The Evolution of Synthetix and Onchain Perps | Kain Warwick

Transcript

if you were a Trader and you were saying I'm not going to trade here at all and I'm only going to trade here you will get worse execution on average if you are not factoring this in as like one of your venues that you want to access now if you're the type of Trader that's like I sit on buy bit and I don't touch anything else all my assets are there okay cool we're coming for you to we're going to bring you across and say don't be on buybit for all of these reasons and we're going to give you better execution lower fees Etc all right everyone so on Empire you obviously know that we talk a lot about the institutions coming into crypto and that is why we are super excited to share that we are hosting the digital assets Summit we posted this since 2019 it's

coming up in London March 18th to 20th don't miss your chance to get ahead of the curve you can get 20% off with code Empire 20 we'll see you in London this episode is brought to you by toku the first comprehensive Global solution for both token compensation and tax compliance toku makes implementing global token compensation and incentive Awards simple with toku you get unmatched legal and tax support to both Grant and administer your Global team's tokens across the entire token life cycle make your token grants easy today with token all right everyone we've got uh the benevolent dictator himself Mr Kane

Warwick Kane welcome back on the show man hey what's happening guys what's up good to see you um so I was trying to wrap my head around everything that you're doing with synthetics and and infinex and it basically uh you've got all these experiments going on right deploy to base deploy to optimism deplo deploy Karina to ethereum uh Andromeda to ethereum snx chain on the op stack and the way I could best maybe summarize it is you spent five years working on the supply side with synthetics now you need to solve the demand side with infinex and I'd be I think just the best starting place for this episode is maybe get us up to this point of like how how do you see synthetics going into 2024 and then that can pivot us into this this infinex conversation right um yeah I was like

how many how many podcasts do we have here yeah ex yeah beex was like you might only have an hour and I was like I I'm not sure about that one yeah I know right let's let's see how we go um so um look I think the the situation in synthetics today is we have product Market fit in a single product in a way that we've probably never had before like actual like longevity of product Market fit right like the thing's actually been working for like a while and we've tweaked it and improved it and it's stayed working and the Market's changed it's stayed working and so I

think that like this is something that uh is is fairly novel in synthetics you know we've had like Atomic swaps and like Spa trading and like you know various things that like kind of worked for a while and then you know the market moves or you know something shifts and and it doesn't work any longer um I think obviously a big test of this is going to be uh the upgrade and and launch of perss V3 this this new perss uh um upgrade and I guess you know one thing that's kind of cool about it is it's like not actually that big of an upgrade it's like four minor improvements in like multiple directions but it's not like all right

everyone we got to totally change the entire model and like rip everything out and like reconfigure it because nothing's working um it's like it's it's directionally working um it's been working for a while it's it's like consistently gaining momentum so now how do we sort of tweak this right and then obviously it's synthetic so you know we have to make it harder by like picking a new network toy on and like a bunch of other stuff right but like in principle it's it's the same thing right um and so that's kind of setting the scene I guess for like where synthetics is at now um you know in in the end of 2023 going into 2024 is like we've got a system that's working um you know we are going

to deploy this new um upgrade that just improves a bunch of things um and then we're going to run some additional experiments in parallel to that and you know one of them is like the collateral question which is a huge question you know I mean uh Santiago you know you've you've had heard this debate for many years right about like is snx good collateral I was gonna say you know it it comes up time and time again you know it resurfaced during the uh Luna FTX debacle right everyone's like well how is synthetics any different you know it's been collateral and you know maybe I don't know if this is a good moment to do it because I think it would be actually super helpful for people to appreciate um how synthetics has managed to survive

all these years and Thrive yeah I you know what's the difference what's the difference between Luna and synthetics there's a couple of differences yes they were uh both systems that are collateralized by their own native token which is worthless if the network doesn't work right like that's the fundamental concern that I think every mid curve to like maybe if you're generous right curve person has had about this right you know um and and like it's like yes if the network fails then it's worthless all like just like definitionally it has to be right the

the thing has value the token has value because the Network's working if the network stops working it has no value and the whole thing collapses right so when people are like can it collapse it's like everything can Collapse by that criteria right like if the criteria is like if the thing stops working does it stop working then yes of course right it stops working um and so you know the question is like what are the ways by which you can stop working that's that's the big thing right and I think the the difference between Luna and how Luna scaled up with this like Ponzi interest rate is if the interest rate even and like I mean there's some real world macro parallels over the last 18 months right but the interest rate even looks

like changing does everyone instantly flee and the answer in the case of Luna is like yes right like there were a couple of gestures of like maybe we need to lower the interest rate and it just creates this like rush out the door where it's like whoa I'm not going to get 20% well then this is not worth the risk right because the risk is like ruin and so then you know it's like well maybe we'll lower it to like 18% or like 16 or something like that and everyone's like this is we see the direction this is going right and you know it's a game of musical chairs and all of a sudden the music like you know they turn the volume down like by 10 Deb and everyone's like out of the room right like it's just like fleeing and so when you look at synthetics you're like Okay

cool so what is the the mechanism by which that can happen you know and the mechanism by which it happens is fees stop being generated if if there's no more fees then the token's worthless if if the fees go to zero right but it's not reflexive in the same way like the the the token price going down doesn't impact the fees and you know fees going up doesn't necessarily impact the token Price Right like they're related but they're not like so tightly coupled and so the reason why synthetics has survived is it's had like fairly conservative parameters you can only borrow so much you can you know you have to have this like five times collateral ratio right um back in the network and

it's consistently produced revenue for you know a really long time and like that's that's it that's the secret sace right like the thing that stops IT from collapsing has been consistent and so when someone's like but what if everyone stops trading and it's like well if everyone stops trading then it's worthless and you should shut it down and move on and do something else like obviously right and I guess I guess to add a little bit more context to that in the case now as we know chai was an absolute wash I mean it was it was fake numbers and it was not even there there right the whole time yeah well I mean I I asked number of times like hey because that was that actually was the most interesting thing from my perspective it's like okay they're getting actual

consumer whenever you see something claimed they have a lot of consumer attaction you're like wait a minute like well we had we had a very combative episode with do you remember that episode with with with d was very it was one of the most combative episodes we've ever done on Empire so yeah I mean I I think that was the the big difference now and and uh um anyways I want to go back to obviously V 3 pers and pers seem to be all the rage these days and you know you have GMX you have other copycats as you call them which you know uh I'm curious uh maybe if you can touch a little bit on that you know what's the main novelty historically some of the challenges that have um you the challenges around deploying pers on chain and why it's

different now and you know what is the trader experience look like yeah I mean if I may you know I can't help but like get embroiled in the drama right of of even the it would be K episode if I mean you know so like I find it so interesting right like you know the the whole mechanism by which uh Tera worked right and like you know I've tweeted about this before like there was a period like I a very Petty person right um and you know I hold grudges for a really long time like you can even see that tweet tonight like you know uh talking [ __ ] about t right that's cuz like Arthur like [ __ ] like brushed me

