Risk Management Maximalism w/ WenMoon (Umami DAO)

Transcript

[Music] thank you hello and welcome back to the strangewater podcast thank you so much for joining us I'm your host Rex today's episode is with one of d5's pseudo-anonymous Builders Wen Moon throughout this episode you'll hear the Deep admiration and respect I have for one Moon so I won't belabor the point here here's all I'll say when I joined Umami Finance for a brief stint at the end of 2022 it was specifically to get the opportunity to work with one this conversation is with one of d5's best treasury managers and I say that

with some confidence as the former treasury manager for anheuser-busch's 20 billion dollar North American Division when I see when in action I not only see the same core principles that make international finance operate I see someone who understands D5 more intuitively than anyone I know uh before we begin as you will hear from Wen himself the most critical part of being successful is understanding risk and crypto is an inherently Risky Business please do not take Financial advice from this or any other podcast ethereum and decentralized finance will change the world but you can easily lose all of your money in the process

all right let's get started when Moon welcome to the podcast good to be here good awesome well first and most important question are you a boy or are you a girl guys everyone everyone this is a voice changer guys I'm I promise I'm a cute anime girl okay voice GPT yes exactly on a more serious note um like one you and I have been friends for uh let's say a long time in crypto time yeah so before just like kind of jumping into what's going on now and what's relevant now would you uh give the audience and give myself um so a little bit about what how you

even got here what Drew you to the space and um yeah how did you go from like a normie to one Moon and yeah sure so I think I have uh a really different uh experience to get into the space compared to everybody else because I hear like a lot of people getting in through poker or because you know they they got in for this reason or that reason but I I got in like I I started off with a finance and economics background right I consider myself an economist and that kind of propels into everything that I uh do in every every way that I kind of look at the markets in crypto markets especially um especially like behavioral economics trying to understand how sentiment changes um you know it's for specific coins and

how how that affects the market so whatever but um I kind of got in late 2020s so actually just after what everybody calls D5 summer right and and I guess now nobody really talks about it anymore because uh you know the D5 lifespan is like one year pretty much so I'm considered buma but um you know I I actually got into it because a friend of mine was making a um project in defy and um I I was like you know this is really cute that's so cute of you and then he he kind of told me um you know we're gonna do this thing called an air draw can he try to explain to me and I dropped and I was like free money you

know that doesn't make any sense right like coming from my background I was like if somebody tells you that's free money it's a lie and so just because it was my friend I was like okay I'll kind of I'll join the Discord I'll I'll I'll I'll hype up the community a little bit but whatever and then um you know a couple months down the line I think uh at the peak that that airdrop was worth um like six figures and I was I was completely blown away number one that that could ever happen and number two why did I not create like 100 different alt accounts to to find that airdrop and um yeah I mean that that kind of that kind of led me I mean looking at that

and seeing something that you know shouldn't exist actually existing um kind of threw me into this world and I was just uh fascinated I guess the main two things was uh number one really that in this space kind of um the thing that blew me away was any of the quote-unquote industry leaders you could pretty much just at least at that time and I would say even now you can just DM them on to Discord or DM them on telegram DM them on Twitter and they will reply right in in what other industry can you can you say something like that right and so um it was just a a just perfect to kind of learn from these guys ask them questions or or even if I

had had like questions of why did they do something like this and and why not some other way and and even you know sometimes giving giving them some thoughts that they they've never already thought about so you know that kind of I I did that for a while and going around from Project to project and then um uh my friend Romy who works at Abra wait so when uh before you continue like something I always like want to talk to people about is when you saw this space like you at least like gave it the time of day and you didn't write it off as like oh it's crypto it's like where scams go to thrive and it's like this degenerate place for you know like gambling and crimes and and that kind of thing

um like my first question is like do you find that um your friends that haven't been crypto pilled or some are the strongest like anti-crypto people you know which is the case for me and two like what do you think kind of separates the people that are willing to jump over the chasm yeah absolutely right so I I mean I think to be honest and I see this in everybody including myself who is in crypto there's like an eight in eight um one thing or yearning inside of them that they all want to have um uh that they all wanted crypto you know this is this is always something that that they wanted in the back of the minds and they're so like happy to kind of to kind of see this and and have something that can rival the traditional

Financial system something that can rival um you know money and the US dollar and everything that is corrupt in this world or whatever it is but um you know the traditional I guess you know the the Layman doesn't think that way obviously and and you know if you want my uh honest thing and maybe it's not right but when when people ask me what I do I don't even tell them that I I don't even tell them I'm crypto I just say I I work in finance so I work in tech and and and then just like because sometimes you know the the the conversation the can of worms that you open from that is just like something that you don't really want to deal with at the time so you're just like okay you know what forget it it's kind of like I kind of see it as

