Building A Better Ponzi with Ameen Soleimani | Layer Zero

Ameen Soleimani is the Founder and CEO of SpankChain, the co-creator of MolochDAO, and the co-founder of Reflexer Labs, which created RAI. David and Ameen chat about Moloch, coordination, DAOs, and what DAOs can do for both Ethereum and the broader world. Additionally, they get into Ameen’s recent fight against the Federal Reserve. This is a mind-expanding discussion that you won’t want to miss. Enjoy! ------ 📣 Swell | Liquid Staking for the People https://bankless.cc/swelldiscord ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 🌱 LENS | WEB3 SOCIAL PROTOCOL https://bankless.cc/Lens 🚀 ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🌉 JUNO | BRIDGE FIAT TO LAYER 2 https://bankless.cc/Juno ⚡️ ZKSYNC | THE LAYER 2 SCALING ENDGAME https://bankless.cc/zkSync ----- Topics Covered 0:00 Intro 5:25 Ameen’s Crypto Perch 7:22 Ethereum’s Culture 9:55 Ameen’s Activity in the Space 14:03 Moloch Meme’s Origin 22:03 Moloch DAO & PTSD(AO) 31:31 Ability to Freely Exit 35:20 Organizational Change 42:55 Slaying Moloch 50:25 Global Settlement Layer 54:20 Sticks vs. Carrots 59:18 RAI, the Fed, Ponzis, & the Dollar 1:10:32 Thomas Jefferson & Slavery 1:15:34 Dollar Printing Gone Wrong 1:18:00 Invading Iraq 1:19:50 Ignoring, Overreacting & the Dollar 1:27:18 How Ethereum Fixes Things 1:34:11 Closing ------ Resources: Ameen Soleimani https://twitter.com/ameensol ----- 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.

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

• 0:03David Hoffman?

  Welcome to Layer Zero. Layer Zero is a podcast of unscripted conversations with the people that make up the Ethereum community. Crypto is built by code, but it's composed by people, and each individual member of the crypto community has their own story to tell. The cypherpunks understood that the code they write impacts the people that use it, and Layer Zero focuses on the people behind the code, because Ethereum is people all the way down, and always has been. Today on Layer Zero, I'm talking to Amin Soleimani, and I've said his name on the Bankless Podcast a number of times before. He's been on the Bankless Podcast a number of times before. He helped meme Moloch into existence in 2018 and 2019. He's the creator of Moloch DAO, one of the first DAOs to come out of Ethereum

• 0:44David Hoffman?

  after the DAO. And he makes this joke about how he made Moloch DAO with many purposes, one of them being to help the Ethereum community get over what he calls PTS DAO, as in PTSD, over the 2016 DAO that caused the Ethereum Classic Hard Fork. So we talk about Moloch, coordination, DAOs, and what DAOs can do for the landscape of both Ethereum when it comes to coordination, but also for the broader world, and really why Ethereum is just coordination tools all the way down. But then we get into some broader subjects, such as his recent fight against the Federal Reserve, and how the Federal Reserve has this

• 1:26David Hoffman?

  relationship with the broader world that is unsavory, and how we as a people need to resist what is going on with the Federal Reserve. And Ameen has always been a very big, patterned thinker, a big philosophical person who can see the biggest patterns that the world has put in front of us, and sees them for what they are. And he's a pretty controversial guy. He's pretty sharp around the edges. He's definitely not afraid of putting his foot down and making people be very uncomfortable. So I actually do not recommend that you listen to this episode with kids in the car, or, you know, young ones who aren't ready for very mature subjects.

• 2:10David Hoffman?

  I even though, I mean, definitely has his controversies. He's a hero of mine through and through for the way that he thinks and what he thinks about. And the lessons that he brings to the table because they're very emblematic of this particular podcast. Why I call it Layer Zero is because he gets down to the bottom of things in a very fast, sometimes crude, but effective way. So I hope you enjoy this episode with Ameen Soleimani. And we'll get to that conversation right after we talk to some of these fantastic sponsors that make this show possible. Arbitrum is an Ethereum Layer Two scaling solution that is going to completely change how we use DeFi and NFTs. Some of the coolest new NFT collections have chosen Arbitrum as their home, while DeFi protocols continue to see increased liquidity and usage. You can now bridge straight into Arbitrum for more than 10 different exchanges,

• 2:55David Hoffman?

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• 3:40David Hoffman?

  And inside the Brave browser, you'll find the Brave Wallet, the secure, multi-chain crypto wallet built right into the browser. Web3 is freedom from big tech and Wall Street. More control and better privacy. But there's a weak point in Web3: your crypto wallet. And most crypto wallets are browser extensions, which can easily be spoofed. But the Brave Wallet is different. No extensions are required, which gives Brave Browser an extra level of security versus other wallets. Brave Wallet is your secure passport for the possibilities of Web3 and supports multiple chains, including Ethereum and Solana. You can even buy crypto directly inside the wallet with Ramp. And of course, you can store, send, and swap your crypto assets, manage your NFTs, and connect to other wallets and DeFi apps. So whether you're new to crypto or you're a seasoned pro, it's time to ditch those Risky extensions and it's time to switch to the brave wallet.

