but like people are not looping, right? Everyone's too afraid of that after all the hacks. People are not like like and they came down a lot, right? So there there's the the leverage exposure to staking has gone down which is actually just overall tampen demand and I think like the stable coin yield complex is like much stronger to be honest right now just in general

probably partially because of RWA demand partially because just like people feel safer doing that and arguably all the new users who are coming from neo banks are like not touching ether soul right they're pretty much only touching stable coin so I I think like it it's sort of a weird thing. There's also a very an interesting argument that I think a lot of the kind the irony is like this type of thing has like divided the um what I would call the Raspberry Pi ETH consortium because like there's the one side which is like the we want hard money but also Raspberry Pies and there's the other side that's like Raspberry Pies will be uneconomical if we do this and so I think that's like that's like the two sides I've been

watching fighting about this cuz like they used to both believe in the same kumbaya drink out of the same fruit punch bowl, but like now it's like one of them views the other one as having poisoned it. And it's kind of an interesting like watching the schisms, the micro schisms of Ethereum are kind of funny to me as just like over time inevitable. I think the Salana one is more honestly a lot more wellfounded. Like they it read the Salana proposals, I think like they did actually put a lot more effort. This one feels like they drew a curve and are like all right well this seems good like great like hard money. It's very thoughtless kind of comparative like the amount of research that went into it compared to the Salana

proposals which is weird to say because like Ethereum used to be the place you would see way more thought go into the proposals like this but the Salana proposals are just fundamentally better researched better studied and I feel like the discussion there the ETH one is just like people getting angry and no one arguing with the content of the proposal [laughter] and the Solana one's kind it's so it's like kind of an interesting change of guard. That's like the thing I would I would say >> I I did see a lot of criticism of this EIP was this idea that I think the timeline for this IP is voting is in like 4 days or something and so I think a lot of people were like oh why was this rushed? It kind of seems like this was decided by some cabal and like

everyone in the community hates this and doesn't doesn't want this to happen. Tom, what was your reaction to this? >> Yeah, I mean agreed. I think one yes like even even already like 1559 and and staking was like a huge change in in eth monetary policy and so changing it again just like removes credibility and and more functionally it's like it's such a marginal difference right we're talking about a reduction of of 1% a year in terms of inflation like that is not really what's moving the market around ETH what's moving the market around ETH is developer activity stable coin activity excitement about things that are happening on on the chain So the door just feels like a big distraction.

Like I mean I empathize with sort of the high you know staking rate but like that seems you foreseeable that's happening on on basically every chain. I think every chain now is also realizing their way over paying for security which is why you see chains cutting issuance to to zero or near zero. But I don't know this this feels like the wrong problem to be to be solving and also it's a very sort of minor tweak in the grand scheme of things. I I I think fundamentally if I were, you know, like if we're treating it if if we're doing the the the the the quaint old memes of like if I were the CEO of Ethereum, I would just [ __ ] not touch the inflation curve and only focus on this postquantum stuff. You're going to get a better valuation as hard money if you're the first real scalable

postquantum chain. Like the Bitcoin people can't say that. They're getting their [ __ ] wallets hacked left and right. Instead, you want to do something like it doesn't like, you know what I mean? It's like it's like true like [ __ ] posting naval gazing. And also the proposal reads like [ __ ] It's like a truly horrendous post compared to like like some of the earlier inflation posts for Ethereum were much better research. I spent a lot more. This one is like a meme post. I like I don't even know why the [ __ ] you put this out. It's like a little embarrassing to be honest to me personally. I just like I content quality words. Yeah, >> it does seem philosophically like they're just knee-jerking and trying to like do the right thing >> in the absence of having a more specific

vision. >> But the quantum >> I mean the crops thing, right? Like that. >> Yeah. Yeah. Yeah. That's that's a good target to go to. Like do >> I know this is like I will say >> deck chairs on the Titanic. [laughter] Yeah, I look I'm I'm sympathetic to the argument that like look, you know, having a high staking rate is like nominal yield. You've got tax leakage. It's creating all these weird kind of games. I'm I like I think all those things are correct. And I think if you were designing Ethereum today, maybe you should have had the staking rate be lower and kind of disincentivized very high. Now that we've seen how it all played out, like yeah, you can look at that and say, "Oh, wow. That's really weird that that's what we created as a emergent phenomenon on top of you know

