The Game Theory of Crypto - with Jordi Alexander, Su Zhu, and Hasu

Transcript

welcome to uncommon core where we explore the big ideas in crypto from first principles this show is hosted by suzu the ceo and chief investment officer of three arrows capital and me hasu a crypto researcher and writer today we welcome geordi alexander a former professional poker player turned macro trader turned crypto trader jordy who competes in the mind sports olympiad is an expert in games and game theory in general together we discuss how to pick up new games and improve how you can apply game theory to the crypto markets what jordy and sue think about the

market especially the role of bitcoin and ethereum and finally why sue is doge built and whether he can convince us of his thesis welcome to the show you guys it's been a while yeah good summer break no nice to uh catch up with you in this setting now i've had a lot of chats with both of you so i'm looking forward to it yeah yeah likewise um why don't you give us a quick um introduction of yourself sort of your your background um both pre-markets and then how you got into crypto and what you do today sure um i'm always stereotyped as you know one of the poker players i was a professional poker player for um five six years

out of college i played first you know no limit games and then increasingly got into mixed games and i i really like the aspect of being good at poker in general instead of just just one game um so i did that quite successfully um for a bunch of years and uh transitioned into trading which is i guess not uncommon for a poker player but i guess the difference was it was hft trading so it's it's much more on the algorithmic machine learning side um i did that about nine years ago transitioned and i still play a lot of poker i still play a lot of games i love games i play chess um i play many games i love strategy and

uh i bring a lot of that mindset to like decision making and both trading and investing in the in sort of the pre-show discussion you told me you come you compete in actually mind the mind sport olympics called pantomime and so you are on rank 4 in the world um which is kind of crazy so uh what is that yeah um it's i would say like right now the premier sort of multi-game um event where there's an event every year for three weeks where you can play multiple games whether it's chess poker batman um you know bridge board games like katan and other things as well and you get a score for how well you do in these games um if you score five

really good scores you actually have a chance for the overall title uh which is the pentamine title which actually demis has abused from alphago one many times when he was uh younger and uh and taking it quite seriously but there are some really strong players around the world who train throughout the year and i like to just kind of get in the ring with them and try to stay sharp how do you get good at so many games new games in general i think the key thing um instead of focusing on the native aspects of a game like in chess you know you can just focus on openings and memorizing openings instead of doing that you focus on the sort of legos of strategy the game theory building blocks and as you get very good at abstractions

you can easily like move those into new games very fast and you can just realize that okay this is that mechanism now or this is a tactical um combination here if you get very much in that mindset then you know you can apply your learnings to many more domains see you have been learning chess recently right what is your process i have um i've been taking lessons from from grandmasters every week with a friend of ours it's actually really fun to learn chess because i think uh it's it's a very rules-based game uh it's a it's a very uh incremental game so you never really

get worse you can only get better and you can see how you're like seeing different patterns i mean at least at my level i'm sure at jordan's level you can actually get quite a bit worse if you don't play a lot um but it's good to be able to like see like new patterns that you didn't notice before or like new kind of um ways of building an attack or these kinds of things so for me i'm still in that phase where it's just very exciting because you you kind of see more and more opportunities each time uh you play the game one one question i would have for both of you so that this has always seemed very instrumental to me in learning new games and getting good at at one game as well which is sort of what feedback loop do you create for yourself that lets you

measure whether an action was good or bad like you should have taken it or whether you should have not taken it because sometimes you know the feedback that you get is always very delayed right you always know you only know like 10 moves later you know whether something was good or bad i mean chess it's almost like we'll put the engines these days and with the analysis they it's really good at it's almost the purest game in terms of like you do an action and it'll tell you exactly how good it was and like how like other options could have been and you know it's interesting too because like when you see the move soon you go through the moves with like a grandmaster they'll say like well the actual engine move you could never have done it yourself because it's it's for these reasons and that couldn't have

possibly been your plan but you know the secondary moves are also very good and you could have found these reasons or you could have found these moves through this kind of thought process so it's almost like there are general right answers and you have to figure out what are those right answers and how to have a framework to find right answers quickly as well right because chess is best played in like you know faster games too where you have to think on your feet you don't have time to think about it all day so i would say like chess has a little bit more juice in it like you saw like alpha chess last year you know the alphago guys when they developed their chest program it was playing completely differently than the engines and it was just crushing the engines so it just showed that there is like a

layer that's even deeper if you want just very pure you play backgammon it's solved you basically just any move that you do on the board it'll tell you you know what's the exact ev probability of this move versus that move the the art of it becomes you you learn from the machine and you say like what heuristics can i draw because if this situation is not exactly the same next time i need to still apply the heuristic and the learning so it drives you towards picking up the patterns and being able to kind of build an intuition that you can apply to a very similar uh but not exactly the same uh spot and that's definitely the case with uh trading as well where you know history rhymes but it doesn't repeat so

judy you play a lot against i assume like a lot of heads up matches against players for example in like the mind game olympics and how much like you mentioned sort of backgammon is a sort of game right so you know you know what to do if the other if the other player is basically the quote-unquote nemesis right it's it's a player who never deviates from the ultimate strategy themselves but that's not always the the best thing to do right if you're playing against another human who who does make mistakes how do you go about um sort of deviating from the optimist strategy if you know what it is that's actually a very relevant question for crypto markets because um when you when you look at poker you can either play gto which basically means you know you play unexplodedly perfectly or you

play exploitably which is kind of more the you know phil hellmuth gets made fun of a lot because he makes a lot of mistakes in in the poker world but he's very successful because he can take advantage of other players um weaknesses and tendencies even if he's not playing gto um so i would say having that understanding in the crypto market is one of the main leaks that i had initially because coming in from traditional markets you know maybe it's not efficient market hypothesis because nothing's really that efficient and there's always somebody you know making making uh making those adjustments but in the crypto world it was very easy for me to say okay something went up 3x i think last year sue gave me like solana two dollars i bought it sold it at six and i

thought like you know this is like the greatest trade ever when you look at it in retrospect you realize because of how inefficient the market is um you can't have this gto mindset you should have a much more exploitative mindset like what is everybody else doing you know this thing is just going to run that also allows you to participate in a lot of the ponzi nomic sort of buildups where you know something just memes itself into some really high market cap um you can capture it because you're not thinking in a gto mindset of like you know where should this actually be trading at you're you're more kind of playing the psychology yeah i mean i would i would question if there is even something like a gto strategy in in markets right i mean we

know even for the simplest multiplayer games that they aren't mesh equilibria but there's an infinite number of them and they're very different properties from [Music] like the nash equilibria you find in heads-up games right you know if you play the optimus strategy in a heads-up game then no matter what the other person do at worst you're gonna break even for any mistake they make you always make a profit but in multiplayer games like one person deviating from the strategy can actually cost you money even if you play quote-unquote perfectly which is like a very different game so i think that's basically yeah now the social element as well and the combination of the two um is something

that is very relevant to some games um like you said not necessarily like heads up games but something like katan you know i was playing catan yesterday competing in this uh championship you have to like do the table talk and explain to people that oh i'm not winning right now somebody else is winning you have to divert their attention to certain places there's a lot of like game theory elements that are not just related to sort of optimal play yeah that's fascinating that this happens even on the highest level because it's something that always happens well in our home games in every game that happens at all the levels constant meta discussion about who to like create coalitions against and so on but um

i want like give me some action of advice like let's say like my friends come over and they bring a new game right and none of us have ever played it or like only one of us has played it how do i get you know decent edit in like the shortest amount of time what is sort of even if you were like sitting alone like with the game like on your kitchen table like what is your process for breaking the game open i think that's where everyone's individual strengths and weaknesses have to play a part for me i realized that the fastest way i can learn something is the most uncomfortable way i basically inundate my brain with information and it feels very uncomfortable in that moment because you know i'm just not remembering everything i'm dropping