you know when YouTube is YouTubers or twitch stream is kind of first started popping off none of them like to say um that's what they did because it wasn't really a career or whatever right um so yeah it's kind of that's kind of how it is yeah I know man I I definitely hear you and like what I like to how I like to phrase it is like you don't get in this space without something happened to you where the system that like you were taught was fair and good and like what we're all supposed to believe in just like really betrayed you in some way and um you know I do think that like that's what it takes to find yourself comfortable outside of like the Global Financial system but um it you know we all are like Misfits

in our own way and I I think that might be like the difference between like people who get washed out in cycles and not exactly yeah I think you put it perfectly I think we're all Misfits Okay cool so sorry I interrupted you so you uh like got involved just from like D5 summer just like basically like the magic of airdrops um and like the good side of airdrops uh and then I think you were saying that you uh moved over to ABRA is that correct yeah so um I have a good friend Romy and he he was in the project Abra at the time and he kind of introduced me to them i i as soon as I saw Robert it was it was something like crazy to me I actually uh like kind of learned about

maker after learning about Abra right oh it's it's you know it's kind of a little bit of a jumble and everything but you know Abra and maker are very similar and and looking at what this was right like inventing and and I mean the the congressman even even said it right like even quoted it minting this magic internet money out of thin air that was something incredible and and and so we kind of I I kind of helped them out for a while and I think that was I started uh even one one year or one and a half years even ago uh and and stayed there and and we did we did a ton of crazy things and I think you know if anybody if anybody remembers Abra it was uh and and still to this day

it has like some sort of Infamous history I mean we were we did the um we did uh you know the djend box which everybody remembers and and now it's like the one year anniversary from Luna and dokon and everything collapsing so um yeah that was always fun and and I think being in this industry I faced like a ton of these um I think everybody has faced a ton of these um kind of one in a once in a lifetime generational events right and um yeah that's kind of from there I think um yeah I was obviously interested in the treasury

that Abra kind of started to culminate and how uh the most interesting thing to me was really like something that you don't get is Abra was a product that was created and and how could they use their treasury um on their own platform um or they've already made this thing which is like a spaceship right and and they are using it with their own treasury now and they have this protocol owned films proposal and I think something like that is has always been really interesting to me like how how can we build something that is actually useful and that's kind of been my thesis what going into like um even Umami right so I joined uh Umami now a year ago to like ver almost a year

ago um and uh when when when I joined the the idea was we want to we want to make um D5 product or these Vault products that treasuries can use right because the the the the the very first Vault that we have um hopefully launching soon or maybe by the time this is out already launched uh will be um the glp volt product and um that that is essentially something that a strategy that we've been running with the treasury for many months already right we've been we've had our grp position we've held that hedge.glp position and you know we we kind of want to offer that uh two other Dallas Market

this to other dials and other treasuries there's a way to kind of keep your exposure in the asset that you want and um at the same time uh earn and what is like above the market rate yield and yeah just simple yeah no and and obviously like we're gonna get to Umami um because uh like both that's where you're at and it's like we're so much of our history comes together there but before we get there like can you talk about um like when you entered Abra and for those of you that aren't following we're talking about uh Abracadabra or magic internet money um but what when you joined Abra like what type of work were you doing and like I you know I just so

vividly remember this time that you're talking about which was you know like q1 of last year and um for me I was experiencing what you're talking about in terms of like realizing the value and the importance of Treasury management around uh ohm right like the original ohm which was like we've raised all this money now like is it just supposed to sit here or what do we do with it and then um and and you know so like that's when the conversations start about like what what does treasury management look like and what do dials look like at least in my head and so can you just talk to me about like what um that experience was like and like what about treasury management like really got you going because like I got to tell you man there's not a lot of Treasury managers out there yeah actually that's a really

great question right so um back back in those days I think the the main purpose of the treasury was kind of that the CVX flywheel and the CRV flywheel and and and uh the reason for that was obviously incentivizing liquidity uh on curve and so that kind of the two kind of became analogous right so you know we were trying to figure out ways and and to order to build a flywheel uh up and uh in those days that that meant you know how can we accumulate cbx uh what is the best way to use any rewards that we have in like a positive some way which is which has always been something that you know I

wanted to keep um from the days right like instead of uh we instead of taking tokens and just dumping them like for example with with we just got the arbitrum airdrop right and we're starting to see I think uh some treasuries just kind of dump those tokens but um maybe they as like more positive some things that you can do with those kind of tokens and and so with everything with with everything from that um you know I guess it kind of shifted because at the end of the day you know I think a lot of these things are um more crypto first kind of things you can't take you can't take somebody from try to find explain I mean how how many hours would it take to get somebody from try

to find explain to them the CVX flywheel that everybody was doing back in the days right they would they just wouldn't understand um and and yeah so uh doing that and and working for towards building that liquidity base I think liquidity has always been uh one of the biggest problems in defy and something that you know everyone's trying to solve and even uh you know I'm trying to solve with like some of them even our advisor projects how can we get options to help us uh incentivize liquidity how can we do this or that so yeah it's just well all of these things kind of come together you know what I mean yeah for sure so we'll we'll pause the conversation about like effective

