BUILD DEFI

“I think we always wanted to get here to have something like quality assets that people can simply hold on chain, self-custody, or, you know, borrow land loop, which is like kind of like a simple way of tranching it, you know, getting the senior trash or the junior trash by lending or by looping it.”

“You want to do it well, you want to inform people about the token, what does it do, what are the risks, what is the yield coming from, be as transparent as possible, try to curate as much as possible. Because that's how you build a user base that appreciates those things, that invites other people, trusts you, etc.”

“But there's this weird dynamic on chain, which is I can just issue a utility token to fund my project. And so like what role does debt actually play? And I guess my view would be it largely has been supply and demand for leverage. And so credit cycles on chain, they don't necessarily follow sort of credit cycles in the TradFi world.”

“What we observed with Prime is when you have something that is sustainable and that scale, it takes a bit of time, but people start trusting it and then they realize they can do useful things. People with that want to earn yield, they can rely on it. So this was always the promise of defy composable money, but there were no pieces to compose with.”

“So, so I started my career in biotech. Um I was like uh 20 didn't know a lot of life but sometimes you need to be at the right place at the right time and need to be bolded. So I uh I talked two of my professors into starting a biotech company with me uh which became very big. I didn't check the market cap meaning I sold years ago but it's called Alnum. We pioneered RNI technology. It's roundabout like people can look it up alny as a ticket but again I'm sold years ago but like I think it's a $50 billion company now like it became wildly successful it's a very iconic biotech company where I have actually and actually that is maybe as an anecdote so I'm doing biotech which makes me very old like since 27 years again I started early and since I'm in biotech I was quizzing all of the people I met and because of the success of a lot of cool people early and I was like why the hell are we only focusing on nichy diseases which originally was the mantra of biotech for 20 years.”

“AI in general, you know, North Korea, I don't know, you know, I have no idea what their operation is like. But, like, assume there's some number of humans that are incredibly intelligent that are, like, working through and doing these hacks. But, you know, humans are, you know, I did security and and, you know, university and stuff. It's incredibly, like, taxing on human minds to kind of go through binary and stuff. It's it's it's super hard. Computers, AI are are are very good at this. So, like, for me, like, you know, I I just think it's there's certain number of human beings that are are doing this are now being leveraged, like, probably 10 x.”

“I think accountability is really important and we can't have that unless we're allowed to ask questions. And so we shouldn't be silencing each other every time something like this happens. What about the victims, right? They deserve to know what happened and why and what these teams are going to do about it, what the industry is going to do about it to make sure that it doesn't happen again. We can't just give thoughts and prayers; we need to improve things and ensure accountability for those who lose funds.”

“Arbitrum took what I or off chain labs, I think, took what I thought was a great move, which was they froze about, you know, between around $65,000,000 worth of these stolen assets. But I see some people saying that, well, this is MultisigFi instead of DeFi, and we kinda to me, I interpret this as this is the ideological backbone of crypto colliding with the real world. Well, I think, you know, North Korea not having $65,000,000 in that money going back to users, like, the outcome is unambiguously good.”

“What onchain lending could change is the future of finance by providing broader access to capital.”

“If you have a large portion of the ecosystem, in this case, all of Layer 0's users, if you have something like 47% of them going with this one-of-one verifier setup, it starts to look less like an individualized choice, and more like actually standard architecture, or even the industry norm. I think what courts will eventually have to wrestle with is, when is it not enough to say, oh, we just provided the options, or we provided the tools? Defaults matter, and the options you give actually shape user behavior.”

“when you look at the research that's been done on an anonymized basis, it roughly half of Olympian athletes admit to using banned substances and only 1% gets caught. So you ask yourself why is that the case? The reason for that is because athletes when they choose to cheat, they take newly developed drugs that are not well researched. They take additional drugs on top of that to hide what they're taking in the first place. That's how they're able to circumvent the testing. And that is completely unnecessary. Because it puts their health massively at risk. And why is that unnecessary? Because all of the substances that would make you perform better, recover quicker, and protect yourself better from injuries are actually substances that are FDA regulated and can be prescribed and are being prescribed by doctors to other patients every single day. And so we're saying, let's not be naive, pretend that the cheating is not happening. Let's take it out of the shadows.”

