Unchained

Latest Episodes:

Post-Merge, If Lido Becomes Dominant, What Does That Mean for Ethereum? - Ep. 372 Jul 12, 2022

Show notes

Ryan Berckmans, Ethereum investor and community member, and Alexandre Bergeron, Bitcoin investor, discuss Lido’s dominance as a liquid staking provider, whether that issue can be resolved, and how it could be a centralizing force for Ethereum. Show highlights:

what stETH is, what the uses cases are for stETH, and why it is important
how Lido had a first-mover advantage and how that kicked off network effects
whether the liquid staking derivatives system is one of a “winner-take-all”
how much of the staked ETH will be turned into a liquid staking derivative
how Lido might have a huge MEV opportunity after the Merge
what the proposer-builder separation is
whether Lido's dominance will increase over time
whether other competitors have been competitive with Lido
why Lido is a natural monopoly because of the incentives and MEV opportunities
what the implication of Lido’s monopoly is for Ethereum’s censorship resistance
whether Lido is effectively a single entity despite having multiple node operators
whether there could be a long waiting period for becoming a validator after the Merge
how Lido is moving its staking derivatives to other chains
how Lido’s new dual-governance proposal works, why it might be useful to decentralize Lido and whether it reduces the power of LDO token holders
how Lido’s centralization is the biggest threat to Ethereum in the long term and what are the possible solutions
why Ryan believes the value of ETH comes from its credible neutrality and whether Lido's centralization may jeopardize that
whether finding solutions around MEV opportunities is a good way to reduce Lido’s monopoly
whether Lido’s competitors could form an alliance and build a tokenized basket of their staking derivatives to compete with Lido
whether Lido could airdrop the LDO token to all ETH holders to decentralize its governance token

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://www.avax.network/

Oasis: https://oasisprotocol.org/grant-programs?utm_source=unchained&utm_medium=partnership&utm_campaign=podcast-oasis-grants-program

Alex:

Twitter: https://twitter.com/bergealex4

Ryan:

Twitter: https://twitter.com/ryanberckmans

stETH

Lido’s explanation of what stETH is: https://twitter.com/LidoFinance/status/1535184472546889735?s=20&t=oQeB1uj7HG7Y4he-0gbcLg
Previous Unchained Coverage: In the Recent Crypto Market Meltdown, What Role Did Lido’s stETH Play?: https://unchainedpodcast.com/in-the-recent-crypto-market-meltdown-what-role-did-lidos-steth-play-ep-370/

Lido’s Centralization:

Alex’s thread on why ETH is broken: https://twitter.com/bergealex4/status/1410761639226318852?s=20&t=JLyNokP7Kxj7tIiDzHIHTQ
Ryan on a liquid staking monopoly: https://twitter.com/ryanberckmans/status/1521179049548300291?s=20&t=JLyNokP7Kxj7tIiDzHIHTQ
Ryan’s proposed solutions: https://twitter.com/ryanberckmans/status/1531731955011579904?s=20&t=JLyNokP7Kxj7tIiDzHIHTQ
Is Lido making Ethereum less decentralized?: https://cryptobriefing.com/is-lido-making-ethereum-less-decentralized/
LDO token analysis: https://medium.com/general_knowledge/lido-finance-liquid-ethereum-staking-ldo-potential-f5dc3553b8d2
Ethereum researcher Danny Ryan’s take: https://twitter.com/dannyryan/status/1524044527828303872?s=20&t=H4UNoLn7sKQyZx5ll3-Ncw
Ryan’s take on Lido’s self-limit: https://research.lido.fi/t/should-lido-on-ethereum-be-limited-to-some-fixed-of-stake/2225/9?u=ryanberckmans

Lido’s Governance Proposals

Lido + stETH dual governance: https://research.lido.fi/t/ldo-steth-dual-governance/2382
Hasu on Lido’s dual governance proposal: https://twitter.com/hasufl/status/1540652075352313857?s=20&t=sJU5C5xo5litEJrZZDaWNQ
Lido’s two-phase voting scheme: https://blog.lido.fi/moving-to-two-phase-voting/