the staking curve that we created. But I think like look if you are thinking of this as a central bank you kind of can't just like great let's jack up rates to 11 because like my model says that we should because you would just like you would create so much chaos and you would lose a lot of confidence and like that's the other part of being a central bank that I feel like is being ignored here. The reality is >> that was what I mean that the changing your polic like look at the reaction to the the current Fed governor, right? It's like this it just feels a little bit like that. >> Yes. Yes. So like the reality is that there's so much that's been built on the assumption that this is how staking works and if you rug that it breaks a lot of stuff. It's going to cause a huge

unwind in DeFi. going to cause all of this [ __ ] that is very foreseeable that like your job as a as a central bank is to maintain stability and like that is a suddenly saying like guess what rates are basically zero now no one's going to do anything everyone's going to unwind a bunch of people are going to unstake there's going to be massive unstaking queue all a lot of protocols are going to go to zero uh because basically they have no business model anymore a lot of dats are going to be like well I have no value ad over just you know holding an ETF because now you know my nominal staking yield is zero so I got to do some weird weird structured product. I got to start taking risks. There's all these flow through effects in the economy in the same way that like look

if you jack a race to 11. A lot of stuff breaks, you know, a lot of people default in their homes. A lot of businesses explode, a lot of financing breaks, you know, a lot of debt assumpt like lots of things depend on relative continuity in an economy that are, you know, just doing this very gross highlevel model of oh well, you know, what's our what's, you know, our star is this, so therefore let's move the rate there. like, yeah, you that's not you don't do that. So, I think that's what they're perceiving. It's not being explained in those terms, but I think that's what they're perceiving when everyone is throwing up on this cuz everyone has exposure to something that would explode if suddenly rates were going to go to zero in DeFi.

>> Even it's not even just DeFi, right? It's like the CFI complex also kind of rely like keep people keeping their assets in crypto relies on some of this, right? Like a lot of people are like, "Well, I have a bunch of unrealized gains. I don't want to get taxed on them, but I do want to get some yield to keep it in in Coinbase or keep it in wherever." Right. And like now they might look at this and be like, "Well, actually, I might just take the gains and go to AI, right?" Like like that. That's like exactly so much like so much stupid stuff where I'm like, >> but that my point is Robert's point rearranging deck chairs on Titanic.

Exactly the correct metaphor. Like focus on something that actually gives the thing value, not like picking winners and losers in a different way slightly. Like >> right >> and [laughter] like the post doesn't get the post like it reads like it was like a few years. It's like it's it's kind of nonsensical to me that you would write this in 2026. >> Right. Right. Right. >> True doesn't like the post. For those of you if you [laughter] if you didn't know, turn things the post was not written well. Um, okay. I think we can move on. I feel like people >> It's like in a world of flop. It's a world of flop. [laughter] >> Well, you want something better than >> Give us one more. One more, Tun. One

more. >> Yeah. I don't know. That's just my That's my It It was a little sad cuz like Ethereum, you know, I I feel like brought a lot of people into the world on [laughter] >> on like good qual like research content and quality and this just makes me want to shoot myself. >> How far they done fallen? Okay. Um well speaking of wanting to shoot yourself um one of the big stories is uh one of the big stories is the collapse of a fund uh a very high-flying fund not in crypto but in AI called situational awareness. Uh, of course this is founded by Leopold Ashen Brener, the young wonderkint who wrote this very famous post called situational awareness

calling this AI super cycle. U he was able to raise a fund that went all the way from um I don't know how much he raised like five six billion I think total he raised uh ran 45 billion started >> started very small right right but total capital raised total capital raised >> um I I read it was somewhere in the some some number of billions that he raised of total capital ran it up all the way to 45 billion at peak making him one of the largest US hedge funds and then over the course of a few days was forced to run a fire sale went down all the way -60 67% in in July after gaining almost 400% plus in June was up over 1,500% since inception but was levered forex when of course there was this huge

