SBF vs. Erik Voorhees: How Do We Regulate Crypto?

A debate between two crypto titans on how to regulate crypto. Whether to regulate crypto? Where do we draw the line? Study and remember this one anon. ------ Push | Try the Communication Protocol of Web3 https://bankless.cc/Push ------ SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ ️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum DESO | DECENTRALIZED SOCIAL BLOCKCHAIN https://bankless.cc/Deso BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave TRUEFI | CRYPTO FINANCIAL HUB https://bankless.cc/TrueFi SEQUENCE | ALL-IN-ONE PLATFORM https://bankless.cc/Sequence ️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/Fuelpod ------ Timestamps: 0:00 Intro 7:36 Should Crypto Be Regulated? 23:50 Transparency 25:55 Showing Up & BitLicense 36:50 Erik's Issues with Sam's Post 52:12 The DeFi Regulation Debate 1:24:27 Why Regulation Now? 1:40:10 DCCPA 1:53:04 Stealmanning Eachother's Points 2:01:55 Closing Arguments 2:06:17 Closing & Disclaimers ------ Resources: SBF https://twitter.com/SBF_FTX Erik Voorhees https://twitter.com/ErikVoorhees SBF Proposal https://twitter.com/SBF_FTX/status/1582835426116575235 Erik Voorhees's Rebuttal https://www.moneyandstate.com/blog/response-to-sbf ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:07Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, how to front-run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Guys, on today's episode, we're going to give you a fantastic livestream that we just did this Friday. Very important listening. Hope you enjoy. Guys, we're super excited to host this livestream and conversation. Maybe we'll call it a debate? I'm not sure. I think it'll be very conversational between Sam Bankman-Fried, that's SBF, and Eric Voorhees. The topic today is crypto regulation. David, I found myself playing a somewhat minor role in a conversation that happened on crypto over the last week, I guess, all of this happened.

• 0:48Ryan Sean Adams?

  SBF was the originator of a post, just his thoughts, his solutions on how crypto should be regulated, and the crypto community had a great deal of response to this post. I think leading one corner of the internet was Erik Voorhees, and kind of giving an ethos-backed crypto OG-type take to what Sam Bankman-Fried has said. And I know, David, that the best place to have a long-form discourse about this is not on Twitter, not in, you know, the character limitations, but in a podcast form. So that is what we are in for today. We're having this conversation about Sam's thoughts on crypto regulation, particularly areas like DeFi, versus contrasting with Erik Voorhees' thoughts, and we might find

• 1:33Ryan Sean Adams?

  that we'd land somewhere in the middle. Any other thoughts going to this episode?

• 1:36David Hoffman?

  I think the two guests here, Sam and Eric, are great two ends of different spectrums, I think, to bring to the table here. Sam, of course, is the founder/CEO of this gargantuan exchange FTX, which has rose out of 2021 and into 2022, and is really just a huge innovator and leader in this space. And also Erik Voorhees, this crypto also-builder, been around since the get-go, this kind of crypto philosopher-builder person, who also has very strong principles around how crypto should be approached and regulated, both internally as an industry, as a community, but also from external regulation as well. So two different perspectives, I think, going to come to the table, and we're going to find what do we want as a community, as an industry? How do we want to approach regulation? How much do we want to go out

• 2:20David Hoffman?

  and seek regulation versus how much do we want to do some self-regulation? And so I think these are the various perspectives that we're going to bring to the table here today.

• 2:27Ryan Sean Adams?

  That's exactly the conversation I was hoping for. You guys are in for a treat. We'll be right back with Sam Bankman-Fried and Eric Voorhees, but before we do, we want to thank the sponsors that made this episode possible.

• 2:37David Hoffman?

  Arbitrum One is pioneering the world of secure Ethereum scalability and is continuing to accelerate the Web3 landscape. Hundreds of projects have already deployed on Arbitrum One, producing flourishing DeFi and NFT ecosystems. With the recent addition of Arbitrum Nova, gaming and social dApps like Reddit are also now calling Arbitrum home. Both Arbitrum One and Nova leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM-compatible. On Arbitrum, both builders and users will experience faster transaction speeds with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io, where you can join the community, dive into the developer docs, bridge your

• 3:22David Hoffman?

  assets, and start building your first app. With Arbitrum, experience Web3 development the way it was meant to be: secure, fast, cheap, and friction-free. The Brave Wallet is your secure, multi-chain on-ramp into Web3 and is built directly into the Brave Privacy Browser. Gone are the days of managing multiple wallet extensions that put you at risk of phishing, spoofs, and tracking. With the Brave Wallet, you can securely manage your crypto assets across more than 100 different chains, including Ethereum, Layer 2s, Solana, and more, all without downloading risky extensions. The Brave Wallet is easy to set up and removes the headache of jumping between wallets and extensions. It's lightweight, but packed with great features like built-in token swaps, buying and holding NFTs with a gallery view, and support for hardware wallets. But also much more than that, because

• 4:06David Hoffman?

  Brave is shipping new features every single month with a mission to make Web3 easier to navigate for its over 55 million users. Wallet extensions are a thing of the past, so get started with Brave's Web3-ready browser today and experience a decentralized web seamlessly without all the clutter. You can download the browser at brave.com/banklist and click the wallet icon to get started. If you've been listening to Bankless, you know that we're fans of the modular blockchain thesis, the idea that blockchains will separate execution from data availability and consensus, allowing all three to become the best versions of themselves. And Fuel has built the fastest modular execution layer in the industry. By supporting parallel transaction execution, Fuel unlocks significantly faster throughput for the web free world. Fuel also goes beyond

• 4:48David Hoffman?

  the limitations of the EVM with its own Fuel VM, which is more efficient and optimized, opening up the design space for developers. And lastly, Fuel brings a powerful developer experience with its own domain-specific language, Sway, and a supportive tool chain called Fork. With Fuel, you can have the benefits of smart contract languages like Solidity while adopting the improvements made by the Rust tooling ecosystem, letting the Fuel development environment go beyond the limitations of the EVM. If you want to learn more, there's a link in the show notes to see how you can get involved with a Fuel network.

• 5:17Ryan Sean Adams?

  Bankless Nation, we are super excited to introduce you to our next guest. Both of them have been on the Bankless Podcast before. I want to introduce you to SBF. He is the founder and CEO of FTX, of course. This is a behemoth crypto-financial institution and exchange rose to prominence in the last bull market, but has been here for a while. And he has thoughts on crypto regulation that we're going to discuss today. SBF, Sam, welcome to Bankless. How you doing?

• 5:43Speaker 02

  Doing well. How are you?

• 5:44Ryan Sean Adams?

  I'm doing fantastic. I've been waiting all week for this conversation. I brought my glasses to the conversation. I hope you'll forgive me for the elitist vibes I'm dropping.

• 5:53Speaker 02

  I'm gonna wait to see what Eric says, and then I'll figure out my glasses. I'm gonna make sure to balance it out a little. We're gonna need some context here.

• 6:00Ryan Sean Adams?

  That's fair. That's fair. Also, Erik Voorhees, of course, you've heard him on the Bankless Podcast before. He's a crypto OG. He's what I'd call a crypto-libertarian philosopher. He's a builder and a thinker. He's built an exchange himself as well via Shapeshift and brings a ton of perspective to this conversation. The reason we're having both of you on is because SBF wrote a fantastic, open starter to the conversation, what he thinks, what he thinks crypto regulation should look like. And Eric, you had a fantastic response. Eric, thank you for coming on Bankless. How you doing?

• 6:32Speaker 03

  Glad to be here. Don't mind the glasses, but what I really hate about you is that bookshelf in the background.

• 6:38Ryan Sean Adams?

  Why do you hate the bookshelf? Do you not like books? Is this part of the Neanderthal coming out, Eric?

• 6:42Speaker 03

  No, it just reeks of elitism.

• 6:45Ryan Sean Adams?

  Okay, gotcha.

• 6:46David Hoffman?

  Okay, can we pause for a moment since we we did our way into these references for the people that weren't understanding these glasses and elitist references? What is going on? Oh, you want me to do this? Okay.

• 6:55Ryan Sean Adams?

  I don't want to talk about it anymore.

• 6:57David Hoffman?

  Okay, so a YouTuber was going off against Ryan, the YouTuber is BitBoy, and Ryan called him out and saying, "BitBoy doesn't represent us," which triggered BitBoy, and BitBoy made a very large rant about Ryan and his glasses and his overall elitist vibes. And so that was the joke leading into the intro of the show.

• 7:16Ryan Sean Adams?

  That's kind of funny. I actually think everyone watching has probably already seen that video.

• 7:19David Hoffman?

  You might be.

• 7:20Ryan Sean Adams?

  Many on the internet have. No, I got relatives texting like, "Who is this guy? What? This dude with Alex Jones vibes? What is he talking about?" And I'm like, "Just another week in crypto." So it goes.

• 7:31David Hoffman?

  Moving on, hopefully we never have to invoke BitBoy yet again on this livestream, but now that that's past us.

• 7:37Ryan Sean Adams?

  All right, so great to have you both on Bankless. We're going to get into it. A long-form discussion on this topic. I think the crypto community really wants it. We have some sections to this conversation, but before we kind of get into the sections and the high level here, I think the big meta question is this that we have to answer for folks. The question of should crypto be regulated? Should it be regulated? I think this is an important topic to start with and important question that will set the context for everything else. Sam, what do you think?

• 8:07Speaker 02

  Yeah, so I think I have two answers to that question. And the first is parts of it should and parts of it shouldn't. And really, you know, there's sort of, my core take is roughly speaking, that one axis you can talk about is how regulated crypto should be. And a second axis you can talk about is basically how thoughtful are we about which parts of it are more regulated and which parts are less? And that it's that second axis that I think I care about the most. And maybe to drill into it a little bit more, you know, if you're looking at a stablecoin, right? And you're thinking, "Should it be regulated?" I kind of think, well, it's important that there's like oversight of these holdings. If it's a one-to-one USD-backed stablecoin, or so it claims,

• 8:50Speaker 02

  there should be something proving that it is one-to-one back. And I'm sort of in favor of like, really thorough regulation confirming that the number of dollars in the bank account is at least as many as the number of tokens there. Like, you know, Maybe you have multiple auditors who have to audit it. It's not a hard thing to audit. It's not that expensive like to do until like going kind of deep into like insuring that from regulatory point of view. I think makes a ton of sense. It's like very regulated for like that piece of it. But then you can say like, you're going to 7-Eleven to buy a bagel. And like, you know, you want to pay with a stablecoin. Like, is there a broker dealer that has to be involved?

• 9:29Speaker 02

  I think like absolutely not. And it's like very important that we not require a broker dealer to buy a bagel. That would just completely kill commerce. And so, you know, I guess my core thought roughly is like, we should be really thoughtful about where the regulation comes in and what it does. The second thing I'll say is that independent of what you think of this, at least in some ways, it will be regulated, at least in the United States. And so it's not a question, I think, like practically of whether there will be any regulation or there will be. It's a question of what should that look like? And which parts should and shouldn't have which types of regulation?

• 10:06David Hoffman?

  So Sam, your general position is that regulation is coming no matter what. We should get ahead of it. And if we get ahead of it, we can kind of define and steer it in ways where the ball's in our court, where we have more say. If we kind of get ahead of it and we can kind of like focus that regulation into areas that are easy wins, easy things that we are willing to compromise as an industry, perhaps like on crypto dollars and the level of degree of audits in the bank. And that can redirect some regulation away from other parts of the industry where we want full control over like our DeFi apps and our nodes. Is that a fair summary?

• 10:40Speaker 02

  I think that that's mostly a fair summary. I think I would frame it very slightly differently because I think some of this regulation is definitively good. Like personally, I think that. And I think that it's not just a compromise, but some pieces of this I think are just healthy. But I think that even if you didn't think that, then I would say the thing that you said.

• 10:58David Hoffman?

  And would you say that if we want to, you know, put the listeners and ourselves into the shoes of SBF as he was writing this blog post, which was the start of this whole conversation, is that the motivation behind this blog post? Or is there other motivations as well?

• 11:11Speaker 02

  Oh, I think that's basically right. And I think that like, you know, maybe just a little bit more context on that is that, you know, there's been a lot of discussion about a possible upcoming bill coming out of the Senate Ag Committee, you know, stop now Boozman bill, DCCPA. And I think that like, you know, I want to give some context behind my thoughts on it, which is cautiously optimistic, basically, and depends on the exact language. But like, I'm optimistic that it will end up striking a balance where it will do a good job of like, providing like a large ratio of customer protection to restriction of commerce, basically.