MEV

Ryan on post-merge MEV: https://twitter.com/ryanberckmans/status/1453597003397611526?s=20&t=JLyNokP7Kxj7tIiDzHIHTQ
Alex on proposer-builder separation: https://twitter.com/bergealex4/status/1540934540901744640?s=20&t=JLyNokP7Kxj7tIiDzHIHTQ
Haseeb on post-merge MEV: https://twitter.com/hosseeb/status/1464003851942391834?s=20&t=JLyNokP7Kxj7tIiDzHIHTQ

Learn more about your ad choices. Visit megaphone.fm/adchoices

How Helium Uses Crypto to Grow Decentralized Wifi and Mobile Networks - Ep. 371 Jul 08, 2022

Show notes

Amir Haleem, CEO of Nova Labs and founder of Helium, talks about the use cases for Internet of Things (IoT), how blockchain and crypto help to construct a decentralized internet infrastructure, and what is the future of Helium. Show highlights:

what Helium is and what it is trying to solve
how, after struggling for years, introducing crypto tokens, finally helped Helium grow
who the users of Helium are and how they differ from each other
how Helium grew to have one million devices around the world
what the challenges and use cases of the IoT space are
why Helium decided to add new networks
why Helium is launching specific tokens for each of the new networks
what proof of coverage is and why it is useful
what an open-source cellular network is and how it would work
whether there is a need for some centralization of the network
what Helium’s roadmap is and what the major milestones are for the future

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://avax.network

EPISODE LINKS

Amir

Twitter: https://twitter.com/amirhaleem

Helium:

Twitter: https://twitter.com/helium
Website: https://www.helium.com/
NYT article: https://www.nytimes.com/2022/02/06/technology/helium-cryptocurrency-uses.html
Plans to launch new networks: https://www.theblock.co/linked/151491/helium-network-accelerates-multi-network-protocol-expansion
- https://blog.helium.com/helium-chapter-2-a-network-of-networks-7372262210bd
Helium 5G plans: https://blog.helium.com/whats-next-for-helium-5g-data-transfer-proof-of-coverage-rewards-67b54f19f8d5
Number of Helium hotspots growing: https://www.coindesk.com/markets/2022/02/17/helium-network-passing-half-million-hotspots-could-fire-up-hnt-price/
Where Helium users are: https://www.coindesk.com/markets/2022/03/09/helium-miners-from-lisbon-to-miami-say-its-location-location-location/
Nova Labs raises $200 million: https://www.axios.com/2022/02/18/crypto-startup-helium-raises-200-million
$111 million token sale: https://www.theblock.co/linked/114095/helium-token-sale-a16z

Learn more about your ad choices. Visit megaphone.fm/adchoices

In the Recent Crypto Market Meltdown, What Role Did Lido's stETH Play? - Ep. 370 Jul 05, 2022

Show notes

Hasu, strategic advisor to Lido, and Tarun Chitra, founder of Gauntlet, explain everything about staked ETH, aka stETH, how it should be priced, Lido’s market dominance, and much more. Show highlights:

the role of Lido, what stETH is, and what its benefits are
whether Ethereum’s lack of delegated proof of stake contributes to the need for stETH
why stETH is not mispriced and why it doesn’t necessarily have to be worth 1 ETH
the inherent risks associated with stETH
how there was not enough liquidity to handle all the liquidations, especially in automated vaults on, for instance, Instadapp
how automated market makers work and what Curve’s amplification factor is
whether 3AC and Celsius had a significant impact on the stETH/ETH “de-peg”
how does the Merge affect the liquidity of stETH
Hasu’s and Tarun’s level of confidence that the Merge will happen this year and whether it will be a success
what will happen to the price of stETH after the redemptions are enabled
why Lido has achieved such a level of dominance
how Lido decreases the cost of staking and helps improve the security of the Ethereum blockchain
whether there is going to be a “winner take all” in the liquid staking derivatives market
how liquidity fragmentation can cause the system to blow up
why LDO tokenholders might not have the same incentives as ETH tokenholders
what is Lido’s new dual governance model and what is it trying to achieve
whether Lido should self limit its market dominance
how Lido coordinates validators and the role of the LDO token in this coordination
what are the lessons to be learned from the stETH situation
how governance is a liability to DeFi protocols