concepts but i think subconsciously my intuition is picking up small pieces and if i do this even though it feels like crap very soon i'll realize that things are starting to form in my mind just connections between um you know the different information pieces i fed it so for me i allow the kind of process to happen even though it's it's not very natural um other people are much more structured they have to like look at all the cards in the game here's like you know you take a tan there's 20 development cards there's you know there's 15 knights and then three victory points and they need that structure around um all the elements of the game and just

kind of build upon it so everyone's everyone's personality has to come in and and kind of suit to their strengths i'm actually not that good at games compared to you guys so i almost don't think i have a very good process for game theory i i think that it's in a way i find myself much more of a like a reflexive thinker like i try to think in terms of not what are the rules of the game uh and how do i beat the beat the game given those rules i i almost don't think of it that way as much especially when it comes to markets um i almost try to think like you know what what are the things that um i think are likely to happen and if it were to happen people

uh would believe in it in an even more as it happened kind of thing so soros talks a lot about this in his books where he talks about how there are so many things where uh before they happen it's not obvious but after they happen they become you know really like like evident and they continue that way and and so i guess like i try to focus on on things where um it's not really zero sum or it's not really like player vs player but it's more sort of like like we can all believe something new tomorrow um and what will this new thing tomorrow be um interesting we have a process for identifying these things in advance i mean just talking to people i mean i spent a lot of time talking to people in

the markets just figuring out what people um you know are thinking and how they view the markets because the market is like a it's like a mix of so many different types of people especially in crypto right so many different mentalities so many different you know time frames and so many different uh narratives um i think from that i just try to piece together exactly how you know the market um could evolve and it's always like like different probabilities different possibilities but i think that the important thing for me is like i try to be as open-minded as possible to all the possibilities being being likely in some world yeah i mean i would just add that being probabilistic in your mindset and not being absolute having some modesty

not thinking that you know this is 100 gonna happen that really unleashes so much power because you open your mind to many more pieces of information that you would otherwise be close to especially like once you start owning an asset and you start being part of that community and ecosystem around it you can very easily get into cognitive biases where you're blocking out information that might actually fundamentally uh warrant a change in your thesis and keeping an open mind and knowing that okay even though like this is my current position um i should be open to other possibilities i think it's key and with people that are very good at investing the clearest point in their thinking is always when they're

transitioning narratives because they've had to drop a belief that they've had for some time and maybe even publicly stated so there is kind of like this loss involved if they're willing to pay that price you should probably listen because that's a point at which they're thinking clearly enough that they're willing to take kind of a short-term loss it says plays nicely into something that you taught me like a couple days ago so that gave me a lot to think about that you pride yourself most on the the moments where you basically uh you were wrong but i mean the process of even identifying that you were wrong is like usually a big profit opportunity right yeah because usually when you realize that you're wrong

uh the con i mean at least for me i think one of my skills for a long time as a trader is real when i realize i'm wrong i realize exactly why it's wrong and and how the counter arguments are like even stronger because i also understand the people that would have had those similar beliefs to me so basically i think the key is like in the moment of understanding where you're wrong the totality of the arguments that you understand from both sides of any position that's like your peak illumination basically it's like you you basically see exactly what's going to happen next almost i think a good example of this was like you know like the market when it bounced off 29.5 again after you know sitting there for 24

hours i think that was a moment where like it was a clear buy-in opportunity um you know because at that point you just kind of saw that um there were no sellers left and you just also saw that you know how little volume it took to even support that price and and and how sort of casually it could bounce repeatedly i think there were a few other elements there too but just that kind of being willing to say okay you know it's time to go all in again you know that that kind of mentality you know is some something that it if you're the type of person to want to be right all the time it feels bad to have to invalidate yourself whereas if you're the type of person to

uh take pride in being wrong but being able to profit from that then these are the best opportunities of your career usually so that's why i shouldn't be a trader you also in that context um you you often mention sort of the idea of you know bayesian thinking um how would you convey this idea you know to all listeners it's all about taking in new information right like each day you get more information about what just happened um and if you're if you're if your decisions don't change based on that that could be correct because you could have considered and then said what i'm doing right now is still correct but there have to be times when that changes right it could be that you get even more bullish and you buy even more or it could be that you get bearish and you

sell some but but there's always value and information so you know i love that idea of like you flood your brand with information because the subconscious is incredibly powerful in discretionary decision making i i i i mean i we stand by it whenever we interview traders in the past like if they don't have this kind of understanding of the importance of discretionary i always distrust them naturally because i i don't know if they can you know handle all sorts of markets or you know handle all sorts of situations but i think like you know that that kind of understanding of of taking in information every day and then doing something with it um that that has to be part of like every trader's process um because otherwise

you're sitting duck right and and so it also does contrast with the idea of like the long-term investor in a sense because the long-term investor he has there's kind of the myth of the long-term investor right where he buys the coins and he goes into a coma for five years and that's also good if you're an investor but then you know if you are making decisions like every day every other day every week then you have to also hold yourself to that standard so it's fine almost like compartmentalize it and say you know if i buy bitcoin and ether for cold storage i put it away but if i'm also trying to beat the markets then i have to be taking in new information i can't sort of mix the time frames i mean in terms of that rejection of 30k it was it was such a strong rejection as

well it the second time it balanced was so powerful that it you know if you're thinking in a bayesian way and you have you know these two possible worlds like do you believe in the sub 30k bitcoin possible world or do you not believe in it i think it was such a strong amount of new evidence that under 30k there's there are like last resort buyers that are there that when you add the new information the risk reward suddenly just goes so much higher because if you know that no matter worst case like if you have an emergency you can always sell at least a 30k the upside of you know 60 100 plus it makes the balance of the risk and the reward so much higher than 32 or 33 and

i think this explosive move started based on that understanding that there is a there is actually a floor that's the new information um and then i was very hesitant around 40 because we were expecting a huge amount of new information to come in which is what does the us government do we already knew what china was doing this was sort of priced in but then you have this completely like new piece of the puzzle which is okay someone's trying to attack crypto it's the treasury what's actually gonna happen and i think when the muscle that we saw from uh the crypto community lobbying senators and really kind of even though in the end they didn't actually manage to pass an amendment

we collectively saw that the emperor does have clothes on there is like a power politically as well now that should provide some cover going forward and i think that's kind of been this next leg now i want to ask both of you so how do you generally deal with you know large events of uncertainty you know there's an event upcoming that has a big impact could be up or down how do you position around that i always like to know a game i'm playing and i like to know if i'm having more information than the other players whenever i feel like there's inside information that i'm missing i try to be very cautious um there have been a few big trades where i have despite that kind of dabbled in there was a big mobile coin trade last

year where somebody had put on a 400 million short on ftx we had really had no idea exactly what was happening there who was putting in what was happening um i usually like to know who i'm up again up against like who's on the other side of the board i like to understand their psychology and what's happening this was a situation where i tried to find out nobody really knew um but i thought that the bet was still worth making so occasionally like even despite not having information um i will make a strong play but usually i'll take the chips off the table if i feel like somebody else has more inside information i think events there's almost no one way to play them i mean almost the idea of an event driven

trade there are some events where because everyone expects x and then x comes you know you see this in global macro all the time where you know when when normal people when they see news they're like how come the market did this like even though it was bearish it's because well it wasn't more bearish than that or it was the market was already positioned in a way that uh sort of made the like the move the most natural outcome of the release of you know it's like a release of pressure basically so i kind of see the senate thing as almost that where you know we did get in fact one of the worst case scenarios for the amendments but it doesn't matter because a lot of people actually de-risked in front of it too going into especially