• 11:44Ryan Sean Adams?

  So guys, one thing I will say about this conversation, I think the scope of this conversation is probably mostly relating to Sam, your initial post, and then Eric's reply and the conversation that ensued. I would like to talk about this new piece of legislation a little bit towards the end, the DCCPA. But it's important for listeners to know, we don't actually have a finalized draft version of this in the public. And so, you know, your post is maybe tangentially tied to that, Sam, but that does not represent the position that we're going to find in a draft of the DCCPA. Is that correct?

• 12:20Speaker 02

  Well, right. A, I'm not writing the bill, and so who knows what will be in it. And it's, you know, it's not mine. But also, it doesn't necessarily represent my view of the DCCPA. It might, it might not, because we don't know exactly what it will end up saying. And, you know, we're going to have to wait to see, you know, what finalized text of it looks like before I will have a confident position on it.

• 12:39Ryan Sean Adams?

  So we'll have to treat that as kind of a separate conversation that we'll maybe weave in at the end. But Eric, let's go back to this high level meta question. Same to you. You've heard Sam's response to this. Should crypto be regulated?

• 12:51Speaker 03

  What a question. So I guess first, let's consider that like Sam's proposal that a stablecoin itself should be regulated at least such that a provider has to prove that it has reserves for the tokens would be a higher bar than the Federal Reserve itself already applies, right? The Federal Reserve does not prove anything inside it with any degree of audibility or attestation. Banks do not need to approve anything about what they do in any way that is cryptographically verifiable. Us in the crypto industry already have a higher standard of what constitutes knowledge, what constitutes proof. And so it is a little ironic for people from the traditional financial world imposing on us the need to be proving anything, right?

• 13:36Speaker 03

  We're the ones that prove it cryptographically. So on the point of like whether crypto should be regulated, it's also important to consider that it already is. Crypto is heavily regulated. I know Sam would agree with that. It's been regulated ever since the very beginning. It falls under all sorts of laws and all sorts of jurisdictions. And we dispense with this myth that it's like some void of regulation. I wish that were true. That would be my panacea, but it's not. It is encumbered already. Third, I guess I'll say that we have a highly regulated financial system and we've seen where that status quo has gone. I think we in the industry should step back and ask ourselves, do we want the crypto

• 14:20Speaker 03

  financial ecosystem to move closer to the traditional financial world? Are we here because we love how that world looks and we want to make crypto resemble that world more? Or are we here because we're trying to build something better? And if it's the latter, I think we need to consider that the regulations are a huge part of why traditional finance has gone where it is now. So I'll leave it there for now.

• 14:46Ryan Sean Adams?

  So Eric, just, you know, I guess maybe a point of clarification. Do you agree with Sam's position that, you know, we don't live in a panacea? And so whether we'd like it or not, it's going to be regulated. Indeed, you've said it already is. And so what we want is the least worst possible outcome. And that's essentially what we would be fighting for. And then I guess maybe a kind of a second question. Well, actually, just take that. So what about we don't live in a panacea? And so we should actually be fighting for the least worst regulation possible. What do you think of that?

• 15:16Speaker 03

  Let's not set our standard to be the least worst option. This is how the entire current political system works, where everyone's basically just voting on who's the least bad. Let's have a higher standard than that. Let's, let's practice some, some ideals such as open finance, freedom, liberty, equality, immutability, and actually seek to achieve those things. Speak positively to those principles rather than simply playing defense and trying to get the least worst bad outcome onto the industry. So I think that perspective is important. It's difficult to know to what degree to engage with these regulators. They will engage with us for sure. Right? That's what they do. All they see is things to be regulated.

• 15:58Speaker 03

  And then we have this immutable system, which does not respond to human dictat. And then there is us in the middle, who are the people that use these systems, which do respond to these things. And we can all make decisions on to what degree we want to, you know, bring the clause of regulation on to the crypto world or not. But I think first and foremost, we need to be remembering the principles of why this stuff exists in the first place.

• 16:22Ryan Sean Adams?

  How about this concept I want to run by you? If to the extent what you're saying is true, is like, you know, cryptographically verified and does not require trust. Maybe people could accept, regulators themselves could accept that there's less degree of regulation necessary because we have cryptographic guarantees. But to the extent that we have a centralizing actor in the middle, but take the example Sam was mentioning earlier, where we have a stablecoin and that stablecoin is not cryptographically verifying that the amount of assets that back that stablecoin is inside of a bank account. You actually have to do like atomic meatspace level audits in order to get that. Where there is centralization, there should be regulation.

• 17:04Ryan Sean Adams?

  Where there is decentralization, there is less need for regulation. Is that an axis that this conversation turns on for you as well?

• 17:12Speaker 03

  Yeah, I think that's a fair perspective. If you want to argue for regulation, I think it's more reasonable that the regulation should apply on people and centralized intermediaries which do not execute programmatically. Like, much of the fundamental rationale for regulation is to try to ensure that humans behave in certain ways. When it comes to DeFi, when it comes to code, when it comes to these blockchains, we don't need to ensure anything. They just operate according to the code. And I would love to hear any regulator even acknowledge like what's been built here. It's hard to take them seriously when they can't even look at these machines of immutable finance and like applaud what has been built. I think they're completely missing the virtues that we've already built,

• 17:56Speaker 03

  the consumer protections that have already been created just through the market. And I would be able to take them a lot more seriously if they could at least acknowledge those things.

• 18:04Speaker 02

  So I agree with some things that you said, and I totally agree with that last point. I mean, I think it's really valuable to have discourse where each side tries to argue the other side's point in general. I think like if you can't successfully or at least plausibly argue for the other side, then you don't understand the other side's arguments and there's a worry that you're discounting them. And so I would love to see a lot of crypto libertarians argue for regulation against regulators who are arguing for the value of decentralized finance. I think that'd be like really fascinating to watch and a cool exercise. One thing that I will say, which I do honestly believe is that, and I want to make sure I don't overstate this comment, but that some, there do exist some regulators who I do think appreciate

• 18:49Speaker 02

  what crypto has and what crypto can provide. I don't want to overstate that. I don't want to claim that there are a very large number of them. I don't want to claim that this is like most, but there are some. And frankly, I think some of them maybe could talk more publicly about this as well. I've had conversations with regulators where they talk about what they're excited about crypto bringing to the world. Again, I don't want to overstate this. I would be happy if there was a lot more of that and if a lot more of them did. But I do think it's not none of them that do. But to your point, like I think it'd be really valuable if we were in a world where there are more pushing, you know, for these advantages. And frankly, in other countries, you see this more frequently, right? Like, I think we're sort of both.

• 19:32Speaker 02

  Implicitly talking about the United States when we talk about regulators or maybe the United States and Western Europe or something. And I definitely fall into that trap of sometimes just like just serve like implying that and I've been like remembering to say that that is true, but that is often going to be true here that like I will default to talking about Western regulators and definitely call me out on that if you know, when there are situations where that's not relevant or where there's like really important distinctions that that should be made. But I do think it's worth noting that in other countries, you know, we have seen, I'm in the Bahamas right now. I'm saying Nassau and we've heard a lot from the regulators and the politicians in the Bahamas about the potential values of crypto. So, you know, that does happen in some places. I wish it happened a lot more in the United States.

• 20:16Speaker 02

  Another thing I want to say is I completely agree with you as you suspected that crypto is not unregulated. We actually looked recently, we tried to figure out how regulated we are compared to other companies and I'm sure we missed a lot. So I want to caveat this with like, don't take this as literal. We missed a ton. As far as we could tell, we could find one other company in the world that was more regulated than us, that had like more regulators.

• 20:41Ryan Sean Adams?

  You're not talking about just finance, Sam. We're talking about like across all industries.

• 20:46Speaker 02

  Well, yeah, although like I'm sure we missed non-financial ones because I'm sure implicitly we did a good job of thinking of the financial ones and a really bad job like healthcare. I'm going to be honest, I like, don't know that much about international healthcare regulation. So we just missed a lot of this and big trees business, mostly finance, but not crypto specific. Like, you know, we looked at like, like, I don't know, we're regulated, it's not just that we're regulated by like 50 state regulators. And also like five federal regulators in the United States. We're also regulated by like 200 countries. And each basically independently. So it's definitely not an unregulated industry. It's maybe an industry where the regulation has a really high ratio of. Like sort of inhibiting commerce to protecting customers relative to other industries. Like I think just because it hasn't gotten to a lawful point.

• 21:30Speaker 02

  And I agree, this is just a dumb narrative that we hear sometimes, and it's just wrong. And it's frustrating to hear. And as there are similar one, I don't know, we sometimes hear narratives around like, you know, like the easy regulators, they're just, they're just wrong. I don't know, like it's CFT is like one of the most thorough regulators I've ever seen. And like even look at the enforcement actions they bring, you can look like the diligence done on applications. It's sort of like an outlier in the strong direction. To your point, Eric, about the Fed and about banks and about like, hey, like, is this actually commensurate oversight? Or are we actually going in the opposite direction here? First of all, I think it's a good point. And I think that there are ways in which there is more transparency required here than of some other things.

• 22:14Speaker 02

  I think part of my answer is, well, it might be cool to see that transparency in other things, right? Like it might, like one thing you could imagine is if you tokenize the dollar, fully tokenize it, right? And then when you looked at like, you had a bank, right? And it was borrowing and lending effectively. If there's all going on on chain, it would be transparent to everyone, like how levered it was, right? It'd be transparent to everyone, like what the actual net borrowing was, what the net lending was, right? You could see transparently what the Fed's balance sheet was. I think that actually be kind of cool. And I think that like, you know, bringing some of that to other industries, I'd kind of be in favor of that. I do think that like, they are though heavily regulated in some ways, although there isn't necessarily public transparency around that.

• 22:50Speaker 03

  So can I jump in for a second?

• 22:52Speaker 02

  Yeah, totally.

• 22:53Speaker 03

  That last point you made is important. The traditional financial world is heavily regulated, as everyone knows. And how transparent do we feel they are? Right? Do we feel that the banking system is a bastion of transparency? No, no one would ever say that with a straight face. And from time to time, that has actually caused like horrible financial calamities. So why is it that we, as the crypto industry, are being burdened with additional requirements for transparency? When we're already more transparent? And when the entire stack of TradFi financial regulations hasn't itself created anything that is transparent?

• 23:32Speaker 02

  Well, I think we're more transparent in some ways and not in others. And I think that that points to where I would like to see more and less regulation. Now, obviously, there's a worry that that won't map onto where it is. But as an example, right? DeFi borrow lending protocols are in some meaningful ways already more transparent and trustworthy than non-crypto related borrow lending is because it's all on chain. You can transparently see exactly what's going on. And, you know, you didn't get that in traditional finance anyway. And so that I think like, I totally agree. I think that, you know, you look at like, at, you know, comparing, for instance, Celsius to a broker dealer that has some borrow lending activity. And there I think you actually see Celsius being less regulated today, or at least less

• 24:18Speaker 02

  effectively regulated. There are many regulations that are sort of ensnaring it to some extent, but not as much or effective oversight of what it's doing. So I think there's like some in each direction. And I guess part of my sense is just like the details matter. Like, I don't know, I kind of feel differently in different areas here, depending on like exactly what is happening, exactly what is regulated, exactly what isn't. And, you know, what the impacts of each would be.

• 24:41David Hoffman?

  Eric, I've got a comment for you. I'd like to get your brain to spin some wheels on, which is, I totally, as like a crypto believer, understand the value of regulation by the EVM. The EVM is what regulates us. That's the point. That's why we're here. That's the cool thing about that. I'll take Sam's point that regulators don't get that. And getting them to understand that is going to be an uphill battle. That's going to feel like pushing a boulder uphill over and over and over again. And then there's this other line that I've heard before that is like a common trope that like, in the world of politics, if you're not at the table, you're on the menu. And so, yes, philosophically, 100% agree. Like, the EVM is what regulates us. Smart contracts are cool. That's why we're all here.

• 25:25David Hoffman?

  But I think Sam's point is that like regulators aren't just going to care and they're just going to eat us alive if we don't show up. What would you say to this response?