• 4:22David Hoffman?

  Download brave at brave.com slash bankless and click the wallet icon to get started. Juno is bringing crypto friendly banking straight into your checking account. With Juno, you can send money from your Juno checking account straight onto a layer two, like Polygon, Optimism, Arbitrum, and they have ZK Sync and Stark Net support on their way. You can skip the ACH wait times, you can skip all the gas fees and go straight from your checking account to an Ethereum layer two in seconds. Inside Juno, you can buy and sell crypto with zero dollar fees and your Juno checking account comes with a metal mastercard that gives you up to 5% cash back on your spending. Juno is also giving you $10 cash back on your first crypto deposit and $100 when you set up a direct deposit. This ad just writes itself, so go sign up at Juno dot finance slash bankless. What's up, Ameen? How's it going?

• 5:05Speaker 01

  Great, uh, thanks for having me.

• 5:08David Hoffman?

  It's quite the eccentric background you've got there.

• 5:10Speaker 01

  Yeah, had to fit the unicorn into the picture.

• 5:13David Hoffman?

  Is that, is that a chair that you're on?

• 5:15Speaker 01

  Uh, yes, this is a, this is a nice little pink throney chair thing.

• 5:21David Hoffman?

  Well, we'll get into all of that and more, but for, for listeners who came in perhaps in 2021 or, or beyond, the most recent cohort of crypto listeners, content consumers, uh, they might not be as familiar with you as I once was when I first got into this space. Uh, can you explain your perch in the Ethereum and broader crypto ecosystem? What would you say that you do here?

• 5:48Speaker 01

  Uh, yeah, so I'm the CEO of Spank Chain, which was the first, uh, one of the first attempts to bring the benefits of crypto to the adult community. Uh, so from that perch, I get to sort of, you know, it's like a libertarian viewpoint, how to make things useful for everyday people.

• 6:11Speaker 01

  You know, not so much like, uh, the grander things too, but, uh, yeah.

• 6:19Speaker 01

  That, that stuff's more about like helping sex workers, uh, you know, use Ethereum tools to keep their money safe, um, and, and so forth, uh, sell NFTs and, um, but we, we do some other things too. Uh, we made the first L2, uh, Spank Live.

• 6:39Speaker 01

  So that was a fun opportunity to learn about, you know, putting L2s in production four years ago. A lot of lessons learned that we've been able to use now, four years later, when it's like finally time for layer twos. I try to focus on the types of things that people aren't, and like where the blind spots were too. So we started Moloch DAO like back in the day. Ethereum was very utopian, and I was concerned that our utopianism wasn't going to like, you know, be very scalable or sustainable forever. So, yeah.

• 7:21David Hoffman?

  Yeah, go into that a little bit more. Ethereum, one of the things that brought me into Ethereum is just how optimistic and perhaps utopian is the right word. Everyone is, it's like it's infectious. Like everyone's really generally happy and accepting. But I think perhaps somewhere to our own like naiveness, naivete. Like when you come into Ethereum and you see like the culture here, what do you see?

• 7:47Speaker 01

  Yeah, I saw a lot of like well wishing sort of people, right? It's like, we prided ourselves for years about being a very welcoming community, about being very friendly. And it led to the Ethereum community getting hacked in sort of predictable ways by people who were like, oh, you know, upfront, like very friendly, but then had sort of their own intentions and goals that were maybe not aligned with the Ethereum community. And so a lot of the kumbaya culture isn't very designed, like well designed around adversarial

• 8:27Speaker 01

  thinking and things like that. And so, you know, the idea of like Moloch was very appealing to me because it described these sort of like game theoretic traps where you have to make some sacrifice of something you value because everybody else does. And like Ethereum doesn't exist in a vacuum. It would be nice if it did, but like it's still subject to the competitive forces that drive everything else. And so if we want our values of, you know,

• 9:03Speaker 01

  Pro-social and positive sum to expand to the rest of the world. We sort of have to compete to protect them and to advance them against other things that might try to outcompete them that don't have those values. And I saw a lot of people taking this idea for granted that Ethereum was just like the best, it was going to dominate forever and it was just going to win because we're the good guys.

• 9:31Speaker 01

  And like in my experience, that's like not how anything works. It's like nice when the good guys win, but it's like typically because they're more powerful than the bad guys. It's not because they like are nicer than the bad guys. Like, I mean, I don't know, you can make the case that like they could coordinate better.

• 9:49Speaker 01

  But like, yeah, that's getting sort of deeper into the subject.

• 9:55David Hoffman?

  Mm hmm.

• 9:57David Hoffman?

