ATOM 2.0, Reversible Transactions & Polygon's BD Game | Blockworks Research

Transcript

Adam's always been advertised as this base currency of the cosmos ecosystem but up until now like there hasn't really seen how that Vision was going to form we just kind of like could see okay there's definitely the potential for this to exist uh but these updates are really like lining out exactly what that road map's going to look [Music] like all right everyone welcome to another Roundup this week we're doing a little something different I don't think you've met me before my name is Garrett I'm the producer for both Empire and bell curve and the parents are gone so we've had to go with something a little different so instead we have Sam Dan and Matt from the blockworks research team so guys welcome to the show appreciate what's up G how you doing doing great I've been complaining about

my complexion in this room so if you're watching on YouTube I am prettier than this but uh look we we want to get started there's a lot of interesting news that's been going on this week I think the biggest thing that's come out is the cosmos or atom 2.0 um update they just had a big Cosmos um conference the other day I think that's really been in the narrative the last few weeks it's been one of the only assets has really held up so um Sam Dan Matt whoever wants to take off I'm just interested what was this update and what should we pay attention to yeah absolutely and uh you correctly highlighted that recent Adam strength we've seen um you know Adams looked really good relative to most other L1 assets including eth recently uh there's been definitely some uh some bid coming in likely in anticipation of

this news uh and so yeah uh the biggest developments here is really the upgraded tokenomics for adom itself uh and then kind of how that all fits in with the IBC ecosystem so a new white paper got released that was detailed by some of the cord devs uh and some other community members from the cosmos Hub team uh that kind of like was around since the original days and helped kind of innovate what the IBC ecosystem has has become um and so you know if you kind of like take a step back here and say like where did Cosmos the cosmos sub start as well as the cosmos ecosystem and where is it in like where did it kind of trend to you know so step one they kind of built out the original infrastructure which is a tender Min consensus mechanism uh and the cosmos

SDK this made it like really straightforward to build an entire blockchain from scratch um and then step two is kind of like can now you have a world of uh app specific blockchains but how do they all communicate so they had to build out the interchain block uh in blockchain communication system the IBC rails to allow uh the communication and value exchange occur between all these app specific change chains um and then step three was kind of this uh recent Innovation called interchain accounts uh and this now kind of like boosts the uh compatibility and composability between these blockchains so uh with interchain accounts chain a can change the state of uh like a contract on chain B without

the user having to like move funds from chain a to chain B so this really helps like the ux and flow from a user perspective because I can just have all my assets on one chain and still be communicating with a second chain through these uh through IBC and interchain accounts uh so that kind of brings us to where we are today where you know uh yof amrani put this in a tweet thread he had kind of regarding all the updates but he's kind he called the infrastructure is ready and the IBC is the golden standard for cross me messaging uh so this really kind of just like puts Adam right in the right spot uh for these the major developments that we've seen uh with adom 2.0 uh and then the inclusion of of these two new features the interchain scheduler and

the interchain allocator uh first I'll hit the kind of the new monetary policy that they've discussed um you know maybe we can put this uh up on the screen here okay how do I put something on the screen it's a good question Shar you go for it dude Dan check that out while uh I think I think a good thing to remember is like Adam has been around for a long time and it's supposedly like it's been sold as the asset of the cosmos ecosystem and I think that's it's been a little bit of a problem because you have these other asset chains these app specific chains and they're like no this is the cosmos ecosystem it's not atom and there's been this confusion and I've actually heard tun in the past say that atom is the Dogecoin of the cosmos ecosystem so I think this 2.0 update

which you're about to go into is changing adom from a meme coin to actually show that there's some type of value acral sorry I was just going to say there's also like a nomencl nomenclature issue there right so referring to Cosmos like refering to Cosmos Hub or adom as cosmos is kind of an issue because you know anyone can go deploy their own layer one blockchain with the cosmos SDK so it's it gets a little confusing like the cosmos ecosystem isn't really like an ethereum ecosystem where all the daps are actually built on top of the same L1 it's kind of completely different so people are probably betting on adom thinking oh I'm betting on the cosmos ecosystem but you know that's not necessarily true although uh some of the recent updates probably make it a little more true in my opinion that's a good

point yeah right on Matt definitely agree with you there and so if you look at this image we have up on the screen for those following Along on YouTube uh this dash line is the old cumulative is issuance schedule and then the black line the solid line is the uh the new proposed one so you can see the linear increase uh in in emissions that the old model was using and that you know obviously isn't very sustainable uh going looking out into the future right you're you're massively diluting the the current holders of the token by printing more uh and so the new model in short like really aims at lowering that rate uh so in the long term you're kind of trending towards uh like a 1% inflation with the ability to go uh into a

deflationary state if the other two pieces this interchange scheduler and allocator uh do pick up traction that that is possible uh so without really getting into the details of what the new monetary policy looks like the the broader long-term goal here is just to cut inflation to a more manageable level uh but diving into The Interchange schedule itself uh theuer is essentially designed to Monet monetize uh IBC economic activity and align atom so the cosmos Hub uh align the value acrel to the atom token with the growth of the broader IBC ecosystem and to Matt's Point earlier like Adam's always been advertised as this base currency of the cosmos ecosystem but up until now like