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://www.avax.network/

Oasis: https://oasisprotocol.org/grant-programs?utm_source=unchained&utm_medium=partnership&utm_campaign=podcast-oasis-grants-program

EPISODE LINKS

Hasu:

Twitter: https://twitter.com/hasufl
Uncommon Core Podcast: http://uncommoncore.co/podcast/

Tarun:

Twitter: https://twitter.com/tarunchitra

stETH

Lido’s explanation: https://twitter.com/LidoFinance/status/1535184472546889735?s=20&t=oQeB1uj7HG7Y4he-0gbcLg
Lido’s explanation #2: https://twitter.com/LidoFinance/status/1536756933054676992?s=20&t=oQeB1uj7HG7Y4he-0gbcLg
Hasu’s thread #1: https://twitter.com/hasufl/status/1524717773959700481?s=20&t=oQeB1uj7HG7Y4he-0gbcLg
Hasu’s thread #2: https://twitter.com/hasufl/status/1525427069198508033?s=20&t=oQeB1uj7HG7Y4he-0gbcLg
Tarun’s take: https://twitter.com/tarunchitra/status/1538775828573609985?s=20&t=oQeB1uj7HG7Y4he-0gbcLg
Tarun’s paper: Why Stake when you can borrow: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3629988

Lido

Self-limit?: https://twitter.com/LidoFinance/status/1540258690942615555?s=20&t=sJU5C5xo5litEJrZZDaWNQ
Hasu on Lido’s dual governance proposal: https://twitter.com/hasufl/status/1540652075352313857?s=20&t=sJU5C5xo5litEJrZZDaWNQ
Lido’s two phase voting scheme :https://blog.lido.fi/moving-to-two-phase-voting/
Previous Unchained Coverage on DAO governance: Solend and Bancor Drama: Did These DAOs Violate the Ethos of Crypto?: https://unchainedpodcast.com/solend-and-bancor-drama-did-these-daos-violate-the-ethos-of-crypto-ep-366/

Learn more about your ad choices. Visit megaphone.fm/adchoices

Oslo Freedom Forum: How NFTs Helped Chinese Dissident Artist Badiucao Evade Censorship - Ep. 369 Jul 01, 2022

Show notes

Badiucao, Chinese artist and activist, talks about the importance of NFTs for political activism, the role of China in his career as an artist, the significance of blockchain technologies to resist censorship, and much more. Show highlights:

why Badiucao became an artist and how the censorship in China brought him to NFTs
how Badiucao only learned about Tiananmen Square when he was 22 years old
why Badiucao took up work as a preschool teacher in Australia
how anonymity is important for Chinese activists for their family’s safety
the intention of Badiucao’s art and what is he trying to express
the repercussions of Badiucao’s activism
why Badicuao eventually gave up his anonymity
why Badiucao decided to issue art as NFTs and what possibilities he sees in NFTs
how Badiucao enabled people to write a message of protest in the blockchain with the launch of his NFT and how this represented the first large mass protest written into the blockchain
whether the Beijing Winter Olympics is an outrage and a disgrace for the international community and how this inspired Badiucao’s NFT collection Beijing 2022
how Niki approached the issue of the possibility of having the art taken down
how Badiucao used NFTs to help Ukraine due to the war
the reasons political art has so much value, and how NFTs enable possibilities for all political artists around the world
whether NFTs are much more than just some apes, and how learning about art is important
how to get started as a political artist and the importance to remain truthful
the significance of using power as an artist

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://avax.network

EPISODE LINKS

Badiucao

Twitter: https://twitter.com/badiucao
Website: https://www.badiucao.com/

Niki

Website: http://nikiselken.com/

Documentary about Badiucao:

https://www.imdb.com/title/tt10601676/

60 Minutes interview: https://www.cbsnews.com/news/badiucao-60-minutes-2021-12-26/

Unveiling his identity: https://www.nytimes.com/2019/06/04/world/asia/china-tiananmen-cartoonist-badiucao.html?searchResultPosition=1