• 25:32Speaker 03

  Yeah, I don't think there's anything wrong with showing up. I think it's good that people in the industry are engaging at different levels with various government regulators. How effective that has been historically, I think, is a matter of debate. So we can highlight, for example, the Bit license in New York, which was, you know, a couple of crypto generations ago. That was the fight that everyone was having and the same arguments of to what degree should we engage with the regulators were coming up. Back then, all the major exchanges, the big companies, engaged fully with the New York Department of Financial Services, provided all sorts of useful feedback. And what came out of that was this hideous monstrosity,

• 26:14Speaker 03

  a 60-page application for anyone trying to do crypto business in New York. And it effectively made New York like a barren wasteland per capita relative to many other cities in the world.

• 26:26David Hoffman?

  And I believe also the author of the of the Bit license, his job became consultant for helping companies get around the Bit license.

• 26:33Speaker 03

  Yeah, let's reflect a little bit on Ben Losky. So after he spent a year or two crafting this monstrous bill in New York, you know, for the protection of New Yorkers. After it was done and launched, he left that department, went into his own private practice as a lawyer to help companies navigate the walls that he himself had put up. How that is ethical or legal is an interesting question. But then, like, as if that wasn't embarrassing enough as something that a human would do, maybe because he didn't have enough people paying him in that role. He then ended up on the board of Ripple,

• 27:13Speaker 03

  getting paid monstrous sums to help govern, you know, Ripple itself. So his career has been great since the Bit license. It certainly was a good catalyst for him to get everything he wanted, and I'm sure he's made a ton of money from it. How has the average New Yorker benefited from all those important consumer protection laws that he put out? I don't think they have.

• 27:37Ryan Sean Adams?

  What you can see here is there's a tremendous amount of distrust, I think, between the crypto community and some regulators based on past experience. We've burnt in the past and I do think this thing that Eric is echoing, which is probably something that you felt some of the pushback on, Sam, when you put out some of your thoughts is, hey, we understand that regulation is coming, but bad regulation is worse than no regulation. And we don't even have no regulation. We actually have regulation, right? And so we can't afford to get this thing wrong. We can't afford for an encompassing bit license type thing to sweep the entire country. And I'm sure you'd agree with that. I'm wondering maybe, Sam, if you could respond to that. And then also maybe your call for getting into the details.

• 28:20Ryan Sean Adams?

  Let's start to get into the details of what your original proposition was. And so we can talk about them maybe piece by piece. But yeah, go ahead, Sam.

• 28:29Speaker 02

  Yeah, so I guess I feel a little confused, I guess, by the argument. So I think part of this is like coming at it from a philosophically, not opposite direction, but just like sort of like some slightly different direction, which is like, you know, I sort of like approach all this from sort of like, I don't know, let's evaluate that specific case or something. And I agree that the bit license has been a mess and has been bad. I completely agree with that and has been worse than there not being a bit license. Absolutely true. And obviously, like, I wasn't active in the industry at the time. So I can't say honestly that like, you know, I can tell you 100% what I would have thought at the time. But I think at the time, I would have reacted very differently to that than I am to

• 29:12Speaker 02

  the, for instance, stop now, but it's been legislation. I think the biggest problem with the bit license is it's a state level license that only works in that state. But I think as an enormous involved process, you have to go through just to unlock a single state. It is not reasonable. That's sort of the fundamental design flaw, I think, with the bit license. But for me, I guess I hear that and I'm like, that's why it's important for us to be engaging on the details of these. Because it's important for us to see something like that and say, hey, guys, like, we should either do this at the federal level or have a passport from state to state. And instead of like making it just a one state thing. So that's sort of like one thought there. And

• 29:57Speaker 02

  You know, I think that like in the end, like the details just matter a lot and the problems were weren't in the details. So I think I don't know actually the details exactly how the crypto industry lobbied on the bit license. It'd be interesting to me to hear. I think that like, there's also, you know, some extent to which, you know, you could say, look, like, I don't know exactly what was happening then, but like, to the extent there was going to be a bit license one way or another. It could have been appropriate to try and work to make it better rather than worse. And that's sort of like a, you know, somewhat independent or separate thing from, you know, thinking about like, whether you should be lobbying for or against its existence.

• 30:32Speaker 03

  Can I jump in real quick?

• 30:34Speaker 02

  Yeah, totally.

• 30:35Speaker 03

  So I think importantly, the lesson from the bit license wasn't that we need to engage more. That was an example of heavy engagement. There are videos of industry leaders testifying in front of the New York Department of Financial Services. And there was huge amounts of discussion, discourse, comments submitted through all the official channels. That was not an example of the industry abstaining from comment. It was an example of the industry's best comments and the suggestions from the entire crypto community. Basically following into the gears of New York politics. And I doubt that federal politics are much cleaner than a single state.

• 31:17Speaker 02

  So I hear you. I'm going to be honest, I'm more optimistic about this time than I would have been about that time. Mostly I think frankly, the industry's lobbying was not very sophisticated. And the industry's engagement, even if it was heavy, it was not sophisticated at the time. And so it actually frankly, wouldn't shock me if it was the case that like, you know, we were going to be able to do it much better this time. And I will say that like, I strongly suspect that, you know, some feedback the industry has had, has already had significant impact on what I expect this bill to look like. Like, I think it just straightforwardly is having impact this time. I don't know the details of that time. I agree that on prior, it doesn't seem like federal will be easier than state. Maybe it's just like it's being done in a more sophisticated and sort of like.

• 32:02Speaker 03

  Yeah, I'm sure that's true. Like, it's definitely more sophisticated now, but the consequences are also much bigger now. This is a federal matter and it will govern and influence how policy is set around the entire world, whereas New York never would.

• 32:15Speaker 02

  Oh, I totally hear you. Although it's not clear that lobbying was bad last time. Like, it may have been ineffective. Sorry, I don't know the details of it. But I think the industry is lobbying in favor of the bit license happening, or that they're lobbying to have edits put into it.

• 32:28Speaker 03

  They were lobbying to influence how it was written and what good or bad things would be included in it.

• 32:33Speaker 02

  Yep. And so the other thing I would say, though, and this is, I think, really the core thing that I think, is that like, when you look at like, DCCPA, like, again, we don't know the details of what it would say, but there is going to be oversight of centralized exchanges. Like, that's gonna happen one way or another. So at least that piece of it, and I totally hear you, that there are other parts of it that you may be objecting to. But at least that piece of it, like, that's gonna happen one way or another, and it's a matter of how it happens. Whereas having a separate New York state framework for crypto that is separate from all the other states and the federal government was not an inevitability. And I think that that, like, that's a pretty big asymmetry in these situations.

• 33:14Speaker 02

  And so, like, you know, killing DCCPA doesn't mean that, like, centralized exchanges with spot commodity markets will forever be unregulated. Like, that's not gonna happen.

• 33:24Speaker 03

  Again, all this stuff is already regulated, right? We have to, yeah, we have to acknowledge that.

• 33:30Ryan Sean Adams?

  So let's do this. Let's get into the details and why there was this kerfuffle. Because so, you know, Sam is talking about, you know, kind of getting into the details. And he actually, he does think that there is a chance for the DCCPA to actually pass and, you know, some version of some of the thoughts from the crypto industry to be embedded, certainly on centralized exchanges. Now, Eric, I'm gonna throw it to you. Okay, so Sam, I put forward a proposal called, and I'll share my screen here, "Possible Digital Asset Industry Standards." And this is not the DCCPA, let's be clear on that. These are Sam's personal thoughts. I think this is written by Sam Bankman-Fried, but neither FTX has all of those qualifiers, all right, disclaimers. But he goes through and he talks about hacks and accountability. He goes through and he talks about asset listing, token equities.

• 34:15Ryan Sean Adams?

  He talks about consumer protections, sanctions, allow lists and block lists, DeFi as well. As I went through this and I read this, I was like, oh, this is what regulators really want to hear about, right? They want to, these are the subjects that they're most concerned with. And Eric, you took issue with some of the positions that SBF had in his original article. And you wrote a very thoughtful response, which I think was definitely the best response I read. And much better than kind of a, you know, two minute rant on crypto YouTube. Won't name any names here, but what were some of the issues that you had with some of SBF's suggestions? Because again, if there is a shot at getting some regulation in, we sure as hell want to get it right, don't we?

• 34:58Ryan Sean Adams?

  And it seemed like you were very concerned that this is not the right path to go down. What most concerned you in Sam's post?

• 35:04Speaker 03

  So yeah, again, importantly, we don't know the text of this DCCPA bill yet. So we're all kind of talking about it blindly in that regard. I'd say there are mainly two big issues that I had with the post. And I want to give Sam credit for how open he's been to feedback and how engaged he's been subsequent to that post. I appreciate that very much. The first one was when Sam said that we should, that everyone else, they must respect and follow OFAC. But to use that word respect, I think was a little bit revealing. And I wanted to counter that because OFAC should not be respected. And it perhaps bears discussion on why. So OFAC stands for the Office of Foreign Assets Control.

• 35:47Speaker 03

  It's a part of the Department of the Treasury and they maintain sanctions lists. And any people, companies, organizations and entire countries are on this list. It is illegal under current law for any American person or any American business to do business with anyone on these sanctions lists. So why is it unethical? Well, it includes entire countries. So in my post, I talked about Iran. It is illegal for any American to do business with an Iranian. This is patently unethical and is the kind of thing which we in the industry should be highlighting as emblematic of the status quo financial system and something that we vehemently oppose.

• 36:31Speaker 03

  It is not okay that an American cannot send money to a brave Iranian woman who is standing out for her freedom in that country just because she was born in that country. We should be reflecting on this as a people and like what kind of financial system do we want to be designing in the future? I don't think we want to be designing one where 80 million innocent people are excluded from the financial system. So yes, as Americans, do we have to follow OFAC as law? Yes. Should we respect it? Absolutely not. And my request here is for someone as preeminent as Sam to make that distinction and say, even if it must be followed right now, it is not an ethical body of law.

• 37:13Speaker 03

  The reason this is important is because the moral premises under which these regulations get imposed on us are important. They're always cast down as if we have these morally prescient individuals in the government that know what's right and wrong, and they keep us, the Wild West crypto industry, from acting badly. That needs to be challenged. We are building actually more virtuous financial systems than what exists today, and OFAC was a good example of that. So I'll pause there for a second.

• 37:40Speaker 02

  Yeah, so first of all, I did mean respect is and follow, and I hear your point of that being a, at least a lazy choice of wording.

• 37:48Speaker 03

  Maybe a Freudian slip.

• 37:50Speaker 02

  You know, perhaps what I had intended to say was follow it, and of course I was lazy about a few other things there, too, some of which you called me out on various points. But like, you know, I said everyone is pretty lazy, but whatever. And obviously, if you're an Iranian trying to buy a bagel, but it's an Iranian selling it to, because you're in Iran, like, that's not, OFAC doesn't make sense in that context. So I acknowledge on that. I will say that I think that your Freudian slip point, I think in general, showing respect, even if you strongly disagree, has a lot of merit. And I don't think everyone agrees with me on this, and I don't think it's 100% clear that I'm right about it, but it is what I believe, that in general, even if you want to strongly disagree with something.

• 38:35Speaker 02

  With some exceptions, doing it while showing respect is the right way to do it. And that just creates better discourse and it creates better engagement on both sides. And that if you come in openly and sort of like preemptively acknowledging the strengths of the other person's point, that will make them more open to engage as well. It'll make them feel more heard and feel like when you disagree with other parts of it, you're doing so having understood why they did what they did rather than like, well, this person doesn't even know why it's here in the first place. That's sort of like one thing I would say, you know, on OPEC, like first of all, I have a lot of sympathy for the concern about disenfranchising and deplatforming innocent civilians.

• 39:18Speaker 02

  That sucks. Like it sucks. It's not fair to them. They didn't choose that. They have been increased, you know, or suspected of any, you know, wrongdoing. And whether or not the policy is right, that sucks. And I also think I would be like excited to see bilateral engagement around, you know, what are ways that, you know, we can sort of minimize the amount of collateral damage dealt while making sure to, you know, sanction terrorist activity. And I'm getting me off, I haven't done a deep enough dive in some cases here to feel confident that I, I know the right answer from a policy perspective in terms of what the right trade offs are here.

• 40:01Speaker 02

  And I totally respect that, like, I at least have a lot of sympathy, if nothing else, for, you know, your perspective on OPEC. I think that like, um, I think the Iran case is the one where there are the most innocent people create caught up in it by far. I think you can look at sort of like on the other side, North Korea as an example, where I think there's a lot to be said for being really careful to make sure that we're not at all facilitating financing, you know, of terrorists in there and that that is just like a large fraction of what's going on in North Korea. And so like, I think it varies case by case. And, you know, I don't know exactly what the right answer is in all of them. But yeah, I hear you on that. And really, my core point is just like, and whatever you think about it is the law, and we should follow it.