it hasn't really seen how that Vision was going to form we just kind of like could see okay there's definitely the potential for this to exists uh but these updates are really like lining out exactly what that road map's going to look like and so yeah quick question for you and why has I think the staking rate in the cosmos ecosystem especially atam has been so has been really high right but one of the big thing is they haven't had liquid staking yet and I think that's a big part of this as well that they're going to introduce liquid staking but is the reason why the staking percentage is so high in the cosmos ecosystem is that really just because of the air drops mostly like what you know their inflation is higher than other chains and I I think if you staked on atom a

lot of times or on the cosmos Hub you'd receive aird drops from the new app chains in the cosmos ecosystem like is that probably the main driver right so the actual staking rate itself uh isn't tied directly to these airdrop rewards like that's just a total separate category it's like a an actual bonus if you're an atom Staker uh the staking rewards itself is tends to be so high just because the inflation rate itself was so high right like if you look at this uh if you remember that dash line from the the visual we had up um you know like the the security budget is is just so high and they're printing so much atom to reward uh the people the users uh defending the network securing the network for some reason um like not not a huge portion of the atom in

existence is actually Stak so I'm pretty sure the inflation of the network is actually more at like something you know Ballpark 112% and uh the staking APR is more like 18 19% or 17 18% uh and that's because you know only I believe something like 2third of Adam is actually stake there's a good amount that are of people who are just holding it on you know centralized exchange just not staking it or somewhere else Dan before you maybe describe just at a high level what the scheduler is and maybe we can get into me and how I think that's like the new narrative Sam I'm gonna just label you an eth maxi even though maybe you're not but I know you're a big eth guy and uh you definitely like arbitrum so I'm just curious as a whole with everything going on in Cosmos and

Adam right now how do you feel about that ecosystem like are you intrigued by it is it something you're watching like yeah what do you think yeah I'm really intrigued by it I'm a little bit skeptical of like the adoption of interchain accounts the kind of better marketing of IBC um and the heavy inflation that they're introducing over the next 36 months I mean 36 months in crypto is a very long time so I'm slightly skeptical of that but I'm also not trying to be a naysayer because a lot of the stuff that Cosmos has done to date has like spread new innovation throughout the industry from people copy and pasting their ideas like you have polygon which is one of the most successful chains in crypto and they basically copied tender from 2018 2019 um and then you also have proof of

stake pioneered by Cosmos which ethereum just switched to so I'm definitely optimistic about the road map I think it's really ambitious um but I mean that's how things are innovated on and improved over time yeah what one little last thing on this I think it's interesting and I'm a big Cosmos fan myself of the of the whole ecosystem but a lot of people say you know other app chains Etc they're adopting this Tech stack and part of that you often hear binance like binance use tender's consensus mechanism but I'm actually pretty sure binance has gone through like three changes in their chains and they ended up adopting an meev based chain and that's actually when they got all their attraction and it's not because the like or I said me evm it's not because the evm is better or it's more scalable Etc but it's just that's

where the contracts were coded in with solidity and once they went live with that that's when you had all the funds go from ethereum oh to this binance chain so I just think that's important to remember because you people talk about like binance tender all the time but that's not actually where the traction um was gathered but anyways Dan let's jump back and uh just talk about the scheduler a little bit because I think me is a big topic here yeah for sure so the interchain scheduler again this is kind of the goal of this uh this new module is to monetize the uh interchain IBC economic activity and align Adam value acral with IBC growth uh and so essentially it's a cross-chain block space Futures marketplace where the right to order transactions for designated blocks will be tokenized and

traded and transported over IBC so what this basically is telling us is that you're you're like paying for Mev um and Mev cross chain Mev is going to be a pretty Dynamic Market uh right because you have all these specific chains moving assets across different uh different chains and communicating with each other uh all to you know serve the purpose of that specific app chain um but there's going to be some definitely some ability to front run some of these transactions as you see on other proof of stakes uh networks uh just like ethereum yeah yeah it's a good point I think something with Cosmos that's interesting it's like a community of chains even though you know in the future a lot of those are going to be

competitors but you want to have economies to scale and when you're splitting into these like individual city states that might say in Cosmos you might lose some of the economies of scale that you have and say like ethereum even though I think that's a benefit at time because you also don't have like a clogged chain from like nft mints of of like trolls or something um so Matt I'm just curious what's uh what's your vision for Cosmos after these updates so they have this me schedule or they also have an allocator where essentially I think they're trying to make Cosmos or Adam be like the reserve currency of the ecosystem by providing funding is trying to really just connect everything back to Adam and make it like the reserve currency is the big point but yeah I think we could probably move on after this but Matt I'm

just curious what's your what's your view on this and I guess at the end of the day I am curious do you think most values just all going to be related to me like is that is that really the driver here because that's kind of what it sounds like uh with the Schuler so I'm definitely no expert in this but I do think that there is one other pretty big value proposition which is that you know the cosmos Hub so basically in you know Co in the cosmos ecosystem the way IBC transfers work um is you actually have to have a hub which is a network that multiple chains are connected to and then those chains can communicate through the Hub and there that's kind of the original value proposition to the adom Token Cosmos adom Cosmos Hub adom was going to be the main hub for all the different chains um

