HARDEN INFRASTRUCTURE

“Interestingly, turn of events, the Arbitrum Security Council recovered $70 million in ETH in a pretty unprecedented violation of chain state, basically seizing the stolen assets by Dow governance vote, kind of opening up Pandora's box about what immutability means on layer twos. There are a ton of conversations that kind of sprawl out from this.”

“And natural gas, we're really disconnected. I mean, the price of natural gas in Europe and Asia went to 15 or $20 per million BTU. In The US, it's below 3, and it's falling. So I was con I was interested in that because we've been reading these stories about how Israeli prime minister Benjamin Netanyahu went to Washington to try to encourage the Trump administration to take this military action.”

“In crypto, a hack is a physics event. It's closer to an aerospace, right? Because if you have an issue in an airplane, people die. In crypto, okay, if you have an issue, people don't die, but it's still very severe, right? And you have these irreversible damage, and now we see like systemic even.”

“Interestingly, turn of events, the Arbitrum Security Council recovered $70 million in ETH in a pretty unprecedented violation of chain state, basically seizing the stolen assets by Dow governance vote, kind of opening up Pandora's box about what immutability means on layer twos. There are a ton of conversations that kind of sprawl out from this.”

“If you build your system with the assumption that any individual component can break, and ideally that like maybe two different components, three different, however many components break, that you still can limit the damage. I think everybody has to assume both in the crypto ecosystem or generally, you are going to get hacked at some point... you need to have a plan for what to do when it happens.”

“April 18th, we had a hack in DeFi, likely North Korea's Lazarus Group... exploited KelpDao's Layer powered bridge to create 116,000 RS ETH tokens. That is the restaked ETH token out of KelpDao without any backing. So, extra tokens minted, they then deposit those tokens into Aave V3 across Arbitrum and Ethereum mainnet to borrow $236 million in wheat... leaving Aave with about $280 million in bad debt that it cannot recover.”

“It's obviously different when you're talking about a supply chain. If China were to cut off the exports of solar panels, that would not affect the ability to turn the lights on today at all. It might affect your ability to deploy new technologies, and install new solar panels, but that's a much different, impact. We're not importing electricity from China. We're importing a manufactured product that makes electricity.”

“In crypto, a hack is a physics event. It's closer to an aerospace, right? Because if you have an issue in an airplane, people die. In crypto, okay, if you have an issue, people don't die, but it's still very severe, right? And you have these irreversible damage, and now we see like systemic even.”

“If you build your system with the assumption that any individual component can break, and ideally that like maybe two different components, three different, however many components break, that you still can limit the damage. I think everybody has to assume both in the crypto ecosystem or generally, you are going to get hacked at some point... you need to have a plan for what to do when it happens.”

“But if you picture the same data, not from zero to a 100%, but just total amount of energy, which is what the world cares about and what the planet cares about from a carbon emission standpoint, we've never used less of anything. The shares are changing, but we're using more wood today for energy than we did in 1850. And when you take a population of billions of people and you grow that population and you grow GDP, what we have seen to date is an energy addition where clean energy and you see these headlines all the time about it's breaking every record you can imagine, which it is.”

“I think the point we were making in the article was a shock like this, particularly in a new world of fragmentation, geopolitical conflict, the, eroding world order that Mark Carney spoke so eloquently about at this year's meeting in Davos. In a world like that, countries don't view interconnection as security. They view it as a risk, and it's gonna lead to a, an impulse in a in a lure of autarky. Let's make everything at home.”

“And natural gas, we're really disconnected. I mean, the price of natural gas in Europe and Asia went to 15 or $20 per million BTU. In The US, it's below 3, and it's falling. So I was con I was interested in that because we've been reading these stories about how Israeli prime minister Benjamin Netanyahu went to Washington to try to encourage the Trump administration to take this military action.”

“What they did basically was to replace the RPC nodes they have deployed with a malicious RPC node, which showed fake data, right? And this fake data were piped into the validator network, which was not a network, which was just one node, was a one-of-one. And based on this fake data, it said, oh, there is a deposit on the unit chain of this amount of restrict ETH, of kelp-dell ETH.”

“Right now in the in The Middle East, the most important piece of oil infrastructure in the world today is the East West pipeline. It's a pipeline that goes from the Persian Gulf to the Red Sea that bypassed the Strait Of Hormuz. Usually, that pipeline is not used. It was built for an emergency like this, and Saudi Arabia was willing to pay that premium for insurance. Energy security, it's a question of how much society is willing to pay for insurance through that kind of resilience redundancy in infrastructure.”

“I think while I do think that this was a good action in this case when we view it in isolation, I think, were I on the Security Council, I likely would have gone along with this. I think that a lot of people who are right to celebrate it in the moment, we're going to look back on this, and it really has the potential to set bad precedents in a lot of ways going forward.”

“The TVL and Aave plunged from $26 billion to $17 billion kind of as like panic withdrawals happened. In response to this attack, Aave paused the RS ETH markets and the WETH reserves across multiple chains just to kind of constrain the damage. Now it's got $180 million in bad debt.”