one time in like 2018 and I'm like one day I'll get him back and you know it's that like snarky tweet about like how dumb it was to use oaml to like write your old blockchain and like it's like so it's very Petty right but like you know the thing that I always found interesting about doe was like there even from the very beginning when I when I met him you know I was sitting on stage next to him and um Jordan was in the audience and it was five stable coins um there was like a representative from maker I think someone from like basis and and they were kind of going through and they're like What's your stable coin design and um I'm sitting there and I'm like the second last

person to talk in doos and he literally describes Haven and I was like what just happened I look out I like Jordan who was like you know one of the other like uh early synthetics um uh people and I was like looking at him and he's looking at me like is this real like are and and I was like I was like okay cool like but you know but it's in Korea and like you know I talked to him later and he's like the the angle is like payments right where like we've got all these merchants or whatever and I was like okay cool and then like a year later no Merchant adoption like nothing right and then bare Market hits um you know real hard like Co everyone's kind of disappeared or whatever and I'm like chiseling this

guy's grave I'm like you know basis is gone terror's gone gone like you know all of these like Flamingo whatever 18 other names that it had is gone like you know all of these things are have disappeared um and then all of a sudden do just comes back out of nowhere and he's like actually no like all of Korea is powered by this thing now and I was like that's just like not credible at all like how like how is and then just goes out to a bunch of VCS and raises a ton of money on the fact that this claim that like there's 10 million people using this network for payments and I was just like that's that's insane like how how could we possibly like surely someone can go to

Korea and like disprove this but like there's something about Korea where like it's impenetrable to people in the west they're like have no ability to like you know I'll tell you my side of the story I met him at Stanford he was at I think he had gone to Stanford I met him at a cafe there he was raising a seed I had invested in Haven as you know and it I was like well no it sounds too too similar and then he was very combative anytime you pressed him hard on any diligence question he had the Knack and the ability to make you feel really stupid for asking the question and I guess a lot of EC's went just like like fall prey to that and be like Sam I think had a little bit of this too and

then he for context he went and did so we copied the sa coin design he then copied the the the with mirror I believe and I looked at mirror as well and look it was a very sweet deal on a number of fronts it was like attractive the terms whatnot and but I remember calling you and saying hey look uh I think uh it looks very similar to synthetics we're gonna have to pass on this and yeah one thing I did not want to do at the time was cross Kane um he can be benevolent but he can also leader yeah that would not have gone down well um Kane with with with synthetics I mean the way I understand V3 is I mean it's always it's always been a purpose platform but now you're getting into into spot right and there's this like

kind of new approach it actually was it was a spot platform and and spot didn't work right like that was the original the original well that's what I was going to ask is like why why come back to it it feels like you're now there's this with infinex and synthetics V3 kind of this goal to be on par with centralized exchanges um the the new collateral model which we were just talking about yeah I look I think um my my sense is that like perss Remain the sort of breakout product right um in uh in in crypto today right and you know when I look around at the market it's like what are the uh you know things that defi can go and and you know credibly take from CI

and from centralized exchanges um it's perks you know there's 30 50 plus billion a day in notional volume and Def doing like a billion of it right um you know maybe a little bit more on a good day and so you know I look at that I'm like okay like there's just a huge opportunity here to to you know take that on versus say spot where like I think defi has made better inroads you know Unis swap has has done a really good job um and you know there's a whole bunch of like aggregators of like different you know uh like amm platforms or whatever um so so to go after that feels more challenging I think you know which isn't say we won't have spot

tokens I think there are use cases for like a synthetic uh spot token especially for things like bridging but at the moment the the obvious Focus has to be pers like that's the product that people care about and and that will move markets I guess yeah there so if we accept the you had this one of your one of your blog posts it was like if we accept the synthetics protocol um needs to be where the users are how does it get there and there are these kind of three approaches that you guys laid out I'd be curious how you like how you made those I think one of them was deploying was like Fork it all the way basically deploy a fork of synthetics on every single chain the next was I think implement this uh it's like the unified liquidity Theory and the next one was um I don't remember the

next one something about minimizing messaging or you can tell me the third one but I'd be curious about like how you thought about those three decisions and like how you came to the conclusion of what to actually do there well so I think the you know we've always had this pretty Grand Vision right of like when we get to a point of uh multi-chain synthetics that it needs to be a unified protocol and that I think has been constrained by the fact that uh synthetics if you lose the sort of fungibility of the network and and of the tokens and um you know of the debt pool and like and all of these things uh

it kind of breaks down right and we uh um we had an aversion to just like kind of forking it and deploying it um onto different networks uh for a couple reasons one was like fragmenting liquidity because you also have this problem like snx is the only collateral and it's a finite resource right like you can't really Fork the token onto Every Chain um I mean you could but like it doesn't even really solve the problem right like it probably you know crypto efficiency allows you to like get away with that for a little while you can like Fork it two or three times eventually people are going to catch on to like wait this is just the same thing you're just printing more of it every time you go to a new network so um so we had all these constraints where it was

like okay um you know we need this like unified cross-chain messaging thing um and really I think the actual answer was no this collateral constraint of snx and and fragmented liquidity is what's holding you back right like we we don't even have a credible path to this Unified messaging like protocol where you know the state of every single deployment on every single chain is in sync like I don't think even you know chain link or or any of I don't think there's anyone out there who's doing cross-chain messaging who's like yeah we're about to nail that right like that's just a a

long-term thing and so it's like okay we can wait for that or we can uh you know maybe pivot and try a different approach and just for context here because I remember you being one of the first ones to really start thinking about an L2 given how fee intensive synthetics was you had to claim your back to fees you had to claim your fees every Wednesday was I remember I had it you know you still do you still do just is like coffee right it's getting coffe every Wednesday you had to claim your fees and it was very expensive for many users um and so you then start thinking about an L2 you become very close with the optimism team people should go back and listen to some of those episodes now you're in a state where okay you know you're deploying optimism I think you

one of the first if not the first um and now you're facing a different kind of challenge um you're I I think I'm looking now in an environment where over the last couple weeks the Market's been you know up only and some of in this market environment which you've not not had some of these mechanism designs start to crack like uh you know because the the bigger challenge that I think people don't appreciate in synthetics model is anytime you're minting and claiming these fees you're essentially taking short on a market that can be a very volatile and you don't want to be caught if you're always short on crypto you can lose a lot of money but the way

that goes happens in the synthetics model is a bit different than a GMX model or some traditional kind of Market maker being consistently short um so I want to perhaps now or later dig into that distinction because it I think it really ties into can this per really work on chain and can scale because you always need to attract a pretty balanced Market where people are taking both long and the short and the protocol is always net neutral because you don't want to be taking any market directionality so I think this is a a really good question and again you know I I I tweeted about this uh maybe like a couple weeks ago where I was like you know I'm probably the person with the