The importance of NFTs

How Activists are Using NFTs as Civil Disobedience: https://www.jumpstartmag.com/how-activists-are-using-nfts-as-civil-disobedience/
Nadya Tolokonnikova on NFTs with social messages: https://editorial.brytehall.com/nadya-tolokonnikova-on-nfts-with-social-messages-and-shock-value/
Unchained Coverage: This Noble Family’s Art Was Taken by Nazis, But Is Being Saved by NFTs: https://unchainedpodcast.com/this-noble-familys-art-was-taken-by-nazis-but-is-being-saved-by-nfts/
Unchained Coverage: Punk6529 on the Significance of Bored Ape Yacht Club and CryptoPunks: https://unchainedpodcast.com/punk6529-on-the-significance-of-bored-ape-yacht-club-and-cryptopunks/
Unchained Coverage: Why This Environmentalist Doesn’t Blame Creators for the Carbon Footprint of NFTs: https://unchainedpodcast.com/why-this-environmentalist-doesnt-blame-creators-for-the-carbon-footprint-of-nfts/

Beijing 2022 Collection

https://www.badiucao.com/nft
Badiucao launches NFT collection to protest against China's human rights record on eve of Beijing Winter Olympics: https://www.theartnewspaper.com/2022/02/01/badiucao-launches-human-rights-protest-nft-collection-on-eve-of-beijing-winter-olympics

NFTs for Ukraine Collection

https://www.badiucao.com/ukraine

Learn more about your ad choices. Visit megaphone.fm/adchoices

The Chopping Block: Here’s What Was So Bad About Three Arrows Capital - Ep. 368 Jun 30, 2022

Show notes

Welcome to The Chopping Block! Crypto insiders Haseeb Qureshi, Tom Schmidt, and Tarun Chitra chop it up about the latest news in the digital asset industry. In this episode, Taylor Monahan, matriarch of Metamask, joins the show to discuss the contagion of major crypto firms, the bear market, SBF saving crypto, and much more! Show topics:

The importance of UX and security
How Three Arrows Capital’s practice of borrowing to leverage their bets has caused a crisis for crypto lenders that rippled out to many customers
How the GBTC arbitrage trade was part of 3AC’s undoing, and how that trade was one many other crypto trading institutions had previously abandoned
How crypto lenders were being degens with customers funds
Why SBF stepped in and made sure that BlockFi and Voyager didn’t default on customers’ deposits
Whether this whole wind-down reflects a credit cycle
How DeFi protocols were built to avoid these kinds of centralized finance problems
How the systemic issues caused by CeFi institutions like Celsius, BlockFi and Voyager are reminiscent of the Great Financial Crisis
What are the similarities between this crypto meltdown, the Mt. Gox debacle, and the 1907 and 2008 financial crises
What are the consequences of losing retail money vs. institutional money
How surviving a credit cycle crisis creates the best risk managers
The lessons to be learned from all these crises
How MakerDAO is trying to figure out what to do with its money
What happened with Solend and why the DAO resorted to a centralized action
Why DeFi needs more clauses about how to handle edge cases
The difference between doing dumb things and wrong things
Why Tarun is impressed with Solana’s DAO tooling
Why Taylor is thankful for the bear market

Hosts

Haseeb Qureshi, managing partner at Dragonfly Capital
https://twitter.com/hosseeb
Tom Schmidt, general partner at Dragonfly Capital
https://twitter.com/tomhschmidt
Tarun Chitra, managing partner at Robot Ventures
https://twitter.com/tarunchitra
Robert Leshner, founder of Compound
https://twitter.com/rleshner

Guest: Taylor Monahan

Twitter: https://twitter.com/tayvano_
Taylor’s thread on resources to learn about all things crypto: https://twitter.com/tayvano_/status/1509380091184246784?s=20&t=kNk8fJ7pJAWfEEVZQHwpvg