• 40:45Speaker 02

  And I also think strategically that just like to think that it was the right fight to choose, you would have to think that it was the one you cared the most about by far. I think that's sort of how the game is set up here, so to speak, that like, this is the one that policymakers generally care about the most. Which is now something keep in mind. And I do think I will say that is very important to enforce sanctions as a general matter. I think that like, there are a lot of cases where these are like important for the world remaining safe. That doesn't mean they're all perfect, and that doesn't mean I don't have concerns about some of them. And I also don't know enough to be confident in what I think about some of them. Like, there are a lot of cases where, I don't know, maybe, maybe if I knew everything that the United States knew, I would feel differently. It seems totally plausible.

• 41:24Speaker 02

  You know, I will say that like, you know, when it comes to Russia, for instance, I think that there is a lot to be said for the core sanctions. It's not entirely clear to me why every person who got sanctioned did get sanctioned. And that might just because I don't know things, and you know, that absolutely could be. But I definitely would say that I'm concerned. You know, if it is the case that there are some, you know, people who got sanctioned there who didn't really deserve it, for whom there wasn't much cause, because I think that that starts to undermine a lot of the world's confidence in their safety with the US dollar. But again, I don't know enough to feel confident that there was a mistake there. There are just things that like, don't necessarily seem clear to me.

• 42:05Speaker 02

  And I would find it very concerning if there weren't any further reasons they didn't know about for it.

• 42:10Speaker 03

  Yeah, and to be clear, I'm not advocating that in this discussion over DCCPA that we try to take the fight of abolish OFAC, right? Like, that's going to be a nonstarter. That's a battle for a different time and different day. What I am saying is that like, when discussing something like OFAC, pointing out its moral deficiencies, at least in a blog post, is worth doing. I also think like, just as a matter of principle, if the US government wants to block payments or deplatform or censor someone from global finance. Let them bring an allegation of wrongdoing. Like, how is that a radical position today?

• 42:50Speaker 03

  Right? Like, if the government believes someone has acted wrongly or done something illegal, let them show the allegation before forcing people to block payments to them. Right? You know, even an allegation, let alone a conviction. But in terms of OFAC, there is no allegation. There's no allegation against 80 million Iranians that they've done something bad. Obviously, the vast majority have not. And I don't think it's any different for North Korea. I mean, talk about any group of people that could use an open money system and break free of tyranny. It would be the North Korean people. Like, we should advocate more crypto usage in North Korea because we understand the danger and tyranny of the North Korean government. Right? And so to associate or

• 43:33Speaker 03

  to try to draw some comparison between the North Korean government and all the millions of innocent people that are literally suffering and dying there, I think is a big mistake.

• 43:41David Hoffman?

  Eric, you're articulating a point that I really like, and I really want to double down on this. As a libertarian, I remember hearing some content from you on some other podcasts and talking about just the catch-22 that it comes with being a libertarian. While, like, no libertarian goes into politics to fight for libertarian ideals. It's almost antithetical, right? So you almost never really get what you want out of politics because if you're a libertarian-minded person, you don't really, like, going to Congress and fighting for your ideals doesn't really seem interesting to you. And I think kind of what you're saying with this whole approach to regulation where, I'll paraphrase, let's not go to Capitol Hill and, like, work with regulators when we finally have this crypto platform to stand on and support us

• 44:25David Hoffman?

  and actually embody some of our ideals. For one of the first times, like, the more libertarian, free-market-minded people have this infrastructure: smart contracts, decentralized protocols, DeFi, DAOs, to actually, like, stand up and prop up and support some of our deals with actual, true, like, social coordination infrastructure. And I think what you're saying is, let's not go and shoot ourselves in the foot by giving up what we have to stand on. And what we have to stand on is a permissionless financial system that can integrate the Iranians and integrate the North Koreans. And I think what you're saying is, like, let's not give that up and let's make the regulators come take that from us with court battles and fights,

• 45:07David Hoffman?

  rather than going to them and, you know, doing some deals and handshakes where we actually end up... Throwing the baby out with the bathwater. Is this a fair articulation?

• 45:16Speaker 03

  Not quite.

• 45:17David Hoffman?

  Not quite.

• 45:17Speaker 03

  Again, I'm not, my ask of Sam and my plea here is not that we don't engage. I think there's nothing wrong with what Sam's doing in terms of engaging with the government. And I support various people and groups that do this. I'm sympathetic to those who have the view that any engagement is bad. Like, I'm sympathetic to that, but I think the Hydra approach of everything from the most radical crypto anarchy to people in suits going to meet with those in Mordor, or, I mean, in DC, that they would all be effective in some ways, right? So, yeah, I want to be super clear that that's not my ask here. What my ask is, is that people like Sam who are engaging, be very careful about what they ask for and where they draw the lines. And those specifics are critical. And I think Sam agrees with that point.

• 46:02David Hoffman?

  Sequence is the all-in-one developer platform you need to build web three games and applications. For your users, Sequence is a smart wallet and it's the easiest, most intuitive onboarding your users will ever experience. And comes with all the features users need to feel empowered in the web three world. Multi-chain support, NFT display, and users can buy SFTs, NFTs, and crypto directly with a credit or debit card. For developers, Sequence is the plug-and-play platform for web three games and apps. Their APIs let you bring NFTs, SFTs, and tokens into your game or application. And a Sequence relayer enables gas as transactions for your users. Sequence already powers some of the best web three games like Skyweaver, NFT projects like Coolcats, and marketplaces like NiftySwap.

• 46:43David Hoffman?

  And Sequence is compatible with all the EVM chains, including Ethereum, Polygon, Binance Smart Chain, Arbitrum, Optimism, and Avalanche. So go to sequence.xyz to get started unlocking the full potential of your application today. The reality today is that five corporations control the entire world of social media. They own our names, they restrict our content, they monitor our every move. And their time is up, thanks to our sponsor, DSO. DSO is a Layer One blockchain built from the ground up to decentralize and scale social networks. With DSO, you can own your own identity, content, and social graph, and take it with you across hundreds of applications already built on the censorship-resistant DSO blockchain. DESO's storage advantages make it finally possible to build infinite state

• 47:26David Hoffman?

  applications that can efficiently store and index large amounts of content and data fully on-chain. DESO also offers multiple crypto-native monetization primitives for developers and creators, including social NFTs, social DAOs, social tokens, and social tipping. So in order to experience the social layer of Web3, go to deso.com and claim your username. That's D E S O dot com. TrueFi is DeFi's largest credit protocol, connecting global lenders with institutional-grade lending opportunities. TrueFi has completed over $1.7 billion in originations and paid out nearly $35 million to lenders, proving that DeFi is ready to take its next big leap into the $8 trillion credit market. TrueFi gives lenders like you access to sustainable,

• 48:11David Hoffman?

  high-yield opportunities backed by real-world investments, usually reserved for high-net-worth individuals. At the same time, fund managers use TrueFi's financial infrastructure to bring their portfolios on-chain, benefiting from the global liquidity, cost savings, and transparency of DeFi. TrueFi is a decentralized financial utility. The protocol is owned and governed by the TrueFi DAO, and TrueFi is here to bring DeFi into the golden age, bridging the power and access of crypto with institutional-grade lending opportunities and portfolio tooling. Explore the diverse financial opportunities available on TrueFi, or launch your own portfolio at truefi.io.

• 48:44Ryan Sean Adams?

  So Eric, what other specifics did you take issue with in Sam's original post? I mean, there's a lot of places we could take this. We could talk about DeFi. We could talk about kind of code. I know there are some points that you do agree with, but let's focus on maybe the deltas here and the disagreements. Aside from the overarching kind of like concept of respect for OFAT, for instance, there are some other like practical things that Sam proposed. What would you point out? What are things that you don't agree with?

• 49:14Speaker 03

  Yeah.

• 49:16Speaker 03

  And I'll start this by also saying something that I did agree with and like, you know, Sam had a very creative suggestion for how exchanges should handle hacks and like trying to create a standard or a protocol for that. The specifics aren't super important, but that he was trying to do that, I think was great. And that being done as a set of industry standards is laudable. So well done there. Certainly the biggest area of contention, both with my own response to Sam's post and with the crypto community at large, is what Sam was saying about DeFi. And I'll try to characterize Sam's position correctly here. He was clear that at a protocol level, things need to remain open and immutable. So that's good.

• 50:01Speaker 03

  Where he made the big mistake is in suggesting that interfaces for decentralized protocols, such as the front end website of something like AVE or Uniswap, should perhaps be regulated as a financial institution. That line cannot be crossed. That line should not be crossed. And if we spend the rest of this discussion on this point alone, I think that would be valuable. My main ask of Sam in these discussions is that however important it is to regulate centralized custodians or intermediaries correctly, the current bill, the DCCPA, trying to do that and doing that well is understandable. If regulations in this same bill get attached to how decentralized products,

• 50:45Speaker 03

  i.e. non-financial intermediaries are handled, that is going to be a big mistake. It's going to be done incorrectly. It's going to be done poorly and it's going to harm America more than it harms the actual protocols themselves. So if I can make any request, it's simply to not include any concept of decentralized finance into a bill, which is centrally trying to govern well central controlling intermediaries.

• 51:11Ryan Sean Adams?

  Sam, what would you say? And Eric, are we talking just about the protocol? Or are we talking about the user interface? I know Sam had some propositions around that, the user interface that connects to DeFi applications. Is that sort of one and the same to you?

• 51:24Speaker 03

  Yeah, so Sam was clear that the protocols shouldn't be regulated. So that's good. But he was suggesting that interfaces to these protocols should be and should be regulated similarly to how a centralized intermediary under the Bank Secrecy Act would be regulated. That is the big line that we need to say no on. So Sam, did I characterize that correctly? And what are your thoughts currently?

• 51:46Speaker 02

  I think that's basically characterized right. And I think I like, one thing I did take a little bit of, and by the way, I'm not sure you're wrong. To be clear on this, like I think it's a complicated question. I don't fucking know what the right answer is. I think you did characterize, I think, basically right. And I really appreciate that you sort of have put the thought in to make sure that you do that. I don't think everyone does that on either side. One thing that they do just want to note is like, and I think you're not your first or your third, but in your second description of what I think, you sort of said that you think is important that decentralized applications not be regulated, and I think that they should be, or something roughly like that. And I think that your first and third versions did clarify roughly correctly what I think. But I think the second version sort of blurred a little bit.

• 52:30Speaker 02

  The lines between like a decentralized protocol and, well, at the very least, and print, the centrally hosted D U E. And so I just want to clarify, like, make it clear that, like, I do draw a distinction there. And then I think a lot of the discussion on Twitter failed to remember that distinction, even if it was pointed out periodically. And so I want to make sure that we keep that pretty clear and that we not sort of like drift back and forth about, you know, whatever it is to. So I don't know for sure what the right thing to do is here. One thing I will say is, well, first of all, again, we don't know what D C C P A will say. Don't have the final text yet. I do not think that we should be trying to hash out a lot of DeFi regulation in D C C P A. I think for, you know, most of the reasons you said, this is like, first of all, a lot of this is just permissionless code. And second of all,

• 53:15Speaker 02

  it's just a tricky area in general. And those are two recipes for Zastron trying to quickly cobble together a comprehensive regime for DeFi. And I don't think, although we'll see, that the D C C P A is going to be aimed at trying to put together a regulatory framework for DeFi. I think and hope that it will be quite light touch on that side. And that, to the extent that it does reference DeFi, at least in prior drafts that had been released, most of that was actually centered around something else, which was if there is a broker dealer, if you have like Schwab or something, and it wants to Access DeFi for its customers. What should the principles around that be? I will say that that thing, I actually feel like

• 53:58Speaker 02

  pretty good about, I mean, I'm sorry, there are mixed parts of this, but I think like overall, like, you know, trying to create ways for highly regulated centralized financial intermediaries to interface with permissionless DeFi is like probably good and healthy and like will open up a lot to DeFi and that like to that part, like the devil's in the detail there and I don't know exactly what it's gonna say, but I think it's potentially exciting and healthy, but putting DCCPA aside for a second because it's like, I think in particular on the DeFi part, it's not clear exactly what it will say. And so it's gonna be hard to hash out thoughts on it exactly. Maybe just drilling into the place where I think we probably at least somewhat disagree, which is on the the gooys.