singest single largest lifetime losses right staking or or being in a in a non- delta neutral uh dbes protocol and like I it's partially joke and partially like not even funny at all right like the amount of money that I've lost is like in the tens of millions of dollars from staking and synthetics um for a whole bunch of reasons um the primary reason is that for the vast majority of its life until a couple of uh synthetic CC's turned up and they were like wait what if we didn't have to have directional exposure right the the old school synthetic way was yeah directional exposure is inevitable right like you can't avoid it if the Market's going

down then people are going to want to be short and if the Market's going up people going to be want to be long and so your job as a Staker is just to hedge this right to you know take your assets and and hedge it um now that is easier said than done right and the market can move really quickly and then you know also you do a couple of weird experiments and all of a sudden uh the the skew in the network is maybe different to like your directional bias and now like I'm long but then the Market's crashing and as the Market's crashing my debts going up and so I'm losing money on my hedges and my my debts actually increasing right because of weird issues with Like Rappers and we

don't need to get into the details but like we just didn't have a good way of scaling the collateral and scaling the the um you know amount of um uh Assets in the network without doing weird things like wrapping which just increase this uh skew in the in the network right it it forced us to almost be like no matter what direction the market was going we were kind of positioned in the opposite direction right um and and you know has to do with curve pools and a whole bunch of weird stuff right um and then a couple people came along and they were like well that's dumb right why don't we actually build a mechanism where the market actually brings it back into alignment right um and you know we

we've been working on that for a while in this like P's um thing and we tried to do it and uh the first version didn't quite get it right the incentives weren't near really aligned and then we tweaked it again and this new version that's been operating now for like a year uh the latest version it's like you can look at some of the charts um I don't have them here but maybe you guys can we can track them down for you um but like they're like some of the most beautiful charts you you can imagine in crypto like it's just a line that like ticks along and like there'll be like a little Spike and then it comes back down little Spike and like the spikes are for like minutes or hours sometimes and it's just like this perfectly delta neutral long short thing that just keeps going

Works um and this the upgrade the propose P3 upgrade just makes it even better you know increases the incentive alignment for people to bring the market back in into alignment and so all of a sudden what used to be you know this thing where you need to get paid a ton of yield to justify taking the risk of staking in synthetics all of a sudden now like you actually have no Market exposure you don't have to hedge yourself at all like the thing hedges for you um and the market has not yet worked this out that like staking snx is no longer this high-risk activity it's actually a super low risk activity where you know you still have Black Swan exposure or something like that but even in weird stuff like Ripple you know when

that Ripple thing came out and ripple spiked crazily and then crashed back down then spiked again the the total exposure of the debt poool was like a million dollars and and this is how funny it is right like back in the day losing a million dollars lping in in synthetics was like a Tuesday like it was not even like an event like it was just like oh yeah of course like we're up a million we're down a million like it would it was so volatile the debt pool but all of a sudden people got got so used to this that they were like up in arms that we lost and I was like guys like losing a million dollars is like that's the entire network that's you know it's a it's a billion dollar Network and we lost a million dollars in a day right

and then people like this is unacceptable so it's just really evolved to a point where um you know the expectation has just shifted of you know what what you have to do but that's not the case for everyone right well not everyone out yet right and I I wanted to dig deeper into that mechanism and I guess for the uninitiated um because perss are very novel to crypto historic it's a d Market that has been dominated by centralized exchanges primarily you know non us now coin bases launch their own uh but it's a really really Capital efficient way to get exposure to a particular token um historically we we talked about this in a prior episode it's relied on this funding rate to keep kind of the market in check of rewarding um any imbalance

right whether you're long if the Market's really long it rewards someone who go short and vice versa with this funding rate mechanism which is constantly dynamic adjusting based on kind of the flows um can you talk about how that mechanism is working in synthetics um and and then go into kind of the differences between other protocols yeah so I think the the per design right that like bitmax uh initiated it's really genius right like it it you know solves a whole bunch of problems with Futures that um I think like in terms of financial engineering uh you know um novelty or or whatever like it's it's one of the most

amazing things that's been done in crypto right um but the the way that you keep prices um in line right with um with a traditional per is you know people can keep buying right um you know the the spot price of Bitcoin could be 30k right and because of Leverage if people are Direction long like they can just keep pushing the price up there's nothing to start to say that the per can't trade at like $50,000 right um but there is and this is the key uh sort of mechanism design um Improvement which is the funding rate you can keep buying as long as you want but keeping that

position open will cost you an increasing amount of money to the point where it becomes punitive and you know people are forced to sort of close their positions right um and so that is what keeps the spot price and the the market price of the uh the per the derivative in line in a a amm style Oracle based uh per this is not a problem for us the spot price is the Oracle price they're the same thing um they can't actually deviate um now the problem with them not deviating is you got a ton of degens with a bunch of Leverage that want to go long Bitcoin and the price just stays 30k right they can just keep go like just going you know you can hit that

thing all day long and it goes 30k 30k 30k 30k and you know yeah you've got all this directional exposure because you're not actually Shifting the price away or or you tamping down this this thing and so the mechanism that we use in synthetics is we say if the market is directionally long and the skew in the market is skewed long then those people pay the funding rate which is kind of the same mechanism of you know if the price is out of alignment then you know the Longs pay the shorts right um we don't have the price being out of alignment what we have is the market being dislocated where there's too many Longs and not of shorts right because you're not trading against each other you're trading against the you know the amm um and so that solution was the

right solution it just took a while to like dial in the exact parameters and and we've got them dialed in now and that's where I say this graph is like soon as someone comes along and you know hits that and gets the skew out of line and Arbors come in and just go bring it straight back down um so yeah it's that's how that's how it works and and why it works yeah from a Trader experience um the funding rate often times has been less competitive on chain uh and the fees of course have been higher um are we closer now to parody um well certainly I mean there's a subset of users that refuse now to use certain uh pers because they don't want to use binance or whatever um but are we kind of how close are we to being a parody

with the exchange exper on the offchain experience yeah so I think like my my intuition and um and you know I don't even know if this is this is accurate but my intuition for like perps that are based on this amm model um is that the funding rate on average will uh approach zero as the open interest gets larger right like because the dislocation of a single person coming in and like hitting you know a million dollar notional position just doesn't really move the dial right if you've got this huge bucket of open interest you've got this tiny little thing that's kind of moving along right and that will compress the funding rates and so the fact that funding rates are I think on average

like in the large markets I can only speak to synthetics but it's like two to three times higher on average um which is not amazing right like that's that's something that you know we should be aspiring to to improve I think people do sometimes get confused uh is they they look at the like eight hour funding rate um on on binance or something like that because the way that funding rates are kind of managed yeah they're they're also not uniform yeah it's not uniform it's a bit weird you know they've got different different lengths of time for funding rate and they discrete intervals versus like continuous funding my my view is honestly continuous funding uh is is a like feature right um it's not a bug and and you know these discret eight