Episode Links

Crypto Contagion
3AC: https://blockworks.co/three-arrows-capital-brink-default-owes-voyager-657m/
Voyager
Celsius + Goldman buyout? https://www.protocol.com/bulletins/goldman-celsius-bankruptcy
BlockFi bailout: https://www.coindesk.com/business/2022/06/21/blockfi-receives-250m-credit-facility-from-ftx/
Unchained newsletter on BlockFi’s bailout: https://unchainedpodcast.com/vitalik-says-this-deserves-mockery/
CoinFlex: https://www.bloomberg.com/news/articles/2022-06-27/crypto-exchange-coinflex-to-issue-tokens-after-withdrawal-freeze?sref=Q2SpVkJl
Babel: https://www.coindesk.com/business/2022/06/20/babel-finance-reaches-debt-agreement-with-counterparties-after-withdrawal-freeze/
Unchained Coverage: Why Possible Insolvencies by Celsius and 3AC Could Spell Disaster for Crypto: https://unchainedpodcast.com/why-possible-insolvencies-by-celsius-and-3ac-could-spell-disaster-for-crypto/
Solend DAO situation:
Unchained Coverage: Solend and Bancor Drama: Did These DAOs Violate the Ethos of Crypto? – Ep. 366: https://unchainedpodcast.com/solend-and-bancor-drama-did-these-daos-violate-the-ethos-of-crypto-ep-366/
https://www.coindesk.com/tech/2022/06/19/solana-defi-platform-votes-to-control-whale-account-in-bid-to-avoid-liquidation-chaos/
Covered on Unchained Newsletter: https://unchainedpodcast.com/does-this-dao-deserve-emergency-power%e2%81%89%ef%b8%8f/
MakerDAO governance proposal: https://www.theblock.co/post/154515/maker-governance-is-voting-to-invest-500-million-in-us-treasury-bills

Learn more about your ad choices. Visit megaphone.fm/adchoices

Does Venture Capital Investment Violate the Ethos of Crypto? Sequoia Says No - Ep. 367 Jun 28, 2022

Show notes

Shaun Maguire and Michelle Bailhe, partners at Sequoia, discuss their long term view and thesis about crypto, what do they look for to invest in a crypto project, the takeaways from the blowup of Terra, the insolvency of crypto companies, and much more. Show highlights:

what is Sequoia’s long term view and thesis about the crypto industry
how different our lives will look in 20 years from now due to blockchain technology
how Sequoia had to adapt to invest in this new asset class and what are the similarities and differences with investing in traditional startups
when a product or service on the internet should be offered in a decentralized or centralized way
how Sequoia decides whether to invest in the entity behind a project or in the tokens
whether having venture capitalists involved at all goes against the ethos of decentralization
why Shaun believes that Ethereum proved that decentralization can be achieved even when you start being centralized
whether people underestimate the value that VCs can add to a project
why Shaun believes that Solana is moving towards decentralization
Sequoia’s thesis about privacy in crypto and the potential of zero-knowledge proofs
how Michelle sees the macroeconomic environment impacting crypto and whether this cycle is different from the previous ones
the importance of product market fit in crypto projects
what crypto projects should be focusing on and the business model they should be pursuing
the main takeaways of the Terra collapse and how it was a major setback for algo stablecoins
how crypto founders should always do the right thing even though there is no clear regulation
whether SBF is the Berkshire Hathaway of crypto today
the lessons to be learned from the potential insolvency of some crypto lenders and investment firms
how demand for blockspace will keep increasing and whether a single blockchain could supply all that space
the future of the metaverse and how it can be defined
Michelle’s mental model for crypto and the phases for achieving worldwide adoption

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Beefy Finance: https://beefy.finance/

Ava Labs: https://www.avax.network/

EPISODE LINKS

Shaun Maguire:

Twitter: https://www.twitter.com/shaunmmaguire
Sequoia Profile: https://www.sequoiacap.com/people/shaun-maguire/

Michelle:

Twitter: https://twitter.com/michellebailhe
Sequoia Profile: https://www.sequoiacap.com/people/michelle-bailhe/
Michelle’s investment thesis: https://www.sequoiacap.com/article/ask-not-wen-moon-ask-why-moon/

Bear Market:

Michelle’s Twitter thread: https://twitter.com/michellebailhe/status/1526373378516365312?s=20&t=c7vdmdg2mnQ34rsAGIm0lg
Insolvency of crypto lenders:
Voyager: https://www.coindesk.com/business/2022/06/22/voyager-digital-requests-loan-repayment-from-3ac-considers-issuing-default-notice/
BlockFi: https://decrypt.co/103422/blockfi-secures-250-million-line-of-credit-from-ftx
Celsius: https://www.theblock.co/linked/151522/crypto-lending-firm-celsius-pauses-withdrawals-and-transfers-citing-market-conditions
Celsius possible bankruptcy: https://www.theblock.co/linked/154100/crypto-lender-celsius-hires-more-advisors-ahead-of-possible-bankruptcy-wsj
Previous Unchained Coverage:
Why Possible Insolvencies by Celsius and 3AC Could Spell Disaster for Crypto: https://unchainedpodcast.com/why-possible-insolvencies-by-celsius-and-3ac-could-spell-disaster-for-crypto/
Cobie and Chris Burniske on How to Navigate a Crypto Bear Market: https://unchainedpodcast.com/cobie-and-chris-burniske-on-how-to-navigate-a-crypto-bear-market-ep-354/