when Tera Luna launched it actually was proven that Cosmos Hub wasn't necessarily going to be the main Hub and it maybe wasn't even necessary so it kind of poked a big hole in that original value proposition so this kind of brings us into like usdc which I guess I'll put on the back burner for one second but um there there are some things happening right now that make me believe that Cosmos could return to this main value proposition of being the Hub to all the spokes that are other chains built with the cosmos SDK so that's like a lot of value outside of me I do think that me will likely be the main value driver for the atom token though especially as usdc launches their own chain that will most likely be secured with interchain security by the atom validators um this basically means that

people looking to do Arbitrage or Arbitrage uh like incorrect pricing on osmosis which is a decentralized exchange built with the cosmos SDK but it's its own chain um you know if you're looking to print usdc to go take advantage of Arbitrage or redeem usdc to go take advantage of Arbitrage you're actually going to have to do that through the Hub as you're uh you know where where that data where that IBC transfer is going through so I think there's actually a lot of value there outside of me as well um I do think everyone's kind of sleeping on all these updates like fading them whatever you want to call it but you know for the last 100 days or so Adam has had extremely uh strong price action it's performed really well against Bitcoin against and pretty much everything else

this has slowed down extremely since the announcement of Adam 2.0 on Monday yesterday on Wednesday usdc announced that they're going to launch their own Cosmos SDK based chain secured by adom validators um so this is going to make a native usdc to the cosmos ecosystem this is super cool for a lot of reasons like some of them I kind of just went over but like another really cool thing that's going to come with a a native usdc and Cosmos is most likely Stargate which is a a bridge an interoperability layer um it's built by layer zero actually I'm not going to get too far into it but anyways now that usdc is native to Cosmos it is likely that Stargate will be able to connect Cosmos to you know all these other layer ones uh although Cosmos isn't necessarily

really a layer one but anyways like you'll be able to transfer your usdc or pretty much any asset from the entirety of the cosmos ecosystem to let's say an different asset on ethereum so you can basically in one click through you know maybe through Sushi swaps Omni chain exchange which uses to Stargate or uh through Stargate itself in usdc you'll probably be able to oneclick transfer your ethereum to the atom token I think that's ridiculously cool and um you know very valuable for Adam and the cosmos ecosystem and it's mostly just being ignored uh when this news came out I think Adam actually went down two or 3% in the following hours which didn't really make any sense to me um likewise with Adam 2.0 news it was down 5 to 10%

in the days following uh after a very strong price action leading up into it so in my head um there will be a lot of value that's now coming back to Adam and it's kind of being slept on additionally I think that the cosmos ecosystem is going to see a lot more um a lot more Builders come and join the ecosystem like following DX so so far we've like the successful chains that we've seen built on Cosmos have been Cosmos native meaning developers are starting a new DB or dap's not the right word but they're starting a new project in the cosmos ecosystem with DX they saw a ton value on their current layer 2 rollup built with starkware and they're actually moving to their own app specific chain built with the cosmos SDK there's a lot

of reasons for this but one of the main ones is that they will now capture all of the value to their token holders uh who will be the validators of the network this is something that isn't possible with uh building on another chain whether it be a layer one or Layer Two because uh if you've ever heard of like the fat the fat protocol thesis a lot of value for daps built on other layers then get sent back to the layer itself as as opposed to occurring to the dab hey Matt on that real quick but if dydx is a layer two do they and they're the only app on there so it's like as specific do they not realize all of the me that would be on there like right now they were using starkware with that sequencer which there was no me just

like being a fair market but in the future when you have l2s that are app specific couldn't they do the same thing wouldn't they be able to realize all the me of their chain so you're saying once layer twos have their own validator sets uh yeah exactly yeah well I guess that's a big that's a big question in itself right yeah there's pretty much every layer to is working towards getting rid of their Central centralized sequencers um just for you know a little bit of background what that means is there's single parties on optimism arbitrum starkware um whether it be Stark net or Stark X app specific app specific um layer twos app specific rollups whe no matter what they all have centralized sequencer meaning one person or one entity who's ordering blocks so they can extract all

the me for themselves they can extract all the me um and give it back to you know token holders of whatever that layer 2 token might be uh or they can just not extract MV at all which was the case with idx on its own ler two roll up through starx but so like you know whether or not they actually are able to move out of that and have an entire validator set is like a question in itself but if they do if they do manage to do that then yeah I do think that you know this this dydx might end up actually moving back um it's not impossible but that's a that's a big it's a big if yeah definitely okay cool I think we've probably covered that pretty well I I mean I just want to retouch on the fact that Circle basically came out this week saying

they're going to launch um uscc on in Cosmos I think it's its own chain it's going to Leverage The hubs like interchange security IC and they also said they plan to launch on polka dot arbitrum one near and optimism networks in the future so basically sounds like they're going everywhere um I for one have no idea why they need the hub's security considering it's a centralized stable coin that can just literally run one valid air on AWS but um does anyone have anything they want to kind of say on that or or do you guys want to move on uh from how I understand it I mean it seems like Adam is the only asset that it makes sense for interchange security for for usdc just because they issue a stable coin so they like logically picked the most the highest market cap coin in the cosmos ecosystem and borrow