treasury management for after we get through your story so you're at Abra you realize like your passion and like what is like interesting to you is in treasury um like real treasury management allocation and like being on the ball and like in emergencies and that kind of stuff and so you find your way over to Mommy which for those of you who aren't following along uh when correct me if I'm wrong but at the time Umami as a project literally just was a treasury so so at that time like I I joined Mommy I guess halfway through its lifetime and and it started off as an Elm Fork right so yeah exactly like all own folks started off as

ponzies and then uh then they became like these massive giant funds of of of these treasuries and and they're still to this day actually some of the um on forks from those days are some of the largest treasuries that we have in like uh and so yeah we we that that that's that's where it was when I joined and that's where um that's what I guess my main dang was right yeah and so okay so you joined Umami and it's a treasury right that may or may not be allocated and even if it is like is probably not done sophisticatedly and then you know what when I show up probably uh in late May or early June of

last year is um we've already like kind of established that we know that the vaults are like the product that Umami is going to like Focus around and so um can you talk a little bit about like and I guess like the the prologue or sorry the epilogue to that story is like once Umami figured it out the entire industry realized like The Only Thing Worth building is glp vaults just like the Cambrian explosion of glp vaults that um you know some are good some are bad like all of them are not as sophisticated as what you're building today but even going back to like the less sophisticated version from May of last year

um can you talk a little bit about how you and like the team together uh like identified GMX as this platform and as this like engine that would like really come to define the entire category during this bear Market well I think so actually when I got there um I'm just kind of reminding now uh the the first few Max vaults were already kind of in construction right but yeah I mean it really has been like a GMX explosion and and the reason is quite simple right I think GMX did uh what is like maybe you can see in hindsight as a quite simple idea but they executed it

perfectly right they they had that um an easy to understand um LP and uh and very user-friendly and d-gen friendly I should say uh platform to kind of Leverage and then earn fees from right so it really was I guess the the first maybe not the first that invented the term but at least one of the first um projects that was producing like a ton of yellow dice I remember like some days it was producing more than like the ethereum transaction fees or something so uh yeah it's it it was an obvious um if you're trying to extract value which is uh one of the things that any Vault Builder is basically trying to do

um it was one of the primary kind of spots that you were looking at obviously to try and extract that value from yeah no and again like especially in retrospect like it it's just it's so painfully obvious that like it kind of even hurts to be having this conversation um and I I uh just kudos to like you and the team for um you know being able to take an idea and like meme it into like the economic engine that's keeping all of our eth like above you know 1500 or whatever but um the I think so I think uh speaking of the vaults and like the V1 version of the vaults like one of the like it sounds like glamorous

to be a treasury manager right like you're like you are in charge of all this capital and you can put in all these exciting things and generate real yield but the flip side of that is like you're taking an incredible amount of risk on behalf of the protocol right um and obviously like the protocol is is taking a lot of risk at the same time right so uh yeah we've seen we've seen some uh treasury managers or or just you know not even treasury managers just treasury is being managed by uh projects and then you know they're just completely losing value and I guess sometimes it flies under the radar sometimes it doesn't you know I mean yeah I mean depending on how it's happening if it doesn't like manifest in the numbers in a specific way like people seem to not notice or

you know it it just um yeah so anyway I bring it up to um like kind of draw the conversation towards like what is it like to be a treasury manager during um like as you said like these existential crises that we apparently are supposed to experience once in a life lifetime but get them quarterly and like how how do you deal with um everything from like being responsible for Capital that's like during the Terra meltdown to like Building Products that could that are supposed to like safely custody these these products that aren't like performing the way you thought like what is it like to be a treasury manager

in the like the Meltdown moments that's that's a great question right and I think um like to be honest with you the like in those situations that there isn't really much of a job like the actual job is uh before that right making sure that I mean I mean if I were to be 100 here the the real job is the risk management right so in order to have your Treasury and and make sure that you are able to pay your devs and you were able to keep the project going you want to make sure that whatever you have your treasury in or however you're holding your Treasury and even things like even things really basic like opsec how how is the multi-shake being held and stuff like

that all those things I incredibly important and all of those things if you do write are able to prevent 99 of any of these kind of things affecting you uh and so if we take FTX for example I think we saw some projects not all and and not even a vast majority but some projects kind of had their uh treasury on FTX for whatever reason um and and maybe they were actually like a more centralized treasury right they they weren't held by token holders or whatever but you know they were still the the the form that Opex was coming for for those specific teams they were held on FTX and you know for for whatever reason they they had a 100

uh faith in FTX and and you know they forgot the the age-old um the age-old lesson in crypto which is not your keys not your crypto right so and and I mean you know if you're following falling victim to them I think uh in a lot of these cases uh you're you're not going to be you're not gonna really make it very far right and and so my My Philosophy has always been uh in order to preserve this uh I mean obviously it kind of depends on whatever the protocol the specific protocol is trying to do right if you're trying to chase yield with your treasury more than chasing sustainability then sure you're going to be facing these kind of