when we first rejected off 42 the first time you know people just thought okay well i saw some here worst case i buy back higher and so you had a lot of that happening and and so and so there's kind of like these rubicons right that happened in the markets we had that in january as well with the mnuchin fudd where you know i think it was actually december ish but basically everyone was scared of the mnuchin travel rule foot and then the market just ripped through everyone because because of all that fear and then you know when it turned out to be not as bad as people thought you know the pressure upward is really high so i almost think like whenever we see fud you have to be really careful about buying or selling or these kind of things like it depending like there's no news that's

bullish or bearish but thinking makes it so i strongly believe this and in crypto especially because it's so early you know bitcoin ether these kind of things can go up 4x from here with like no similar macro convergence happening in like stocks gold rates you know it's just it's just too early and and especially when you get into altcoins right like any altcoin can 5x without like needing there to be a strong reason in the global macro or in sort of like event driven space like the unlocks especially right almost all these unlocks have been very bullish but if from a from the kind of person we're like wow investors must be selling these unlocks well what if they don't what if they don't need the money right what if they believe in the project so

otc or whatever yeah yeah exactly i i had an eye-opening moment like this basically when i heard um light on up only a couple months ago or something i think was the episode before the coinbase ipo and uh the question was if he believes in like the super cycle right and he said it doesn't matter how bullish the fundamentals of the market are because the prices are still set you know by humans right and um like it doesn't matter how good the market is like the prices can still get exuberant like even like the most fundamentally strong market can crash and likewise you know the most fundamentally weak weak market can rip right because the price is only like basically the result of you know

expectations that people have in relation to whatever the market is i think too when he's talking about super cycle um i think what he's trying to say is that um like even if uh the fundamentals are very good uh it doesn't mean like we're almost like using different meanings for the word supers that go like i think for me when i used it or when i kind of coined it on up only i kind of think the basic idea is that crypto just reaches mass penetration mass adoption across the world right you know whether that's in the form of bitcoin hyper monetization store value thesis or you know on top of that web three as well uh smart contract programmable

money uh just the idea that this is sort of the most important trend of our generation um i think that that that is a very different kind of understanding of super cycle than the understanding that some people have which is that you know the market can't nuke randomly um yeah you know because it's almost like it's almost like we're seeing a lot of supercycle type stuff happening now right the past few weeks where you have ted cruz being very pro bitcoin and you have you know you you have texas going and courting minors you you you have serious sort of uh geopolitical conversions uh on the value of of bitcoin and i think this kind of

stuff you know it's it's people ignore the stuff at their peril i think and i mean we've already seen like that the cycle is different from previous cycles that we've never seen a like a break to the downside as big as the cycle without it being a bear market right yeah and um so like we know we are in a different regime and it's meaningfully different from all past circuits but nobody really has yet presented like like a thesis that's more appealing and more predictable than you know it being like a supercycle where basically some of the original cyclicality is lost and yes even in this drop we have seen relentless investing and allocation from outsiders right several billion dollar funds

raising even when crypto was down 50 right it this stuff did not happen in the last circuits i think something like pronounced in this cycle that um maybe sue will disagree we can we can discuss a little bit but the effect of bitcoin dominance on the cryptocycle in general um i feel has been very powerful basically you know we had this huge narrative digital goals last year it was a very strong meme um a lot of money and institutions and hedge fund managers piled in towards the end of 2020 and then once bitcoin started stalling out around let's call it 55 where the incremental moves every day stop being parabolic and they were sort of you know bitcoin would go up one or

two percent and then you know you look at coin gecko and you have the top hundred coins on average between 20 to 40 of that day um it sort of created this fear greed imbalance where a lot of people just went for you know what's going to give me a high return exited bitcoin and the bitcoin bitcoin dominance going down can only be sustained at a certain level because at some point somebody looks at you know what we've created which is just built a bunch of clouds upon clouds and you know things that are not fundamentally rooted anywhere where the digital gold narrative was no longer driving a lot of the prices in the whole space having this correction that we had now

to 30k normally like it would be the end of a cycle because it's either like macro driven or like you know the liquidity is being just sucked out of the system entirely um or it'll be you know some regulatory driven but i feel like what happened was you know you had elon you had this esg fud um you had bitcoin stalling out versus altcoins so people were just sort of ditching it for everything from ethereum down um and then the cycle sort of reset itself and it's building again sort of through bitcoin strength and we're gonna sort of have these iterative cycles i believe it is sort of one way to reach an equilibrium where you kind of progress through cycles of

bitcoin strength bitcoin weakness crashes the market as soon as bitcoin stalls and we kind of keep progressing up and that is a way that you get a super cycle as well yeah i mean i agree with a lot of that i get i think one of the points that it does take a lot of time in the markets you usually understand and i did find it impressive that jordy kind of caught on to this quite early on from studying crypto but it's that when you have a bitcoin-led market it always will lead to an alt season because bitcoin wealth is created and then bitcoin cell walls by ogs by profit takers uh by rotators uh then lead to ether going up a lot of other coins going up this has been the way of the market for

four years now i think that there's a also there's basically in my mind broadly two types of worlds that can happen in crypto there's a world where we get bitcoin up to 20 trillion market cap 20 to 50 trillion market cap and then the sum of all coins the sum of other coins will be around two to ten trillion two to five trillion um so something a lot less um and with that kind of a world or you have a world where it's much more distributed right um where where you have you know ethereum maybe you know 10 trillion the next one being like 6 trillion the next one being 4

trillion these kind of distributions i think that the reason i believe this is that um if you if you have a very high bitcoin dominance market um then all other coins they get value with much less monetary premium um and they get valued um in terms of versus each other more so than versus bitcoin right now we're in an interesting spot where or we have been an interesting spot where ether has has contended for the throne quite aggressively i think in the past few months and there is this desire to value ether as a percentage of bitcoin market cap and indeed to even flip it right and

so from this you would have a very strong ether price in the market and this then puts a lot of value into alt layer one and into application layer uh but especially into all layer one because then a lot of layer one contend as a percentage of ether market cap right where you know seoul should be x percent of that or avalanche or you know polka dot and and so you get this kind of like um you know this kind of post-modern inter-subjective value thing where it's like you can only value things versus other things and because ether contents of the bitcoin throne and then things contend to the ether throne you have this kind of lower bitcoin dominance market in this kind of environment so the ways we get out of that there are two ways right one is that ether flippance bitcoin and then we get

into this world where you know uh we have very very highly valued smart contract chains basically um and we have very sort of fast turnover very hyper capitalist basically this kind of system and i think that's a very possible world um another one is that bitcoin uh you know the people in society who are really going to put money into the space as a store of value they buy a lot of bitcoin because they see that it's uh that it can't be disrupted by tech you know you have more political or philosophically uh inclined buyers and as this keeps happening and as the rest of the pie keeps you know splitting uh you have it pull away again right

because right now the market is in a situation where they don't really understand that bitcoin can pump again uh but if they now see that it can pump while other coins don't go up by as much you know it it all it all turns very fast basically so um but these are really the only two worlds that we can be in i think from what i understand of crypto because if you if you can imagine right like it's very difficult to flip bitcoin and then have the next coin be 90 of dominance because you will have already broken the veil of uh of of the idea that because it is the first therefore it will collect everything right you are now fully in the world of tech uh you are fully in the world of of internet stocks

and once you're in that world people will then happily value the second one at half or a third of the first one like they did with either in bitcoin right so you give this fraxel like kind of behavior even much more so it'll be very exciting i mean in that world there would be absolutely insane profit opportunities i think like knowing what game you're playing is is a key learning um for playing games for investing and for trading understanding the game you're in um you know what's your time horizon who are your opponents what are you actually trying to do and for me like if does have a little bit of a problem in terms of knowing what game it's playing is it trying to tackle store value you know you had people going out and talking about ultrasound money um and then at the same time you know they