security from it so that the only choice there is Adam so I believe that's why they went with that decision and then also potential Revenue opportunities down the down the line I mean if they have their own app specific chain there really is a lot more things they could do and services they could provide on that chain if they so choose to do so so I think it's just kind of a new Revenue stream and kind of embarking into the more Crypton native territory it's interesting gotcha yeah definitely definitely agree with that number two I think on number one it gets me a little bit in that like they could just have one validator like in the future with l2s for for example you don't have to have a decentralized validator set you could have a centralized sequencer um only if you want to get out of this

are we a security or not is probably where that's going to end up mattering because if someone does censor you and you're an L2 you can always just jump off and go to another one as long as there's that like actual back door which don't exist yet with rollups right like they still have the training wheels on Sam do you want to touch on this GMX me strategy it's it's too uh too big for my lizard brain but I'd love to kind of hear what what happened here yeah absolutely it's honestly not a huge deal just a little bit of money was extracted from the strategy but basically you can stake GMX tokens and earn escro GMX and then uh eth uh trading fees you get 30% of the platform trading fees but then you also get multiplier points and they're always paid out at a fixed 100%

APR so basically if I would stake 100 GMX let's say I'd be making eth and I'd be making escro GMX tokens but then I'd also at the end of the year have 200 GMX worth of stake weight so like you wouldn't actually get 100 extra GMX tokens this is just like improving your stake weight and therefore your APR um so it's a way to boost your APR over time and basically the problem that this created was um it kind of disincentivized unstaking Because if you think about it logically if you're a large holder of GMX that's staked and you unstake it then you're not looking to restake it because then your multiplier points are gone so your your APR starts back at the base APR amount

so they're obviously not going to restake and then you could say well maybe they just want to hold it there and have the the very for your liquidity but that doesn't really make sense because then you're sacrificing a really high high APR um so basically someone made a bot because they assumed that the longer you hold your GMX stake as soon as you unstake it you're likely going to sell and basically the bot would like uh scan um the the basically transactions look for whales who are unstaking their GMX and then immediately sell GMX tokens and wait for that whale to sell their unstake G MX and then buy back right after them um and this profit or this strategy was really profitable for the

last month and a half I think it was po ply on Twitter said that the uh The Entity that made the bot had made 2,300 bucks over the last month and a half so not like a groundbreaking amount but had a whale who uh found this strategy picked it up sooner it could have been a lot more catastrophic um but he uh reported it to the GMX team they're looking into it it's really a pretty easy fix you just let people unstake their GMX and sell it in one transaction uh and yeah they he got awarded with $500 for reporting the Bounty so I feel like maybe they should have given him a little bit more money considering that could have been yeah exactly uh but yeah that's kind of the the tldr on that situation okay very cool sounds like they need to start

teaching maybe you'll have classes in high school now where you get to run me Bots because it sounds like you know we're talking about like all these jobs are being automated away well maybe we need to learn how to write me Bots because it looks like and also audit code um I forget last last week it was Spencer saying he needs to like what is the one thing he wish he learned from the situation is just like learn how to like read contracts so I can find these little you know codes and and get paid the Bounty so um very cool man uh me is just so interesting because this is kind that kind of links into it so all right we need m u macro Mike for this who is gone but we're gonna touch on Jerome pow and uh Christine lagard a little bit so

uh there was a conference this week uh in France they're both on TV and there's a few other people that talked as well went into Jerome talked a little bit about how defi needs more regulation there's not a lot of transparency and they also got into cbdcs so um I don't know Dan Sam Matt anybody want to just give your thoughts on on what they said and I don't know biggest takeaways I'm looking at you D yeah I can I can take a stab at this one I think all of us hear the word macro and are like oh over my head right but uh no I think this was pretty interesting right I mean essentially you have politicians and Central Bank uh figureheads coming out and saying you know we need to regulate which to me like that's not really a surprise right their job is to regulate

so like when they say that's what they want to do I'm not like blown away and shocked um you know some were some comments were more interesting than others right like the uh Singapore monetary authorities said I don't see any redeeming value in cryptocurrencies and their time for Reckoning has come like okay there there's clear values instant settlements just truly undeniably valuable um so it's it's hard to to say like what the goal of that is right like essentially like in my view they're all part of a political game that they need to play right so they're they're saying things for a reasons I don't necessarily think they're saying things that are inherently exactly what they believe um but I think uh Christine

lag guard's comments around you know saying that uh regulation needs to come in to you know essentially protect investors from things like terrorist collapse like I I think there's no understating the damage that uh the loss of Tera did to defi like that's going to be used as the Anchor Point for increased regulation in defi when in reality like there's probably a simple fix to that if like you did want to regulate something away okay algorithmic stable coins that are purely backed by you know an asset that the same protocol is making okay that system clearly doesn't work we've seen that time and time again and terara really put the the nail in the coffin on that one yeah I was going to say like to