“It's obviously different when you're talking about a supply chain. If China were to cut off the exports of solar panels, that would not affect the ability to turn the lights on today at all. It might affect your ability to deploy new technologies, and install new solar panels, but that's a much different, impact. We're not importing electricity from China. We're importing a manufactured product that makes electricity.”

“What they did basically was to replace the RPC nodes they have deployed with a malicious RPC node, which showed fake data, right? And this fake data were piped into the validator network, which was not a network, which was just one node, was a one-of-one. And based on this fake data, it said, oh, there is a deposit on the unit chain of this amount of restrict ETH, of kelp-dell ETH.”

“April 18th, we had a hack in DeFi, likely North Korea's Lazarus Group... exploited KelpDao's Layer powered bridge to create 116,000 RS ETH tokens. That is the restaked ETH token out of KelpDao without any backing. So, extra tokens minted, they then deposit those tokens into Aave V3 across Arbitrum and Ethereum mainnet to borrow $236 million in wheat... leaving Aave with about $280 million in bad debt that it cannot recover.”

“An oil shock is less harmful if oil is less a share of your economy. And so the most durable thing you can do for energy security is just to use less in the first place, and there's a lot of low hanging fruit that we often forget to pick up off the ground when it comes to energy efficiency.”

“But if you picture the same data, not from zero to a 100%, but just total amount of energy, which is what the world cares about and what the planet cares about from a carbon emission standpoint, we've never used less of anything. The shares are changing, but we're using more wood today for energy than we did in 1850. And when you take a population of billions of people and you grow that population and you grow GDP, what we have seen to date is an energy addition where clean energy and you see these headlines all the time about it's breaking every record you can imagine, which it is.”

“Most of the things you would wanna do to deal with an oil shock don't help with this oil shock. They help with the next oil shock. And when the immediate crisis fades, the political urgency to do something for the next one tends to fade as well.”

“I think the point we were making in the article was a shock like this, particularly in a new world of fragmentation, geopolitical conflict, the, eroding world order that Mark Carney spoke so eloquently about at this year's meeting in Davos. In a world like that, countries don't view interconnection as security. They view it as a risk, and it's gonna lead to a, an impulse in a in a lure of autarky. Let's make everything at home.”

“This is the largest oil supply disruption the world has ever seen, somewhere on the order of 13 to 15,000,000 barrels a day of supply that otherwise would transit the Strait Of Hormuz offline. There are some measures to compensate for that, like strategic stocks, but there's no policy tool in the policy toolkit large enough to deal with a shock that large. You're talking about 10 to 15 of global energy demand, oil supply. The Arab oil embargo was 7% by comparison.”

“This is the largest oil supply disruption the world has ever seen, somewhere on the order of 13 to 15,000,000 barrels a day of supply that otherwise would transit the Strait Of Hormuz offline. There are some measures to compensate for that, like strategic stocks, but there's no policy tool in the policy toolkit large enough to deal with a shock that large. You're talking about 10 to 15 of global energy demand, oil supply. The Arab oil embargo was 7% by comparison.”

“Most of the things you would wanna do to deal with an oil shock don't help with this oil shock. They help with the next oil shock. And when the immediate crisis fades, the political urgency to do something for the next one tends to fade as well.”

“I think while I do think that this was a good action in this case when we view it in isolation, I think, were I on the Security Council, I likely would have gone along with this. I think that a lot of people who are right to celebrate it in the moment, we're going to look back on this, and it really has the potential to set bad precedents in a lot of ways going forward.”

“I think for everything digital, like we are in the probably 12-month period of max danger because we are now seeing AI systems at a certain level... they're able to find insane zero days, not just in smart contracts, but in traditional like web to like operating systems, browsers, like all of these things. It is really, really scary what is possible now.”

“Right now in the in The Middle East, the most important piece of oil infrastructure in the world today is the East West pipeline. It's a pipeline that goes from the Persian Gulf to the Red Sea that bypassed the Strait Of Hormuz. Usually, that pipeline is not used. It was built for an emergency like this, and Saudi Arabia was willing to pay that premium for insurance. Energy security, it's a question of how much society is willing to pay for insurance through that kind of resilience redundancy in infrastructure.”

“An oil shock is less harmful if oil is less a share of your economy. And so the most durable thing you can do for energy security is just to use less in the first place, and there's a lot of low hanging fruit that we often forget to pick up off the ground when it comes to energy efficiency.”

“I think for everything digital, like we are in the probably 12-month period of max danger because we are now seeing AI systems at a certain level... they're able to find insane zero days, not just in smart contracts, but in traditional like web to like operating systems, browsers, like all of these things. It is really, really scary what is possible now.”

“The TVL and Aave plunged from $26 billion to $17 billion kind of as like panic withdrawals happened. In response to this attack, Aave paused the RS ETH markets and the WETH reserves across multiple chains just to kind of constrain the damage. Now it's got $180 million in bad debt.”