wipeout in a lot of AI names uh and a huge wipeout in the Korean stock market. Um a lot of his uh long short book just totally blew out and basically he was forced to sell his entire liquid book to uh Citadel. So Citadel bought the whole thing at a significant discount. Um he's now he's still alive 10 billion aum I think a large portion of that is just his private anthropic exposure but he still has some public book that he's continuing to trade legendary wipeout of a fund that we have seen few times we have seen it in crypto before very reminiscent of three arrows capital in many ways although unlike three arrows capital Ashen Brener survived where uh and of course there was somebody to buy his book that for three

arrows of course not not not so much so thoughts on this event. >> It's a big event. Luckily, it has nothing to do with crypto. It's fun to talk about a topic that shows that there's financial disasters in traditional financial markets consistently, too. This one reminds me more of like Archagos or like one of those like people that just like flew way too close to the sun, way too aggressively, right? It was a hedge fund. Flew way too close to the sun, way too.

>> Still is a hedge fund. Still is a hedge. >> Still is a hedge fund, right? >> Still is a hedge fund, but my my my liquidity cost just went up because the only thing left is is a liquid position. >> Correct. And I don't know the exact Yeah, I don't know the exact terms of how it's structured under the hood. There's been some conversation that certain uh private investments like Anthropic are side pocketed and so, you know, more recent investors >> are 100% wiped out. And if you do the math, you know, based on how much the fund declined, the only thing left was the private stake.

>> Well, no, no, no. They still have they still No, no. They still have Publix. He said in the investor letter that they still have a public book. >> Yeah, but he's also been raising more money. I mean, he sold based on what I >> down a lot. They must be down a lot, but they're up this year. So, if if private investors came in in January, they're up 80% >> year to date. However, if they're not in the sideocket, >> that's on the private market, >> right? If they're not in the side pocket, then they may be down. >> Yeah. >> Yeah. >> So, I don't know the exact math and accounting that they're using, but it sucks. Like, he basically wiped out a lot of value on highly levered bets, right? He's extremely young. I feel like this is a mistake that everyone makes in

their 20s, you know, at some point. I think we're going to be talking about him for a long time because, you know, anyone who can reach this level of venture this early is not going away. Never remember John Merryweather raised multiple maybe four hedge funds after LTCM and they were bigger than LTCM. So like it's >> absolutely right. >> Absolutely. >> I feel like the bigger your loss the higher your chance of raising your next fund. That's like kind of the lesson I think finance has always taught you which is like for some reason everyone unfortunately rewards the not unfortunately sometimes it's fortunate but but but there are cases where it's unfortunate they reward the uh SPF side of the log wealth debate

>> yeah but too much leverage blew up sucks >> I do think it's funny you know FT there's like so many crypto thing lineage to this story also right like the fact that you worked at future fund and stuff, [laughter] >> right? So, Ashen Brener worked at FTX uh on the future fund which is like their charitable arm. He was part of the effective or still is part of the effect of altruism movement and is marrying actually married two days after his fund blew up, married the chief of staff at Anthropic. So, which of course was invested in by FDX.

FDX led their series A I think it was. Um, so there is a weird kind of extended crypto universe element to the story. Although Asher himself was never actually in crypto. Tom, did you have a reaction to the story? I don't really have any take other than what people have have said so far but uh it is you know there is still this like I don't know era of of shot and freight still still running around like fintech crypto Twitter where people like mock him for for uh uh you know collapsing but it's like look he's still alive still up and he's still better investor than like >> he's still yeah exactly I I do think that like the the shot in Freud is like a little misplaced cuz like if history is a lesson to you anyone who blew up

this big have a future success like like it's just like inevitable. >> But I do think an interesting thing about this is like the the idea that like you know this was a fund that like raised all of its capital like in SF basically and then like unsuccessful at raising money in New York and so I think it's like kind of fitting that it ended up with a mainly private book. [laughter] It's like it's kind of like almost like a fitting end, you know, like all right, well, yeah, you should just >> I I expect he's going to run it back on the public side. I I think after the story now everybody in the world knows this guy's name.