the lack of transparency comment from pal it's just like kind of silly to me it's like I would bet that more people can track a transaction on ether skan than that same number of people who can actually thoroughly explain the way our financial system works so I'm with Dan I think they just kind of got to talk about regulation and honestly like we want regulation like I don't think anyone in crypto does not want any regulation like we want to protect retail investors we want to get the institutions involved so it's like let's just do it and get on with it and stop talking talking about it but let's let's be fair let's be logical let's get people who actually know what they're talking about in on these policy discussions um but yeah that's just going to take time and this is going to be something we talk about for the next

three four years probably yeah I agree there's there's been a little bit of a narrative too on like permissioned defi um and how institutions might play in that and also how you might have applications like a which they already have I think it's a Arc but you might start seeing that from uh different applications and I think it's going to be really interesting we had Ben foran on here who is creator of parap um and he's a big bull on that but he's also a bull in saying that you can have these decentralized permissionless applications that we have today uh but these permissioned um sources are going to probably end up being a lot bigger because that's where the the money's going to largely come from so anyways I think it's really interesting if I was usdc in this scenario I'm feeling pretty good because you're like look everyone's

using my stable coin uh I can actually be regulated but it's by far it's one of those zero to one things with a stable coin uh like usdc that you can actually point to when somebody says like what's a use case in crypto like like to me that's just an obvious one so anyways there's clear reason like if you just say crypto doesn't have any value or digital payments Etc like it I think you're just you're missing out you're in the dark you're in the dark um and one thing on this the circle note like so there's really no dominant stable coin in the cosmos ecosystem at this time like if you pull up osmosis and look at the assets listed um you know there's only 30 million of axler wrapped which axel axler is a bridge that partnered with osmosis to bring assets into uh the

osmosis ecosystem and so they will wrap usdc from ethereum and Port that into osmosis and and so you're taking Bridge risk when you're holding this asset right you have to trust that Axel will not be compromised and that your $1 on us of osmosis usdc will be redeemable for one true uh usdc which obviously with the app chain coming into the IBC ecosystem that's not going to be a problem anymore um but it like if so right now there's only 30 million axler wrapped usdc and about 9 million uh axler wrapped die so it's like there's just no dominant stable coin and if you look at something like ethereum or any of the other l1s that have kind of have some defi traction and get get gain some traction and uh gain some users like you

see the relevance and importance of stable coins right like users need a stable coin to store value um and so yeah like I think usdc is making great play here and this is really just going to expand their market cap and in a high interest rate environment they're just absolutely crushing it right so right now they have their last at testation uh they had 43.5 billion dollar of short-term us treas treasuries ranging from about 1 to four months and so let's just call that an interest rate of like 3% uh in the given environment then that's like well over you know $1.2 billion of Revenue just from their treasuries so expanding that by any capacity is a great move for them and it'll beting interesting to see like you

know if they are using the cosmos uh hub for any train security like how are they going to be incentivizing that or is are like Adam validators going to be like doing a favor for that chain in order to bring in meev Opportunities I don't know uh but they certainly have the revenue stream to be to be paying for security yeah one last thing I'll say on that is Ben foran again who's coming on bellur he's going to be our episode this Tuesday um he talks about and you've seen this before on Twitter but with usdc they could almost like C usdc and it's a rebasing token that actually some of those profits it's almost like securitizing um us treasuries and some of that interest actually goes towards the token um which would be pretty cool and it it it almost seems like in the

long run that might be inevitable and you can kind of see that with um maker Dow with the PSM is basically talking to coinbase about essentially moving some of their usdc out of there to actually earn some Revenue because maker just earns nothing on that right it's all going to uh Center so um see what's next guys I I think we ought to T touch on uh reversible transactions I think it's pretty interesting so I think this was either this week or this last weekend it's like a group of Stanford blockchain researchers uh they posted an article in a Twitter thread explained their work on bringing reversible transactions to crypto which to me just that kind of catches your eye because you're like no no no it's uh you can't change anything that's on the blockchain essentially um they kind of point to all the major

hacks that we've had I don't remember the number but we've had over like one or two billion dollars in hacks already in 2022 and they're saying like this is strong evidence that we need to have have something where you can have reversible transactions I've got to admit like this is embarrassing to say I shouldn't say it on the podcast but blockworks people get permes when you uh come to the company and I've made some transactions in my life and you always do that little test transaction well uh I somehow entered the wrong address for my permy and my per is sitting there in an untouched contract so it was a sad uh sad day for me my on two we two weeks in to the company and I haven't told Jason that yet so he'll find this out but um guys I just want to get like high level

thoughts on there there's one less per in circulation one dude seriously yeah it's our EIP 1559 Garrett um yeah uh let's just go I don't know Sam you want to just like what do you think on this what's your first thought when you hear reversible transactions yeah my first thought was like this is a terrible idea but then I like started thinking about it and it seems to kind of make sense for stable coins I guess because they can already be blacklisted already um but I was talking with Dan and Matt earlier about this and it's like okay well what happens if you put reversible assets into an amm and then they're in a pool it's like how does like if it's against a volatile asset then that could really wreck everyone who's lping in that pool if all of a sudden a bunch of stable