** For more episode links and details visit the Unchained website **

Learn more about your ad choices. Visit megaphone.fm/adchoices

Solend and Bancor Drama: Did These DAOs Violate the Ethos of Crypto? - Ep. 366 Jun 24, 2022

Show notes

Derek Hsue, cofounder at Reverie, discusses the recent controversial decisions by Solend DAO and Bancor, the importance of establishing processes for black swan events, and whether decentralized governance truly exists. Show highlights:

what situation prompted Solend to feel it was in jeopardy
what Solend DAO’s response was to that situation
why Derek views it as “the nuclear option”
why the proposal sparked an outcry from the crypto community
whether this issue could have been prevented or managed differently if the protocol was built on a blockchain other than Solana
why, a day later, the DAO reversed its first decision to take over the whale’s account
whether Derek thinks the DAO made the right decision to not take over the whale’s account
what is Impermanent Loss Protection, a feature offered by Bancor
why Bancor decided to pause Impermanent Loss Protection
whether Celsius and 3AC had anything to do with Bancor’s problem
how Bancor’s decision was made unilaterally
how DAOs should deal with black swan events

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://www.avax.network/

EPISODE LINKS

Derek

Twitter: https://twitter.com/derek_hsue

Reverie

Website: https://www.reverie.ooo/
Twitter: https://twitter.com/hi_reverie

Solend DAO Situation

Covered on Monday’s Unchained Newsletter: https://unchainedpodcast.com/does-this-dao-deserve-emergency-power%e2%81%89%ef%b8%8f/
Proposal to invalidate the first one: https://decrypt.co/103330/solana-lending-dao-overturns-vote-to-take-over-at-risk-whale-wallet
The whale moved $25 million from Solend: https://www.theblock.co/post/153207/solana-whale-shuffles-25-million-to-reduce-risk-to-defi-protocol-solend

Bancor Pausing Impermanent Loss Protection

Bancor’s post: https://blog.bancor.network/market-conditions-update-june-19-2022-e5b857b39336
Anthony Sassano’s reaction: https://twitter.com/sassal0x/status/1539082583832526848?s=20&t=OzTV6M5bCH4fxJIJUtLA4Q

DAO Governance issues:

Lido DAO proposes to reduce the existing scope of governance of its token holders: https://research.lido.fi/t/ldo-steth-dual-governance/2382
Jack Niewold 's thread: https://twitter.com/JackNiewold/status/1539307339928457217?s=20&t=OzTV6M5bCH4fxJIJUtLA4Q
Unchained Coverage: How Soulbound Tokens Could Reduce Speculation and Improve DAO Voting – Ep.360: https://unchainedpodcast.com/how-soul-bound-tokens-could-reduce-speculation-and-improve-dao-voting-ep-360/

Main tweet

On this Friday’s Unchained, Derek Hsue explains:

* why the first Solend DAO vote was the “nuclear option”

* whether Solana’s history of downtime spurred the proposal

* Bancor’s decision to stop Impermanent Loss Protection

* what this all means for DAO governance

Learn more about your ad choices. Visit megaphone.fm/adchoices

CFTC Commissioner Caroline Pham on Why US Crypto Regulators Get a B- Ep. 365 Jun 21, 2022