“this actually had a compounding effect in that, there's a lot of positions on Aave because they rehypothecate the ETH collateral quite heavily. This liquidity issue now turns into a solvency issue on the USD markets potentially. So that the there's a lot of positions there that are ETH collateral borrowing stable coins. And so, normally, when the market is is there's there's enough liquidity, the liquidations on a ETH USD position can function just fine. The problem is is that with an impairment in the ETH market, if the price of ETH drops, there's no more liquidity to sell and then recap like, recapitalize or basically pay off the loans that are reaching margin calls.”

“His longer-term view is a financial system with broader access and more competitive products.”

“I was talking to everyone at BrainPoint that this is going to be really good and big in Solana. Because we always wanted this and we finally have it. And I think although we live in this permissionless 24-7 world, it's still fine and some people still lose money and things break.”

“I think accountability is really important and we can't have that unless we're allowed to ask questions. And so we shouldn't be silencing each other every time something like this happens. What about the victims, right? They deserve to know what happened and why and what these teams are going to do about it, what the industry is going to do about it to make sure that it doesn't happen again. We can't just give thoughts and prayers; we need to improve things and ensure accountability for those who lose funds.”

“The second time I went back for seven years, it was to launch the inaugural vogue.com. So it was like this still unfigured out and quite frankly, mostly failed attempt to figure out how to migrate these things online and have both properties complimenting each other and working together. It ends right at the start of the industry becoming a very different industry. So it's definitely nostalgic in that sense. To work at these places looks nothing like it did 15 years ago.”

“The way that they were able to do that was by effectively exploiting the OFT, which is basically a cross-chain boundary bridge between two chains. In this case, it's an implementation provided by LayerZero. But the infrastructure can actually be run by anyone. They were trying to lock a value which was not actually held on Arbitrum, and they effectively spoofed a packet saying that Arbitrum received 116,000 RS ETH, and now you're clear to go ahead and release that to this address on maintenance of Ethereum.”

“It's by the way there's one company out there which does that perfectly people just don't know it or know it they know the company but like not the business model because they're not public which is Red Bull uh if you look at Red Bull yeah it's a consumer product um but they own various sport events. Um, it's not public, but my guess is uneducated guess is that at least some of them are really profitable or at least value a creative like the Red Bull Formula 1 team. Um, but the vast majority of the brand value of the Red Bull Formula 1 team is going to Red Bull. So, they make money or they build up value by owning it and they have this massive translation into their consumer product. And that's very simple or simplified said like what we are aspired to become.”

“I just kept seeing anytime like a female character was either bad or like outspoken, or we were always giving her a big handicap to make sure like we could forgive her or like her or stick with her. I was like, what if you had a character that comes, is not running from the law or experiencing mental illness or hiding a big secret or escaping a troubled childhood and she just made some bad choices and maybe was driven by some less than lovely impulses.”

“It's not even about smart contract exploits anymore; you can have a million audits and that wasn't the cause of any of these recent attacks. Now it's about all the dependencies around oracles and bridges and collateral and multi-sig configurations or operational security practices. It sort of feels like you're just playing whack-a-mole. North Korea and other illicit actors are just going to keep coming up with new ways, probably greatly aided by AI, to exploit vulnerabilities in the systems surrounding the core code.”

“Where is the term medicine coming from? Where's the term doctor coming from? It comes from a report which was commissioned in the 1920s by the US government. Uh which was great back then because before there was no definition. Everybody could sell this whole thing and like yeah. So that report said hey if you want to call yourself a doctor you need to have a minimum of a dedication. if uh they call the disease a negative deviation from the norm uh and then a medication which has a minim minimum efficacy yeah and where you know kind of what are the side effects in order to bring back the negative deviation of the norm to the norm by the way back then I don't want to criticize it groundbreaking because it improved the medical system it's actually what the western medical system is built on but like the tricky thing was that negative deviation from the norm it's very obvious for cancer.”

“It's not even about smart contract exploits anymore; you can have a million audits and that wasn't the cause of any of these recent attacks. Now it's about all the dependencies around oracles and bridges and collateral and multi-sig configurations or operational security practices. It sort of feels like you're just playing whack-a-mole. North Korea and other illicit actors are just going to keep coming up with new ways, probably greatly aided by AI, to exploit vulnerabilities in the systems surrounding the core code.”