coins get ripped out of it so I don't really know but I also know from personal experience if I have a very large amount of stable coins like I am very scared to put all of those stable coins to work in one single pool because then you're just obviously subject to more risk than putting it in maybe eight different buckets but if I knew that the transaction could be reversed then maybe I'd feel more comfortable going into that really Rogue like 500% APR like usdc usdt pool on like some Rogue chain that no one even knows about so I I see the idea behind it but then there's a question around like basically their proposed um method is to select like a a judge uh like a committee of Judges but it's like how do you select that like

that's pretty opaque and against the crypto ethos like blockchains are supposed to be immutable like we just talked about all this um flash bot stuff with their relayer and Mev boost and yeah I don't know it's a hairy situation Matt or Dan maybe you can kind of give some more light on like the process that's being proposed because I'm not like super caught up on it and I think Dan proved me wrong here but Apple was going to have an update where you could like edit text you've already sent and to me that sounded like complete nightmare because you know you could send a text someone responds and then you change what you actually asked and then you like send a screenshot of that to somebody so like sometimes reversibility like if you book the wrong you know ticket on a flight like you want to be able to reverse that right or

you just kind of be pissed off but there's other cases where I can see like you want finality and it's like the best and worst thing of crypto is that everything is final so yeah Matt give us your thoughts yeah so like you said um immutability is kind of in my head a good thing when I first saw it the cipher punk in me definitely came out and I was just like what this is this is ridiculous awful you know anti the ethos of crypto um but then I got to thinking about for a second and completely had the same flip-flop that Sam had where I was like okay you know what I could see a few scenarios where this could actually make sense um you know reversibility in what's like C defi protocols like protocols that aren't completely decentralized um where like complete censorship resistance isn't

really an expectation so like usdc and things of that nature I think that you know it could make sense but as Sam was alluding to it's like you dump like let's say like you know you hack uh you hack uh 30 board apes or something like that you sell those 30 board Apes immediately across you know into a couple pseudo swap pools on open SE on looks rare you know get you get rid of them quickly they're gone within 24 hours you sell them to the highest Global bids so they're just immediately gone in reality what you're doing when you like reverse transactions the this usdc or sorry these board Apes so if you take these board Apes back because they're BCR um you take these board APS back really what you're doing is you're you're hurting the end the end buyer and that person wasn't in the fairy actor

they weren't malicious they weren't a bad person the hacker still getting getting away with all their ether usdc or whatever they turned it into um so it's like really most of the time you're actually only going to hurt uh people that were not acting maliciously so in my head it's it's kind of really uh I guess maybe kind of stupid the Stanford researchers who publish it say well we know that that's the case but that's how the law works you know the way the law works it doesn't matter if it's a stolen asset and then someone buys the stolen asset it uh you know it sucks for them but you know maybe that's something that's nice about crypto that shouldn't be changed um I don't think it's a great idea to implement reverseable transactions also like immutability is 100% a value

proposition of crypto sure as a buyer it's not always the best thing but as a seller it is like unbelievable if you look at um you know PayPal right like there's this big large PayPal scem I have no idea what the exact value of it is but uh basically someone buys something on eBay or on Amazon or whatever but through PayPal and they call PayPal and they say that it was an unauthorized transaction uh and PayPal is 95% like the far majority the time they're going to give the person their money back and the seller is going to get screwed and sellers actually have to price this in if you own a retail store you know you're doing the same thing with credit card fraud um if you own an online business you're doing it with PayPal and with credit card fraud as well but you're you're pricing that in

so assets actually cost more because businesses know that they're going to lose money due to these scams um so as a seller you know like crypto's finality crypto's immutability is 100% of value proposition yes that does lead to the buyers having you know like there's more power in the side of the seller than the buyer um that's 100% true and then also you know if you're not careful with your crypto you're going to end up with a permy that's just completely lost in the aits but um sad day but I guess like what I think that uh that's more about education and you know creating better user interfaces to deal with the space than it is about than it is about like creating reversible transactions that are really just going to screw over theend user and still let hackers get

away with their get away with their funds yeah Dan I mean those are all great points instant I'm curious just do you have any additional thoughts on that I know one thing when we were talking back and forth you know a lot of this per permission defi Etc then you a lot of people think in the future we're going to be interacting with like Ci front ends that connect to crypto in the back end so like my one thought is maybe like you have a soft finality on the CI front end so if I would have sent my permy somewhere I would have had 24 hours or something to hopefully get it back and then at times they actually do like a final settlement on L E1 I think that's a little futuristic to talk about and just do you have any other takeaways down yeah it's like tough to you know

you fast forward 10 years from now and like say hypothetically the Global Financial system runs on and settles on blockchains right like what does the ux look for like the for the individual person and while like people really in the weeds of crypto like as Matt so eloquently just described like we love the finality behind it like it's that's why we're here and like we like building on that and watching The Innovation happen um but for like the average person is that the best thing for them like I can definitely see why the answer is no there like I I feel like I don't have to like people like make mistakes you know that happens all the time and uh people aren't necessarily like equipped to be holding like their

own like you know their net worth in a metamask wallet or a ledger like that there's a lot of complications that can come with that uh so yeah like I I kind of see why this would happen and you know to me like maybe this makes something for something like usdc like they already have a blacklist fun function it's already like essentially tokenized treasuries they're not trying to be decentralized so maybe like this reversible transaction kind of makes sense for like something like usdc this is kind of just like a blacklist function with improved ux like instead of like I know tether if someone steals a tether uh and they can like map it out and like tether the company itself can say okay like this actually happened you got your funds stolen we will Blacklist