• 54:42Speaker 02

  Maybe I'll make it a few points here. The first is that there are some blurred lines here. Like, and I'll acknowledge that, like, some things I've said, but I think it's sort of like forgotten about those blurred lines and treated as if there is like crystal clear differentiation between different parts of this, which doesn't exist, but I think that

• 55:04Speaker 02

  the most important thing by far, and I'm interested if you disagree with this, but my instinct is that by far the most important thing is, or set of things is the following, that protocols can be permissionless, that on-chain code can be permissionless. Sorry, the only reason I'm saying can be here is that it's permissionless to write it and obviously could write on-chain code and put permissions in it. I don't, we shouldn't make that illegal, but you know, that that should be permissionless to write coding and you know, that good can be permissionless and that like peer-to-peer transfers and payments can be permissionless.

• 55:43Speaker 02

  Like, those are things that I think are like incredibly important and fundamental here. And I think that like, if those are violated, I think those are sort of the sacred things. Because if those get violated, I think it just breaks the whole thing. And by the way, I think it's true or tried by two, if you try to say everything is permissioned, no one could go to a shopping mall anymore. Like you could not buy food. Like the world would just starve the next day. And I think that like the result of that would be to like effectively ban Digital commerce and say that like the only unregulated commerce can be physical unregulated commerce. So, but anyway, I want to check if you agree, not with my statement that I think that they should be permissionless, but with my claim that that's the most important thing by far.

• 56:26Speaker 03

  Yes, I think I agree with that. Cool. I take a little issue with your point about the current payment system not being permissionless or being permissioned. Like today, it is absolutely permissioned. Then you can go with your credit card and buy something at the store is only because several intermediaries have your box ticked as approved. Right? That is permissioned and that can be taken away from people for wrong think or for anything that, you know, some Orwellian government wants to do to them.

• 56:53Speaker 02

  Oh, sorry. I think what I'd say is parts of it are permissioned and parts of it aren't. And I think it's totally arbitrary which parts are and aren't. And I think that I agree with you on the present art, like, sorry, you can go to a store and you can pay it through credit card or it's a dollar bill. And one of those is intermediated.

• 57:06Speaker 03

  Cash, yeah, cash is permissionless, right? That's the last bastion there.

• 57:11Speaker 02

  I think you're making a good point here, which is like, when you go to a store and you buy a bagel, it costs 2% to a payment processor. And that's if you're allowed to buy the bagel, right? That's if you have connectivity to financial services. Now, you can buy it with cash either way, I guess, but cash is a pain. And why does it cost 2%? I think a lot of that is because like you're trying to get like gigantic companies to zoom in and say like Alice wants to buy an everything bagel with cucumber. What do we think about that? And it's like, that's hot. And like, that's where that 2% is going effectively, right? That 2% is going because you're trying to mediate like that transaction. And as you said, like, not everyone has a credit card and credit cards don't always work.

• 57:56Speaker 02

  And so that 2% fee is the good case. That's the case where the payment does work. So I agree that like a lot of the fact that payments are scripted is because of this. And so anyway, so it seems like we agree on what the most important things are and agree on what to do about those most important things. For where we disagree, here's my argument, and my argument might be wrong. Like, I don't feel 100% sold by my argument here. I, on balance, currently think it's correct. Um, but basically what it is, is that like, given, she's taking it as a given, that that is the most important thing, that smart contracts, that code, that, oh, validators is another thing I should have thrown at that, which I assume you agree with, that it's very important that validators can be permissionless, or else again, you have like 10,000 random people

• 58:36Speaker 02

  running code to validate mathematical transactions and also think about everything bagels with onions at 7-Eleven and Alice, which is insane. And maybe I'll say, just to clarify, I make explicit, a website hosted on a centralized service by an American that targets financial products at American retail, back ending onto DeFi, but is non-custodial. And so it's not, it's not custoding, which I'm guessing is maybe where you would be drawing this line here.

• 59:07Speaker 03

  No, non-custodial. So let's use a specific example, like a US-hosted, US-owned front-end for Aave.

• 59:15Speaker 02

  Yep, which is, to be clear, in this case, US-hosted, US-owned, and offered to Americans. And sorry, offered to Americans is a vague word, but like, I sort of want to say, like, isn't IP blocking the US or something like that? And like, I don't know, we, there's lots of interesting details here about that, but like-

• 59:33Speaker 03

  The question is, should an American need a license to offer a front-end for a backend DeFi protocol like Aave?

• 59:41Speaker 02

  Yeah.

• 59:41Speaker 03

  Your, your blog said yes.

• 59:44Speaker 02

  And sorry, just want to clarify, it offered to Americans.

• 59:47Speaker 03

  Correct, yeah, to Americans.

• 59:48Speaker 02

  Yeah, so I want to sidestep for a second, so we can get back to it. The question of whether I think, if I were dictator, that should be required, and rather answer a question of what policy should we be proposing and arguing for? And my core thought here is the following, which is that I claim that the most important thing here, at the end of the day, the most important thing is that smart contracts, validators, payments remain open and free, and that the most important thing is that that gets protected at all costs, and that-

• 1:00:32Speaker 02

  Because of that, like I am relatively willing to accept compromises if they preserve the things that I believe have the vast majority of the value for DeFi. And that plays a non trivial part in my thinking here, which is that first of all, like if my best guess, my projection is let's just expand out 10 years from now and say, you know, what will empirically in expected value terms, regulation look like for DeFi in the United States for with all these caveats, again, Americans offering to Americans, blah, blah, blah. If I had to guess, I would guess in expected value terms that it looks worse than it does

• 1:01:16Speaker 02

  in a world in which it's like dollar here, small contracts, game is totally free, but in which the centralized American hosted targeting Americans of a Gooey requires a burger dealer license or something like that. Like my projection is that that world is better than the expected value, what the world will be. Maybe I'll just pause for a second there and ask you, do you agree with that statement about the relative expected values?

• 1:01:40Speaker 03

  I think the tendency of the regulators is to make the world a darker place, no matter what. Now it's up to non regulators. It's up to you, Sam. It's up to people in the industry to highlight the reasons, whether ethical, moral, legal, why those people should not be imposing the controls that they want to impose. And I agree that the protocol being immutable is the most important thing, but I kind of feel like you're starting to compromise far too early. Just as in the same way that like, if we agree that the heart or the brain is the most important part of the body, we would not so readily surrender our arms and our legs to be chopped off just because the heart may be arguably more important, right?

• 1:02:24Speaker 03

  Like, let's keep the whole being here. Let's not invite in this kind of restriction. And if they force the restriction, then they'll force it and history will be the judge of that. But let's not be the ones who invite that in upon ourselves.

• 1:02:38Speaker 02

  I totally hear you. I want to make an empirical claim, which it might be wrong. And if this claim is wrong, then I change my position on some of this. But my empirical claim is the following. Maybe I'll sort of like lay out my logic here. Step one, most important thing, validators, et cetera. Step two, I predict that in expected value terms, that compromise is better than what we will get. Maybe it will be better, maybe it will be worse, but like it's better than what we're expected to get because it preserves the most important thing and I'm not 100% sure that that will be preserved. I really hope it will be. Step three, I think we have to fight to make sure it gets preserved. I think that's the most important fight. And then step four, and I think this is an important and non-trivial stuff that I might be wrong about,

• 1:03:19Speaker 02

  but which is very relevant for my thinking on this, is my sense is that it is much more effective at getting what you want the most if you come to the table with a stance which is immediately recognized as willing to compromise and reasonable. And I'm not yet making a statement about what matters or what the right thing to do is, but that like, my belief is that like, if you come to the table in DC and ask for exactly everything that you want as your first ask in a very forceful way, you will not get what you want. And that you will not be taken as seriously.

• 1:04:01Speaker 02

  And that the way to maximize the odds of getting what you want the most is to express a willingness to compromise on the things that are less important. That is my belief.

• 1:04:13Speaker 03

  In principle, that's, that's absolutely right. You're not wrong on that principle, but you're sacrificing far too much from our, from our position here. Let's be pragmatic for a second. Forget all principles and everything. If DeFi front-ends catering to Americans need to be licensed, DeFi in America dies.

• 1:04:36Speaker 03

  It dies. People will not use DeFi through licensed frontends because it will simply look like C-Fi. There will be no meaningful distinction. That can't be sacrificed.

• 1:04:47Speaker 02

  Well, I think I disagree with that, but I more strongly disagree with at least one of the things you said. Even if I don't know which one, like, in other words, I don't know that you can simultaneously think what you just said and also think that by far the most important thing is that validators, et cetera, remain permissionless. Like, because what you're saying right now is you lose the whole thing. If you give up permissionless frontends, but then you also said that you get most of the value if you have, like, permissionless backends. And so I think I'm now confused about which of those you think.

• 1:05:24Speaker 03

  If you gate the way that people use DeFi, 99% of people use DeFi, which is through a GUI. If you gate that as a licensed financial institution, you have turned DeFi into TradFi.

• 1:05:37Speaker 02

  And so just to clarify then, like, the sense I'm getting now is basically that you think that, like,

• 1:05:45Speaker 02

  the front end is just about as important as the backend. That like, you know, if,

• 1:05:49Speaker 03

  Yes.

• 1:05:49Speaker 02

  if you got like 70, 30 odd on like which was permissioned and which was permissionless, you'd be kind of like, I'll just take whichever gives me the 70%. Like, I kind of think about equally important. Like, is that kind of how you're thinking about this?

• 1:06:01Speaker 03

  I'm thinking of this from the perspective of actually wanting the entire world to be able to use an open immutable financial system. And 99% of those people use GUIs. So if you gate the access to permissionless blockchains with GUIs that need financial regulation on them, we've failed. We end up with TradFi.

• 1:06:22Speaker 02

  I feel confused about whether you agree with my statement.

• 1:06:25Speaker 03

  Okay, what am I missing?

• 1:06:27Speaker 02

  Sorry. I know what you think the best case is here. I know what you think the worst case is here. I, so what I'm trying to say is like, is an intermediate case closer to the worst case or the best case? Like, if you have a case-

• 1:06:39Speaker 03

  This is the intermediate case. My best case is that governments leave free sovereign individuals alone to interact economically as they will, like the country was supposed to be founded on. But that is a radical notion that no one in Washington accepts anymore.

• 1:06:52Speaker 02

  Sure. So, sorry. So if you take, sorry, of the following three cases, granted that there are many cases beyond these three, but of the following cases, case one, all of DeFi and things related to DeFi are unregulated. Case two, backend unregulated, centralized frontend regulated. Case three, backend regulated, centralized frontend regulated. Do you think case two is closer to case one or case three?

• 1:07:19Speaker 03

  I think it's closer to case three.

• 1:07:21Speaker 02

  Got it. So you think that basically like, if anything here requires oversight, that you've lost most of the value?

• 1:07:29Speaker 03

  I think we need to move the conversation up a level and acknowledge that the oversight in DeFi already exists, and it's done by immutable code that operates perfectly as written. It has oversight.

• 1:07:41Speaker 02

  Sorry, I agree. Oversight from a human-based financial regulator in the government.

• 1:07:47Speaker 03

  Why do we want to invite that?

• 1:07:50Speaker 02

  I'm not making an argument about whether I think it's good or bad. What I'm saying is, and maybe you dispute that we have to choose because maybe you think that like, it is fairly likely that we end up in a world in which there is no human regulatory oversight of anything related to DeFi. And if you think that that's an interesting belief, which is not my belief, but which like would be very interesting to me if you thought it was true.

• 1:08:12Speaker 03

  There's already human oversight over these things. Fraud is already illegal. Theft is already illegal. Right? It doesn't matter if I do it through a DeFi smart contract. If I steal from someone, that's regulated.

• 1:08:23Speaker 02

  Sorry, I hear you. Okay, I feel like we're being a bit pedantic here, but I will go with the flow and I will like, add a lot of words to this sentence, but I think you know what I'm trying to ask. And I'd appreciate it if you asked a question you know I'm trying to ask. So is your belief that if any part of the flow by which many people currently access DeFi, in which you go to a American human hosted website, Eamid Americans hosted on AWS, paid for with a credit card, that then backends onto AVE in a non-custodial way?

• 1:08:57Speaker 02

  That if any part of that requires an explicit license from a government financial regulator, that that already means we're close to the worst case in absolute value. And that like, it's not worth that much to talk about which parts of it do and don't require a license because if any of them do, it's already like you've already lost basically the whole world. Is that roughly what you think?