problems where you're gonna have to be up at night trying to take your money out of um anchor or trying to make your money out of FTX and trying to be the first one out the door but you know My Philosophy is just completely avoid those situations as much as possible and you know you won't have to uh actually be on those um at those times just completely freaking out you know what I mean yeah I think what you're saying is that like if your treasury manager is freaking out when the Market's freaking out like you it's already too late and you've lost yeah yeah I think that the job was the job the real job was much much earlier than that yeah yeah I was in like the planning and the strategy and like

foreseeing these events and like anybody can move funds around on chain that's not what's important yeah and I think I think you know nobody can foresee these events and I don't I don't I'm not even saying that I can it's just you know there are no I couldn't foresee FTX blowing up but I can foresee some sort of uh you know some drawbacks to having your all of your Opex uh runway on a centralized entity right if that Central identity goes down for whatever reason even if it is FTX and even if you do trust them uh then then that will be bad but it's kind of the same in my opinion as you know if I gave uh the multi-tig one of one access to just one person

then sure I could trust them uh you know as much as I want but at the end of the day there is that risk factor that you're kind of introducing and you want to mitigate as many of those risk factors and and and just you make them as low as possible Right yeah no yeah and I think um yeah I mean I think like for better for worse like this industry like puts you through The Crucible and like builds us into stronger versions of ourselves like I don't know for for in this context we're talking about like treasury management um and like they put you through the lessons and you learn the lessons or you don't but like if you survive like you just grow more resilient you know and I think like I guess what I'm trying to say is like the

the beautiful thing about this space and experiencing all these crises is that like you are we are learning what what to do and what not to do absolutely right and I think I think that applies to everybody right just any any average Thief I use it any average uh anyone who's holding crypto right everyone knows that the coins can go down like 90 right but if you're shocked when they do you know you you've already you've already made that mistake and I think every everybody who's who's still here has learned that lesson right because we've seen we've seen some some people just some Builders some either just completely leave during the bear markets and and it is you usually what happens but you know if you're still here at

this time I think you know you you've already learned that lesson yeah so so picking up on that and like kind of the lessons that we learned in like the the I don't know treasury managers it turns us into um what like at a high level like what do you think makes a good treasury manager and choose to answer this sequentially or in parallel but like how is that different from what makes like a good personal investor I I think um so so really it's all about portfolio management right in both cases um and a good a good Trader like let's say um I think you mean Trader right when you when you say what you say uh by like

a person I think I think trading is interesting too but I just like like I can think of myself as Rex style right and I'm managing my treasury or I can think of myself as just like I own a bunch of eth right and so when you think of like managing your personal stock versus like acting as a treasury manager what are the things that you think like are the same skills and what do you think are like it's important to think about differently so I think uh for for someone on their own personal portfolio versus like a treasury the treasury has uh maybe some operational expenses or this and that that they have to kind of take care of and and I I would help uh you know maybe you have a different risk

uh preference than the treasury and and it all really comes down to you know whatevery personal and like every Dao uh feels about those specific things right so let's say your [Music] um you are extremely risk adverse so you are extreme extremely friendly and you really think that ether is gonna go up to the Moon that is not you know what what maybe I have the exact same view and I and I do actually have the same same view but that that doesn't come into play when you're kind of talking about these things because like the the the goal for for I guess a treasury at least Umami treasury that we're doing maybe not every treasury depending on the size

but is is kind of that Capital preservation and I think everyone here at least personally um is is here to try and make it right or whatever it is and and so we have we have a thesis and we can kind of act on that but you know as a treasury manager you you don't just have the you know your own you know if you lose if you lose your money because eth goes down that's on you right and you can kind of say that but but you know as a treasury manager um you're kind of doing this for not just yourself you know what I mean it's it's it's like a bigger bigger play that you're making so you need to be you need to be more careful and you need to uh take your biases it's more important to

take your biases away and and everything that kind of revolves around that yeah that makes sense and it's like the kind of thing where it's like I don't want to make any assumptions about you when but like if you are like doing really well and don't have any kids and like you know you might be willing to like eat at 80 loss on your portfolio but if you're a co-worker like needs to feed his family tomorrow like that's just like not a risk that is acceptable to him and like that's I guess what it means to be like part of a community and part A treasury manager that is like owned collectively exactly right so every everybody has their own uh risk preference I know people who do have kids and they're still in crypto and and even I'm kind of saying they're like

well if I had if I had kids and if I had all these things to worry about then maybe maybe I would change the way that I kind of view a lot of these stuff but um right now I'm I'm willing to take uh that bet on eth or whatever it is and even if it does go down 80 I'm completely fine uh and and yeah I think that's like the hardest part about this industry on a personal or professional level is that like the numbers are so wild and so large and move so quick that it's like really easy to Lose Yourself and like get emotional about it and um I think for like a personal uh Trader or like a personal if you're trying to