  It's having watched and you being a leader for me in this space with just like how you think and your writing. It seems very appropriate that you are the person to be beating this drum of adversarial thinking of this guy who's like doing this ICO, span chain that like really just like throws people off. And we're just like supposedly doing this very professional thing of trying to build a platform for payment channels. But what do we do with that thing? Oh, we we apply it to like making sex workers' lives like easier. And then like you have this like air about you that's very like, I kind of find like Ethereum aligned in that we're here to move the needle of humanity, but we're not going

• 10:42David Hoffman?

  to take ourselves too seriously while we do it. And and so like, well, this started off as like, you know, what am I going to do with this payments technology? I'm going to go like straight into sex work in like 2017. And then like that kind of also, I think also relates to how you interface with like the broader Ethereum community is like, oh, everyone is in this like growing the pie mentality, but I'm going to be like the hardliner that enforces like adversarial thinking and thinking of everyone as an enemy because all of you people aren't doing that. That's kind of how I like quickly and quickly and roughly summarize your activity in the space. Does that resonate with you?

• 11:21Speaker 01

  Yeah, absolutely.

• 11:23Speaker 01

  It was basically a reaction to the prevailing utopianism that drove me to embrace the Moloch meme and feel compelled to share it.

• 11:35Speaker 01

  Because I like, it's not like, to be clear, like, I like the utopianism, right? I like the aspirational nature of Ethereum, I like the optimism. I think it's important to sprinkle it with a dose of realism.

• 11:50Speaker 01

  And like, also, there's other communities where like, the slang Moloch meme wouldn't have worked out because they don't care. So like, you know, maybe in other communities that are less mission oriented and more mercenary, you know, oriented, you know, they don't care about slaying Moloch. They're like, wait, I can trade my values for competitive advantage? Fuck yeah, that sounds great, let's worship Moloch and do that, right? Is there a point to this whole blockchain stuff that beyond getting ourselves rich? I don't know, but like, who cares? You know, but like, that's not what you feel in Ethereum. What you feel is like, we are advancing something that matters, right? And, you know, I just, I also care about that goal.

• 12:36Speaker 01

  And I wanted to help advance it how I could. And that also, you know, meant acknowledging that like, it's not always going to be, you know, sunshine and roses, like, sometimes it's, you know, not going to be great. Like, we actually have to make sacrifices. And if we want to, you know, keep advancing these values, then we have to fight for it. We have to out-compete the rest of the world. And so the paradox of Moloch that I talk about sometimes is that like, you sometimes, we talk about slaying Moloch, but like, the paradox is that in order to get the power to do so, we like, sometimes have to worship at his altar, right?

• 13:20Speaker 01

  Like, if we didn't at all strengthen ourselves or become competitive, then, you know, we just auto-lose, right? So. There's like some middle ground between, and this is why it's a paradox is like it doesn't fit, you know, very cleanly. You're like, I just want us to be the good guys for, you know, but it's like, no, it's like if you have this like value thing, you want to preserve, protect, advance, you have to like compete for it, fight for it, you know, do all the things that you'd normally do. You just have to also preserve it because that's the core thing that you're trying to do. So, yeah. I don't know if all that made sense.

• 14:02David Hoffman?

  I think we'll, we'll have to actually like explain this like Moloch meme. This is a meme that Bankless has been just like, it's the banner that we kind of live under. But again, we haven't really talked about it in 2021, 2022, nearly as much as we did in earlier times. But maybe we could actually explain the Moloch meme by giving a history of its relationship with Ethereum, which is an intimate part of like your own story with Ethereum. So maybe we can go back to where the Moloch meme was really just getting incepted into Ethereum culture for the first time because you were really leading that charge. Could you take us back, back in time and start the story there?

• 14:40Speaker 01

  Yeah. Moloch means a couple of things. So I read the blog post, Meditations on Moloch by Slate Star Codex, Scott Alexander. It's a rationalist blog post. And it describes the, you know, rationalist god of coordination failure, put a word on an anxiety I've had my whole life, which is like, why can't we all get along? Why can't we have nice things? And it's like, you know, because people and, you know, in these competitive situations, they have something that they can sacrifice, that they value in order to get an edge and the end results is everybody does it. And so like you end up in these sort of, you know, unfortunate equilibrium's where, you know, as a country, we want to spend money on guns and bombs and plane, or I'm sorry, we want to spend money on healthcare, education

• 15:24Speaker 01

  and infrastructure, but we end up spending it on guns and bombs and planes because we like can't coordinate with everyone else to disarm at the same time. And if, even if we did coordinate with everyone else on the planet to disarm, then like whoever is the last person with all the guns, you know, takes everybody else over and then the world reflects their values, which is like secretly amass a bunch of weapons. And so like the...

• 15:51Speaker 01

  Whole disarmament like wasn't very effective, right? And Moloch is used as like a shorthand to describe these like coordination failures where like if we could all just work together and had some mechanisms to do that, that would be great. And maybe we could reach better equilibrium. But because we don't, we have to like compete and fight. And we're trapped in this like less good equilibrium. And the story of how it relates to Ethereum is that I also discovered Ethereum in like the same week, discovered Moloch. And then try to bring these ideas because I realized that Ethereum was a platform for building coordination technology. So like if you're in one of these unfortunate equilibrium, you want to get to the better equilibrium. How do you do it?