“We have to ask ourselves if we should start thinking more carefully about constraints. I think one thing that we conflate a lot in crypto is decentralization and permissionlessness, because they're not the same thing. Even just talking about permissionlessness, people usually assume you mean KYC, but a protocol can restrict what kinds of assets or collateral it will allow, or it can impose rate limits. If we even want to survive as an industry and a technology, we need to really seriously think about the trade-offs between crypto's core values and keeping users safe.”

“I would get up at 4.15 every morning, seven days a week for two years. I wrote from 4.45 to 7.45. My first child gets up at 7.45 and then I was done. I couldn't do any, whatever the, after I'm looking for somebody's trumpet or croc or making lunch or screaming at people, I can't return to whatever that writing space is. So I was done writing every day by 7.45 and that was how I did it. I don't know who that person is now because I cannot find her.”

“I think that we've all had that job or that relationship in which we're like, this is a life or death situation, you know, like making this relationship work or not getting fired from this job. And then you do lose a relationship or you do get fired and you're like, wait, once you break the spell and you like are on the street with your potted plant in a box... she's been working so hard on building an identity that is very inauthentic. And she doesn't want to lose it and becomes more and more desperate not to lose it.”

“Amex answered the three hardest questions in agentic commerce: identity, mandate, and accountability. When the agent screws up, who pays? This is the one that matters most, and crypto has obviously not figured it out. Amex says we will pay if you use our rails and the agent screws up. That is what is going to unlock adoption for agentic commerce—the liability and the accountability—especially because the laws in this space are so uncertain and current laws are built for humans swiping cards rather than AI agents.”

“So, in the US, for example, if you win gold, you make 37 a half thousand. Compare that to the 250,000 that we're paying if you win an event. Massive difference. In Germany, where I'm from on Cru, where we're both from, uh the prize money for for gold that Germany pays you is €20,000. So, it's really nothing. And so we had one female swimmer, she won gold at the Paris Olympics in 2024 and she was saying like, "Hey, I've now represented my country on the highest level, won the highest award there is in my sport after having dedicated my lifetime to the craft and I make 20,000 euros, but if I go to Love Island, I'm going to make at least three times as much from just rocking up there. So how is that possible?"”

“No, I think Christian uh you're making a good point that I think the underlying thesis is right, how can we showcase the efficacy and effectiveness of enhancements when they are administered under the right clinical and medical supervision. And so there is, as Christian alluded to, right, there's athletes that can break world records, but that's extremely unrelatable, right? There's very very few people, one right, that can hold a world record. And so we have a second category of athletes like Megan who's 35 coming to beat her personal best. But then still how can you make it even more relatable? And so everything on the sporting side then if you take a step back and look at as an overall organization everything that we do on the sporting side is the showcasing of the efficacy and effectiveness of those enhancements to go out there and inspire people to think about their own health differently and consider what can enhancements do for me.”

“We need to build better infrastructure and not have one of one DVNs that are governing, you know, the ability to move value that quickly. And then, you know, aside from that, like how do we eliminate the blast radius on other DeFi protocols like Aave? Aave should not be accepting deposits that are that large from brand new addresses without those being flagged. If we're feeling downtrodden right now because we're really facing the music of DeFi in general potentially being at risk here, to me it's just a wake up call that we need to double down on our efforts on securing this infrastructure.”

“The other the other kind of weak point here was that the KelpDAO team used, like, a one of one DBN, which means that you're just relying on the layer zero laps, sort of core infrastructure. If they had used, you know, a deviant set that required two of three or something like this with different independent operators, it would have been this much harder for North Korea to, like, compromise each of these independent organizations. So I think that was that was clearly a failure as well as is using a one of one implementation was, you know, not the right choice.”

“Think about it like Formula 1. When the engineers of the Formula 1 team designed the Formula 1 car, that's at the forefront of scientific innovation and technology, that Formula 1 car is never going to get mass-produced. But what the engineers learn in developing that form car in some form of a derivative is going to trickle down into the world car production a few years down the line. So the anti-blockage system that you have in almost every car today actually comes from motor racing. very similarly for us would help Christian Golam, a Greek swimmer that broke the first record last year as an enhanced athlete. What helps him break a world record is way too complicated for an average Joe like myself. But the work that we do with Christian and all of the other athletes is constantly improving our product offering and our prescription guidelines for the people at home.”