• 1:09:26Speaker 03

  Yes, I think if that is the outcome, then none of us should be proud of anything that we've been doing to build this whole industry. The entire point of this is open permissionless finance. And when we say that, it is not just a slogan, it is the entire point. And if you exclude 99% of people from open permissionless finance, then all you've done is make a more complicated, more expensive TradFi system, right? So that's not acceptable to me and I think to most of the people that care about why we're doing this in the first place.

• 1:09:56Speaker 02

  I think I disagree with your last statement about exactly how it's acceptable to and not, although I also think I maybe it would be if it was phrased the way you phrased it. But okay, I think I think I now understand your view here and your view here, tell me if this is right or wrong, but my understanding now of your view here, roughly speaking, is that, and I think I understand why my previous question didn't get at this and I'm sorry for that. I now think your view is roughly speaking that if anything in this process requires a financial license, then that means that the people, so to speak, won't be able to access it. And that means we've already lost.

• 1:10:37Speaker 03

  And that Yes, just like just as if we were having this discussion 25 years ago when the web was being created and we were taking these same positions and you were asking me. If any part of the web stack that lets someone log onto a web browser and access something as powerful as the entire tome of human knowledge like Wikipedia, if any part of that required a license, would we have lost the battle? Yes, yes, the web would not be the beautiful thing that it is today. The reason that it is so special, the reason that it is so innovative, the reason it's so dynamic, is because people do not need permission to access the web, to read to it, to write to it. And it's amazing that that has lasted.

• 1:11:20Speaker 03

  And anyone who researches the history of the web knows that these very same battles and discussions and debates happened back in the 90s. It would be the height of irony if crypto entrepreneurs then gave up that very same argument 25 years later and allowed finance itself, which is no more dangerous than information, to become a permissioned system.

• 1:11:42Speaker 02

  Okay, I hear you. I hear your point here. And I have a lot of empathy for it. I think it's like, I think that there is a totally plausible argument to be made here, which you're making, that yeah, that like any amount of, if anywhere in this process were requiring a license, then in practice, the worry is basically in practice, no one's gonna be able to access it.

• 1:12:06Speaker 03

  In practice, it's no longer an open financial system. You've lost that. So if you're okay with losing that, if you're okay with having a closed permissioned financial system, then we see things very differently.

• 1:12:18Speaker 02

  So I guess I don't see things in binary. Like, I guess what I would, felt like a very binary statement.

• 1:12:26Speaker 03

  It's a statement of a line. It's a statement that if we cross this line, we've lost permissionlessness, which is the entire point.

• 1:12:35Speaker 02

  But I don't think permissionlessness is binary. Like, I think that there are shades of gray here and that you're sort of sweeping that a little bit under the rug. And that like, the real answer is that like, I think there are costs to losing this line. But I also think that like, that doesn't mean that you've lost everything. Like, I think that like, in particular, sorry, maybe even more explicit here. I think that if you end up in a position where it's licensed to deploy a smart contract or to interact with a smart contract with code. That puts a gear in the works that is very difficult to overcome. Like, I think then you just get like on-chain stuff just doesn't work. Like, it's just like you can

• 1:13:20Speaker 02

  Yeah, so we agree on that statement. So on that side, I think I feel maybe somewhat similarly to your sort of sense of like, it's very difficult to find ways to mess with that, that don't break the whole thing. I think I don't feel nearly as strongly about the thing I said. So if what you're saying is that an American hosted GUI, even an American retail hosted in a centralized way on a centralized cloud server requires some sort of financial licensure. I don't think that that basically breaks DeFi. And I think there are a lot of reasons that I don't think it does. You know, thinking through like, what impact does that actually have like? Well, you know,

• 1:13:59Speaker 03

  I mean, I

• 1:14:00Speaker 02

  like

• 1:14:01Speaker 03

  can make this very practical. If a company needs to be licensed and do KYC to operate its American front end for AVE. That company now has a compliance program. That company has registered in a certain jurisdiction. That company is now taking personally identifiable information from millions of users and storing it. There is nothing decentralized about that model. That is a centralized model that is endangering people with custodianship. That is TradFi. That is not DeFi.

• 1:14:29Speaker 02

  So I think, sorry, that model, meaning that company. But some other parts of this stack are still definitely decentralized. Not everyone's going to be accessing it through that protocol. So if nothing else, I think like other smart contracts aren't going to be accessing it through that portal, for instance, like that's a big deal. I think that like you can still have things just building on each other in every direction, which is super cool. I think other countries can have different regimes, which is super important. I think that like, Americans can still freely contribute IP and products. And on top of all of that, I don't even agree that that company is definitely taking PII. Like, I think that many of them will be. But like, I think I could describe a system to you that I think would probably get there on a regular for contacts without that company taking any PII, which I think is a little of a side point, except to say

• 1:15:14Speaker 02

  that like, I think there's a lot more nuance to this than what you're saying, right? Like, let's say that you had on-chain, you know, you had some people KYC'd for other purposes with some company. That company wrote out on-chain.

• 1:15:28Speaker 02

  This person's address is KYC, not saying anything else about them, other than that I have KYC them and given them a checkmark. And then this front end only let addresses in that list interact with it. Then this GUI is not taking any PII while doing so, right? And again, that's like a little bit of an in the weeds point, but like, I think that's just like true of a lot of the things relevant to this GUI thing. And so I guess I just like, think this in practice has a lot fewer of the downsides than usual. Although I think it still has downsides, like I'm still concerned about it, like I'm not.

• 1:15:59Ryan Sean Adams?

  So Sam, is it just to take a higher level point because you do think it still has downsides and you would prefer a system that didn't make this compromise? One question I think I'd have for you and maybe like Eric or the crypto community is also asking the same thing is like, so why are we being forced into this choice now? Like, so to use Eric's example from the 1990s, why not come back when our regulators understand DeFi a little bit better? When our market share and education around the US populace or different jurisdictions around the world is a little bit stronger? People have seen the practical use cases. Why can't we sort of strive for the best and have regulation that goes into effect remain silent on? Why isn't it enough to just do the C-Fi regulation?

• 1:16:42Ryan Sean Adams?

  Why are we forced into this position of terrible compromise if what we want is the outcome where we don't have to make this user interface compromise?

• 1:16:51Speaker 02

  So I don't think I'm arguing for us to try to make that happen. Like, I think that's misrepresenting pretty grossly what my position is. And I feel like I've never said that. And I feel like that, I don't know, like what I've said is that empirically, it might turn out to be the case that this is true. And I have implied that that might be a compromise that we live with, but I'm not saying that we should make that happen. And I think that like, I'm not saying that that's the same thing DCCPA does. I'm not saying that we go and make it our priority to make that happen. Like those I think would be probably not the right tactics.

• 1:17:31Speaker 02

  I think what I am saying is that, you know, when asked by a regulator, would I think that that was appropriate? I think what I would say is that the most important thing was to keep smart contracts, validators, payments decentralized. And that like, if that did mean that like, you know, Essentially a front end by American, targeting American retail had to be licensed. I think that could be reasonable. I think that that's like a little bit of a different statement.

• 1:17:59Speaker 03

  And if we, sorry, I don't mean to cut you off here, but if the question was, let's acknowledge that the email protocol will be permissionless as a protocol. But every email front end requires licensure and KYC so that we can make sure no one's sending communications with terrorists. Where would your position on that question be?

• 1:18:21Speaker 02

  So, okay, so first of all, I think that's not quite the right comparable. I think that sounds more like payments to me than like.

• 1:18:31Speaker 03

  We're just talking about emails here, right? Like the sending of messages across the web. If the protocol was going to be immutable and no one would have to put any sort of censorship in the protocol of email.

• 1:18:44Speaker 02

  Yep.

• 1:18:44Speaker 03

  But it was the law of the land in America that every email front end provider required KYC from its users.

• 1:18:50Speaker 02

  Yeah.

• 1:18:51Speaker 03

  Because under the justification that we do not want people sending information back and forth with terrorists.

• 1:18:56Speaker 02

  Yep.

• 1:18:57Speaker 03

  Where would you stand on that position?

• 1:18:59Speaker 02

  Oh, I'd be strongly against that position. I think it'd be, I think it'd be.

• 1:19:02Speaker 03

  Why?

• 1:19:03Speaker 02

  Why would I be against it? Because I think that I think it'd be like against freedom of speech. I think it'd be disenfranchising a lot of people. I think I would not trust in practice that I would do a good job of sorting people. I think that's like the, just the gains from it are relatively small and the risks of it are massive. And I think it would also just introduce a ton of friction everywhere. So I agree with you on all of that. I think that like, and sorry, this is.

• 1:19:25Speaker 03

  Why is mine different?

• 1:19:26Speaker 02

  So I don't know how compelling you're gonna find this. One thing I will say is that like, I'm making a distinction here between, for instance, payments versus derivatives contracts. And that like, it's email feels to me more like payments. Well, it's weird because I'm not sure exactly what the equivalent of derivative contracts is in the email paradigm. Or there's the like, you know, messaging paradigm or something. But like, I think that like, that is one of the reasons that I do think that I'd be very worried about a world in which we ended up with like, you know, every payment ever being permissioned. I think that would be.

• 1:20:10Speaker 02

  Crazy and untenable. And that feels to me like the closest comparable to the email thing.

• 1:20:15Speaker 03

  Why is AVE somehow different than email?

• 1:20:18Speaker 02

  So, why is it different than email?

• 1:20:21Speaker 03

  You argued so well and so passionately to not block email with licensing in KYC. I loved hearing that.

• 1:20:28Speaker 02

  Yep.

• 1:20:29Speaker 03

  That filled my soul with joy. Such good arguments. Why does that not apply to financial transactions?

• 1:20:35Speaker 02

  So, why does it not apply to financial transactions? I think there are a few things here. So, first of all, okay, to some extent it does, right? Obviously, some of the answers here is that I think there are a lot of ways in which it does apply and which I have similar feelings like. So I'm not going to say that there is no similarities there. All I'm going to try and argue is that I think that I at the very least feel significantly more strongly about payments than I do about AVE for instance.

• 1:21:08Speaker 03

  Why?

• 1:21:09Speaker 02

  So here's why, just looking at the trade off of benefits, right? Just looking at like, what is that trade off in practice? When you look at, you know, payments, or at least let's say when you look at like email, that's something where it's used constantly by everyone in lots of precious ways day to day. And it's sort of like a really central part of how we communicate.

• 1:21:36Speaker 03

  Today it is.

• 1:21:37Speaker 02

  Today it is.

• 1:21:38Speaker 03

  In 1994 it was not. And I wonder what it would look like if all of that was licensed.

• 1:21:43Speaker 02

  It's an interesting question. And so, okay, I think that from a payments perspective, that feels similar to me in some ways. That like, that's a really fundamental ever ensuing day to day. And like, dumbing up the gears on that is real bad and like really disenfranchises people.

• 1:21:59Speaker 03

  So why, why do you see that for payments? But if I'm trying to pay AVE, the logic changes. Why?

• 1:22:05Speaker 02

  So, first of all, I think that like, our lending protocols, um, I think they're awesome. I think they have a lot of utility. And I really, sorry, I really want to make this clear, like. On an absolute scale, I'm a huge fan of them and I think they're super cool. I don't think that there is as important to the world as the ability to pay for things. Like I think that just like on a relative scale, like, you know, if I had to choose like which one of those is like more central to like important things going on in the world is clearly payments. I think it's by like an enormous factor. Like I think it's not like a factor of like 1.2 or something. I think it's more like one of them grinds commerce to a halt.

• 1:22:46Speaker 02

  The other one is sad, is how I feel about it, roughly speaking. And so like, you know, I just like quantitatively think that that like, yeah, that one of them is is more important. Second thing is that when you look at like, so in terms of like the costs, you know, of gumming up the gears on them, I think just like massively high in one case and the other. Second of all, is that like, especially when you look at more complex products, like there's a range of things, Sarah, and I understand that like one could be worried about lots of things being swept up into this, but especially when you look at more complex products. I think that first of all, to the extent that they're going to be

• 1:23:27Speaker 02

  used by many fewer people, the costs of, for instance, KYC in aggregate goes down, you know, and that like those people are using it much more each means that that again, the cost of a one-time friction cost goes down. Now, to be clear, I feel very differently about a one-time friction cost and an every-time friction cost. If what you were saying was that like, in order to use AVE, every single time anyone used it, they had to go initiate a new annoying permissioned process, that would be very bad. Like that would kill it and I'd be very sad about that. Now, most of these things, ideally, optimally, and query whether you think this would actually be true in practice,

• 1:24:12Speaker 02

  but ideally would be one-off per user things, a type of thing where like, you know, the first time that you registered for AVE, you know, you would spend 10 minutes going through this process and then never again. And I think that that while sad is just like a much lower cost than if you had to do this every time that that that.