the stolen funds and then print you new tether so that's like essentially the same thing they're just reversing the transaction instead of blacklisting so you know in situations like that maybe this does make sense um but I think as it was already mentioned like if you steal funds and then just throw them into an amm I don't see how you can really reverse a transaction out of that yeah yeah I agreed it it really like breaks composability but Dan I want to say you uh so far have the word of the podcast with eloquent sounded great always trying to look for those so see if anybody can top them off um let's let's move on we have this Apple nft announcement which to be honest I couldn't actually find an announcement just saw people talking about this on Twitter um so high level it's basically

just saying that I think Apple officially came out saying that you can now have games and like sell your nfts through the App Store so if you have a game on there now the problem is a lot of people got like oh that's great they kind of mad because Apple charges 30% fees even if you're like a Marketplace so if openc had an app on there they're trying to charge 30% % on every single say nft that's sold it's 15% if you're under 1 million and you see this pain everywhere I was at a company actually my last company we didn't want to go in the app store for a long time because 15% is a lot right um but I I kind of want to skip that unless you guys have strong thoughts on it I'm more just curious if nfts come back again what are

what are your thoughts on nfts besides it's like pfp do do you think gaming is going to be this next sector where like nfts that's really like going to be its moment or does anybody have thoughts on what's next nfts Beyond just Twitter pfps because I feel like to degree that's that might come back but it's kind of died out for a little bit and I feel like if we want to cattle it needs to be something new yeah I would say gaming is a big area of interest for me like I just think it takes one triaa game that's just as fun as Call of Duty or fortnite or something else on console that really connects people and they're able to like talk and catch up with their friends and actually own the assets and move them around into different ecosystems I think we're a ways away from them I'm sure we

have a lot more axi Infinity types like boom and busts from now until we get there but I do think it will be what onboards like a 100 million people to crypto more so than defi like I can't even hardly get my friends interested in defi I'm like look I just took out a loan in like two seconds no credit check and they're just like I I don't care like what what do you do with that internet money so I just see gaming as kind of like a gateway drug and nfts are like the back of that and then just to touch real quick on the Apple point I think it's a good thing overall like I think they'll realize why wow like like maybe it's next Bull Run or the bull run after that but maybe they'll realize wow we're losing out on a lot of Revenue

we're not letting people pay in crypto we're we're taking way too much of a fee but maybe they'll be like wow Open Seas making a billion dollars a year now like maybe we should tap into that and since they already laid the ground work like they can kind of plug and play from there so I'm happy about it not how the implementation's being done but overall it's good news Sam can you give us like a two second update on why unicorns are your favorite nfts and what you do with your unicorns yeah all right I can plug my favorite nft project it's called crypto unicorns it's like a Farmville simulation for like anyone who played Facebook Farmville back when they were younger but they're introducing like little Mario Party game Loop type stuff and they're doing a lot of interesting things by combining like onchain actions

and offchain actions so like it's a smooth experience because like you don't have to click like a like a a transaction every single time and your metamask like with defi kingdoms that was pretty annoying for me so uh yeah I just and then also they're like really experienced game developers in uh freeo play so that's kind of what I've been looking for for a while is just like a game developer who has experience who's made a lot of games and kind of crosses the chasm uh over to over to crypto and he's super crypto uh Native so like he understands liquidity pools super well and like total d d gen honestly and uh that's kind of like what exactly what I was looking for so now I gotta hope that we get back to highs and uh get return from like down 90 95% Sam Sam did tell me he paid me a

little bit to let him pump his bags but uh it is it is hilarious seeing him with his unicorns uh Matt and Dan I think the Unicorn uh app is actually on polygon and we haven't like talked about this before but polygon just is absolutely killing it on the BD game like I I can't even name all the partners I think they've done something with Disney they had Starbucks the other day I think they even had another announcement what do you guys think about honestly I feel like what do you guys think about polygon obviously the BD's team is killing it do you think the technology is interesting are you do you think they like SP spray and prey technique with all these ZK like different Technologies they're working on I'm just curious what's your what's your idea of that because you don't hear a lot of people

talking about their Tech at the moment but their BD team is incredible so one thing about polygon that annoys me a little bit is that they sell themselves sell themselves as a layer too but in reality they're ethereum side chain um they're pretty much their own complete layer one they have their own risk assumptions they have their own validator set so you know they're not relying on the security of ethereum besides in a very minuscule way um anyways like that that always like annoyed me a little bit kind of think it confuses the masses but like you said their business development team is just you know killing it all over the place they're their Partnerships their Integrations they're funding you know project after project everyone wants to integrate with them um and I think that in reality in crypto pumpamentals

sometimes at least historically have been more uh valuable than fundamentals so at the end of the day I think that you know polygon could be a real competitor also Sam wrote this amazing 10-page report for going in through all the like they're testing out so many different Technologies and you know are they all going to succeed probably not but if they even managed to have one or two of these new technologies they're testing out succeed with mostly ZK zkm would be the one that I'm most interested in um I think that they are well set to have both the fundamentals and the pumpamentals to be a good project I definitely don't own any madic myself I'm not really interested in purchasing any but it's definitely a token I'm going to keep an eye on and