hour intervals even though it gives you in theory uh like more certainty you know as a an arbitrager or whatever of what the funding rate will be It's actually an inefficiency in the market the market actually can be less efficient because you're not reflecting the actual current state you've got this weird eight hour lag of like where the the state is um and so you end up with these kind of swings around those points where the funding rate changes where people are closing and opening positions and it just creates marketting efficiency so like having anything in continuous time is is going to be more accurate so um I think it's an improvement but it does cause people to get a bit freaked out because they're like oh the funding rate is this which

is the continuous like one hour funding rate versus like eight hour whatever um but if we had you know a billion dollars of open interest in the you know BTC uh uh per Market on synthetics I think the funding rate would drop down to you know close to or or maybe even less than we don't really know you kind of need to see empirically how the market responds but like it would compress it significantly right the open interest now is is much much smaller than most of the per it's just a function of size right yeah like in theory right like you don't know how react because if you jack it up then maybe someone comes in and like hits you with a100 million emotional trade which great I would love

that that would be awesome um but you know we don't we we'll sort of see like over time it has compressed a little bit yeah and what kind of uh Traders are how would you kind of characterize the pool of traders that are using this um so this is this this is an interesting question because I have no idea um I've been for the last uh five or six years um operating in an environment where we do not uh talk to users uh nor really care about their preferences build things AAC Kane like is that just because you have like like like if you build an app in fintech you you have so much first-party data on those users you

have none of that in Defi and it's just not worth the headache to try to figure it out like it's even maybe worse right in synthetics we went out of our way to completely uh block the ability to capture any customer data like we actually like disconnect you know we had heat maps and stuff in the early days and we like there was a little bit of uh kind of uproar like back in like 2019 or something like that and and I was like you know what actually this is fair like if the purpose of this is for it to be this you know open permissionless thing why are we capturing all this like metadata about people we shouldn't be doing that that's user data youly you certainly have the ability to understand okay the

average user that is using this per and synthetics also is interactive with GMX um for binance his average wallet here is uh you know 10,000 or you kind of segment it into wallet sizes uh and perhaps you you can do that the question is do you do you do that right and certainly in the case of I think you know I can only speak for synthetics like we didn't make an effort to do that um it just it just wasn't something that that we did um which is it's its own thing I guess but what's interesting um is over the last like three months as we've been working on infinex um there is a different social contract as at

least like this it feels like implicitly there is right um if you turn up and you put a username password email you know in and create an account there and obviously you know you need to sort of accept there's going to be some you know tracking or whatever it's a bit different to like turning up to what is supposed to be a Very Thin Client layer in the form of like a defi dap that really shouldn't be like tracking you or doing or storing information about you or whatever it's just supposed to be a very thin layer that sits on top of the contract TRS at least ideologically that was my view maybe wrongly but like that's just kind of the view that we've had um but if you've got like this Rich web 2 like experience where you're actually inside of a platform and the

platform is giving you access to the things it feels much more reasonable to identify what users are doing and like what are they clicking on what are they not clicking on where are they getting confused and and so all of a sudden you know um we've got people that are like doing user interviews and it's larious like you know people are saying things that I'm like huh that would have been good to know that that was a thing like never occurred to us really to like talk to people you know we talk to them in Discord but like you know it's not very it's not a structur synthetics Discord is not exactly well they're very vocal I guess it's not very user inter all right everyone so we talk a lot about the institutions coming into crypto on Empire Santi and I are both

headed out to London March 18th to 20th for blockworks his eighth ever digital asset Summit Das this is an Institutional buttoned up conference that we've hosted since 2019 I like to joke that it is probably the last remaining kind of suit and tie event in crypto people are still wearing suit and tie it's pretty funny you'll actually hear from a lot of the largest institutions in the world coming from Standard Charter FIS JP Morgan framework folks coming out winter mute vanc Goldman Sachs there are a couple big themes of this conference one Bitcoin Catalyst the having and the SP ETF two A View From the buy side three rw's tokenization and stable coins four Global regulatory Frameworks five institutional infrastructure including

Banking and payments and six the macro case for crypto if you have anything to do with the institutional side of crypto you have to be there Santi and I got your back we hooked you up with a 20% off code it is Empire 20 there is a little competition running internally at blockworks to see who can drive the most number of tickets so helps Santi and I out register with our code and you get 20% off that is Empire 20 this episode is brought to you by toku the first comprehensive Global solution for token compensation and tax compliance if you say yes to any of the following four questions toku is a no-brainer solution for you number one are you planning to launch a token number two is your token

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Foundation Min Foundation hadera nosis safe getcoin and many more reach out to toku that is tok.com ire T ku.com Empire click the link in the description or DM me on Twitter and I'll get you connected to the team I have one more question actually about synthetics before we before we move on to infinex stuff um we were talking about optimism Kane why what like when you think about l1s and just like the execution layer in a perfect world users would just go to the best product right and they wouldn't really care about the execution layer but it's clear because databases have tokens that they do care about the execution layer how I'd just be curious

to get your updated view on like how long this kind of fragment fragmentation of users at the ex execution layer less until someone comes along and Aggregates the users at a layer higher than the execution layer and and that like that's not supposed to be like a cryptic response right like at the moment this is the way that we interact right most of defi interacts with with uh smart contracts right we have our own wallet that we own right um we have like a plug-in or um you know a hardware wallet or some combination of those and we turn up to a right or Unis swof or whatever and we click connect wallet and I take my thing that I own that I control right whether

it's a plugin on my browser or you know it's a hardware wallet and we click connect I connect my thing I do my thing and I disconnect bang and the relationship is like very transa like transactional in a way that doesn't exist anywhere else right and then I go to a different appap and I click that and I connect and I do the thing and I disconnect there is no sort of longevity of relationship there like I'm not like a a user on the platform of of a the way that I am like a user on the platform of like Instagram where like I have an account and I go to the thing and like the information's in that thing and so there's no way to really aggregate users or uh or aggregate you know even

liquidity or assets or whatever right and so one of the things that I think about infinex that we will be able to do is we will be able to say you have an infinex account you you sign into that account it's your username and password that you put in once you put that in you turn up and there's a whole menu of things that you can do one is per one might be spot it might be spot via uni swap it might be spot via cow swap it might be spot via some aggregator or something like that right you can also stake eat it might be Lio it might be rocket pool it might be you know an aggregator of both of them right but you will have your assets on that platform when you think I want to go and do a thing you will not think let me go and

grab my piece of H Hardware where all of my things exist and bring that to the platform connected and then disconnect it you will just log in and all of your stuff is there and you just choose the thing you want to do and all of a sudden we'll have like aggregation of users and of the user Assets in a permissionless layer right like it's still non-custodial we're we're not doing a CI thing where we're like trapping their assets in a database and taking control of them but we're going to have this like aggregation layer that sits on top of all of these smart cont tracks and will'll be able to present to users new things as they arise like friend Tech or you know some novel thing right and like until that happens people are going to