>> I mean, also it's kind of hard to like beat the index and the Cosby is down 50%. And he was like so correlated to it, right? Like >> I mean, he's crushing the index. No, no, no, no. He's crushing every index. Why? >> No, no, no. Sorry, but he was levered up, you know. >> No, no, but his liquidation. Yeah. Yeah. the liquidation part he had just was you know the old phrase it's like do you have alpha or you just levered beta and then if you have levered beta well then you're [ __ ] because there there will be there's always some probability of draw down big enough to liquidate right >> I know but he wasn't just levered beta he was levered most connected to the AI growth trend >> well that's why I said Cosby because

Cosby the Cosby index became a semi index >> I mean sort of yes >> right but but to be clear that was relatively recent right like the This guy's been doing this for a while. He ran it up from a very small. >> He said, "I'm gonna buy stocks. I'm going to buy stocks that benefit from AI." Boom. He right. >> That was the thesis, right? >> I mean, look, the problem with leverage is really that you can be right on all the on the end points and the path can. >> Yeah, that that's Sorry. That's what I'm trying to get at is the path dependency thing is like clearly what >> you can do the anthropic a and still end up in prison. So, [laughter] >> correct.

Tom, Tom, Tom Tom, Tom Tom. Sometimes you got to have more of these zingers like that. Like holding I feel like you're holding them back from our audience. >> People want zingers. I'll give him more zingers. >> More zingers. >> Tom the Zeist of Zen. Zing. >> What? [laughter] >> I'm a new title for him. >> The Zealot of Zing. >> The Zealot of Zen. >> Okay, that's pretty good. Not bad. That's not bad. >> All right. All right. All right. We'll definitely be hearing more of this kid. I think it's very clear this guy is very very good at what he does and um obviously it's a lesson and anytime somebody blows up they get chasened and it's like one of those memories they keep with them forever. He is never going to forget what happened over the

last uh couple weeks. But um it's very clear like the amount of alpha inside of that office is probably more than any other hedge fund in America. So whatever it is they're doing with respect to the AI cycle, they are absolutely crushing it. and I expect to continue doing so. So, um, now coming back a little bit to cryptoland, uh, one of the things that we've seen is that it's not just AI that's changing, crypto is changing, too. One of the ways in which it's changing is what people are trading is changing pretty dramatically. Uh, once upon a time, the the most traded thing on Robin Hood was crypto and a huge amount of the revenue was coming from crypto, actually, even more so than equities. Uh, that is no longer the case. Uh, but it's also no longer the

case that it's not that it's not that crypto is pulling back, but actually prediction markets have now flipped both crypto and equities. Prediction markets on Robin Hood as of their Q2 earnings are generating more revenue than equities, which is worth 129 million. Crypto worth about 100 million. Event contracts hit 156 million. It's only trailing options. Options now is about a little bit over twice the size of event contracts. Uh, but basically events are an enormous business for Robin Hood. Of course, Robin Hood has been routing a lot of their volume to Kulchi, but increasingly they've been routing more and more to Rothera, which is their JV with Saskuana. And uh we saw the same thing happening in DeFi. So in DeFi, of course, the big story has been trade XYZ. We've talked about it a lot. RWA

volumes are increasing. We just saw two weeks in a row in July that trade XYZ did more volume than the rest of Hyperlid, meaning trading crypto. So RWAS are now flipping hyperlquid volume for almost the entire month of July. So we are decidedly in a new world. Coinbase is seeing the same thing. Uh prediction market revenues are growing dramatically and of course both poly market and kshi are seeing their revenues increase. How do you guys think about this with respect to the future of crypto trading with respect to the future of exchanges? Is everything in everything exchange now? Should we stop thinking about crypto trading as a meaningful line item? I think if you zoom way out and you say what attracted people to crypto generally, it's two

things. One was a grounding philosophical belief in the transformative potential of Bitcoin and the ability to create something neutral and big [clears throat] and more valuable than all the other, you know, currencies on earth, right? Number one attraction. Number two attraction is volatility excitement trading speculation, all the fun ways that people are making money around that extremely core philosophy.

And right now, I think a lot of the conversation in crypto in our society has sort of muted a little bit towards the first thing. What is the transformative power here? And people are still a little bit focused on the exciting part. I think it's natural that all of the products will gravitate increasingly to the second part because they can't invent a new Bitcoin, right? They can't really latch on to that drive and gut and emotion. And so they can give the market what it wants, which is trade the craziest products, trade every product, you know, wherever there's volatility, be able to jump on it, you know, in some way with as much leverage

as you can. And that's that's what the people want fundamentally. And so, you know, I think it's a natural destination for every platform. I think it surprises none of us. I mean, we were talking a few months ago about how the number one product on Poly Market was, you know, starting to be these like extremely short duration markets, right? Because they're exciting. Every platform and every product will slowly gravit gravitate towards the most exciting product that, you know, the people are clamoring for. And so, doesn't surprise me. I think it's a long-term evergreen trend. I don't think it's going to go away and I think people are going to continue to optimize and design around that product.