• 16:31Speaker 01

  Well, you need to come up with some game to coordinate with everybody else in order to, you know, advance this sort of better coordination station. So the tools for doing things like that are what Ethereum is all about, in my opinion. And so I was like, how do I get people to feel this thing that I feel right now? I'm going to call this Dow Moloch Dow. Hopefully it'll get all these people to read this blog post. And we're like several years downstream from that. And now there's like comic books and like more literature and memetics that are being developed around the Moloch meme. And it's turned into a sort of rallying cry for the Ethereum community to coordinate around like what is, you know, our own mission?

• 17:16Speaker 01

  What is our goal? And it's helped, you know, crystallize it's like, well, what do we do here? Right? We build coordination tools.

• 17:26Speaker 01

  It's not about, you know, like my country, my faith, you know, my whatever. It's like about building things that allow us to like progress past the like coordination systems that we can even imagine today. You know, like countries are great, but they have borders, you know? Outside of the border, like you're not really our friend. So it like has a scalability limit to how far I can, you know, coordinate people. Same with faith, you know, faith have heretics and nonbelievers. And that so they run into limits on coordination. And so the idea is like, what if, you know?

• 18:07Speaker 01

  The big idea for things like Ethereum is like, well, you know, how do we do better? Like, what if we took like country and faith and like other types of coordinate, you know, group, nonprofit, corporation, like, these are our starting points of coordination technology. And so the way that we, you know, slay Moloch is we improve on coordination technology itself. And that's, that's a powerful thing, because I think a lot of, like, you know, we're used to being raised in this like us versus them mentality, everybody is. And so like trying to identify the traps like of the us versus them, you know, it's like us versus them is kind of a psyop.

• 18:49Speaker 01

  So really trying to figure out like what exactly is the, like, why is it us versus them in this specific way? Like, how do we unlock, you know, more coordination value out of humanity? And when we started making DAOs, like, there were three DAOs, right? Moloch DAO was like, it was like DAO number four. So we've had a great opportunity to like, sound like complete, you know, really out there, like, you know, heretics or, you know, nutcases or whatever. We're like, there's, yeah, there's gonna be 10,000 DAOs, like, when we're on DAO number three.

• 19:32Speaker 01

  This is like stuff that we used to say with like Eva and Peter and James Young and all the people who were like early Moloch DAO, because we could see the coordination potential that we, you know, we could see about to be unlocked. We're like, people are gonna flip when they figure out DAOs, right? It's like-

• 19:53David Hoffman?

  And this was back in 2018?

• 19:55Speaker 01

  2018, 19, yeah. We're like building it in 2018, being like, oh my god, this is gonna be so much fun, like, people are gonna be so excited, you know? And there's like 10 DAOs by the end of the year. Yeah, 2019, it was like me and Peter and Telegram groups, just like starting another DAO every like couple of weeks, like, marketing DAO. And there was like a Orichi DAO, it was like a DAO for drinking, you know, events. It was like the Kickback guys made it. There was, there was all sorts of DAOs. We made the Yang DAO, just to pay some kids in Colorado to like put up flyers and like pay the, you know, deep fake memes for Andrew Yang. So- Between 2019 and now, like 2022 at ETH Denver, I like let, you know,

• 20:36Speaker 01

  helped Andrew Yang get inside the event, uh, cause he was like stuck outside the event. I like went to, you were talking to him because you were talking to him about DAOs, uh, and about his lobby three DAO. Uh, it was like a special event. And I was like, this is sweet. I want to go to Andrew Yang's event. I helped start Yang DAO. Uh, let's see where he's gotten in three years. So we just roll up, you know? I'm like stuck outside ETH Denver and there's a dude in front of me wearing a suit. Like who the fuck goes to ETH Denver wearing a suit? Uh, and the event organizers like wouldn't let him in. And I look over and it's like Andrew Yang, like apparently running for president isn't enough, you know, uh, to get into ETH Denver. Turns out he'd like given somebody his badge or something.

• 21:18Speaker 01

  So I was able to, you know, give him my badge, get him in, uh, and give a great talk with you guys on stage. So, um, yeah, it, it feels pretty cool to see all of that stuff happen. Uh, and then people like research Moloch, you know, they're like, oh, look like this DAO. It's like cool to have, uh, you know, put that like medic brick in this like, you know, immutable wall, uh, and, uh, see that, you know, pay dividends in terms of, uh, recruiting people to, uh, be aligned with the original mission that we were trying to help people frame and understand. That was a long rant. I had a lot of caffeine. Thanks for listening to all that.

• 22:03David Hoffman?

  Just to make it extremely, extremely explicit as to the connections being made here. But, but you said Ethereum is a platform to build coordination tools. And then, and then you went through the history of Ethereum as it goes from three to 30,000 DAOs. I mean, we can extrapolate beyond 2020 to where we are today, where everyone, you can spin up a DAO to buy a constitution if you so choose. But just like, can you, can you just connect the dots on all of these things about Ethereum as coordination tools, DAOs and Moloch?

• 22:32Speaker 01

  Yeah. So like Moloch DAO, you know, was, uh, one of the first DAOs. Uh, the, the first one blew up, right? It was called the DAO, uh, and it's why we have Ethereum Classic and Hard Fork and da, da, da. And we had PTS DAO. And so we made Moloch DAO to be very simple, uh, and to just like fund grants with ETH and do very little else. But between like, you know, Moloch Dow itself was a whole ordeal. Like, we were onboarding people with EtherScan at ETH Denver. You know, I was like manually typing in zeros. It was very early in the whole process.