• 1:24:35Speaker 03

  How about when the Iranian woman tries to do that the first time and it's not 10 minutes, it's never?

• 1:24:39Speaker 02

  Yep. Oh, I totally hear you on that.

• 1:24:41Speaker 03

  Why are you okay with that?

• 1:24:43Speaker 02

  What you buy okay? Humanitarian perspective like. What you mean okay with that? There are lots of bad things that happen in the world every day. And I don't grind to a halt because of that. I try to do the best I can. I try and move things on the margin and constructive direction without sort of like giving up because some bad thing happens. And like, I'm not saying I'm happy about that. I'm not happy about that, but also like it's not infinitely bad. I mean, it's somewhat quantifiable, right? You know, it is about one percent. That's about how bad it is and that sucks. And like, but also, you know, I don't want to throw the baby out with the bathwater here. And, you know, I, I think that like, you know, obviously also there's still be, you know, Iranian commerce in Iran with Iranians.

• 1:25:28Speaker 02

  But I, you know, I understand that that is not the same thing as real global financial access is very different thing. But just to say that, like, I think that the like, you know, the scope here does matter to me because we are in a world where like, we are always making trade offs and like, we are always trying to decide, given all the factors before us, realistically speaking, what we can do and what we should do. And so like, you know, I think that these things while bad are not, not infinitely so. So that's another piece of this. You know, when you look at like the reasons to permission them, I think at the very least, having like

• 1:26:08Speaker 02

  a knowledge based test on complex financial products is not an insane thing to do, especially when you look at, you know, websites that are marketing and targeting these at retail users. I think that that is a kind of thing that could help reduce fraud, reduce scams while still making it the case that anyone who did actually understand these products could use them.

• 1:26:36Speaker 02

  And by the way, I will make it clear, I will fight against monetary threshold tests to access financial product. I think those are bad. I think they're discriminatory discriminatory. I think they're classist. I think they're racist. I think they're just like real bad. I think that like being in a world where you say that only the rich can access financial products is fucked up. And so like, I'm not saying that like I will support every type of regulation one could imagine for them either. So I think that some types are just bad. And I think that we as a society have messed up on that in a lot of cases and had undue on stakes and. But I think that if you're saying that like, you know, you have to demonstrate that you understand the products that you're using, that at least feels a lot more reasonable to me.

• 1:27:20Speaker 02

  Especially again.

• 1:27:22Speaker 03

  You don't see that as paternalistic.

• 1:27:23Speaker 02

  Oh, I do see it as a little bit paternalistic and I'm not saying that I feel unreservedly good about it. But on the other hand, if you say like, should people be able to market really scammy things pretty aggressively with no barriers to anyone using it? Like, that's a stronger statement.

• 1:27:39Speaker 03

  And scams scams are illegal. We don't need new regulations to make scams illegal.

• 1:27:43Speaker 02

  So scams are illegal, but if you only do that in a retrospective sense, if you never look proactively at them. Then for what it's worth, and it isn't the worst possible thing, but it does mean that like. You know, you only catch scams, you know, like after they've already scammed people and like, there's at least an argument. To having a proactive check on is this a scam before allowing it to go forward? Now, there are costs to doing that as well. So I don't want to say that like, it is clearly pure good to have that check, but there are some advantages to doing so. So I think that's like, you know, a factor here as well. And I think it's not crazy to want to have that check in place. And I think that like.

• 1:28:28Speaker 02

  You know, when you have a site that might be like really deceptive in how it describes what the decentralized on-chain protocol that it was marketing to its users does, right? Very heavily implying that it does something very different than what it actually does. You know, maybe you say, okay, well, that's a scam. They should go after it. Maybe they're popping up all over the place. Maybe it's complicated to figure out. I think it's complicated and that like, I feel like at least more on a relative scale. I feel like the costs are lower and the advantages are higher. I think the costs are way lower and the advantages are moderately higher to putting permissions on centralized frontends

• 1:29:11Speaker 02

  for derivatives trading protocols than they are for payments or centralized frontends for pure, pure, pure payments.

• 1:29:20Speaker 03

  So to bring this back a little bit, we're debating right now, like, how should DeFi be regulated? Right? And this is a big, open conversation and you and I have two views among many.

• 1:29:32Speaker 02

  Yep.

• 1:29:34Speaker 03

  In terms of the DCCPA, as you've acknowledged, it's very hard to get DeFi regulation right. You're not even sure where you stand on it.

• 1:29:43Speaker 02

  Yep.

• 1:29:43Speaker 03

  And you're one of the smartest people in the industry. Can we acknowledge at least that the political class, the regulators themselves are nowhere near ready to be regulating DeFi? And whatever the appropriate regulations are for DeFi, this bill is not where they should be contemplated. We are not ready and thus the DCCPA should not include any conception of DeFi. Because if it does, it's going off the track. Do you agree with that?

• 1:30:11Speaker 02

  Um, sorry, sort of. There's no part I strongly disagree with. There are a lot of parts that I would put differently. And feel conflicted about. So first of all, I'll say briefly, I think the smartest, most knowledgeable people tend to be the least certain in general. I think the fact that I'm uncertain doesn't mean, I don't think anyone should be certain. I think it's fucked that some people are. But I think it will always be uncertain and that doesn't mean that like, you know, we have to give up on ever acting. So I will always be uncertain.

• 1:30:41Speaker 03

  I'm not advocating to give up on ever acting.

• 1:30:44Speaker 02

  No, I, I, no, I, I hear you. I hear you. I hear you.

• 1:30:46Speaker 03

  Do you want to exclude DeFi from DCCPA?

• 1:30:49Speaker 02

  First of all, most, right. In general, I would argue that it would be ideal to basically exclude D, DeFi from DCCPA. I think that would be the ideal approach to say, look, we're going to figure out DeFi later. This is not a DeFi bill. This is a C5 bill. That is what I think roughly speaking would make sense here. And I think that would be appropriate for all the reasons you said. I want to give one caveat to this, which is, I'm interested in taking on this. One thing that has been in some drafts, at least I think DCCPA, I'm interested in your thought on is what if there was do some studies to have some discussions about eventually developing a framework for how an already regulated centralized custodial broker dealer

• 1:31:33Speaker 02

  could access liquidity from a on-chain smart contract. That feels good to me because the status quo is that it's effectively illegal to do so. So that's an example of a DeFi provision that I think is good.

• 1:31:51Speaker 03

  That's reasonable under the condition that the scope is narrowed to precisely that kind of party.

• 1:31:56Speaker 02

  Right.

• 1:31:56Speaker 03

  If the scope is how does a business, for example, interact with DeFi? That means that any person's LLC now has to fall under the licensure, right? That's a very different question.

• 1:32:06Speaker 02

  I totally hear you. So anyway,

• 1:32:09Speaker 02

  some of what the DCCPA says about DeFi, in fact, most of what it is, is about the thing I said. I think that thing's at least reasonable and probably good, but I acknowledge your concerns here. Um, outside of that, I basically think that like hunting on DeFi is the right thing to do because I think it's complicated. And I think that like, you know, it's not going to be easy to get right. I will give a few reasons that I would make a weaker statement than the one you made in addition to the thing I've already said. First of all, I think Um, it's, well, I believe that the people working on DCCPA are unusually thoughtful and knowledgeable. And I share your prior about what happens when, you know, a bunch of bureaucrats get together and try and like,

• 1:32:53Speaker 02

  write down how people should use a product they don't know, like that generally produces nonsense. I will say that like, in this particular case, like maybe it's just dumb luck. I think in part it is. But I do think it happens to be the case that like, there are just like unusually good thoughtful public servants who are working on this who are unusually knowledgeable about crypto and about DeFi. And in part because I believe they viewed it as their duty before even writing a bill, before even figuring out how like, whether any version of a bill would be scoping DeFi in or out, that they had to understand the subject matter. And I don't think that's always the case. I think often people act

• 1:33:37Speaker 02

  without understanding it. I've seen that happen countless times.

• 1:33:41Speaker 03

  Yeah, I will grant, let's assume for the sake of the discussion that everyone working on it is very knowledgeable.

• 1:33:45Speaker 02

  Yeah.

• 1:33:46Speaker 03

  But not arguing that one.

• 1:33:48Speaker 02

  And maybe they're not, but like, that's what, at least my belief is premised on that. So, okay. It shifts me a little bit in the direction of being, and again, I don't see these as binary things. I see it as all as a spectrum. And it shifts a little bit, what I'm comfortable with. I'm not all the way, but a little bit. So that's one thing that I would say in this particular case. Another thing that I would say is, you know, what are the provisions? Well, we don't know it's going to be in the bill. But what are in various drafts that have been circulated? What are provisions that exist here? First of all, I think that like, one thing that I've seen is like, commissioning a study to determine what might be a productive direction to go in with respect to.

• 1:34:32Speaker 02

  Well, really, it's with respects to regulated entities accessing DeFi. So not only is it in the end, I think, targeting a healthy thing, which is how do regulated entities access permissionless smart contracts, but it is in fact taking the approach of let's not try to write the answer down right now. Let's like acknowledge that we should think about this and talk about this. Now, I acknowledge that like you may have concerns about how this study will go, and I hear those, but I do think that that shifts me a little bit more. I think like in general.

• 1:35:05Speaker 03

  I don't mind the study.

• 1:35:06Speaker 02

  Yep. So the study is, you know, that's a fine and appropriate thing. And I think it's a study again about a pretty healthy direction here. Now, I think that one could totally reasonably have concerns that this will bleed over, that like this would bleed over into not just like, how does a currently regulated broker dealer interface with DeFi and into like, you know, why should we ever allow commerce to happen? And that sounds facetious, but that is a worry of like, I am seriously worried about like extreme anti-commerce and anti-freedom things happening.

• 1:35:37Speaker 03

  So can you comment on that really quickly?

• 1:35:39Speaker 02

  Yep.

• 1:35:40Speaker 03

  If that kind of nightmare gets proposed, let them propose it and then let us talk about it and show the world what they're proposing. And even if we lose, let history judge it.

• 1:35:49Speaker 02

  Oh, I agree. We should not be proposing something that we really don't like. And I claim, I think, well, sorry, again, we don't know what DCCPA says. As of the last draft at least, I claim that at least my reading of the intention of it was that it was not trying to regulate DeFi. It was trying to have studies about how C-Fi should be able to interact with DeFi.

• 1:36:20Speaker 03

  So I've, I've heard some very worrying things that in more recent language, the target is shifting from just regulated institutions to DeFi and DeFi users. If that's not true in the language that we see, then great. But I do not feel like it's going in a comfortable direction.

• 1:36:39Speaker 02

  Sorry. When you say that, just to clarify, are you saying that that is true as of after the most recently leaked version?

• 1:36:47Speaker 03

  I don't know what's the most recently leaked version, but the people that I know that are dealing with this are not happy with the recent movement of it.

• 1:36:55Speaker 02

  I'm gonna be a bit of a dick there and say, can you read the most recently read version and then we continue this part. Like, I don't actually want to say that, but I actually am a little shocked that you haven't. Like, that's what started this whole thing. Like, this whole dispute on Twitter started with a leak of a version of DCCPA. Like, the whole text was there, posted. Like, I'm a little surprised that you would have written this blog post and, like, done all this without having read it. Am I wrong?

• 1:37:23Speaker 03

  My concern isn't with how drafts are written. My concern is with how the bill is written. And I wanted to comment on your thoughts about it because you're influencing how that bill is written.

• 1:37:32Speaker 02

  Right. So I totally hear you. I'm sorry, I'm not even saying with with respect like this podcast, but like, I haven't heard the things that you're alerting. Sorry, I have not heard from a source I trust that the things you're alluding to are happening. I've heard vague rumors of some people being worried that maybe they would happen.

• 1:37:50Speaker 03

  We'll see how it turns out. All I want to establish here, all I want to establish here, and I think you agree with this, is that the target of whatever rules are proposed are intermediaries, that those are the affected targets. Whether or not that means how those targets interact with DeFi or not, that's understandable. But if the target moves from intermediaries to normal, unregulated, non-financial businesses, operators of websites, people who are interacting with DeFi, that that is a line that should not be crossed at this juncture. Do you agree with that, Stephen?