exist on their favorite place where they like to connect their wallet right like I connect my wallet to things that are on arbitrum like that's a sensible thing to think in 2023 I don't know if that will be a sensible thing to think for the average user in 2025 hopefully not well I mean exchanges have been um if if you look at the behavior that has happened in certain moments of time like when binance launched BSC like all of a sudden all their users just went to BSC they didn't know any better I guess um and coinbase has also been a times very opinionated in which l2s it allows direct withdrawals and so you know Yan know I My Views we're just so early everyone's kind of a beta tester when

you once you get like 10 20 30 50 million people that that's the type of user that would just absolutely no care may not even know what ethereum or salana is you just will want to do stuff um and Kane so so you launch infinex um I remember you call me said kind of I think it's now is a time to really allow users to deliver an experience to aggregate it and kind of curate is it fair to say um Your Role at that point is when someone logs and creates an account you are curating the menu of things that show up right uh in a similar manner when the first iPhone came out you know Apple had a say and still very much does on which apps show

up um what you can do and not do you're potentially taking a view on which apps are secure vetted which are not um what so is that true and also kind of what role as a developer do you take in in this type in this protocol and how does a user experience compare to some of the other products have been around for a while like uh some of the easier wallets like Argent and Phantom and some of these others that have been around for a while but you know I think all of them has especially like Argent like kind of has hit in my point like like a wallet hasn't scaled as much as I would have hoped yeah it's it's a good question why

like the wallet thing hasn't worked right um my my sense is that one of the reasons is that the vast majority of people in crypto uh for a long time at least right do most of their transactions on a desktop like or laptop like that's like you know it's in browser right like that's that's just where most the activity happens and trying to migrate them on there when a lot of deps like the the you know uh mobile app experien is is very uh weak I would say right um you know is is challenging right and like every time people try and do that it's it's just a hard thing to shake right um but I think

that also has to do with like signing and like you know custody and and a whole bunch of things so um the question of like why will this work versus something else I think the primary thing in my mind is that you need to have a product that people want to use like that they're desperate to use right and at the moment uh people really want to use perss right um there's a ton of people using per 95% of the volume that's happening is happening in centralized exchanges in people's databases right and most people it's not that it's inaccessible to them it's just not really like a good ux to

justify them moving right they're willing to take the risk of getting rugged by a centralized exchange uh which is you know not even like a crazy idea you know in 2020 three given what just happened so recently and yet people are willing to take that risk because the ux is just not there for uh for Defi and so if we can get the on boarding and user experience up to the same level like the web two level that people expect from uh like a centralized exchange then I think that can be the wedge that we drive in to really kind of bring some users uh onto the platform and having done that once you go to user base with their assets there right it's

hard to get people to migrate their assets to your wallet when they're already kind of on metamask or they're on you know a hardware wallet or whatever right like that's probably been the hard thing I think um but once the assets are there then you just it's a distribution channel so to your point around like the App Store yeah probably it starts curated but one of the things we've already done as we've decentralized governance very rapidly has been to allow people to earn governance points from being a SE Trader from you know potentially being like a Unis swap Trader from being a GMX Trader and so uh you know the next thing that we add let's say it's staking right so now if you are uh you know a Lio Staker

a rocket pool Staker or even like a solo validator you'll be able to earn governance points and why do we do that because we want the people who are doing these things to be participating in the ecosystem and and deciding which of the Integrations are sort of most optimal right and helping to vet them so it's this like you know governance curated App Store of every dii app if you will yeah and the revenue model for you guys is you're taking some commission off of user underlying user activi say they're using going to Unis swap you take part of the swap fee um or you strike referral programs with these protocols

just on a per user basis how does the ization work yeah so perss is easy because there's already a mechanism for this right like there's there's rev share kind of baked in um with these protocols um you know Unis swap just added a uh you know um just added a front end fee right um you know things like um liquidy have had like this front end integration fee for a long time I think the more aggregators there are the more pressure there will be because if you have two lending protocols and one has this baked in and the other one doesn't well I can tell you which way governance is going to go right um you know if a implements a 10% you know

referral fee the governance Point holders are going to be like well we're going to a like that's just what's happening yeah um I I saw a tweet of yours uh not too long ago it said there's a there's a huge process to select the initial delegates I believe and and you came out of that I think there was a lot of reception there was a lot of excitement a lot within from within the synthetics community and then and then you tweeted my God this is really painful and uh something to the effect of we need better tools to identify really good delegates and my question was well you and my response to that was I

totally agree I think when we find this type of tool it will help fix democracy um and I think this is a broad discussion like I mean I think think look every protocol at there at some point has a dow decentralizes governance there's decisions that need to be made you can be protocol light or protocol heavy there still needs to be some sort of Dow that you know um for decentralization purposes and and and taking some sort of action on these decisions um what's the your just now overall kind of house view on Dows and governance and how do we go from here because I think uh especially in bare markets the attention really wains and you know uh that can there are a whole

host of vectors in Dow governance that I think haven't surfaced but are there um especially I worry in a bull market some of these vectors probably will get exploited um uh once the B like you know the these Dallas control sizable treasuries can make protocol upgrades I mean it's some of them perhaps haven't been as carefully architected and it might EXP Expos some pretty big cracks um now or down the road and then the participation rate has been zero so anyways loaded question but what's the house view on Dall yeah look there's a there's a lot to unpack there I'm you know somehow I've been able to maintain

like my naive around uh governance in spite of like years of being beaten over the head with uh all of the governance problems and you know even like thinking about a bare Market I said this uh you know as the market kind of turned um a couple years ago for for defi certainly like now is the time right in a bull market no one's ever going to focus on governance right like everyone's like scrambling around to you know catch the money falling out of the sky right like governance is the the least of our concerns and in in uh the bare market like we need to focus on that look I don't even want to say that we've made an attempt at that and and like I'll I'll hold synthetics

particularly to task here right um synthetics over the last I would say 18 months has had the least governance upgrades of its life right so we've had 18 months of bare Market you know kind of down only and in the lifetime of synthetics it's done less to upgrade its governance than it's ever done right at any other time and I I just like I think the incentives are just not there right like what I've realized is it actually requires someone you know driving that like you need someone who's mandated to to drive that and like force people to like make because it doesn't matter whether it's a bare Market or a bull market it's never going to be the

sexiest most urgent thing to do right um and so you know how how you get a community to like invest in governance improvements I just I don't know the answer to that and that it's probably the thing that I'm most concerned about uh just in decentralized governance General well that's interesting because because if I remember correctly your governance was very active historically in bare markets like the first 2017 I mean it was a huge Haven to synthetics overhaul yeah look a lot of it perhaps was the core team The Haven team and other people that surfaced from within the community and the the Discord but then over time we've had other kind of ups and downs and I just remember the