are in a knife fight right now with a lot of layer ones and you know the layer two rollout is you know it's messy you have matic which is unclear um you know how that's gonna progress once the new ones come out eventually like a lot of the later ones will maybe even kind of compete with eth on its sort of throne of smart contracts so knowing what game you're trying to play um can at least clear up a lot of the fog around your strategy i think i would defend ether to the to to some newcomers uh in the space who i think they look at ethan bitcoin and bitcoin appeals to a lot of

uh people who are very objectivists so they see bitcoin is simple it's clean it's pure it can't be corrupted in the same ways as other coins but you know ether is kind of the either kind of inherits the throne like almost from the old bitcoin like the old i mean some of the ones who in the winter bitcoin cash or something like but it inherits the throne of the idea that the money which has the most you know activity that will be the real money that we use in the long term so i think this argument is actually it's very strong i think as well so i think that there are definitely two sides to that stone where i think what we're basically gonna have to see is are the philosophical buyers are the philosophical qualities of bitcoin stronger than the sort of um

you know fast moving you know fast dealing economy of ethereum right because there are some worlds where let's say you even get a lot of smart contract activity on other chains but ether still benefits because it is the you know the the most commonly used money is the most deflationary money uh among cryptocurrencies uh like that could be a world conversely if the smart contract activity moves that does hurt the eip 1.5.9 meme quite a bit because you're saying that this burn will happen a lot due to activity but an activity all goes elsewhere you know fees keep moving off layer one that would then hurt that meme um there's also potentially a problem if you get the sort of sense that um you

know ethan's basically if it optimizes for holders as opposed to users um then you do run into a risk of more political attacks a lot you can kind of run into risk that ethereum goes more in the way that what big what happened to bitcoin in 2017 was that you start getting more battles more and more stalling more and more sort of sort of complex game theory of like among the constituents of ethereum as well so i think that like the inherent strengths of ether are are sort of earned from those weaknesses that it creates as well for itself right like you don't get anything for free basically um but i would say like

in the long run it's it's not basically this kind of a classic example of like we don't even know if we have the right framework to analyze what will be the future money right um i think one thing that is true throughout history though that i would say is not talked about nearly enough when this discussion is had is the distribution um it's talked about generally you know what's like the number of wallet holders or like you know does somebody have 30 of dogecoin um the distribution argument is key because it ties into human psychology it ties into incentives it ties into like the base effect of the game which is you know you have politicians you have people around the world they're just reacting to individual people's

incentives they're not reacting to what's a better slightly better you know tps or like you know which one's going to scale a bit faster they're really reacting to you know who's economically aligned who's incentivized to support something as you get like president supporting you know bitcoin or like something else that will affect things in a huge scale and having a coin for example like dogecoin the reason i i can see like stalling at some point potentially is if you do have you know one or two wallets that have 30 of the entire supply can that thing really be worth a trillion dollars when there's going to be 300 billion dollars sitting there

there is something very unstable in that while bitcoin being first having had the largest distribution around the world the largest amount of holders the amount of incentive um to allow it to survive and thrive is deeply ingrained in a way that can't be reproduced and i would say i would say this i've done this thought experiment thinking about you know what would the perfect money look like you can design something a little bit better than bitcoin you know technology wise even inflation-wise you can have just like a constant one percent inflation to stop people from hoarding too much because you you ultimately do want to have a little bit of inflation i think um also for security um but also just you

know when you when you look at fiat or gold or anything else having a little bit of inflation stops people from not spending and hoarding it and allows this healthy circulation of the capital and that's ultimately good and i would say the first thing i would do if if i was able to design this technology and you know we had this perfect crypto i would start off by saying you know you can do a one-for-one switch with your bitcoin and just get this other coin because the value of that network the distribution being somewhat tied to real world distribution because in the real world you know you have you know the us government having x amount of money saudis having x amount of money china has you know this percentage

if one of these countries is completely unable to participate um in a currency they will not allow it to survive or thrive in their community you know also on the issue of sort of distribution i think one thing that people have long underestimated in bitcoin is sort of um counting miners also as important holders right mining i think that's one of the like core things that i've tried to like convey for the last couple years is that like mining hardware is basically is basically um physical futures on bitcoin that you get delivered at some point um so miners are you know structurally long bitcoin and i think we've seen now

or we are seeing now what sort of downstream effects that creates in the political game right um where um countries are rallying behind bitcoin instead of other coins like a big like thai um telecommunications company like getting big and big into bitcoin mining texas going back into bitcoin mining and lobbying for it in like the senate um i think like these sort of alliances um are ultimately very important as well this is something where your coin benefits i think a lot from having uh like a um uh hitoro genius uh distribution of folders it's not like oh doesn't like very different

like backgrounds and colors and i think it's not this is something that you're definitely gonna lose in like a proof of stake system where instead of your note your validators are the same as your coin holders yeah i think one of the biggest reasons that you know we became sort of much more bullish on bitcoin recently too was um i had dinner with bellagio's the other day and he he kind of impressed on me the idea of that bitcoin would become the flag of liberty for the western conservative establishment and he said that this was something that in a in a secular post-religion world in a in a sort of world capitalist uh versus you know non-world capitalist world like bitcoin is the clearest rallying cry uh that uh you know

especially for the gop tea party he said uh so this kind of um you know complete uh mind uh share you know mind space capture that bitcoin has been able to achieve it among these types he sees it as um incredibly powerful because he says like you know you will have people willing to fight wars for bitcoin in that kind of a case right whereas same is not true for any other coin um and so i think that that's something that i do think that you know i mean we've been around talking about markets for since 2018 right has to i mean we've seen money thesis versus tech thesis all day only i do think we're in a moment where the money thesis of crypto is very

misunderstood by a lot of people um you know there are some people out there that think that it's all tech thesis and i do think we're we could get a resurgence of money thesis uh from some of the things that we see happening right like the the reason why the like the reason why you know bitcoin as it goes up this time if it were to keep going up um there are actually a lot of virtuous uh cycle type stuff that could happen right like african countries now that they know that bitcoin will really not disappear that it's part of a new global new world order they'll enter mining right they'll actually go and say okay well we have this energy here we have this energy there let's start mining let's start

doing this let's start doing that you can now do multi-billion dollar infrastructure projects assuming the existence of bitcoin long term and so this then creates even more stakeholders bringing them into the system and this flywheel um can mean that every country then has this right and i think especially for the gop um the reason why they see this as so strong is because they're also kind of broadly advocating for almost a type of a like a neutrality or like a freedom right where they're saying you know the like the world capitalism wants to be able to say you use energy for x and that's bad we don't like what you do hence we want to be able to stop you from doing things with energy

and then for the gop for the libertarians they say well we don't want government to be able to decide what is a good use of energy or not we let the people decide so if the people decide this this is what they should do so i think that there's that big philosophical political debate that happens there and i think because of that like bitcoin is almost like the purest play for them to to win sort of their broad political mandate to have that kind of world exist as opposed to the world where we are indeed in world capitalism where um you know like everything that everyone ever does can be cancelled because it's like not in line with what people are supposed to be doing at that time

yeah i mean it's almost like the money was tech thesis is going through its own cycles right where sometimes you have the money the money he's this rule and then you get more and more tech and people start to question what can the money you know is the money actually like can it win against attack because the tech is so new and shiny but then what happens is the attack can be copied by the money can't and then you get like a supply basically flooding the market of new tech coins and that's exactly what we see with all the layer ones right we see so many layer ones but they have very little activity but they are all very new tech and um i think they compete much more with ethereum which is kind of a no-brainer than with bitcoin right and at the moment where people see that there's a