allocate your own capital I think that's the most important lesson that you can learn right just to make sure that um you're not you're not Sweeping in with those tides of you know I'm I'm I'm seeing these big numbers and I'm internalizing this and then I lose this and then and then I've kind of like I think I talked about this in in one of my tweets and uh I think DJ in Spartan as well he he puts this much better than I could ever put it but a lot of the times these these things kind of have a psychological toll uh on on the way that you kind of act and 99 of the time if you can if you can uh just be the exact same Trader but just take those uh whatever it is that is making you feel

that psychological um you know warping out you're going to be a better Trader because those cycle those things that are making you feel that way are what is leading you 99 of the time to make every single one of your bad decisions right you can I'm sure you've seen it yourself and everybody who's watching is probably thinking the same right you know how many times has it been where like a coin goes up like 10x and you think well I can like look how rich I am and and I'm so I'm such a great Trader and and and this and that and this and that but you know the goal is kind of taking that out of your psychological uh mindset so that you can kind of look at things objectively yeah

I mean how like how common of an experience for ever everyone is it like the first time you trade perps and like suddenly just get like liquidated out of nowhere your first reaction is double or nothing I can win it back no I remember back in the hour days every like I remember opening up the Discord man people used to people used to blame us for getting liquidated oh man it was a crazy time yeah well I definitely remind me if I forget I want to Circle back to like what it's like to be a treasury manager in this kind of like the good part about this industry

is that you can get you're so exposed to like the leaders and you can get in contact with like Sam kazemian to like dokwan like to you know you can get in contact with these people whether or not they should be in contact with um but like on the flip side like what that means is these people have contact with you and like you know let me put it this way like the treasury manager at JP Morgan like doesn't have to like explain why you know like he made a a hedge position against like this asset that like everyone else is like super exuberant about and so um I said let's talk about it later but I've already introduced Juiced it enough let's talk about it now like what is

that like to uh be a treasury manager um and like be accountable in a way that like just doesn't exist in like Corporate America or UK or really anywhere else yes that's a great question right so um I mean I think some of the time you can say that you know if if you're getting called out on Discord or whatever for whatever you're doing probably you're making a bad decision right if everybody is against it and I think we we see that today I mean I I know I'm probably dating the podcast but with them I think I'm gonna send this out tomorrow so let's let's we can go super topical okay okay so Aragon I mean you know if everybody like in their comments and

screaming at them for for what they're doing with their treasury it's because you know that isn't what you're supposed to do right um but but and sorry just for um for for the audience tldr Aragon decided that um what they called like risk-free Raiders or something were buying up the tokens in order to like make a government to vote in which would which basically like the centralized Foundation didn't like and so citing fiduciary responsibility they have taken the assets out of the Dow to um to fund a grant program yeah exactly and I think I think things like that in one way obviously it can increase stress

like it's probably more stressful and whatever but you know like at the end of the day it's always going to be stressful even if even if it's just your like the guy above you screaming his head off at you um because you made the same bad trade or if you say this good guy uh but at least in with their space uh in those situations there's there's number one more transparency right where else can you see uh this kind of thing get called out on Twitter like so immediately right and number two just it it kind of holds you accountable right it's I mean I guess you know we're seeing these grifters who really don't care but but uh the idea is at least that you know if

if you if you're gonna get called out on Twitter and you're gonna face all this public backlash then um hopefully that will stop you from making idiotic decisions right I think like the old adage of like uh sunlight is the best disinfectant or something to that effect right where like transparency is like ultimately good for everyone is like 100 true and like you really need to believe that to believe in ethereum exactly um man like that you're being a token holder man I'm asking the treasury manager like how does it feel like I'm sure it sucks right no no honestly like it 99 of the time um it adds a level of accountability

that like you're always thinking with every trade right uh what will the Discord think or or whatever it is and and and that that prevents you from making those um and decisions but like I will I will be honest the the community is incredibly at least the one that we've cultivated is incredibly um generous and and and kind of uh listens to to why why one certain uh strategy is better than another or is is willing to have those kind of um discussions but I've seen I've seen some communities that you know it it would probably I would probably tear my hair out if I was if I was part of them

you know and I probably wouldn't take the job in that case yeah yeah yeah so I don't I I like I'm trying to figure out how to ask this question that does not ask you to like name any names or like call anyone out but like I am really um curious to like kind of tease apart like what makes a a treasury that's well managed versus one that's not and so like again without naming any names or making yourself uncomfortable like well when you say like an unsophisticated or poorly managed treasury out there like what what are the um Hallmark signs that you for you the number one like I can I can really boil this all down to one thing and it's it's improper risk management right it's