• 23:16Speaker 01

  Like now there's, you know, Dow tools for basically spinning up everything. And there's a lot more flexibility.

• 23:25Speaker 01

  And it took a lot of people just grinding for years. We, we made Moloch Dow, like as a nonprofit, just to do the grants with ETH, right? So, so it didn't have any of the other features. The original design for like my investment Dow Moloch Ventures is like closest to like, what is being released just now with like Moloch version three? So that we, the version one was like just grants, just, you know, to positive. ETH couldn't do any other tokens, didn't have any proposal types, couldn't change the governance, couldn't do anything, right? And that was to help address the security issues, you know, around launching these things because the last one had blown up and stuff. And so.

• 24:11David Hoffman?

  It was what we really needed to get over what you just called our PTS Dow of just like, okay, let's eliminate all complexity and do one thing and one thing only, which is agree to coordinate as to where to send Ether. And so all other, all much surface area was just like stripped away because we as a community, still, when you said the word Dow, people would flinch because we, you know, almost blew up Ethereum and had to hard fork away. So we needed this like, yeah.

• 24:38Speaker 01

  Don't do that. It sounds scary. Why would you do that? Did you see what happened to the other guys who did that? They got blown up, dude. We're like, okay, relax. Like, we'll just do it the dumb way, the simple way. We won't do anything complicated. And then people, you know, other people would be like, we got this great feature idea for your Dow. And we'd be like, that's a great idea. We're not going to do it.

• 25:00Speaker 01

  Talk to me in a year. And so we had to like run a grant DAO for like just a year. And it turned out to be like the right thing to do to advance, you know, the coordination culture, to have more people who done DAOs. And like I have this mental model of progress. Maybe it's more relevant for like open source stuff, but you know, I see progress as a series of motivational equilibrium. Like I don't actually have to solve everything myself. I just have to push the ball, you know, to push the state of affairs to like the next motivational equilibrium where there's like more people, more motivated to solve all the problems. And I feel like that's kind of what we accomplished with Moloch V1, just grants, you know, ran

• 25:41Speaker 01

  it for a year, got, you know, to hustle basically like 20 people for 100 ETH early on, raised a couple mill, got EF consensus, Vitalik, Joe Lubin, put in a couple mill, made some grants, tornado, you know, probably the most important, bunch of other grants around ETH2, you know, helped give the first grant to like the thing that is now Protocol Guild back in its inception. You know, did all that, but like also helped meme DAOs, you know, like help people recover from PTS DAO, helped educate people about how to DAO, like what does it mean? There's proposals, there's, you know, grace period, you can exit, like popularize the rage quit as a way of embedding minority protections into your DAO so that, you know,

• 26:26Speaker 01

  participants can leave with their share of assets at any time. And like it took years for these concepts and like to proliferate and percolate in the, you know, ecosystem until now, there's like lots of DAOs, you know, there's investment DAOs, there's like protocol DAOs, there's nonprofits, there's social clubs, and they run using, you know, different types of systems. Some are multi-sigs. I'm like a DAO boomer at this point. So I'm like, all right, you know, that's a multi-sig, get off my lawn.

• 26:58Speaker 01

  But yeah, like, people started coordinating, right? Like, all of these are examples of coordination. With Molok Dow, we raised money from like, I don't know, 25, 30-some people in like 10, 12-something different countries with no paperwork. Nobody signed anything. It would have been a lot harder to do the same type of thing in like your, you know, MeetSpace. You know, I talk about these things as like your jurisdictional stack, right? So like, in order to do the thing which Molok Dow did, which is like, allow you to pool money with a group of people, but also like vote on proposals. And if you, you know, at any time don't want to spend your money anymore, pull your money

• 27:42Speaker 01

  out without asking anyone. It's like impossible to do in MeetSpace because you have to like set up a bank account, hire lawyers, come up with bylaws, and then you have like several people, you know, to do every process. You're like, oh, we would like to collect signatures on a vote on this thing. Oh, okay, you have to like go through some software, Carda, you know, like, you know, some like management thing to like collect signatures and authenticate people. And you have to do that every time you want to, you know, spend money on anything. And then like if somebody wants to leave, they have to like ask for permission and then like they have to go through their lawyer, to go through the banker and like send a wire. And like any of those steps could like fail for whatever reason, or get held up or frozen or, you know, censored.

• 28:26Speaker 01

  And like the, you know, the reason that people trusted the Molok Dow smart contracts was because they knew that they could push a button and the smart contract would release their money. They didn't have to talk to anybody, there's no like jurisdictional stack of things that can fail. And that unlocks a lot of value. The overhead that isn't there now makes it so that it's viable to create a group like this to solve a problem that would otherwise have been, you know, not worth making a group like this to solve. And so like when I'm talking about unlocking coordination potential, like that's the kind of stuff I'm talking about. It's like specifically the coordination overhead is a number and it gets smaller, right?