lot of competition with ethereum they automatically go back into bitcoin so on the on the issue of politics was surprised you know how many people decided to rally behind crypto during the sort of infrastructure bill issue it was a pleasant surprise um i think we were all kind of unclear what the balance of power would be on the u.s side it's the first time we've seen that politically like it could be a single voter issue in the future um just as you have guns and other issues in the u.s being so dominant for individual voters if their economic livelihood is you know basically attached to bitcoin or crypto in general

you can see that overriding any other issue for them um especially with how messy the politics has gotten on every other issue in the us that i think a sort of constituent that focuses purely on this will drive a lot of political power um but it's going to take a while and i think it's a little bit overplayed right now um maybe like in 10 years once millennials are kind of a much bigger part of the voting population um a lot of the kind of boomers are not voting anymore that will be even more powerful so i think that's a long-term trend but at least in terms of being worried that we're going to get shut down across the board over the next you know year i think things are looking a lot

better now yeah i think i've been a little surprised by how weak actually uh yellen or the treasury was after the bill started to to to go around where they then you know expressed the things that they uh uh like kind of they kind of agreed that um on the exemptions as well and it kind of seemed like they just really wanted to to put up a fight but they weren't that committed to the fight because they didn't want to have to deal with the political battles um so i think that that almost is a real interesting kind of experiment about

governance right because china the example is is the opposite where you know the high command says that this is not something that we like and therefore we do this this and that whereas america you know even if the money don't have the voting block yet just like the backward induction just the threat of the future voting block is already scaring a lot of people and people are asking myself is this really a battle i want to you know do i really want to die on this hill being anti-crypto do i really want to you know go out this way and and and so that um effect i definitely feel like is is getting really big in the us because i see broad appeal for crypto now across um across um

the population right you you seeing like you're seeing like gen gen z to talk about nfts all day they're talking about you know crater economy you're you're you're seeing you know the boomers who follow michael saylor they're talking about you know sound money they're talking about you know return to standards and and so there's something for everyone basically uh i think what crypto really does is it allows these kind of like micro communities to to to share ideas and then to to say okay you know what we value the things that you know we agree to value these things uh and and we agree that um you know we respect each other and and these are the things we all adhere to and so that's why i think uh this is really dangerous stuff for politicians to be against right because you're you're you're gonna put yourself

in a situation where the people who might be on your side are essentially this kind of vague you know semi-authoritarian status concepts of you know we need to be able to track everything we need to be panopticon and on the opposite side of you are you know all your voters like all the actual people of society so i think it's actually a grand it's actually a grand victory for individuals versus you know it it sort of just really proves that individuals make up the government it's not the government as a separate thing from individuals jordan you mentioned earlier sort of what makes you good at you know playing a variety of different games is that you um you sort of have these lego blocks right these abstractions that are the same across many games and then when you find a new game

you can already already identify that it has like this or this abstraction in it and you know exactly like how to deal with that particular scenario like sort of an auction game or like a coordination game or like a discoordination game and so on so i would be curious here like exactly how you apply this to crypto what games what abstractions do you see in crypto and how do you act on them yeah i mean one that you see a lot um especially in the device space where it's less about memes and you know you're supposed to have you know different tokens representing flows of cash from a project something that builds into building blocks around that

is the concept of you know is this a ponzi game or is this like a game that has fundamental value so everything looks at like it has fundamental value because nobody wants to sort of appear as you know if you're in doing something like yield farming you ultimately want to have some value proposition so even though we have a lot of dexes like radium we'll say that well we're putting our stuff on um you know the order book of serum so this kind of makes us unique somebody else will say like one inch we're just aggregating things and you know you can all go down the list there's a lot that you kind of question whether they're actually adding something substantial and if they're not you can kind of predict a very

normal building block which is kind of like the ponzi building block what that looks like is there is this like initial surge of enthusiasm high yields high tbl it just kind of feeds on itself where the yields keep going up because the the token price your liquidity mining keeps going up so you have this like effect of this virtuous cycle um people just join in because they see the yields up at some point either because of like a supply shock you know there's like an unlock or potentially the the period of the initial you know two months or three month incentive goes away that's where you see things peaking the yield starts flattening or going down other projects have better yield and

once the tv all starts leaving you kind of go in this downward spiral um so it's a very predictable building block that i have in my mind whenever i'm evaluating like a new project either for vc investment or for yield farming so what i like to think about is like would this exist without the money-making mechanism does it have enough sort of use that people will use it even if they're not you know yield farming um for for a little bit so axia infinity is is a good example where you see that people in philippines are doing it because they're making money um not necessarily like world of warcraft people who are trying to you know buy a very unique item

so we'll see how that plays out um yeah i think this uh this sort of is the same as we talked about in our yam episode right so where you sort of introduce the concept of like the pool 1 pool 2 game and i think this is one that you can find like all across d5 and i think that's it it's always very important that you recognize when projects use this kind of building blocks where you need a token you know a project's native token in order to farm more of that project's native token right and so instead of the demand for that token that bootstraps the price of that token and you know if either of them reverses then you know both both reverse at the same time

and you get this like hugely and tv island price um what would be what would be another game so on the meme side which is like the other part of the market you know getting away from the sort of fundamental equity investment side of the defy side if you go into the meme side of the game you know touching upon like dogecoin shibainu like this this type of economy that becomes very much a coordinated game where you know if you want the price to go up you have to kind of have almost like a religious um aspect to your approach where you're creating a community you're even ostracizing people who leave the community you know who are selling you

know you're obviously bitcoin has had some of this you know with the whole sort of have fun staying poor and all this kind of aspect as well but even more from the meme coin community sorry i mean the original meme huddle i mean hodo is kind of more positive i would say i'm even talking about like the negative side where you know someone someone's attacking and you kind of go after them very hard um so anyone who is kind of against the in-group um gets sort of ostracized that that's kind of very common thing so with things like dogecoin and shiba yunu it just becomes a pure it's it's a it's a game where the community has to have to really succeed they have to have like a vision that

they all share and they're moving towards there has to be cohesion nobody can just like you know sell out and just kind of dump on everybody else um as soon as that pump and dump dynamic gets created the thing falls apart so you need to have this like coordination aspect i think dogecoin looked and i know i know sue is bullish on deutsche and i'm kind of bullish in pieces and then i get very bearish and kind of i try to trade it as a trader more i know that that one it looked like there was some coordination by elon musk where you could say that you know it has a leader and and they're kind of following him on snl they're following him on different places and potentially like they can coordinate quite a lot more than a headless token

um but i feel like elon has kind of shown himself to be a little bit unreliable although i have to say like recently with the foundation and vitalik you know some of these things can can create some long-term coordination um i don't know what do you think about that one sue um i'm very bullish dogecoin uh i've delved into the community delved into what's been happening and what's um what's kind of the broader thesis for people that own doge both in terms of normal people as well as you know investors and i think there's a i mean the best way to understand doge i think is that uh if you look at robin hood which is sort

of the most like blue-collar style just like of crypto investing doj is 60 of their crypto revenue and crypto is 40 of robin hood revenue so robin hood is basically a doge uh proxy and i think that that doge has actually four times the name brand recognition over ethereum uh in many communities in the us not talking about like smart people but just talking about people right um so i think that um there's something just like very understandable about doge right it's just like the dog money you put your money in dog money uh and there's also something that's the only

coin i've ever seen women show up other women if you just look on social media you look on tick tock instagram doge is the only coin where you can see a woman shielding another woman and not being paid to do so but just doing so because like she likes the coin and and so i think that doge is like really underestimated in terms of just that sheer virality and sort of the quality of the memes and the organicness of that i i do think that elon he he's a strength and a weakness for doge obviously it net like a huge strength um and i think he believes in it actually uh in a much stronger way than people realize like a lot a lot of people when they analyze like elon they think he's just doing it for kicks you know shits