Show notes

Caroline Pham, commissioner at the Commodities Futures Trading Commission, discusses how we should build a regulatory framework for crypto assets, whether the SEC and CFTC should work together, what were the consequences of the Terra collapse, and much more. Show highlights:

how Cmr. Pham got started in crypto and became a CFTC commissioner
the importance of the regulatory strategy around crypto
what crypto’s role is in the financial system
how bitcoin is a sort of money outside of the traditional financial system
how friendly regulators should be with the industries they regulate
why she believes transparency is one of the greatest ideals of American democracy
how Cmr. Pham believes in self-determination and the power of free markets
why Cmr. Pham published an op-ed with SEC Commissioner Hester Peirce
how the Terra collapse incentivized regulators to look deeper into the space
whether the US approach towards regulation can improve
the role of the regulatory agencies in making the US the financial leader of the world
what Cmr. Pham thinks about the new Gillibrand and Lummis bill
whether SEC Chair Gary Gensler is right about the majority of cryptos being securities
what are the low-hanging fruit opportunities for regulators when it comes to crypto
how Cmr. Pham believes we should have a global regulatory framework for crypto
why she believes algorithmic stablecoins are derivatives
why things like Terra could act as a “shadow banking 3.0”
whether there is a way to regulate without having intermediaries
what Cmr. Pham thinks about FTX proposal to bypass futures commission merchants

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Beefy Finance: https://beefy.finance/

EPISODE LINKS

Caroline Pham

Twitter: https://twitter.com/CarolineDPham
CFTC Profile: https://www.cftc.gov/About/Commissioners/CarolineDPham/index.htm

Stablecoin regulation

Financial Times article: https://www.ft.com/content/981c380f-bb1c-45bd-8d0d-a95b15d96a00
CNBC on crypto regulation: https://www.cnbc.com/2022/06/03/cryptocurrency-industry-focus-regulation-stablecoins-market-crash.html
Unchained Coverage: Why Crypto Twitter’s Disrespect Toward Regulators Is a ‘Really Bad Business Decision’: https://unchainedpodcast.com/why-crypto-twitters-disrespect-toward-regulators-is-a-really-bad-business-decision/
Unchained Coverage: Can a DeFi Smart Contract Be Regulated? Two CFTC Commissioners Discuss: https://unchainedpodcast.com/can-a-defi-smart-contract-be-regulated-two-cftc-commissioners-discuss/

FTX proposal to serve as the trading engine for derivatives:

https://www.forbes.com/sites/jasonbrett/2022/04/27/the-ftx-us-proposal-that-shook-congress-and-the-crypto-derivatives-world/?sh=3dac29ef4e19
Unchained Coverage: FTX Wants to Compete with CME – Here’s Why It’s a Big Deal: https://unchainedpodcast.com/ftx-wants-to-compete-with-cme-heres-why-its-a-big-deal/

Hester Peirce

Caroline’s op-ed with SEC Commissioner Hester Peirce: https://thehill.com/blogs/congress-blog/3503277-making-progress-on-decentralized-regulation-its-time-to-talk-about-crypto-together/
Hester Peirce's token safe harbor proposal: https://decrypt.co/66453/secs-hester-peirce-floats-revised-crypto-safe-harbor-rules
Unchained Coverage: Hester Peirce’s Former Counsel on Terra 2.0, XRP and a Bitcoin Spot ETF: https://unchainedpodcast.com/hester-peirces-former-counsel-on-terra-2-0-xrp-and-a-bitcoin-spot-etf/

Learn more about your ad choices. Visit megaphone.fm/adchoices

Why Possible Insolvencies by Celsius and 3AC Could Spell Disaster for Crypto - Ep. 364 Jun 17, 2022

Show notes

Mika Honkasalo, independent crypto researcher, discusses what is happening with Celsius and Three Arrows Capital, the importance of having proper risk management, and the contagion effects on the industry.

Show highlights:

why is it so significant that Celsius paused withdrawals
what is stETH and why is it important to understand the Celsius situation
how the Luna/UST debacle started a contagion effect in the crypto space
why Celsius’s investors won’t bail the company out
what will happen to Celsius’s retail customers
what Three Arrows Capital (3AC) is and whether they have a solvency problem
how 3AC was levered long and whether they had poor risk management
who will be hurt if 3AC goes under
what would be the effect of 3AC and Celsius collapsing
which types of funds that Mika will be eyeing to see if they also end up in a similar situation to 3AC and Celsius
why Mika would counsel anyone who keeps their money with centralized crypto lenders to scrutinize their practices