the amount of upgrades on the sort of cadence of every three months or so but yeah so I I think just to be clear right like governance is as Lively if not more lively than it's ever been but it's static right like there's no attempt to improve the governance right so it's like we have all of these governance issues and and you know um things that should be improved like the most obvious one with synthetics is the uh the protocol da right protocol Dow is the multisig that governs the thing and you know I've been saying for years we need to get rid of this we need a mechanism to bring this fully on chain right and you know it's 2023 almost the end of 2023 and yet here we are it hasn't happened

right and it's like investing in something like that is just never going to be the highest priority um so you know and and in like in spite of like the regulatory environment and like all the pressure that's coming like we're still not trying to like push further decentralization um it's it's just a bit scary and like when I look back like where did it come from as you say it came from like probably three or four people in the community including myself who just like were obnoxiously agitating for we need to improve this we need to improve this we need to improve this and when those voices you know are not active all the time it it shifts into this like kind of business's usual mode

of like okay governance works and like you know no one's trying to like pick it apart and like work out what are the edge cases and the attack vectors Here's a thought experiment because at one point you left the synthetics Council or you know your role as a sort of top down command you end up going to benevolent dictator take I'm taking a a less active role and then you have to come back after a year or so uh saying no actually I think there needs to be a little bit more handan holding here and and top down directive and I think it's that tension of look for Better or For Worse the regulatory environment has dictated decentralized as quickly and humanly fast as possible and I think that comes with a serious

tradeoff of the Cadence by which you ship the like I unfortunately think it said differently if you invert if the regulatory environment was not such I think you would not see this push towards Rapid decentralization on the governance side and you would more take an approach of web to which is like for instance ovium your brother like games like just like what are you decentralizing theity has no say doesn't know how to build a [ __ ] game they know how to play it hopefully but like there's a very talented team of artist creators that needs to run chip right even the I've been on the council there I think I was the longest standing council member there for and the quality

of the conversation was like God this is like talking to like kindergarteners like I'm like there's no ien everywhere I think everyone feels yeah that's what I'm saying like I'm like there's no business for us to be talking about this like can I can if you have an issue you can call me and I can hopefully hear you out and be a therapist as an investor not get in the way but I'm not here to like you know I mean like if you're putting a responsibility for me to vote on these like I'm sorry but I it's above my pay grade you know what I mean and my question so that was the context for all this the question really is if we can get some regulatory Clarity where tokens can actually have a fee Revenue generation model can can be kind of

these hybrid whatever we want to call them and we don't have to dance around this decentralization theater that happens at times do you think that a the type like how would you wave in that scenario how would you go about like rearch in governance or do you even need to have these things you know I I sometimes wonder whether like the the very adversarial and progressively more adversarial environment is actually not uh like a feature right as painful as it is it's it's like natural selection right um there's this forcing function uh that's sort of culling the

Wake if you will right the the you know the projects that are not willing to decentralize or or this chilling effect right of um and forcing everyone to like actually be decentralized in a way that I think if Regulators were like this is amazing this is the best thing ever we would be completely centralized like what would be the what would be the the incentive to be decentralized if Regulators were like yeah great keep going like it would be just FTX is all the way down um you know like well I want to challenge that because I think you sure the problem with FTX was transparency I think yes now if you have an environment where you start you build in the open it's an open

source project you know I think you can verify proof of funds you can verify the source code you can verify all these things um while still you know maintaining control and I think if if as a token holder I think we can crystallize the type of like governance rights that a token may have now of course a lot of people there was no board in FDX like it was just like but I think um look FTX is but like LUN Luna's not far off though right like Luna was its own blockchain right how did doe manage to centralize that thing so effectively and yet it was like a

blockchain it's pretty impressive right um you know people will find a way to maintain control and and hold and so if there was not a forcing function like it's about control right for me the decentralization is about ensuring that you do not have like some top down hierarchical control mechanism that's what like I think it's a a better coordination mechanism right and so if we're not using it for coordination if we're just using it for like open sourcing the software and making it available or whatever that's that's valuable and I think that would continue right like people would deploy things like Unis swap or you know whatever right um and maybe we'd have more stuff like that but the the interesting thing to me or one of the

most interesting things is like how do you actually decide what to do like what's the coordination mechanism and I think the having Regulators who say you know if this person controls this thing I'm coming after them all of a sudden you have to be like whoa how am I supposed to do stuff if I don't control it yeah that's not a thing that we've had to deal with like corporations like no I control it I'm the guy I'm the CEO I control it I do you know you can be the CEO of like a Linux drro and you release everything open source and you have like some weird Revenue model but the control and decision making process is still top down hierarchical MH yeah yeah I mean it's I guess what you're

saying that comes at at the expense of like efficiency and that's that's just the necessary trade-off that one does when you try to build in a decentralized open source context so I I won't uh no I will actually like I was gonna say I'm not I'm not gonna explicitly called this out but like I have a thesis right that if we had not been under such duress right to decentralize decision- making that the vast majority of projects and like let's take ethereum right and you know I'm sure some people will be like no this is not right but

honestly I think if the ethereum uh cord devs had been operating in like a single room together in an office working on you know some of the problems like plasma whatever right like we would have we would have gotten to the merge and and we'd be where we are today like in 2018 right the fact that it was this like distributed coordination mechanism where no one was allowed to have control and what you know and like I I would argue vitalic had significant power right if not control over those decisions but like the latency of communication and how everything flowed versus like what you

see if you have you know a startup where there's 20 people in a room and they're just like focused on this thing uh I think it would have been a very different outcome and a very much fostter outcome and part of my reasoning behind that is I've seen the same organization in two different structures one with like more uncertainty deliver faster this is synthetics now I'm talking about right you know we had more uncertainty in 2018 2019 and we delivered faster the wrong things to be fair but like we coordinated around the things we were trying to deliver so much faster and so much more efficiently than we do today even though today we have much better sense of where we're going and like we've narrowed the problem space and and you know it's clear what

thing is and it's like and it's crazy because I actually sit there with people in infinex right and you know infinex is consuming this protocol and so infinex will be like hey um have you guys thought about this thing like we need this thing to work this way right and there'll be some conversation that happens right and you can literally plot the conversation from five people in a room that are like we need this thing and it goes and then it literally goes and two weeks later it's back to those people being like yes it's like insane how latency this is like it's like you would sit there and

think like I'm actually joking and I swear to you I'm not I've seen it happen multiple times because trying to coordinate things in like different people like we like the three of us we' got three different time zones it's midnight for me it's it's 7 a like you know like it's just so much harder and I think people massively underestimate how much harder it is and I've like watched these things in parallel and like it's blown my mind is that a I mean it sounds a lot like a bug is there some feature component to that where you might surface more insights because of this wisdom of the crowds you're now allowing more people I mean because the the academic theoretical might say well you know you're pushing decision- making to the nodes and the nodes really know