and giggles whatever he's just doing it because he thinks it's funny but i think he has real commitment to it right he he's been talking about doge for a very long time his early followers of it have gotten incredibly wealthy on doge and they understand his concept i think which is a which is almost like a william brian jennings game theory it's like a it's like a neo-populist concept where he says you know like bitcoin will be the gold but the real silver is actually doge it's not like coin or it's not something else it's actually doge because it is the coin that people can own like like whole amounts of it's the coin that uh can be sent around to uh among people so it can have a high velocity um and also uh

it's memes are simple you know like the like the man who drinks beer can understand it you know the like the girl who post selfies uh can understand it and she can just put her money in it and outperform everybody right like if you bought doge in january you're up versus everybody but getting away from the money thesis you know i made x return because obviously like that drives a lot of people you know i just want to make like a 10x bag or 20x bagger when you're talking about like the the real reasons why those people want to hold it i can understand that you know there's a community aspect for the laws obviously it started off as you know this thing on reddit where people would like tip each other and that was a lot more for like entertainment and enjoyment but when you

touch about like digital silver and these things i started the question a little bit because things like dogecoin acting as a store of value you know what is value it means somebody is willing to work or or you know give their assets for that thing um you know somebody will if their kids are gonna go to college they're going to like you know they're put their money in this store of value so that in 20 years their kids are going to be able to afford to go to college i don't see how like something that is kind of like a meme coin even though it brings a lot of happiness and enjoyment to people can really reach that next level of storing value like it's already happened though right i mean it's already happened i mean if if

that were not possible then it wouldn't not have already become 60 of robin hood holdings right and robin hood are actually the real people that you need to buy or your other coins right like everyone's wishes that their coin could be bought by robin hood people but instead robin people are actually buying doge and they're not and they're buying it not even because they're shield that hard by anybody they're buying it because they see all the coins and they're like you know what doge i like i like doge and that that that virality of like normies shilling normies is only happening on doge it is happening to a lesser extent on some other coins but it reminds me of xrp of the previous cycle but just better in every way because one there's no foundation that has a ton of it there's no reliance on a on all

elaborate banks using it for payments narrative it is just clean it is just simple and it's also a fair launch by the way so like there's no risk of it having like ever become deemed a security right there's no risk of it having any regulatory issues ever so i think that like there's this big concept in crypto i think where's that like crypto needs to be serious and like the coins that are not serious are therefore like somehow like not gonna make it but i think that doge what it does show people uh and i mean i mean doge pizza have a lot of natives because like basically like everyone is down in doge right like there's no one who's not down in doge like you thought you were late

in 2018 if you bought doge you you have a billion dollars so that there's like every native is down in dodge so it pisses them off like normies are up way more in doge than they are are like versus natives so it's in a way it's almost like bitcoin was to the traditional finance doge is to traditional crypto because it is just so simple so obvious but everyone misses it you see absolutely no absolutely but the difference i would say is like how strong are the beliefs of the underlying holders because there's people who you know will hold bitcoin to their death like they're they're so like strongly minded about you know sound money and what that means with dogecoin once things start out and this is the same thing for xrp if you just go from first principles and you say you

know a lot of this community is there just because they want the return you know they see the returns they want to get rich when moon when moon so at some point even if it's like 10x from now 20x 50x from now it'll start out right like it'll reach a point where it just can't grow anymore so at that point you get this like reflectivity on the way down as well i actually see the opposite of that where i've seen a lot more interest from bitcoin people to sell to ether than i have like if you go into the communities like for deutsche people to sell to other coins and i think the reason is again this kind of this big dilemma of like how serious are you about crypto right like the deutsche coin buyer he buys a thousand bucks of it he's not like you he's not giving two

[ __ ] about it he's not thinking about which coin he needs to buy next he buys the dog coin because he hears his friends buying it and they're all money on it and he also likes it and he's also up he knows if he waits long enough he's not money on it because the chart is so strong it's so parabolic and and so whereas the a lot of the bitcoin investors that have come in especially the last year they come in and then as soon as people talk about ultrasound money they're like okay i need to sell my bitcoin for eth and then i need to sell my eath for soul i need to sell my soul for avax you're getting a lot of that happening actually so it's actually ironic but um if you just look at patterns of holdings like if you just really analyze it like

the data like doge has actually the strongest like single holding power among like almost like any coin where that i think is very surprising to people but if you think about it from a broader point of view it it it just shows the value of um like if there is a coin that's owned like between a hundred and a thousand dollars by many people what coin would that be i think that's almost a question you need to be asking like will will there be a coin where people who are worth let's say between ten thousand and a hundred thousand dollars buy a thousand bucks of this single coin and then don't think about it too hard that coin is doge basically and you already see in the volumes you already

see it in the i wouldn't bet against this trend because i think that the reasons for this trend are actually incredibly organic relative to what's contrived in a lot of other coins where they have to really do a lot of marketing really do a lot of stuff um and i think that you know doge having more catalysts as well i mean you saw you saw mark cuban as well as say he said 95 of people actually spending doge in the mav store i mean 95 of the transactions of people actually spending the map store are using doge so people actually like using doge uh they like the idea of moving around the economy uh so i so i think it doge is almost the ultimate i like the iq bell curve trap i think because it it for people in the middle of the curve

they see it they're like this is not serious this is a dog how can i invest in a dog and they don't buy it and then you know the the the people who don't take crypto so seriously and they don't think about it that hard they just buy it and and they don't think about it again and that's almost the definition of it right where the 100 key people they're projecting their own thought process onto 50 iq and they're saying well i would think about what coin to own all my life so therefore i'll i'll sell out of my dojo and starts going down like no the reason he bought it is because he's not thinking about too hard he just likes the coin and and so you're getting this very interesting kind of effect of like what actually makes people hold a coin what actually gets people to go into the

community uh and i think for me like doge is actually the clear winner in terms of capturing that demographic and and you see this in the robin hood data i think it's it's like any argument that those would get abandoned after it fell is already refuted in robin hood data and we can see it each time robin hood will post their quarterlys but this is not something that i think is mirrored as well now increasingly across coinbase i mean a few a few days ago like doge volume went higher than ether you know it's still very high volumes relative to other coins on binance is regularly at top three top five volume coin uh you know it's people want to trade doge i mean one thing i've discussed on the dogecoin side that i i do appreciate a lot is

you know young people feel kind of left out of the financial ecosystem the asset prices are so high you know housing prices in many places are just really unaffordable for a lot of young people and dogecoin in a way is kind of like this like woodstock economic rebellion thing where you know i'm gonna buy like this dog coin and i know how you know dumb it looks and that's the whole point it's basically like it's like an fu to kind of like this like big financial system that's kind of priced everybody else out and in that aspect i i do understand like the huge community-led dynamic in it i just feel like from a game to your perspective if there's not going to be a lot of coordination

because it is a coordination game and if you just have you know random people in it before because you've almost answered your own question right it is in fact the coordination point for people who don't want to buy a serious coin start from the assumption that you don't want to own a serious coin then what coin do you buy but why make this assumption you know because you guys are serious people but not everyone's a serious person i'm actually much less serious than you guys too so i i get it you two are better game theorists than i am right because you're more serious so it's kind of this but this kind of this kind of mentality as well i mean so crypto right now is sort of in a stage where people do not take it serious and i wonder if this is not a

big contributor to why doge can be so popular and if there was a stock for example or like oil commodity that would be like doge branded or whatever i question if in the traditional market something like that could have the same amount of success and longevity and if we believe in the super cycle then doesn't crypto eventually become a boring market as well absolutely not absolutely not i think the fundamental of crypto is very meme is very community and that's the almost the entire point of it and you know when you mention the past like the idea of a meme coin as being very bullish for bitcoin when people call it a meme coin then by extension you must also extend this to dosh coin which has incredibly