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://avax.network

EPISODE LINKS

Mika Honkasalo

Twitter: https://twitter.com/mhonkasalo
Substack: https://mhonkasalo.substack.com/
Mika’s writings on The Block: https://www.theblockcrypto.com/author/mika-honkasalo

Mika’s blog post on the stETH-ETH peg: https://mhonkasalo.substack.com/p/stetheth-peg-not-a-peg-presents-a?s=r

Celsius announcement that they would be withholding assets: https://twitter.com/CelsiusNetwork/status/1536169010877739009?s=20&t=hL-ZsBSKZOLF-whTwNmjgw

Nexo’s offer to buy Celsius assets:

https://twitter.com/Nexo/status/1536256598993211393?s=20&t=vKmJCZGNToaOqZU-TEjcDg

Celsisus’s investors unlikely to bail out company:

https://www.wsj.com/articles/celsius-networks-investors-unlikely-to-provide-more-funds-to-bail-out-crypto-lender-11655395113

Celsius hires restructuring lawyers:

https://www.wsj.com/articles/crypto-lender-celsius-hires-restructuring-lawyers-after-account-freeze-11655250575?tpl=br

Why staked ETH is part of Celsius’s and 3AC’s woes:

https://www.coindesk.com/markets/2022/06/14/staked-ether-becomes-focus-of-crypto-stress-from-celsius-to-three-arrows/

Conor Ryder on the stETH liquidity problem

https://twitter.com/ConorRyder/status/1537130483007508480?s=20&t=pZGZf17ed_DyOS18CHExmQ

The DeFi Edge on the 3AC situation: https://twitter.com/thedefiedge/status/1537465349976694786?s=20&t=Q29mo3EKSASasTenHVEm4Q

Who else has exposure to 3AC:

https://fortune.com/2022/06/16/crypto-crash-hedge-fund-three-arrows-capital-insolvency-rumors-novogratz/

3AC withholding $1M in assets from 8 Blocks Capital:

https://twitter.com/Danny8BC/status/1537224378554806272?s=20&t=Q29mo3EKSASasTenHVEm4Q

Meltem Demirors explains the problem from the balance sheet perspective:

https://twitter.com/Melt_Dem/status/1537155214897201153?s=20&t=Q29mo3EKSASasTenHVEm4Q

Adam Levitin on Celsius bankruptcy

https://twitter.com/AdamLevitin/status/1536932912674836481?s=20&t=Q29mo3EKSASasTenHVEm4Q

degentrading on Why Celsius and 3AC going under should cause you to worry

https://twitter.com/hodlKRYPTONITE/status/1536902115540742144?s=20&t=Q29mo3EKSASasTenHVEm4Q

Learn more about your ad choices. Visit megaphone.fm/adchoices

The Legal and Regulatory Fallout From Terra's Collapse: Who Will Pay? - Ep. 363 Jun 14, 2022

Show notes

Olta Andoni, deputy general counsel at Ava Labs, and Ari Redbord, head of legal and government affairs at TRM Labs, discuss the Terra stablecoin meltdown, implications for impending international regulations, and the history of stablecoin regulation internationally. Topics covered include:

What the most important legal issues are for the Terra meltdown
How the Terra implosion will trigger more regulation of the space
How regulators seemed to think stablecoins should be regulated even before Terra
How their approach differs between dollar-backed stablecoins vs. algorithmic vs. crypto collateral-backed coins
How European regulators want stablecoin issuers to be treated like banks
What the Lummis-Gillibrand bill would mean for US stablecoin regulation
Whether Terra’s demise will mean that regulators won’t tolerate experimentation with algorithmic stablecoins
Why regulators will be skittish about stablecoins in response to Terra’s meltdown
Why Olta and Ari were impressed by the NY Department of Financial Services guidance on stablecoins
What the establishment of SEC jurisdiction over Terraform Labs based on the Mirror investigation from last fall means for any enforcement action by the SEC over Terra
Whether Do Kwon and/or Terraform could face criminal charges in multiple jurisdictions
Why international regulatory consistency is important in the crypto space
Whether civil and class-action lawsuits against Terraform could be expected
How Terra 2.0 could open TFL up to further action from regulators and law enforcement
Why more education is needed to overcome anxiety about DeFi regulations
How hack nondisclosures could be subject to government investigation