>> Yeah. I uh it's like um I think it's like Al Capone quote. It's like uh you know why do you rob the bank? That's where the money is. And it's like why do you trade the XYZ? It's like that's where the volatility is. And I think that's really just the answer >> want to trade. People want to trade whatever is why do people want to trade Pokemon cards right now? They wake up Pokemon cards. Pokemon is amazing. I really really care about Pokemon cards all of a sudden. No, it's Yeah, they have the vault and you know in the early 2000s it was like FX um and people only trade FX volatile and like we've seen this kind of cycl cyclical behavior in terms of what assets people want to trade and it just happens to be right now that crypto is really boring. It's

really flat. there's nothing really happening and maybe one week it's commodities, maybe one week it's particular equities or indices, whatever it might be. But like that's also just a much much bigger market than just trading Bitcoin. And so I think this is kind of where the crypto is going. It's also like stable coins kind of eating the um you know use case of of payments, right? Like well Bitcoin's big but the US dollar is bigger and and in some ways kind of better and so people want to use that to you know conduct payments instead of just only relying on on crypto assets. So until you know someone brings volatility back to to crypto or maybe more volatile assets on crypto like I think this is the way it's going to go.

>> So you think this is a temporary regime or you think this is long-term look we've grown into it. We're mature now. There's not going to be the crazy volatility that once was. >> I think unless you really I mean I think volatility will return to crypto. This is like famous last words. You know it's uh you know all the way down. Yeah. >> This is like the New York Times articles that are like the Bitcoin is dead, right? like that's like betting on crypto volatility to >> I saw one of those. Yeah. So, we might be close to the bottom, but um I I don't know if it's going to be Bitcoin or something else or there's already some kind of interesting experiments around tokenized RWAS on Robin Hood chain where people are doing sort of like mini Dow buyback thing kind of like kind of like

nouns almost like so I I don't know what it's going to be but I think volatility will return it will probably look different next time. I I think like crypto maybe in some ways made a deal with the devil of like hey we're really always we're really going to be like kind of web 2.5 I don't know what else to call it where it's like you know we're focusing on the boring assets focusing on the RWA stuff like that but these are all things you kind of know how to price right like and like it's not like they're like some huge margin huge volatility thing and so like there's a little bit of that as a mllifier for Sure. Like it it needs to be a completely new thing, right? Like that causes a bunch of volatility, right?

It's like think of like 2019 precoid like that was just like painful in some ways, right? It was like the only asset with volatility was like Tron. Uh and so like I think like there but then obviously DeFi started take taking off, pandemic happened like and those two things kind of like fed off each other, right? And like created this huge V event. And so I just think it's like we don't have a new technological we haven't had like a new frontier thing and whether it's technological cultural whatever in a little while and I think like the moment there is some very clear sign of that we're going there will inevitably the

animal spirits will be back. Also it's just like people have taken like forget about Leopold right like he's he's fine. you read some of the stories of these like the Korean stuff of like PE losses people took in like that stock market. It's like I sort of just think like there's also a sense in which like the equity volatility may have like gone too high and like we're kind of we're due for a rebalancing out. I just don't know how long that's >> Well, you know what's striking? You know what's striking is that despite the fact that there was such enormous blood bath in the Korean market, right? Korea famously was one of the highest countries for crypto trading anywhere in the world. Um, and in Korean retail, you know, anytime something would get listed on Upit, you would see just massive

spikes in the the demand for any particular asset. Despite the fact that we saw the biggest blood bath in the history of the Cosby, the the Korean stock market, couldn't see anything, nothing in crypto, which tells you retail's gone. Like retail is genuinely not here. It's actually very surprising that people losing that much money does not show up on a crypto chart. Tells you we are in a different regime. For so many years, we've been saying the institutions are coming. The institutions are coming. The institutions are coming. The institutions are here. They have dampened volatility across the sector.