I see I see these kind of treasures who are like yo there's this opportunity that's um earning me two percent yield on this new Decks that has upgradable contracts and I haven't done the proper due diligence and you're just sitting there like are you are you for real and then like you know a week later when it when it gets hacked and they've lost that you'll kind of this is kind of what did you kind of expect right that that is in my opinion and and we've seen it maybe a couple times but really if you if you if you see you know that that sort of thing happening it's it's probably something to stay away from you know you you really want to make sure that you're

doing you're doing the proper due diligence like Risk pricing and and keep in mind even I say risk pricing is incredibly difficult in in defy so I'm not I'm not really asking anyone to you know give me give me exact uh numbers of what they think risk is but like at the end of the day you've got to make sure that um number one uh you how much Capital are you putting at risk right and and I think a lot of the time you see just these these protocols um concentrating so much Capital into these strategies and then you know even if they get wrecked even if they don't right like I think this is the important bit it's not really about the the result it's about you shouldn't they probably

should not have done that and I was not pro there was improper risk management uh to to place a trade that was like so high capital and they could have lost half of their treasury if the contracts were upgraded and whatever uh and you know a lot of the time I I like to talk to these these uh teams and and see you know what what due diligence do they do and and a lot of the time you know I get the right answer I get oh oh okay I didn't even think about that and they they've got their dads even looking at the small contracts and I think this is actually a really great point is is that the great thing that I can do that probably an individual trade account to is that I can ask my dads right if I if I if I see a new protocol and I I want

to allocate some Capital to it or if I if I want to announce a new partnership with a new protocol I can ask my devs can you quickly just have a look at their contracts and tell me if you know they look good and and you know audit or not because I don't know how everybody stands on audits but I'm sort of on the fence about them I think a lot of the time they are rubber stamps like certic depending on the auditor obviously something like hellborn or or zokio those are very good Auditors but um you know it's it's one of those things that you when you when you get when you get an expert uh looking at the contracts can make you feel much better you know what I mean yeah for sure yeah and I mean again I think we can have a

conversation another time about the auditing industry um but like there is absolutely objectively no question that like peer review is good and like the the only way really to move things forward and um yeah I mean just like on your overall point about sizing risk I mean the the one that like really clicked [ __ ] in for me was um the like do you remember when um three AC was like really getting blown up and like the chart that was like really really making the rounds was like the economics of a carry trade and it was essentially like this like slow or wait I'll do it backwards like this like slow increasing line up and then drop down yeah

and like for me that is I don't know I mean like that where all of our brains are weird and work in different ways but like that for me like clicked together what um what it really means to like understand risk you know and I think that um yeah again for better for worse like when you and I talk all the time offline about how like it doesn't matter what happened the fact that it happened is good because it is something you can learn from um so like none of this feels good but like the nice part about being in crypto is like if you stick around you learn how to do all this stuff because you have to yeah yeah and I think that I think that's an excellent point right so that

that chart especially of the the carry trade um on and I think the one that blew um 380 up was obviously UST and anchor but you you could see you could see that trade and I I even I was obviously assessing it and I and I never played a part in it because the the truth was and I the crazy thing to me actually was you know some of the guys who were doing this trade um that I was talking to some of the quote-unquote Smart Guys what were basically saying like I know I know USC can blow up right I would I was like telling them you know this is a I was trying to tell them in the contract right like this is an algorithmicable point buy the contracts trying to teach

them this stuff and they're like no I understand yeah I'll get out before everybody else yeah and and so it's just you know if you start to go down that kind of path obviously you've already gone too far right and I think that applies to both like if you're trying to we're kind of talking about like earning yield and defy but it the same works for you know any [ __ ] coin right so everyone's buying these [ __ ] coins and everyone's saying you know I'm gonna get out first and you don't really know how big the the door is and you like how can you actually say that you're going to be out first right um and and yeah so we that's that's like a whole other kind of worms but at the end of the day all that meant was no no

way the risk of this like algorithmic stable coin that was like completely um unbacked at like the time that we were looking at of course like I guess I'm back to like one two percent or whatever with that wizard fund which didn't really do anything but um that that whole thing no way you know the the risk of that was way over 20 right so when I saw that I was like no way I'm taking this and you know that's that's kind of how you have to look at these things and I think um I think a lot of the time these kind of funds fall into um kind of uh what is it where you know you you do something good and you think that you're so smart right like they self-confirmation that is right and they

were just just falling into the Trap and and pricing everything okay this is [ __ ] this let's up the leverage right why why is there not 3000x leverage on this strategy and whatever and then and then blowing up and and you know you're kind of sitting there like you know this is the tail race what did you expect right yeah I what you're saying just like reminds me of like my biggest takeaway in terms of like my personal like growth and development from the SPF Saga was like if you ever find yourself the main character like it's the beginning of the end right like you are in a very dangerous position and I think that um you know that's like reflected in all

these guys that we're talking about but it's like really just the reason it's a dangerous thing is because like you lose the ability to size risk in any like appropriate way yeah and I think I mean the the thing about these main characters is already another can of worms right I mean I think you can the the popular picture right with with all of these guys who who have all been main characters at one point and then like how many of them are basically gone right how many of them have been wiped out how many of them are no longer here whatever it is and and it's just crazy right yeah well it's even crazier for like I'm pretty sure I'm a much more recent no no you said you joined in 2020 I joined in 2021 so not bad after you but like I was around when sifu showed