• 1:38:24Speaker 02

  I certainly agree with most of it. I certainly agree with users. I certainly agree with developers. I certainly agree with validators. I agree with operators of websites. I do agree with that.

• 1:38:38Speaker 02

  I'm gonna be honest, like, I'm sorry, I might be off on this read, but like, I'm not feeling super optimistic about like, like my read here, which again, might be wrong, but my read here is that like, at the end of the day, that might be the trade off that we have to make. And I think that would be, I think, and it could be wrong, that some versions of that, if very carefully scoped, would be the right one. And so I think I would have to see the details of it to know on some things there, exactly what I would think and how bad I think it would be and how much it would change my view of the net thing here. I don't feel confident that I'm thinking about that part, right? Like, that's just like, that is my current, like, on net, I guess, sort of thinking about how

• 1:39:21Speaker 02

  to sort of mesh these things together. Um, I, I think that like, some versions of that would be more free than the status quo. Like, I think some versions of that would be frankly deregulating relative to how things are, realistically speaking, today. Because I think realistically speaking today, there is effectively some amount of regulation on some of these front ends. Like, I think that is how some regulators are treating it today. And so I think that's like worth acknowledging. And I think that changes my mind a little bit about like, exactly where I think the lines to draw are here. But anyway, you know, all of that being said, like, I would certainly be really cautious and nervous about language around that and like, would be very nervous about it unless

• 1:40:02Speaker 02

  it was like, really carefully done. But I don't think for what it's worth, that I would be comfortable giving a sort of blanket statement of like, anything that touches any front end in any way, unless it's an already licensed institution, is a deal breaker. Like, I don't think I would go that far.

• 1:40:25Ryan Sean Adams?

  Understood. Guys, um, this has been exactly the conversation I think the crypto community wanted. And I just want to thank both of you for participating so openly. This has been hugely productive. I think I just have like two quick questions and keep these as brief as you'd like to be. But I want to go back to the challenge SBF you made at the beginning of this conversation to steel man the other's case. Can you just give a steel man for Eric's case here? And then Eric, I'm going to ask you to do the same for Sam's.

• 1:40:53Speaker 02

  Yeah, totally. I think I'll sort of give two different types of steelmans of it. Caveat again, just to be absolutely explicit to anyone listening to this, this does not represent my all things considered view, although I do agree with some parts of it. This is me attempting to steelman argue for a different person's case here. Put that caveat somewhere on this. Do not.

• 1:41:11Ryan Sean Adams?

  We won't, we won't create a gotcha clip here, Sam. Don't worry.

• 1:41:14Speaker 02

  Oh, this is not for you. This is for a sort of mal.

• 1:41:18Ryan Sean Adams?

  Our friend who doesn't like glasses? Okay. You might be in the chat right now, by the way.

• 1:41:22Speaker 02

  Oh, it's possible. Anything could happen. But, you know, first of all, what I would say is, um, that in general, like, deciding what someone is and isn't allowed um to do with their own money, you should have a presumptive concern of paternalism, and you should have a presumptive concern that I, you know, are you I going to end up doing something that is A, hurting the people you are claiming to protect, B, not what those people would ask you to do. In fact, they would tell you to stop trying to protect them. C, heavily discriminatory

• 1:42:05Speaker 02

  in exactly the ways that you would be concerned it would be discriminatory against the underbanked, against minorities, against rural populations, against the poor, against people in really difficult situations. Would it persist uh class disparities? That's one concern that I would have. And again, this is different if there's a regulation claiming that something is going to harm an unconsenting third party. But if this is just someone acting on their own behalf, then I think there should be a presumptive deep concern about whether it is really helping the person you are claiming to be helping if it is paternalistic. And then, second of all, what I would say, there's something magic that happens when you have

• 1:42:49Speaker 02

  permissionlessness. There's something magic that happens when you have pure on-chain actions. And in particular, what you see, which I do think is just incredibly powerful, is

• 1:43:05Speaker 02

  You can end up in this situation where you can just build, where you can build on what's been built, where you get exponential growth in innovation. And as soon as one step here is permissioned, instead of the whole system being able to innovate at the level of computer code and human innovation and action and cooperation, it goes at exactly how slow and bureaucratic, the single most slow and bureaucratic permissioning agent is. And the more permissioning agents you have, the worse that gets. But even one, even one of them, right? With a weak turnaround time, might take you from 10 seconds to a week in innovation time scale.

• 1:43:50Speaker 02

  And when you, that is a serious, serious risk for throwing permissioning into an otherwise permissionless system. Similarly, when you do something like what we see with charge facts on current transfers, ACH, you know, and credit card transfers, where there is a system whereby it might, rarely is, but might be the case. In some cases, that if a payment happens, it might be reversed two months later. And that you can't compute whether or not that will be the case. That is a sort of bespoke human action deciding what would happen there. When you have a system like that, you end up in a world where if you get paid something,

• 1:44:33Speaker 02

  there's nothing you can do to become absolutely confident that you actually got paid. There's nothing you can do to know for sure that that money will ever be yours. It might all be fake. And because of that, um, you end up in a world where any money that you have, you kind of can't spend for two months. Because if you turned out to not get it, maybe everything breaks. And if you have a malicious actor here, Then maybe you have to keep it in custody and have to freeze every transaction for two months so that they can't gain this by maliciously doing a transaction and charging back. And as soon as you even let this in a little bit to a financial system, there's

• 1:45:16Speaker 02

  a serious worry that you end up in a world in which literally every commercial transaction takes two months, even though it's only a tenth of a percent of payments that you're saying might be charged back two months later. That is actually enough to make it commercially the case that you might not be able to sustain a business model where you don't hold up everything for two months on that because of abuse, because of uncertainty. And so there's a real worry that small amounts of friction and non-determinism in a system, especially exploitable non-determinism, can ruin the fundamental behavior of an entire

• 1:45:54Speaker 02

  system. And we see that today. We see today that two years ago, tens of millions of retail traders got frozen or liquidated all at once, trading stocks on retail platforms because they made so much money that those platforms worried that maybe one of the ten intermediaries might two days from now turn out to not settle a transaction that they already claimed to settle. And because of that worry, they all had to shut off all trading or over retail. And that's a terrifying place to end up in. We don't want our lives to end up like that.

• 1:46:32Speaker 02

  I think both of those factors create a really strong presumption of worry that paternalistic regulation can cause massive unfair harm to people for unfair upside. All of that, sorry, all of that I actually believe. That wasn't steel man. I believe all of that. The steel man side, which I don't think I believe is, that set of things is so strong that I think it just outweighs all benefits of regulatory oversight.

• 1:47:05Ryan Sean Adams?

  Eric, a few layers to the steel man that Sam gave you. Can you steel man Sam's argument?

• 1:47:11Speaker 03

  Yeah.

• 1:47:14Speaker 03

  Sam is in the trenches with regulators on a new bill. And he has some principles on how these protocols should work. He believes that the protocols should be immutable and that nothing should be gated or permissioned at the protocol layer. He's very worried that if that isn't defended at all costs, that'll be lost. And he is willing to sacrifice things which he believes aren't too important, like a US front end being licensed to allow people to interact with DeFi smart contracts. He doesn't want that to occur, but he would be willing to offer that up as a compromise to make sure that the protocols themselves are not permissioned.

• 1:47:59Speaker 03

  And I think he sees this as a pragmatic stand of where that compromise should or could get to.

• 1:48:06Ryan Sean Adams?

  Sam, last question for you then. Could you just wrap this up? Closing arguments for your case and your position will throw it to Eric to close out.

• 1:48:12Speaker 02

  Yeah, so I think it all comes down to the details. I think nuance is always in the details here. And I think that today we are potentially in a massively better place than we were a year ago. I think that a year ago, we were in a place where there's nothing but acrimony between crypto and regulators. And many products were empirically not being offered in the United States because of regulatory problems. So I think it was a really big problem and huge acrimony. Over the last year, I think constructive engagement, give and take, push and pull, being willing to have nuanced positions and being willing to entertain compromise and

• 1:48:54Speaker 02

  being really open about acknowledging the benefits of other people's positions over the last year has led us to a world where, as of today, things are mostly the same in terms of what is actually doable in crypto. But where a large swath of DC is much more open to moving in a positive rather than negative direction on the regulatory front. And I think we're very close to seeing changes that I hope will be very positive. And I don't know for sure that they will be. And I don't know for sure that they will happen. But I believe that we are better off today than we were a year ago. I believe that is by a significant amount. And I believe empirically that that has come through nuanced engagement. And I think that like, you know, that doesn't mean always compromise on

• 1:49:37Speaker 02

  everything. That doesn't mean always take the most extreme standing. It depends case by case on the details, on the benefits, on the costs. But that's at its core, that is my belief, that I can use evidence that we're making progress. And I think you can see this reflected in the attitudes and beliefs of regulators and policymakers in DC. I think that they have become substantially more constructive.

• 1:50:03Ryan Sean Adams?

  Close this out, Eric. What's your closing position here? Argument?

• 1:50:07Speaker 03

  Uh, we, those of us in this ecosystem, this industry,

• 1:50:14Speaker 03

  have created essentially a new financial foundation for the whole world.

• 1:50:22Speaker 03

  This is a huge responsibility. And the entire purpose of this financial foundation is that all of humanity can use an open immutable financial layer. We are separating money from politics. We are separating money from the state. And in the same way that the church was separated from the state and everyone now hails that as one of the greatest things that humanity ever did, we now too, it comes to us to do the same for money. Money is as or more important to people than religion is. We interact with it every day in all sorts of manners. And just as mathematics or language are immutable and open to the entire human race, so too should the exchange and management of money.

• 1:51:08Speaker 03

  That is the principle that makes this entire ecosystem important. That is the principle that justifies everything that we do. And if we lose that, it will be something that we regret for the rest of our lives because we had that opportunity. We can't protect that principle when it comes to centralized custodians, granted. But we can protect that principle when it comes to decentralized immutable finance, which we call DeFi. That line exists to the degree that we all defend it. So that's what I'm trying to do. My request to Sam and anyone else working on this bill is to exclude DeFi from its conception. Not because DeFi shouldn't ever be regulated, but because it is too important to screw that up.

• 1:51:52Speaker 03

  And it should not be included in a bill that contemplates how normal custodians should operate. So it's a very pragmatic request, and hopefully we can have more of these discussions.

• 1:52:02Ryan Sean Adams?

  Indeed, I hope we can. Sam, Eric, I want to thank you guys again.

• 1:52:08Ryan Sean Adams?

  This is exactly what we needed in order to have this discussion, bring it to the light. And a much better back and forth than on Twitter. You know, they can't contain these types of conversations. So we appreciate you being willing to come on very much. Thank you.

• 1:52:19Speaker 02

  Thank you. And thank you so much for engaging constructively. I know that I shit on you a little bit here and that's probably too negative and a little bit unwarranted. And, you know, let's ease within without sin past the stone here. But what I really do appreciate you engaging, Kerry, appreciate you doing so constructively and that you have done that the whole time. I hear you. I really respect, you know, your arguments and I'm, I'm going to push for, for a number of them.

• 1:52:42Speaker 03

  Okay. Thank you, Sam. I appreciate that I am a, I'm not the man in the, shall we say, FTX arena here. It's always easy to criticize what other people are trying to do. I think you're a good actor and I hope you hear these points and help express them in a productive way. So thank you for the discussion.

• 1:53:00Ryan Sean Adams?

  It's, it's, this sounds way too friendly for a crypto contentious crypto conversation. This is, this is not what I'm used to on crypto Twitter, damn it. Action items for you, Bankless Nation. Hope you enjoyed this extra long episode. We didn't mean to go that long, but I think it was important that we did some action. Why don't you go and read the tweet thread that started it all off? We'll include a link to that tweet thread from Sam in the show notes. It's pretty entertaining, I gotta say. So make sure you go check that out and some of the discourse that has fallen out from it. Also, read Sam's original thoughts that is posted at ftxpolicy.com. We'll include a link and read Eric's response. As always, gotta let you know, none of this has been financial advice. Risk and disclaimers, it always, it never is.

• 1:53:44Ryan Sean Adams?

  Eth is risky, so is crypto, so is DeFi. You could definitely lose what you put in, but we are headed west on the frontier, fighting for a better future. This journey is not for everyone, but we're glad you're with us on Bankless. Thanks a lot.