That's what we said we wanted. Now that we have it, it's a little bit like, oh, I kind of liked it before when things Exactly. Grass is always greener, right? Like we we thought we wanted volatility dampening. Actually, we hate volatility dampening. We love the volatility because that's why retail showed up. Retail showed up because they like volatile assets. And so, yeah, you know, like who's trading Skhinx on leverage? It's not institutions. It's it's retail. >> Well, some institutions. >> Well, I don't [laughter] know. >> Yeah, >> historically. Historically, once upon a time, it was institutions. So, um anyway, all that is to say, I do think I I I agree with you. I think obviously this is all cyclical. Crypto very famously has cycles. We're very clearly in the lull of one of those cycles. I

suspect that long term what we need is for AI probably one, we need to see a couple of these IPOs get loose. We probably need to see labs be public. We probably need to see at least a couple quarters of revenue so that we can start to predict a little bit better what's going on. The reason why volatility is so high in AI is that nobody can predict anything. People keep getting surprised. You know, you see like half a trillion dollar you know deltas in the open and closes on these markets where like you know Amazon and Apple are getting repriced 15% on a day. Like these things are trading like shitcoins. And why is that happening? It's happening because nobody can predict anything. It is very difficult.

Free these companies incinerated a hundred billion dollars of free cash flow in one quarter. Right. Like some of them did in a way the market likes and some of them did in a way the market doesn't like. >> Yeah. Yeah. Exactly. But but >> right which means that like they can't predict what the market wants. >> Yeah. So like at the end of the day when everything becomes more predictable is when volatility decreases and once we can start to guess ah here's what the revenue ramps look like here's what enterprise spending looks like here's what you know supply chains look like here's what GPU prices look like and we can start to just draw the lines out farther that's when volatility will go down now that doesn't mean that like prices will go down prices may keep going up but volatility will come down and that on a relative basis is what

will attract retail back to crypto I think that probably takes like 9 12 maybe 18 months before that happens is my guess personally. But I I think that's kind of what you need in order for people to care about crypto again from a retail perspective. Institutions they believe it, right? Institutions, yeah, I believe in Bitcoin, believe in stables, I think all this stuff is good, but they're not FOMOing into this stuff and they're they're like, great, I will take my 1% exposure part of my diversified portfolio. That's exactly as much as I need. And that's that's what you get. You don't get explosive growth from that.

So, um, all right, last story just to wrap things up. Of course, the big thing on everybody's mind in the crypto industry is the Clarity Act. We've talked about it at length, but we are now going into the final hours of clarity. The August recess takes place, I think, what is it? August 9th or is it August 7th? August 9th, 7th, >> August, >> end of this week. So, that'd be August uh 7th, Friday. So, we basically have until the end of this week for there to be a vote on clarity. Otherwise, it is very likely there will be no vote. Now, possible that after the recess there was a vote, but people mostly think that that's not likely to happen. If you look at the market right now, poly market is pricing 25% chance that clarity passes.

It's now very unlikely from most people's perspective. Not impossible, but unlikely. Now, interestingly, there's another market on Khi that shows that there's a I believe 42% chance of a floor vote, meaning that if it goes to a vote, more likely than not that it is going to pass. But more likely than not that it will not go to a vote at all and therefore it's going to get delayed and we are not going to see um any chance for clarity to to to pass. So right now there's some last minute maneuvering. There's some convers you know we've now seen um Secretary Bessant start brabbiting some people supposedly there's some kind of 11th hour compromise of the White House that will try to bring everything together and see if they can't get something that uh Democrats are willing to sign off on.

But time is ticking very low at this point and most people think there's not enough time to get this thing passed. Robert, you are our DC whisperer. What is the what is the feeling from your end about clarity at this point? >> Yeah, the feeling that I hear most often from Democrats, from Republicans, you know, from industry, from Hill staffers is that everything hinges on the ethics provisions. Should it? I don't know. Right. But it does, right? I think it's because over the last year, the primary things that have gotten us to this point, the reason why it hasn't passed yet is frankly like the number one person who's made the most money in crypto besides probably CZ and besides probably the Tether guys,