back up and I had to spend like the first two days of that figuring out why it even mattered you know like like oh we have like these villains that go to nothing and then like reappear and I just um man it was wild that's crazy well yeah yeah so um anyway back to uh back to like treasury management and the conversation at hand so like one of the things that I like I've really always like loved and respected about you is that like you're like a great treasury manager and that you're able to like figure out the appropriate like amount of assets and where they belong in chain and that kind of stuff but like I've never seen someone use like the work that needs to be done in order to keep organization

moving to like to grow the business and like do such Business Development and grow the network in like a way that you do and so um you know just giving me way too much credit yeah man like I I love that you're young and humble and like don't ever become the main character but um like no man like you are like you're like very well respected and known and like um like you're very much part of this like a core part of this ecosystem and part of that is because like you're able to like take a real Treasury and like use that to open the door to like talk to people and then like get everybody on board with like you know rowing to like a new positive

sum Target and so like one I just like I want you to know that that's what me and like the rest of the industry thinks about you but too like can you talk about like how how that kind of worked up happens and and like I'm pretty sure that's what you love about treasury management no yeah so I mean um I like I completely appreciate your comments right of course I can't I can't accept any of that uh but um like yeah you're right at the end of the day this this actually is one of the greatest uh points I mean I just yesterday I was talking to this fund and I was kind of telling them about the strategy and and they had actually been running a similar strategy and I had been running a similar strategy with the Traders and we were kind of talking

about you know how how they how they're running the strategy and why exactly what we're doing is is is with the vaults is is so unique uh and whatever and then you know they kind of understand and they kind of get it from that point of view and it really helps uh in those situations of course and and yeah so for sure like it kind of opens doors in BD right okay yeah like obviously Business Development like it I look at it in two different modes right like there's business development for people who understand like the game that we're playing basically like other people who are already degenes or other crypto protocols and then there's like this business development for people who are like completely outside of this right and like usually what that means in this context is like helping people get comfortable with your products so

that they're willing to like put capital in it but um just like kind of in general without any like specific conversation that I'm referring to how do you like communicate these types of projects to people that aren't like necessarily comfortable with like just some of like the Baseline knowledge that we have okay so I think I think that's a great question and it's actually probably easier for us than than many other protocols just because uh what we are kind of doing is kind of easily translatable uh I can kind of explain um GMX uh to these guys maybe maybe they they they are not used to this kind of uh exact payoff but they definitely can

understand you know there is actually One Singular counterparty and and you know that's earning all the funding and essentially what we're doing on the other side is is like that funding rate Arbitrage right except that we're also taking the trade a p l risk or soon hopefully we'll be releasing uh the trader p l hedge risk which will just be funny right Arbitrage right so when I explain it in when I'm kind of like taking these you know the D fight quote-unquote terms like impermanent loss and I'm and I'm uh um translating it into something that these guys know like Gamma or or whatever then they can kind of understand and then they can kind of get on that level um because you know they're not going to take the time to learn the terminology

so if I can translate it for them that's that's how they are like oh okay I got it I got it boom that's it you know we're on the same page and that's kind of helpful and then just like this is coming from my like specific knowledge of um I guess like an ancillary part of how the GOP Vault works but like part of that is like you're buying insurance right or at least at one point you're buying insurance and I guess like that to me is like a vertical in D5 that's like super super interesting because like to people outside of this world it's like oh I understand insurance it's it is the backstop but to people within defy it's like that might be the most sketch thing because like we don't actually think

that um it can kind of like do what it needs to do and so I just like Wonder Do you ever find these like moments where like the defy understanding the track fight understanding are like so separate that you like really need to do some work to to bridge that Gap like it I've always the the good thing I think about the way that I kind of like understand because because you know I especially back in uh the Bull Run days it was it was a situation where like nearly every day a new Innovative protocol was coming out and it was like a rage to kind of either a pin as quickly as possible or or like me trying to like read the docs and understand what is going on but the the

exactly so these things are kind of um completely out of the realm of what anybody understands at one point but you're you're trying to understand it from uh in anyone learning something new you're trying to understand it from what you know and and thankfully like I come from that same side as these These funds these investors that are like that they know those terminology and I know them too and and translating it like is is kind of how I how I learned these new protocols off off the off the start right I think obviously there are some that are like completely out of this world and um you know maybe the lost causes in terms of trying to explain okay how does

an om4 correct to to a to an Institutional uh uh client but you know at the end of the day I think there is always some sort of parallel that you can kind of draw right like it's kind of explaining something new to someone right like if if you've never tasted this this food before but you know what like two foods like it tastes like I can say oh it tastes like this it tastes like this yeah exactly it's kind of it's kind of explaining it in those in those terms and and and that's that's what is is like needed to make that click for these guys all right so for all of you main characters out there like just take a lesson from when Moon Mastercraft where

he's telling you that the reason he's never run into this problem is because he's so damn good at translating between us with brain worns and the tradify Brain worms but he says it in a magical way so again when you deserve all the praise you get and um man you're you're like the real deal for treasury management and just uh a man I'm proud to know you so uh like just want to like move the conversation on and talk about Arboretum in our last few minutes here um again like I said we'll release this very quick so that it's relevant but like the thing that I've been tracking over like the last week or two is this new decks on arbitrim Kronos which like in the first day I got 160 million tvl I think it's up to 230 now and like when I