• 29:07Speaker 01

  Across all of the participants, needing to verify that other people have done stuff, that the treasury is accurate, like these are all, you know, trust things that allow us to trust each other more quickly and allow groups to scale trust more quickly and execute their goals more easily. So.

• 29:25Speaker 01

  Yeah, this is like stuff, nothing has changed, right? Between 2018, 2019 and now. Like, like, some more code has been written to make these things easier. But really, what's happening is stories. Like, I was, I remember interviewing a CoinDesk reporter in 20, uh, last year at, at MCon. I just got back from MCon in Denver. So that's the Metacartel Conference. So they did MCon 2 this year. Last year, they did MCon 1. And I talked to this journalist and they asked me like what the limiting factor was of, for like growth and, you know, more people thinking it's a good idea. And I, I said that like, the code is mostly there. The limiting factor is stories.

• 30:10Speaker 01

  People need to see the narratives develop. People need to see the story of somebody doing a DAO, being successful, you know, raising money for some cause and then being able to imagine themselves as part of that story in their own way. And until that happens, you can't recruit people because they don't have any examples of how to work with it, you know, the framework. They're like, okay, you have a DAO, like, what do I do? Right? And so it's really important, I think, to push narratives forward. And so with, with Moloch DAO, you know, the, the story was an ETH dev, didn't feel like going through the EF for grants, uh, made his own DAO for grants and like, uh, started

• 30:54Speaker 01

  funding things to advance the ecosystem and like eventually got other people, you know, including the EF to buy in and like operated his nonprofit, you know, using this technology with a community of people that were into it and like protected their own, you know, minority rights. You can too, you know? Like, um, it was basically a non-starter to like, consider using things like DAOs for, uh, you know, and like nonprofits and stuff. And so we had an example of us doing that in a successful way. So a lot of times it's, you know, you just gotta go first.

• 31:31David Hoffman?

  One of the elements of why this works so well, you touched on it, I want to double down on it, is this like free ability to exit as an individual. And it's truly something that only is possible because of private keys, because of, you know, really the invention of being able to custody your own funds and have people ask you for permission, rather than you being the person to ask for permission. Can you just, let's double down on that. Why is that such a fundamental part about like, why all of this coordination stuff works in the first place?

• 32:02Speaker 01

  Yeah, this is a great, great question. Custoding funds is great, because it means you don't have to ask people for permission to use your money. Just very high level, like custody funds is one of the core things that blockchains, specifically cryptocurrencies are about, right? Like, even if DeFi and stuff doesn't, you know, where it's like, you don't want to have to like call your bank to send a wire and they're like, no.

• 32:31Speaker 01

  Right? It's just basically like that, you'd never want that outcome. And like the Bitcoin network, you know, so long as it remains censorship resistant, will never say no to you. Ethereum network will never say no to you. And then we can like piggyback off of this like custody property to do other cool and useful things. Right? So like,

• 32:56Speaker 01

  one of the, you know, differences between something like Molok Dow and something like a nonprofit with a bank account, is that you have custody of your funds.

• 33:07Speaker 01

  This is also different if like you use the multi-sig, right? You know, the operators, the signers of the multi-sig are custodians of the funds, right? But Molok Dow had this very unique new property called the Rage Quit, and that allowed you to maintain custody and sovereignty of your funds, even while you pooled it with other people. And so that's, that's an important thing, because it turns your like donation to this nonprofit into more like a pledge, a revocable pledge. And so you can choose to exit, you know, if a proposal isn't going the way you wanted,

• 33:48Speaker 01

  you voted no, the rest of the, you know, Dow is like, well, we really just do want to spend money on this. And like, if you don't like it, so be it. You can be like, well, Okay, fine. You know, I accept that you guys are still gonna fund this. I disagree. I don't wanna do this anymore. I'm taking my money. I don't want it to go for this cause and I'm rage quitting. I'm exiting with my pro-rata share of the remaining funds. And so, you know, I'm out, right? And I had custody of my money. I didn't need to ask them for permission to do that. But it does also change this game theory. If you've heard about, you know, the voice and exit.

• 34:24Speaker 01

  Like custodial systems have no exit, right? You can have a voice. You can, you know, complain or ask for help or permission. But at the end of the day, unless you can exit, you're sort of trapped. And then it's, you can be coerced. You can be forced to do things with your money that you do not consent to. And so, being able to have custody over your money, even while it's in a DAO, even while you pooled it with other people, even while we can submit proposals and decide how to spend it together. But also retaining that ability to, you know, exit whenever you want is super important because it makes it a lot easier to join in the first place. I would, I'm basically willing to join any Moloch DAO.

• 35:10Speaker 01

  Because if it has a rage quit, I'm like, well, you know, what's the worst that could happen? They submit a proposal. I don't like it and I leave.

• 35:21Speaker 01

  So, yeah.

• 35:22David Hoffman?

  So the cost of joining any DAO is as close to zero as, it's basically a gas fee.

• 35:27Speaker 01

  And so. In theory, there's some social costs, you know, of like, oh, I joined, now I have to leave, I have to talk to people. But exactly, it opens up the landscape.