better but sometimes like no great things ever no great things ever got built by a committee and that's what's happening in right now well look I mean I think it's an interesting socioeconomic this this coordination experiment that is happening in blockchains is really fascinating anyone should just be paying attention It's like because because because the coordination is marginally faster more incentivized because there's real values get in the game but in spite of that people are like it's still really slow and you could say the same thing about a democracy in theory when you're voting and people vote with their feet but when they're voting it impacts their taxes their schools they're hospitals like and still they don't even show up to vote or

vote for you know terrible people uh it's really shocking so I I I think this wisdom of the crowd's idea is so popular in crypto but people don't really understand that but it sounds like Kan is Kane are you arguing that um would for when when you think about Dows like it sounds like mostly bugs but there is this one overarching like good feature which is it's a a protective feature against centralization of power I think my my theory of of what the feature is is that you go slower right and you you go down fewer dead ends

let's say right like while I was running synthetics as you know the dictator the actual dictator right we went down many dead ends right because you're sort of biased towards action and you're like let's try this thing and you you know and so there's a lot of wasted resources I would say right and having like unilateral power uh just creates that kind of problem um at least in you know again it's one one data point right but like you see more of that um and by forcing people and I was trying to explain this to to some people at infinex today right like by forcing people to go through a process of approval that really needs to represent

like the overall constituents in the the thing that they're building um it like I think it it puts a level of rigor on on the thinking um that sometimes can slip in like a startup environment where it's like move fast and break things right like it's like move fast break fewer things ideally so like that's the feature but the thing that I'm describing is like just not even that I think you can I think you can have like a a fast moving thing and then it does a whole bunch of things and then it turns up and it's like what do you think of this and then you have this mechanism where it's like yeah not quite go back and try it again right and so if

the if the thing that's like trying to do all the coordination and solve the problems is a group of people in a room and it's like every day they turn up and they're like we think we solved it right and then the the people that are vetting the solution are like you didn't quite get it there right it's much easier to sit there and like judge the solution solution and like make a decision as to whether or not it's like fit for purpose than it is to actually solve it right and if the solving takes like two months because the people are spread All Around the World in like 80 different time zones then you know you have the solvers going out and then they come up and they're like does this work and people like No And it's like okay cool we'll see you in a year and then they come

back and it's like what the [ __ ] is going on here like no like we have to have quick solvers and then still the mechanism that like vets the solution solution if the solvers are the people who vet the solution they can lose their minds and they can go off and be like they've solved it and they're off in the wrong direction right you need to check on power there um and that's where I think the Dows like that's where synthetics works you know and and it forces the the solution to be like vetted and make sure that all the people are accounted for um it's not like it's not perfect but like I think it's a novel way of coordinating things yeah how would you go about solving some of the challenges um look I hear you on

the higher high higher rigor as it comes to decision making more accountability on chain like you're voting it's registered recorded people Now understand how you vote and you know I think in the case of ovium Dow for instance um you know as every three months or so you get a rotation right so if the community doesn't like you you're out right so there's higher degree of accountability than there is in I guess other political systems um but how would you go about just going like increasing the Cadence of shipping of you know just actual output from a doubt I mean the thing that I was complaining about is a a single person

who has been on multiple different councils in multiple different uh capacities right and I can only assume at this point is just like grifting right like just grifting DS right like you get a dow type and you turn up and like you know maybe you do some stuff and I think like this person the first couple of epochs that they were on you know the synthetics Council they were fairly involved and then for whatever reason just stopped being involved right and so when out of nowhere in the last minute they uh got elected to the infinex council I was just like what are we doing like how does no how do how have we forgotten about this person right like how are we letting them surely and it's because it was a new set of Voters

it was like a novel set of Voters and they were just like this guy has a large following on Twitter like it's got to be legit right and there was no other like kind of background to like bet this person like has grifted 18 councils over the last five years or something like that right and so anyway so I was like maybe you know they've turned over a new Leaf like let's see and so I I dm'd them and I was like Hey like what's your plan here um and they were like my plan's to participate it's going to be great whatever literally the first call doesn't show up and I was just like like and so the next thing is like come up with a mechanism to dismiss people if they don't actually like have criteria that people need to meet and if you don't you know if if the

government's in session and you don't turn up then you're gone yeah I want to transition a bit in just kind of what your um near to medium term Outlook is for the type of activity that we'll see in infinex like you know or sounds like more engagement and interest is there stable coin activities Rising you know are we you know people are more optimistic um what can we expect to see in or what are you seeing I guess at the protocol level in terms of new signups uh and interactions um on the app so uh we haven't yet in my opinion at least measured the things that we

will measure post launch right um we've got a mailing list of like 200,000 plus people um that have signed up um the vast vast majority are airdrop Hunters I I can only assume um but of those people we've been able to like get some decent data that like there's solidly like high singled digigit thousands that are legit traders that you know have then either connected an API from like binance to show that they've got trading volume on binance like it's not pure airdrop hunting right they're people that that are actual Traders have want access the platform so we've got this interesting thing where like it's going to be a closed uh you know waiting list process to like get on right and you know people

want it's a new thing like of course people want access them whether that they wanted access to friend Tech or whatever um it's just going to be much more gated because of the way that margining works and you know there's a finite amount of margin to access Etc um you're you're not going to be able to you know get 50 invites a day to to kind of add people um so we're sort of seeing the demand come from real people um but ultimately like our Northstar is there's $50 billion of notional on CI daily we want that per volume no show per volume that's what we want what's the highest day recorded synthetics as for comparison I think just north of a billion um if I remember correctly like

800 but you know there were incentives for a while so I think we need to Pro like unincentivized highest volume like Circa 500 mil maybe 600 mil I think um that's not so yeah no it's not it's not nothing but like it's still you know single digit percentages of of the big pie right so yeah and I want to go just back to something that I want to crystallize in people's minds is like why would if if the funding rate is not as competitive as in a centralized exchange could just enumerate kind of the reasons why You' want to go on train one is I guess you're it's incentivized so you're you're in hopes earning some sort of reward which is okay at some point higher volume delad to more