look at that and I look at Arbor trim I think like on the one hand that's good and I like activity and I like that people seem to be using this but on the other hand like there is that just like does not pass the smell test to me you know and I just you there's literally actually literally no one more plugged into like liquidity on arbit room than one Moon so um do you just like have any like thoughts or Insight onto like what is going on and like what does this mean for like the stability in the future of arbitrum yeah so um with with arbitrim obviously you know for the past few months we've seen a boost in I mean we've seen an absolute Skyrocket in their TV out right because

activity on ambushroom is is growing and I think you know even even right now there's never been a time to jump from mainnet to arbitrim like a better time with with the main net fees uh just skyrocketing right and and uh because of all these [ __ ] coins and for some reason none of them are on albertron but I'm totally happy with that uh but yeah so um we have like this liquidity kind of engine churning because of um arbitrum having lower fees the the now the liquidity injection into all of these doubts thanks to uh the Arbitron airdrop and um now there's like new decks pops up

but like here's the thing I I think we used to see we used to see this sort of thing a lot uh back in the days when I used to start when I kind of started out where like these dexes would pop up out of nowhere and gain even like upwards of a billion tvl and um like you kind of sit there and you kind of wonder where the hell is this tvl coming from a lot of the time it came from like these insiders that would just um coming in to to farm these Rewards or whatever it was or for whatever reason kind of like push the push this decks up the tvl rankings so that could definitely be uh part of what's going on here um you know we haven't already seen that in a long time but definitely like I

mean who Who's Who heard of this decks before before it kind of popped up I I didn't hear about it um so like you kind of suspect where where do these guys kind of find out of of this decks from I've looked at the liquidity it's actually mostly non-native tokens so I was gonna say you know maybe it's their own token that they're kind of putting in LP pools but it isn't really the case it's like ethusd so I do think you know we could do a little bit of wallet tracking and see there but in terms of is it healthy for the ecosystem I think at the end of the day like uh if if if these Protocols are there because you know this this this whale is doing something malicious or whatever I don't think it really

affects the chain thankfully right like it kind of we know who the real Dex players are on arbitrary right that's like Camelot that's um GMX and they and and so forth and they're doing they're doing what they're doing and they're still churning out and and and their tvl if you look at the TBR that's still growing and and it's all the numbers are all looking good and those are the ones that we want to be watching and and I'm watching and everything's still looking good you know what I mean yeah I mean I think um if if you were to like my my kind of naive or my first impression response to this is like this like just seems like not great and like you know I would never touch Kronos with the 10 foot

stick and like just like what what is happening here but like I am very much reminded of the S um was it the Stargate launch on layer which was like the first layer zero application that got like so much tvl so fast and I think there was something about Almeida and like the coin and some like bid or whatever just and I just like remember walking away from that being like I don't really know what's going on here but like there is danger around this protocol and now we're like a year later and like I don't feel like that anymore yeah yeah so I think I think you know as long as everybody kind of respects their own that own a feeling like I mean stock

was a legit protocol but if you're sitting there and you're feeling feeling that thing then I I would say you know if you if you're if your gut is telling you to stay away then stay away because you know you can't you're not going to be able to lose money in a rug if you never touch the protocol right even if it is a rug and and like the most important thing is is for you as a user to to just preserve capital and to make sure that you are like surviving in this ecosystem so if you see this like new protocol pop up with a 100 million TVO and you you think it's fishy that's probably a good enough reason for you to stay away and and if you are really interested then you know the the best thing to do is to do your own research

right it's as always and if you can then maybe even get your devs to look into the smart contracts like I do yeah yeah yeah and you know I I am frustrated by do your own research in in general because like the quite frankly most people aren't capable of doing their research um but you know I think if you're not capable of it too you have to ask yourself serious questions of what you're even doing here and uh you know I said this on the Leviathan stream a couple days ago and we were talking about meme coins but like if you ever find yourself like making decisions because you missed the boat on ether on the last meme coin or whatever and you need those kind of like you know multiple like 100 or thousand X returns like that that is how you get

rugged and like how you get taken advantage of and like how bad things happen so I think according to your point just like your gut's there listen to it absolutely yeah it all comes out it all comes back to that psychological thing right if you're feeling that fomo that's probably a good enough reason for you to stay away no yeah man for sure for sure all right when well uh we've been at it for an hour now I don't want to take up any more of your time so uh first of all just thank you so much I really appreciate the time and the support and um just man the Friendship so um thank you and uh before we go can we where can the people find you well you can I I like to [ __ ] post a little bit on Twitter that's why you can follow

me then yeah great zero X One Moon yeah no h and and yeah thanks a lot yeah man no no it was a pleasure and uh talk soon man well I'll catch you on Discord see ya foreign