• 35:36David Hoffman?

  And so like the, joining like a nonprofit has overhead, right? So how many nonprofits can one person really manage their, their relationship with in their lives? Probably a single-digit number, probably even on the average person, no more than like two. But like in, with DAOs, like your participation in DAOs is really as many discords as you feel compelled to like pay attention to.

• 36:00Speaker 01

  Basically.

• 36:01David Hoffman?

  Yeah. And how does this change the relationship of like the broader org with its individual members? Because now like this is all about putting power into the hands of the individual, right? Like the individuals always have, well, maybe they don't have the most power, but you don't have, organizations don't have power over the individual if there is that rage quit mechanism. So how does that change like the nature of the organization when that is the new equilibrium?

• 36:29Speaker 01

  It makes it much more likely that the decisions of the organization will reflect the values of the individual members. You, you sort of get this like all proposals are consensual implicitly because everybody has the opportunity to leave if they disagree with any proposal.

• 36:49Speaker 01

  So the game theory of it works out that like the organization is not incentivized to pass any proposals that they think will make a lot of the people leave. Because even if I can make this proposal pass, like if you guys all leave, then you know, I'm stuck paying for it and I might end up being like paying more for it, right? So to the extent that I want to share the costs of things with you, it's to my, it would behoove me to make sure that like we're spending the money on things that like generally benefit everybody.

• 37:26Speaker 01

  And if there's any imbalance, even perceived imbalance, then the people have the opportunity, you know, to rage quit and make that known. And that disincentivates, you know, provides a feedback mechanism for the group. Maybe the group just doubles down because now there's less, you know, outside like, like conflict within the group. But also that's a good outcome for the group. For the remaining members, it's like we can actually build alignment over time by shedding some of the members who might be less aligned as we go. And so.

• 38:04Speaker 01

  I think it's actually a good system for both, you know, the individual goals and the goals of the group.

• 38:12David Hoffman?

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• 38:54David Hoffman?

  And yes, there's also going to be a token, so give them a follow on Twitter too, @ZKSync. Rocketpool is your decentralized Ethereum staking protocol. You can stake your ETH in Rocketpool and get our ETH in return, allowing you to stake your ETH and use it in DeFi at the same time. You can get 4% on your ETH by staking it with Rocketpool, but you can get even more by running a node. Rocketpool is the only staking provider that allows anyone to permissionlessly join their network of validating Ethereum nodes. Setting up your Rocketpool node is easier than running a node solo, and you only need 16 ETH to get started. You get an extra 15% staking commission on the pooled ETH that uses your node to stake. You also get RPL token rewards on top. So if you're bullish ETH staking, you can boost your yield by adding your node to the

• 39:36David Hoffman?

  decentralized Rocketpool network, which currently has over 1,000 independent node operators. It's yield farming, but with Ethereum nodes. You can get started at rocketpool.net, and you can also join the Rocketpool community in their Discord. You can find me hanging out there sometimes in the chat, so I'll see you there. Lens Protocol is an open-source tech stack for building decentralized social media applications. It is the new era for social media. We all have toxic relationships with our Web2 apps. We want to break up with them, but we can't. These applications own our digital lives and all the relationships that we've made. We need to break through to a new paradigm of social networking applications that we control, rather than them controlling us. Lens isn't a social media app, it's a protocol to let 1,000 web- Web3 social apps bloom. Lens is a permissionless and transparent social graph that is owned by the user. In crypto, we say not your keys, not your crypto.

• 40:20David Hoffman?

  And on Lens, we say not your keys, not your profile. With Lens, your followers go with you to whatever social media application you want to use. And instead of being trapped by an algorithm chosen by that app, Lens lets you choose the way you want to experience your social media. Lens is the last social media handle that you'll ever need to create. So in order to get started, there is a secret code word in the show notes. Enter that code word in the Google form links and you'll be well on your way to entering the world of Web3 social. And we can like do a quick compare and contrast of like other social systems, right? Where like say, say there's a DAO. Maybe let's like take the Constitution DAO, just because that's kind of the big one that everyone knows about. That's the most modern. And say like the Constitution DAO leadership voted to pay themselves half the money in the treasury.

• 41:05David Hoffman?

  And that's like eight of them. And say this vote actually goes through. Well, then there's the rage quit mechanism that all these people can rage quit before they, they, their, half their money gets paid to the leadership, right? Which makes this vote not even like feasible in the first place to ever do. But like, we can compare this with like, I don't know, maybe a nation state where the leadership of a nation state, since they're the ones that control the military, they can just say, hey, all, all gold is now illegal. You must pay it to us and we now own all the gold. It's, it's, it's harder for these individuals to exit because like, you know, it's, it's one thing to exit from a DAO by processing a transaction on Ethereum to get your money back. But it's another thing to like process the exit from a nation state where you have your home

• 41:49David Hoffman?

  and your family and your life and your culture. And so like this thing is-

• 41:55Speaker 01

  And they just took your gold.

• 41:56David Hoffman?

  And they, yeah, right. And so like, I mean, we're, you know, doing an apples to oranges comparison here. But like, this is the difference between what is a, systems that are free to exit and systems that have a high cost to exit. It's like high cost to exit systems allow for opportunity to like bully you around.