then also I just wanted to add real quick like side note for the nfts um we had like a not like an argument but a little bit of controversy in the research analysts group chat yesterday surrounding music nfts um and just like that's something I'm interested in I think it's a cool space uh specifically like Royal uh where you get the royalties by owning you know you own a portion of the song from this nft and then you get royalties based on it I think it's a really cool space I think there's a lot of regulatory concerns and you know most of my co-workers completely disagreed with me maybe I was going left curve um which is not always bad idea but anyways yeah I just thought i' I'd throw that in there send it to zero you know what Cooper terly came on if I'm if I said your name right Koopa

trupa um came on Empire the other day and honestly I thought it was really convincing too I mean I I I do love physical records and I don't know how this can like play up with that but if everything is going digital I don't even think there has to be some type of utility attached besides you just love that artist so anyways I think it's interesting also uh I do like polygon as well but none of this is financial advice of course um Dan do you have anything to add on that or what else are you thinking no I think I think Matt really covered it all there I think the spray and prey method as you called it is is interesting and like you know why not if you got the resources to do it uh you know I kind of like I like their

approach it's it's kind of unique to what we've seen other uh platforms try to do uh so yeah you know I'm not a mic B I uh I'm not a hater either I just just kind of neutral on it like you know I spend most of my time in defi so I'm basically sitting in ethereum made at a vast majority of the time yeah no makes sense the one thing I would add on the polygon thing where Matt says like yeah like they Market themselves as an L2 so I don't really love that if there was an evm compatible chain that would have launched in 2017 and marketed as well as polygon and like completely gone away like imagine if Avalanche launched in 2017 with their C chain like they totally could have just stolen a ton of market share a ton of developer activity

ton of users like fees Etc and really made a robust competitive to ethereum but like polygon and their team decided to stick by the ethos of ethereum and they continue to try and scale it today so I feel like yes I do understand the hate for the marketing but at the same time like it could have been a worse outcome for ethereum yeah definitely yeah and and at the end of the day I feel like there's no other ecosystem that has that great up PD and business development and that's going to be such a huge deal I mean Tech you always say Tech come first right comes first especially in crypto but the end of the day like you have to grab capture and like keep attention and they look like they're doing a pretty good job at it so honestly you probably I'm expecting to

see even Dows come up that like their specialty is like hey we help out other protocols with their business development and marketing because in in real life in traditional businesses that's huge but that's not something you see in crypto yet that I would expect um let's let's move on I think we can pretty much wrap up unless you guys have anything I just say Doan seems to be on the Run um there's been issued a red notice but he says he's like sitting in his room in Singapore so not really sure what's going on there I don't think there's a lot of to take away we've kind of already talked about what ter has done to the ecosystem to some degree um any of you guys want to talk about anything else before we close up I think we're good I appreciate you having us on Garrett yeah I gotta get

one I mean you got to plug something what's uh what's like either a report or something we should be looking at and why why should I care about blockworks research um so like blockworks research we as blockworks research analysts we provide investable insights that you're not going to find elsewhere so basically we spend a lot of time in discords governance forum um really on chain just like trying to get data and tracking transactions tracking wallets and our goal is to basically be crypto Twitter to narratives token updates governance updates and get them to our subscribers before anyone else um would basically all the information we're providing its goal is to be investable so whether or not it's something that be good for a token bad for a token good for an ecosystem bad for an ecosystem maybe potentially a narrative that's going to

form or seems to be forming so like me and Sam just did a a whole series on uh decentralized perpetuals where we cover dyx and GMX we call the incumbents and melium um and a couple other and you know we we have more reports coming out too but anyways like uh blockworks research really is like a required uh a required tool if you're constantly investing in crypto assets not only do we streamline the information for you but we're going to probably provide information that you wouldn't see elsewhere like you would not see on crypto Twitter or in your Discord group or whatever um right now we're really revamping our data so we're going to have some of the best dat like some of the coolest charts in space that you really wouldn't find elsewhere again um and yeah definitely subscribe to our newsletter we just made the block Works

research newsletter free it's a daily newsletter that comes out at noon Eastern Standard Time every day and we pretty much just cover anything interesting that went over the like that happened over the last 24 hours cool stuff funny stuff and best of all um stuff that might be able to make you some money or you might be able to help in uh use in your investing even though of course not Financial advice yeah Matt I feel like I'm in high school and you have like a note card like you know like in yourr sock or something that you just read from you just killed it thank you I'm just I'm just bullish block Works research so I like talking about it love it well I'll include all the links in the show notes definitely check that out follow them on Twitter honestly they're tweet threads are really great too

they're always just like six eight tweets but it really captures and makes everything easy anyways I'm G to start pumping their bags um obviously hit subscribe whether you're on Empire bell curve if you're on Empire and you haven't listened to bell curve or vice versa uh give it a listen and and yeah this is a lot of fun guys yeah appreciate it really enjoyed it Garrett thanks for having us sweet see you next [Music] time