>> besides Hib, you know, has been, you know, Donald Trump. And it's a very visible thing, right? And so ethics has become the thing that all legislation has compromised. It's all politics. Both sides need a win, right? I think a lot of people perceive the clarity bill on its own as being, yeah, maybe bipartisan, maybe a little bit more Republican in its basic nature, but that the Democrats are really looking to stick it to Trump in some way through ethics as the thing that they need to sell it to their base and to grab their own win on the back of clarity. And so, if there's an ethics compromise, I think clarity passes, right? No one really knows what the, you know, Tis Ggo, you know, proposed bipartisan amendment

looks like that was sent to the White House. All we know is as of Tuesday when we're recording this episode of the chopping block, the White House hasn't responded to this proposed compromise that was negotiated in a bipartisan matter. It's like the Tillis Gay one. They were responsible for figuring this out. It was sent to the White House. We don't know. I believe if there is language that the Senate Republicans and Senate Democrats agree on that Trump won't veto, you know, I'm sure it's not what he wants. But if it's not going to be vetoed and it's negotiated in a bipartisan way, I think if everyone agrees on the ethics language, then I

think the bill has a great possibility of passing. I think without that, it's just not going to pass. I don't know whether it's going to come back up for discussion, negotiation, whatever after the recess. The pre-election months are incredibly hectic with everybody spending their time running for office with the Senate negotiating budgets and focused on not giving either side a win. Who knows what happens to it. Ethics is the lynch pin. If they can get that done in the next two days, that's incredible. If not, there's always a chance that they get it done after the recess. You know, I would not count clarity out even if it doesn't get done in the next few days. Personally, I think everyone's focused on it, but there is a very clear path to clarity passing. If during the

recess they figure out some negotiated ethics compromise, they can just come back and pass it. They're at the one yard line, the bill's basically ready. So, the thing that you should constantly look for is just the word ethics. Search Twitter, set Google alerts for it. You know, if there's any movement there, that's going to be the deal the deal. That's going to be the bill. two two points I would make. So one, I think it is very important that they try to actually just get the get a vote. And I think part of the reason why is that for Democrats that are in opposition to this bill, right? They actually don't want to be on record being against the bill because of course they don't want the big boogeyman fair shake to come after them. And if they don't actually vote, then nobody knows who the votes are. And

like you know in principle like just holding it up in this big negotiation is kind of the perfect outcome for the anti-crypto lobby or the anti-crypto democrats if it goes to the floor they actually do pay a cost because whether it's their constituents or whether it's fair shake they're now they're now they're out there and they're going to get counted and there's going to be some kind of political accountability for what what their vote was. >> Absolutely. But if they pay that cost, right, then they're going to say, "Well, there's no cost for us to continue to drag our feet on it and not support it."

And there's the potential that the probability is they pay that cost starting in August. And then there's a lower incentive for them to reach a bipartisan compromise. That's the risk. No one knows what the best path is to get. >> So, you'd rather have the stick and not use it. Obviously, it's more effective as a threat than it is when you actually hit someone and see how they respond. I think the other the other element that's also worth keeping in mind is that uh so actually Khi has a market that shows passage for clarity on different expiration dates. The main market is just for this year right and very clear for this year both polymer market and call she agree 25%. which basically means that if it doesn't so if if we go past the August recess probably both markets have it at basically nil but

they have another market that also tracks into next year and they put the odds at clarity passing in 2027 at 30%. Which tells you that look this bill is not dead now it will probably get renegotiated if there is a very different uh makeup of the house probably there's going to be a different compromise that's struck on a lot of the points. So the bill will not survive in its current form, almost certainly if it doesn't pass in August, but clarity is not dead. And I think even if we don't make it through this corridor, there's still a lot of room because at the end of the day, this is an important piece of legislation. So I I just want to reiterate that not all is lost even if we don't end up getting it done this week.

>> Yeah, it it's too important to get dropped, right? There's been so much work from both sides to get to this point, right? Yes. like the contours of it will change significantly potentially in the next 24 hours, especially as people look towards an ethics compromise. Other pieces of it might change. There's still people nipping at the heels on quote illicit finance and the stable coin yield pieces. They seem pretty settled, you know, especially in comparison to ethics. But the draft text we saw a couple weeks ago will not be the final text that is signed into law.

>> Right. Well, hopefully by the time you guys hear this, there is good news. But even if there's not, I' i'd say look, it's a long game. Uh there's a lot of game left to be played. So with that, we will wrap. Thanks everybody, and we'll be back next week. [music] [music]