“I think the real breakdown here was, you know, not necessarily that KelpDAO ran a one-of-one between Arbitrum and ETH Mainnet, but it's that Aave allowed it to be a collateral asset without properly vetting the bridge risk of the one-of-one. I think Aave is not without fault here. They did have, you know, one of their key risk teams walk out earlier this month. That was Chaos Labs. And Omer Goldberg did a very good post on X, explaining like a lot of the things that we could have added in terms of sanity checks and circuit breakers.”

“I think Bitcoin's totally fine. I do though think that they will burn those coins or freeze them or do something. They're not gonna let a $100,000,000,000 of Bitcoin get burned. But what I think the sorry, using another analogy here, but the other analogy of an ideological movement doing this is like the church, which everyone loves to compare Bitcoin to. I think it'll be fine. I mean, the church kinda went through this when they had to reconcile with the Roman emperor and, like, you and I wouldn't care about this, but in Christianity, you can only worship one god. Roman emperors were version like, worshiped as gods. How do you reconcile?”

“the 50year-old teacher in Iowa who just wants to do more with his grandchildren or whatever. He's not on Twitter. He's not going to go on a out of his own impetus. And most likely he's also not going to get reached with the marketing the classical the platforms are doing at the moment but he's going to most likely watch one of the biggest sports events of the year and when he's then learning about it he's like oh wow there is real science behind and that's why our clinical study we're doing in Abu Dhabi beyond that it's like gold standard for the uh for the athletes what they're getting in terms of uh medical service I think it's very important that be very scientific and everything we're going to do in the future and everything we're going to recommend uh is going to be backed up by science and with that sort of combination approach of like this massive global sports event which going to reach again hopefully millions and millions of people.”

“you can do, DeFi custody in the right way, and it's been actually, some of the oldest protocols have been doing this the right way, which is, governance under time locks. And where there are multisigs that have, like, custody of funds, they need to be under time locks. And then for immediate reaction time, you have these, like, freezing multisigs that can react right away, but you need this, like, the custodian of the assets to always like, any sort of, like, unexpected movement that can be done with the assets, you need this under a time lock. This is a this is a massive, deterrence, to North Korea.”

“The Ninth Circuit heard this, and the other interesting thing is all three judges on this three-judge panel were actually appointed by Trump, but they sounded openly skeptical of the CFTC's federal preemption argument. If we have the Ninth Circuit rule against the prediction markets, and another circuit rule for them, that makes it way more likely that the Supreme Court is going to take on this issue. We’re likely looking at a 2027 or 2028 timeline before we have a final answer on whether these are considered gambling or legal contracts.”

“Morpho functions as a layer to make lending markets more transparent and efficient.”

“we need sort of, like, independent risk ratings within within DeFi. Right now, there's, like, a a, like, an incentive problem with, with, like, the the managers of these risk curators, I guess, is the term that's used. So, like, basically, the ones who are optimizing for growth, revenue are the same ones that are underwriting the risk of the collateral that are being onboarded. And so this is not what happens in in TradFi. There's, like, the risk side and the growth side are two separate and, like, you know, walled off entities such that the growth side submits a proposition to the risk side and the risk side from purely risk, like, sort of perspective says if it's if it's a go or no go and what the concerns are.”

“Well, I think one of the major design principles is effectively to segregate the base layer or the validator network that's actually witnessing transactions on those source chains and then attesting them into the blockchain. And then basically making a general abstraction, which we call subnets that allow multiple different, you can call them subnets or layer twos or whatever. But you can basically have like the base network, which is only responsible for custodying the L1 assets. And then those are being credited to networks that can have their own validators set. Our first subnet is our exchange, which is a limit order book.”

“Proof of work, scaling on Ethereum, it's worked well enough that it still costs less than one cent to send any amount of USDT in normal gas times. So if I can spend less than one cent in gas fees to send any amount of value on Ethereum, what's the purpose of something like Arbitrum in the first place that offers decentralized scaling for Ethereum? It's like, no, either use the full corporate chain tempo or use Ethereum mainnet. I don't really see the reason for having Arbitrum anymore.”

“I still think that the models flatten to a commodity over the long run and just that the harness, how the harnesses are really good and that Anthropic has a ton, or OpenAI has a ton of compute power. But I don't see it being, I see it being likely that people will be able to use open-source models to devise the same caliber of attacks as we're seeing today. So I really don't see certain nation states having an advantage over others that are purely due to model dominance or even compute.”