powerful memes has actually the biggest meme lord on earth uh supporting it has the you know i mean i will i will say this too like compared to what i expected the price of gme to be like right now you know months later after the initial spike and the price of amc it is clear that like if you get this like huge community event potentially like the fundamentals start to improve as well you know get rid of the ceo exactly dogecoin can start doing smart actually the same way that bitcoin itself grew i mean i know some like very og bitcoin there's they're they're super long those you know you angelo bdc who's like sort of the hero of the previous cycle like huge bitcoin og mega bullish doge because they just they

saw the same thing happen in bitcoin because bitcoin also was not so serious for a long time right people were like what is this bitcoin what is this thing you know ether is also not so serious for a long time so i think if a lot of people are interested in it yet it's not seen as so serious that always gets me really interested because it just tells me that like there's something happening here that people don't understand yeah absolutely i mean to touch on one thing that is a slightly different game and i guess house who probably can relate to this as well like based on your comment or just now if you look at the the alt versus kind of serious coin game there is a little bit of like um you know it can either be like a plus uh zero a positive sum game which basically

means we can all win if we coordinate in a certain way um and there's zero sum games you know when you're trading futures on bitcoin someone's losing someone's winning you you obviously need somebody on each side it's a zero-sum game crypto as a whole can be positive some like money can enter the space from outside the space so this sort of can make everybody in the space richer potentially my i think maybe houses worry and my concern a little bit is too many of these like things are happening where you know you're getting very badly poorly written code on many projects that results in you know huge losses of money from from people hacking it makes the headlines you know so people

see crypto in a way where like i can lose my money very fast and to be fair that is true like if you're not very careful it is easy to get hacked that creates this sort of like negative sum for the entire community while you know positive headlines can create a positive sum for everybody and i think as a community overall the crypto world should try to put social pressure on things that are bad for the community overall i think right now people kind of gloss over too many things um and potentially like allow but it's very hard to get people to agree on what is good or bad for the community i mean if you guys pick corners ethereum is bad for the world if you guys eat people they tell you salon

is bad for the world so you know it's very difficult to get consensus on what is good or bad absolutely and this is kind of something uh i was thinking about just today which is once you're aligned so much with one of these things and your mindset is so much supporting it you start attacking other coins around you that you potentially view as a threat and that is actually negative for the overall ecosystem so some coordination within the community can actually go a long way and the fear is if you have too many things stepping on the same you know store value thesis or this thesis or that thesis as opposed to kind of being legal bricks that you can just kind of build together

[Music] i mean i think you you kind of answered also your question earlier like when you said for these meme coins they can that includes bitcoin like any kind of store value that has like this coordination game underlying where you know all the holders you know take each other's hand and you know say like we don't sell like um which is kind of the whole idea right behind all of these coins right you you basically create strong hands and uh and that makes the coin go up over time and attracts more buyers like to join this community and for them it does make sense it doesn't make sense to a degree to be you know tribal and create these like shelling fences against people leaving the community and selling their coins and buying it to other coins

and so it's like really hard to get people to do something you know what's best for space versus you know what's best for their particular holding it is an interesting question too because like you know like in every crypto cycle like near the top of it you got guys saying like you know bitcoin is the yahoo of crypto it's gonna go to you know you need to buy the next one and all this kind of stuff and then people get mad at them after the market dumps because they say like you know you should have been defending the bitcoin showing point this and that but the way i see it is like um bitcoin and i think also ethereum at this point are are here to stay and i think that there's also a lot of new communities that will

come and also end up here to stay like i don't think that like the existence of bitcoin historic value means like that like everyone in crypto has to defend it all the time it's already big enough it doesn't need that defense i do agree that in 2017 actually it really needed it and i think it got it eventually but i think in 2021 like bitcoin doesn't need that defense bitcoin that there's quiet buyers every day they don't announce they buy there's you know people just buying it and holding it it's it's already it's already there uh i think i think eric wall just he just put out a tweet saying like why does he only tweet about either not even though he mainly owns bitcoin well because he thinks either more interesting stuff happening but that doesn't mean he's not like just long bitcoin only uh or or mainly and and so

i think that you know like it's it's not it's not as important as it used to be for everyone to like say but by the way we we think bitcoin is a store value like it's just not it's almost i definitely agree with that i think like something can have so much power that it just doesn't really lie on if if the idea because ideas are you know the most powerful thing in the world and if the idea is strong enough ultimately the actions of individuals are not as important as kind of like the incentive structure that's built into the idea yes yes i think so and i think like ethereum people will eventually understand this too i think right now it's kind of at a it's kind of like the community is like is feeling a bit pained because it's

like solana's gaining traction and l2 arbitrary is really uh it's not out yet and and optimism as disappointed and and so people have kind of like just been upset that scaling is is going you know and then like and then like there was some toxicity in like medic versus ethereum people right because people are like saying okay well how does this feedback to ether value long term like what you guys are doing with this manic yield farming now we have avalanche yield farming coming out too which is like 200 ml of incentives which is going to bridge a lot of value over as well and and so like i think i'm i'm long-term very bullish on e like like ether ethereum if i wasn't like i wouldn't buy a lot of

nfcs on ethereum right um but i i do think that like either we'll have to go through the challenges that bitcoin has gone through as well which is that it has to understand that you know where it needs to be defensive possibly but where it needs to be a lot more like like just open to innovation from other chains learn from what's happening on on other chains and and find ways to work with them as opposed to just like i mean it would be a huge mistake for your ethereum to inherit the bitcoin maximism toxicity because there it makes even less sense right at least for bitcoin it makes some sense because they're literally just sitting around holding whereas for ethereum they're actually trying to build a platform they're trying to build things um

you know let tizen was something that i've been thinking about like last two days like i wrote on twitter that like there was sort of this this eagle situation eagle is this token that you know basically bribes miners to tokenize you know the uh the power to vote over the gas limit and um when i like whenever i write something that's negative about ethereum basically we had 10 bitcoins like writing follow-up threats or like bitcoin maximalists like retweeting that and like saying look how dumb ethereums like and then i i said jokingly like half of the bitcoin maximalists to still follow me do so you know in order to get ammunition to dunk on ethereum which is maybe that's a bit overstated but i mean it's it's definitely two two degree

and um and like the other half has me sort of blocked or unfold or whatever and i've been thinking so why is this like why do like people like me sort of feel like driven out of the bitcoin community and i think i think it's because like my working theory is because it just doesn't afford you as a like creative person who wants to like make it in the space and wants to contribute it just doesn't afford you enough you know freedom to do things enough opportunity really right like what can you do like you can't build on bitcoin you can't even criticize bitcoin like you just get you dunked on relent i saw jack recently um stirred some commotion and the theorem i think maybe

house you were tweeting about this as well where you know jack is obviously kind of very much on the bitcoin side and um somebody tweeted basically saying that ethereum is being treated by bitcoin as a scam and the reason is because they're going around paying the foundation's paying developers to go around and talk about ultrasound money so it's kind of being treated very negatively and very aggressively and i think this is kind of where the game theory plays in it's sort of like you know if you just stay in your lane we can all support each other we can kind of build things together and like all of all of kind of like the bitcoin can get wrapped go on to eth get yield farm there it could be like the bank for the bitcoin asset yeah everybody can

kind of work together that's a positive sum game while it's like view of like attacking you know this is my only lane and you're getting into my lane right now and i'm actually like the stronger one in this lane so like i will you know be like the ape and kind of smash you out it kind of plays naturally i think from the from the game theory dynamic that's a very good point and i think there's also a big dividing point within the ethereum community too which is that you know you got some types who say like you know talking about flipping is toxic we shouldn't even be like talking about that and then you know like the bankless guys say like you know we we're we're advocating like bed right a third bitcoin the third ether third defy and sort of that and i think that's really