Capital efficiency and then you kind of bootstrap your way to that the other one is just the the mechanism is transparent at times their centralizing changes haven't been that's forthcoming or have defrauded users around this funding rate mechanism in times of highall um you don't want to use a centralized exchange for you know you have counterparty risk issues uh what what other reasons might someone kind of want to use synthetics versus you know continue to use a centralized exchange yeah so you know funding rate is one component in fees right like the other is like your fill price and so um you know if you're a like decent sized Trader but not like a whale um you know

this is this is where I think the competitiveness of uh dexus has really improved over the last like six to 12 months you can get better fills like you will get more you will get better liquidity on a ton of markets right um you know including like high cap markets all the way to like longtail markets not necessarily every single trade um but it's no longer like there's worse liquidity in principle on a DEX and the only reason to use it is because you know ideological or whatever right like you can you can legit you know there's better ARB opportunities at times there's better fill prices um you know there's there's lower fees depending on the direction of the market you're going uh um so you know like the the it's a if

you were a Trader and you were saying I'm not going to trade here at all and I'm only going to trade here you will get worse execution on average if you are not factoring this in as like one of your venues that you want to access now if you're the type of Trader that's like I sit on buy bit and I don't touch anything else all my assets are there okay cool um we're coming for you two we're going to bring you across and say don't be on buybit for all of these reasons and we're going to give you better execution fees Etc um but if you're the type of Trader that's trading on five different exchanges depending on Market movements or whatever and you're not considering this is one of your venues you're just obviously missing out at this point like it's unequivocal yeah yeah that's

fascinating um we haven't talked about the challenges with other perss um I don't know if you want to go there or do you want to talk about something else I know we got you know like um your time is valuable so K's it's 12:20 in the morning here yeah uh I I think like the um the the interesting thing about uh this is like you are building in public right um and the tradeoff that I believe that that we get from building in public is

not a personal benefit you do not get a personal benefit from Trading from from building in public sorry um you get a societal benefit so like what does society want right like Society wants people to go out and do things build things try and generate new activity whatever and so Society incentivizes people to go and take risks to do things by you know ideally providing them with the benefit of it works right um and so as a society we should want like lower barriers to entry we should want people to um you know we should want to maximize the reward and minimize the

downside right um ideally for society we want hundreds of thousands of people going on making big bets for them but small bets for society that's how we progress right um and so when you look at defi what you get is like this shared playing field where like you can pick and choose little bits from each thing and like everyone can learn from each other right um the barriers are lower the learning uh curve is is less steep right um You can really you know pick things up very quickly you can turn up and like see how people operate their entire organization just in Discord you can you can work that out right um that is valuable to society it's not valuable to Kane War right it would be far better

for me if we didn't publish how governance works I would love it if like our competitors had no ability to like figure out you know all of the things that we've done over the years from like adopting an EIP style governance system to like you know there's a Litany of things that we've done over the years to improve how synthetics works that have then synthetics uh staking contract that was used um everywhere yeah like there's as I say like there's a long list right like I'm sure I'm sure someone's done a tweet thread on it at some point but um you know it would be far better if all of those things had been close from Kane War I would be you know far better off personally if all of those things had

been close source and I've been able to use them as my own proprietary thing to maximize the the return but the tradeoff for me is I get to turn up like I did in 2016 and be like whoa whoa whoa what's going on here like how do we build these things oh stable coins okay and I was able to like bootstrap myself into this thing and be like oh there's a gap there's a stable coin Gap turns turn out there wasn't but it looked like there was and you know you have a crack at it um and so you know uh like it was better for me to get in but once you become an incumbent right it's far worse um and so I think a lot of people like look at you know people borrowing from different protocols or whatever and it's

frustrating like communities are frustrated they're like they're stealing our stuff right um and yeah like on some level it is right um but like on a on a personal level it's bad for people to steal your stuff on a societal level it's good that's what we want and that's why we do it that's my like ideological reason for that's why we build in public that's why we do open source stuff so why we don't do weird little you know business licy scammy things where it's like it's open source is for you know until whatever 2027 or something like that like I just find all of that like not okay yeah yeah I mean I think the the Lindy effect that you get get by building in public like you still get

some recognition the marginal recognition and it's just worth kind of revisiting what are the modes in open source in this world of Open Source software development I think the pace of innovation is faster and you know I think the people that are pushing that will get rewarded in other ways certainly not maybe like immediate financial you know like I guess like IP stuff you know I think that the whole IP kind of monetization is just for lawyers you know and it just doesn't like the the big challenge with investing in open source software prec crypto was that you didn't have a token as a coordination and incentivization layer and I think that to me is the biggest novelty all of a sudden you have a rapper and you align developers and users collectively

especially early users and people that are contributing to even a dow to earn part equity in a token in a in a network that is building in the open and that's the connective tissue now if the protocol is not shipping or working people are going to go elsewhere because there's no barrier which is a feature not a bug like the standard is just higher I think it's it's bad for the protocol it's good for the world right like yeah like the amount of consumer preference being created is massive and that's the biggest winner we should abandon bad protocols like we shouldn't allow bad protocols to lock people in and not Escape right it's actually funny you mentioned IP I remember when we were shutting down the uh The Haven uh entities um and the lawyers we were

using to like go through that proc proc they were like but what will you do with the IP and I was like I don't care like it's like like throw it in the har you now call them and say well doe can take it and run with it or something like that yeah yeah I know I know but it's like the only IP is the is the code and it's open source like there's nothing else we don't care about the Haven logo although maybe it's now worth something who knows Kane you've been on the Pod now four or five time five times he's the number one most wow yeah wow well like it's funny considering the time differences here we

uh yeah I'm kind of I'm curious to see how this plays um it felt very rambly um even even by my own own rambly standards so I'm I'm curious to see how how it lands yeah um well gonna have to have you on again because I think especially in Bull markets my anxiety level goes up higher than in bare markets but I think it's important to have folks like you around to make sure that we're not losing sight of some of the mistakes that we've done over the years um and it's so important to just keep that top of mind because you know there's another FTX out there Brewing you got to make sure that it just

doesn't get to the scale but it did and and some of the learnings that I I think synthetics has always been kind of a an incubation kind of field for a lot of ideas people that have come out of the synthetics Discord and Community um and and a lot of the learnings that you guys have had un fortunately or unfortunately have had to learn earlier than other protocols and I think if other protocols can avoid those uh and look at that I think it would be uh pretty interesting I think as a overall ecosystem to kind of Leap Frog prior mistakes we've done and yeah yeah so most of I guess as a wrap most of

your energy now is dedicated to infinex like you're you're kind of like 90% there and still that's it yeah yeah I'm on this I'm on the Spartan Council so I get to get up early tomorrow morning for the Spartan Council uh governance call so that's going to be fun um but yeah like other than that and you know again what's the point of the Spartan Council the Spartan council is really there to like vet the solution right is this the right solution that's that's our job so we're not there to prioritize or you know decide what should be done it's like we have an outcome people go and try and coordinate to like get that outcome and they turn up and they say is this it and we say no or yes like that's our job um it's a pretty easy job to be honest right like you know it when you

see it like you see a good solution you're like yes that's the solution well done well implemented right um someone turns up with some you know bridge to nowhere and you're like that's not the solution I'm sorry and like you can just tell yeah for sure awesome man well it's great to have you as always um yeah thank you thanks guys thanks for coming on yeah thanks hey everyone thank you so much for watching today's episode really hope you enjoyed it we wanted to take a second to just remind you about our upcoming digital asset Summit in London March 18th to 20th Santi and I got your back seats are limited and we hooked you up with a 20% off discount code it is Empire 20 if you heard it earlier in the podcast there's a little competition

running at blockworks to see who can drive the most number of tickets so when you register for the digital asset Summit make sure you use our code Empire 20 see you in [Music] London