“Amex answered the three hardest questions in agentic commerce: identity, mandate, and accountability. When the agent screws up, who pays? This is the one that matters most, and crypto has obviously not figured it out. Amex says we will pay if you use our rails and the agent screws up. That is what is going to unlock adoption for agentic commerce—the liability and the accountability—especially because the laws in this space are so uncertain and current laws are built for humans swiping cards rather than AI agents.”

“If you have a large portion of the ecosystem, in this case, all of Layer 0's users, if you have something like 47% of them going with this one-of-one verifier setup, it starts to look less like an individualized choice, and more like actually standard architecture, or even the industry norm. I think what courts will eventually have to wrestle with is, when is it not enough to say, oh, we just provided the options, or we provided the tools? Defaults matter, and the options you give actually shape user behavior.”

“So what happened is that there is, a bridging mechanism for RS e to go to other chains. This is called a lock and mint bridge. So, basically, the RSE is is natively issued on Ethereum. And so if you want to go to, another chain like Arbitrum, you would then lock the RSE in the this is a layer zero bridge on Ethereum, and then it would send a message which would mint the, RSC. It's like an IOU for the backing that's sitting on Ethereum. So what happened is that, there was a forged message, from the security mechanism within the layer zero ecosystem. Again, this North Korea was able to penetrate deeply into the infrastructure layer here.”

“We want to enable value to be communicated as quickly as possible, but like any time when it is about to leave the boundary, you want to just like spend a little bit extra time because it's important that our orders match at sub microsecond in like HFT, but it's not important that the actual funds settle between institutions and TradFi in sub microsecond, right? That takes longer. It takes hours, if not days. There's reasons for that. There's circuit breakers. There's people on both sides checking. There's middle offices like everything that TradFi has built in terms of circuit breakers. We're just speed running, relearning those things in crypto.”

“DeFi and just the whole crypto industry, it is kinda playing on hard mode because, we can't rely on just, like, moral hazard and someone bailing us out. If anything, like, maybe the closest, we have in crypto to, like, a lender of last resort would be someone like a Binance or a Tether, where they're extremely profitable. They have a huge balance sheet. They have a lot of sort of excess reserves where, they can backstop, losses. You know, private got hacked. Binance, had a loan out to them to make sure that they could still cover withdrawals.”

“Open blockchain infrastructure could make lending markets more transparent and competitive.”

“The Ninth Circuit heard this, and the other interesting thing is all three judges on this three-judge panel were actually appointed by Trump, but they sounded openly skeptical of the CFTC's federal preemption argument. If we have the Ninth Circuit rule against the prediction markets, and another circuit rule for them, that makes it way more likely that the Supreme Court is going to take on this issue. We’re likely looking at a 2027 or 2028 timeline before we have a final answer on whether these are considered gambling or legal contracts.”

“I think a lot of people were caught off guard by the fact that, like, you know, Aave, which is kind of like a core pillar of the the industry, through this smaller relatively collateral RSEs, they've had exposure to, you know, what turned out to be a pretty unsafe, like, bridging setup. And it's pretty challenging to, like, map out this whole dependency graph of, you know, you're just a depositor in Aave Eth. It's you you know, on the face of it, it seems like it should be a very safe asset, but you're actually exposed, you know, through a couple layers of intermediation to, you know, a one of one DDN bridge.”

“We have to ask ourselves if we should start thinking more carefully about constraints. I think one thing that we conflate a lot in crypto is decentralization and permissionlessness, because they're not the same thing. Even just talking about permissionlessness, people usually assume you mean KYC, but a protocol can restrict what kinds of assets or collateral it will allow, or it can impose rate limits. If we even want to survive as an industry and a technology, we need to really seriously think about the trade-offs between crypto's core values and keeping users safe.”

“I actually think when you look at the, what are the movies like? How to Lose a Guy in 10 Days, 13 Going on 30, Devil Wears Prada, like they over-simplify it for sure, but I think they have done a nice job of certain parts of it looking as exciting and as glamorous and as full of access that it really was at the time. I can't speak for now, but I'm not usually offended by them. I think they do what they're supposed to do, which is portray this fantasy world that is selling a fantasy world.”

“Why institutions are starting to pay attention is the shift toward more customizable financial products.”