ADOPT ISOLATED LENDING

“North Korea is actually playing a really big part of this story. So Lazarus Group obtained about $2,000,000,000, in hack proceeds last year from DeFi and crypto. That is a non trivial amount, and the exploits here are getting far, far more sophisticated. So a part of this story is we could be doing better in terms of multisigs. Like, at least on the Kelp DAO side of things, there was a layer zero DBN, which was operated by them, and it was one of one, which was a central point of failure.”

“WAP is, like, emerging competitor to Stripe. 2,000,000 businesses and, like, 20,000,000 creators hold assets on WAP. They had a partnership with Aave and Plasma and Tether, right, to just if you're holding money on their platform, hey, you wanna earn some yield? They're gonna deposit that into AVE on plasma in the background. And so so it's defi mullet cases, which I think could have gotten big, big chunks of depositors just because, you know, it's all abstracted away. Now that's gonna be kinda hard. Right? Because those risks and, you know, if I was just talking about an ETH depositor that didn't know about kelp kelp DAO.”

“I would just say that if you look at the composition of deposits and lending activity on these borrow lend protocols, people are interested in RWAs much more so than crypto native assets. I think it's pretty clear that the driver of the let the next cycle or at least a big part of the story is gonna be different types of actual real world assets and people using it, like, RWA looping, this broader, trend. Shout out three f, small but proud bag holder there. But, yeah, I think that that's gonna be a big part of the story.”

“Nothing we can really do about that apart from, you know, clean up our act as it relates to some of these things we've just kind of brushed under the rug, like, having one of one multisigs for, you know, securing nine figures. I think, like, 97% of layer zero DBN setups were one of one or two of two. So, like, that's a problem. That should be addressed. Yeah. Can I can I just add one small thing? You know, back in the day at Chorus one, we looked at a lot of these interop networks, and we used to optimize as both investors and users sort of the most secure bridge.”

“I think someone resurfaced a tweet from Carl Samani this week about him saying that, you know, security doesn't matter. Like, all all that matters is speed. I think for a while, the last few years, the industry has optimized for scalability and speed and whereas in the early days of blockchain, we really optimized for security. And I think that pendulum is swinging back. Now we know that we can have fast chains. I think we now need to work out how we have secure chains, including smart contracts, and that, of course, is under the same umbrella as DeFi.”

“The risk was not that Aave had a, you know, a bad multisig or Oracle configuration or anything like that, but, another type of risk, which is the type of collateral that's been onboarded into one mixed pool, it caused these knock on effects. And you're you're essentially looking at a bunch of people right now. This is sort of without precedent. You know, I I I don't think in any of these, maybe, analogs that you could point to and TradFi, you've seen something like this, which is one, everything is a 100% transparent, and you have some folks who are locked a little bit or unable to, you know, unable to to move stuff on the wrapped east side of things.”

“Aave as evidenced by the launch of v four, is what is the model of lending here? And you have, like, the Cominos and the Morphos of the world who maybe started with a more, isolated markets or, modular approach to lending as opposed to, the more, you know, structured product of of a core. And there are trade offs to both. Right? But I think that's also something that people are thinking about here too. Yeah. Definitely. And, Mike, I know you spent a bit of time in this space, but I also think it's worth pointing out, you know, Aave, you mentioned the asset itself is was the thing that created risk.”

“How can you get in front of these agents? And, like, potentially, there's a lot of value to be captured there in terms of owning that distribution channel. And so they're not really like money Lagos anymore. It's just more like a back end as opposed to, like, composable primitives that developers use in their own smart contracts. So I think the Lego sort of conversation is changing more to, like, a direct to smart contract back end kind of conversation. Like, do you need to compose anymore? Yeah. Maybe maybe you do.”