healthy but i do agree with jordy that like a lot of the reason why um bitcoiners are are attacking ethereum as one because they see it as the biggest threat right and and so it's it's also rational for them to to be the most defensive about it it is a show of strength for ethereum that they that they attacked it because they don't attack other coins um you know until they get really big like i think when dodge was at 70 cents actually bitcoin is i saw them attacking doge like the doubts when like guys like this is now starting to scare me right so um ethereum definitely scares a lot of bitcoiners and i think that it's actually one of the you mentioned this to me three months ago actually a lot of things you mentioned to me three months ago i now like adopt your view three

three months later but i think ethereum is actually very bullish for bitcoin long term because it does drive it does it does have this force under bitcoin saying you know i i am at a very high potential market cap if you don't get your [ __ ] together eventually you know there will be problems for you and and so without that you know the community might be even worse than it is now but i do see some signs that you know bitcoin community um you know not not not scaling in the way that ethereum will scale or not scaling the ways that other things will scale but there is a lot of drive right like you're seeing that with the bitcoin beach you're seeing that with like the rise and you've seen that like you know tap tap root in november like we'll will be

quite momentous for soft work in four years um i think that there's it's it's all still [ __ ] compared to what's happening on ethereum but i actually think that stuff wouldn't even happen if there was no ethereum because there there's some chance it would just really be people sitting around all day talking about holding and talk talking about like eating meat right so like like you know like even with d5 right like when d5 first came out i remember like you and i we were in telegram groups in 2018 talking about d5 because that was when the first time like the dharma they coined the term and everyone was laughing at the iptards that they were saying like you know they're they're trying to make this like on-chain finance it's illegal stable coins are illegal i remember nick carter wrote this thing about how stable quotes

are going to be illegal all this kind of stuff right and and and i think like like now like we're talking about how do we do bitcoin how do we do defy on bitcoin right how do we do these things so i think ethereum is one of the most important experimental grounds because it it has this culture of experimentation and has this thing and i think that the moderate bitcoiners they've always respected this part of ethereum and they've always understood it as being actually very important for ethereum long for for even bitcoin long term because it shows like what what needs to be done long term potentially right like to add utility maybe uh to to do these kind of things um and i do think there's an interesting game theory where a lot of bitcoiners will support outlayer one and not ether because they

think when they support layer one it's not a threat to bitcoin sov whereas eth is already so strong that if you also support eat the store value then you break the entire showing point like we mentioned that that's a fantastic point actually like if you are a bitcoin believer supporting like not being a maximalist in the pure sense and just saying you know bitcoin everything else is a [ __ ] coin if you actually like skip past number two and you go to number three four five down the list you know i don't know about cardano i don't want to comment too much about that one but you know if you kind of look at the other layer ones it makes a lot of sense to support those and clarify kind of like the distinction between you know this is a smart contract platform this is a store of

value and i think potentially like you know a lot of the solana and the other pumps that we're seeing can get driven by a lot of the bitcoin money yeah and we like we keep we keep going back to like things we've written three years ago which is kind of funny uh in like an article about religion in crypto and it's like why do some religions um outside of crypto why do they tolerate other big religions but why do they kill you if you're an atheist right so there's like there are these these these uh basically these groups that are tolerated or these two points that are tolerated even if they are not in group and then they are the ones that are like completely not tolerated and like being pro-ethereum in the bitcoin community is like being an atheist if

you're like i don't know and so i mean even even a better example is kind of you know cold war right like you have us and ussr and there's all these proxy sort of nations that okay like you know us going to support turkey just because it's you know it's close to russia and we you know we want to have sort of a counterbalance to to russia i do honestly think though too that like i think bitcoin toxicity is very overstated i think the community that you were a part of was actually the most toxic part of possibly all bitcoin like and i warned you about this in 2018 where i said these guys will cancel you over like you know you're tweeting a single good thing about eth and like just these people you won't learn nothing from them

and you will just get hazed all day and and like you know that that's basically what's happening but i mean i look i know a lot of moderate bitcoiners i mean i consider myself one um i like these guys are farming i mean mike mcdonald is a great example of a moderate bitcoin he's kind of like the he's kind of like the paragon of moderate bitcoiner right he like holds 65 bitcoinish like maybe five percent eat to zero percent depending on how he feels and then he owns punks he actually uses ethereum and he farms a lot with wbdc so he has no problem with ethereum loves using it gets nfts punks og has made more money on punks than most ethereums have made on eth uh like is made more on d5 than most ethereums have made on d like as well like he happy to

use the chain happy to buy eath when he's bullish on him but he long term believes in bitcoin his store value but he also believes in or he likes to to experiment on ethereum and other chains so i think like there's 200 000 wbdc now so clearly bitcoiners are happy to move their bitcoin over and use it and i think that that's all very healthy for the space i really don't think the average bitcoiner is as nearly as toxic there's almost like it's almost like this like uh straw man i think i mean i point out this to some ethereums where they're saying wow the bitcoin maxi is so toxic i mean i think um gary tan recently like did a podcast where he was like saying who are these toxic bitcoin maximus and i'm just like these people really don't exist it's like playing

20 dudes on twitter probably maybe 30 dudes and everyone else is like like pretty moderate like even jack like i think he's relatively moderate he he has to be he has to be bitcoin only because of his focus and of his business but i mean he i mean he minted in nft uh on ethereum for the tweet he used vcent he he he really he really dislikes the historic value thesis so he's pushing back extremely reactively against that but i think if that thesis was gone he would actually support a lot of other chains so i think he he he's in that kind of fight-or-flight kind of thought process there i mean if you get if you get bitcoin dominance over 70 i don't think he'll be doing stuff like that anymore

so i think it's like you know it's the same thing with ethereum right like ethereum at 0.02 um there was much less toxicity toward ethereum from bitcoin people too there was more dunking but there was like less toxicity like you know and and and so i think like like the there there's just it's very actually it's very hard to categorize the average bitcoiner i think uh and i would say especially once you get off of twitter then it's like actually people a lot of people just own like like 80 20 or like 70 30 like anyways and so there's not even like a question of it there's market cap weighted and and so i think it's just it's all it's all in people's heads i think

uh for the most part uh you make a good point actually like when you get off crypto twitter there is still a big crypto community and you have this concept in u.s politics which is like the silent minority which is you know all these people who are voters they have jordans my bad basically you know there's a lot of crypto people that are not on crypto twitter we don't like see them dunking or or you know memeing or whatever but if you go on youtube for example you know there is like coin bureau some of these other videos have millions of subscribers there's obviously a ton of people who love cardano who you know on crypto twitter you don't even see anybody chilling cardano so there is this like huge silent other part that's outside of crypto

twitter that as it came as a crypto community it probably makes sense to at least be aware and sort of tap into what what they're thinking and what they're seeing because it's not the same as what we're seeing exactly that's kind of a point in my tweet where i said like people think like people will wonder why crypto twitter is debating bitcoin versus all day well like they're debating like cardano versus like doge or other coins that's actually so true like i don't see normies like ever debate bitcoin versus either actually they just buy some bitcoin and some either and then they decide what to do with the rest and they asked me why i didn't tell them to buy more cardano the only point i would say is like the gme thing again like but getting back into that is basically like there is like a

huge force even of unsophisticated people if they get behind something that gets the enough resources to then create fundamentals like cardano was like a running joke right and then charles started getting on youtube he does all these amas whatever people get kind of religious about it at this point they have enough capital that they can just fund a ton of developers to try to build stuff i mean we're still waiting to see what's going to come out but they have a lot of capital potentially like for the first time recently we were hearing people you know getting getting uh offered projects on cardano smart contract projects might start appearing and it might be legit because they have a lot of fundamental of this like silent majority money um guys thank

you so much for the discussion it was a pleasure thank you guys now it's a lot of fun thanks dude [Music]