• 42:16Speaker 01

  That's right. Yeah, the first question, you know, people ask is like, when you try to get them into this type of thing, it's like, how do I leave? And, you know, the concern is like, I don't want to be bullied by the other members. Like, I don't want my funds to go to stuff that I don't want. So I either have to trust the other members, or, you know, trust that I can leave, trust the mechanism. And like, when you can trust the mechanism, you know, it's a lot easier to spin these things up and start making grants and see, you know, see how they go without as much overhead, without as much risk, without as much opportunity for coercion.

• 42:55David Hoffman?

  There's a line that I go back and forth with Kevin Awaki, and I believe also you, is that like, you don't actually kill Moloch. You don't actually like magically solve all coordination failure, but you can make that, make Moloch retreat, right? Can you help us draw this connection between like, all right, well, we didn't exactly, you know, buy, you know, the state of DAOs in 2022. It's not like we've really solved coordination failure. We kind of just made a bunch of Ponzi's. Now we're in the bear market. But, uh, oops, but, but also like, uh, we have created a new system where Moloch retreats, right? Can you just explain like, going where, where we have like this new coordination platform, which is Ethereum?

• 43:35David Hoffman?

  Now we have this new coordination primitive, which is DAOs. How is Moloch less deadly as a result of this?

• 43:44Speaker 01

  I think, I think the cool thing, maybe this is like a frustrating thing, but, uh, I started saying this more recently, is that like, I think it captures this concept fairly well. Slaying Moloch is an infinite game.

• 44:02Speaker 01

  And like, what that means to me is that like, you know, looming behind the rotting corpse of the most recently slain Moloch is like, a shadowier, deadlier Moloch, you know, waiting to strike.

• 44:17David Hoffman?

  Right, Moloch level two, Moloch level three.

• 44:19Speaker 01

  And, and so it's like this endless series of boss fights, you know? Uh, and like, we can just keep going, uh, and like, see what happens. And it's like, still worth playing this game because it still seems worth, you know, advancing coordination because like, that's what it, I don't, I think that's like, what it means to be human, uh, like.

• 44:41David Hoffman?

  What the hell else are we gonna do?

• 44:44Speaker 01

  Like the opposite of that is just like winning some, you know, intermittent zero sum game.

• 44:53Speaker 01

  So, so yeah, I mean, we did all this Dow stuff. Now we have to sort of, like, the way I see it now is like, we have, we have Dow veterans now, right? So like last year, it was like freshman year, activity fair, activity expo. You know, you show up to college, there's booths everywhere, you want to be in every club, you sign up for 10. You, you know, you make it to the end of the semester and like, you're lucky if you're still showing up to like three or four. You know, maybe, maybe less.

• 45:23Speaker 01

  And then this year is like sophomore year, right? Everybody's like, okay, we know how last year went. We will sign up for a couple of clubs and we will, you know, stick with them and we will like, you know, make sure it's useful and not like too much to handle and blah, blah, blah. And by junior year, you're like leading clubs, you know, you're, you're, you have like a leadership position. I see everybody going through the same sort of progression that we did, which is like, we start out, we have no idea what we're doing.

• 45:52Speaker 01

  We hope we're doing useful stuff.

• 45:57Speaker 01

  And then like after a while, we like figure it out. It's like, oh, like, you know, flat organizations are kind of hard or like, oh, like this isn't just like a corporation on a blockchain. Like, you know, people who come from both sort of sides are having, you know, sort of trouble and like are learning to like, build structures within the context of DAOs and like figure out what processes work, how to do compensation. Right? And so there's like cultural knowledge being built up in, you know, a thousand different groups at the same time. About how to do all of this stuff. And that is what is going to anchor the next generation of DAO contributors and people.

• 46:40Speaker 01

  Right? So like in the same way that everybody who more or less joined Moloch Dow like went on to start some kind of DAO, right? Peter started a bunch of DAOs, Cooper started a bunch of DAOs, Ryan, you know, started Bankless. He was in Moloch Dow, you know?

• 46:56Speaker 01

  So a lot of the people who have now come into DAOs as contributors, as tourists.

• 47:04Speaker 01

  Get to learn and figure out what's going on that, oh, you know, it's not all just like these DAO guys haven't figured everything out, right? Like, we haven't just solved coordination.

• 47:16Speaker 01

  But we have like discovered, you know, useful tools at coordinating better. And like, you know, you can look at the amount of money raised or the, you know, number of these groups that have formed and like the excitement around them, all as indicators that like, we're making progress, we're doing something right. And like the things that will, you know, interest me more is like next generation, right? So like, uh, right now, we have like plutocracy, you know, plutocracy, like for basically everything, like token vote. Vitalik writes about this, you know, in collusion resistance, that we need more, you know, identifiable system so that we can vote with people, have some amount of democracy in

• 48:01Speaker 01

  addition to having all of the, you know, plutocracy that we have.

• 48:06Speaker 01

  Like, nobody has really done that well. Like optimism is trying, they have their like two-tiered, you know, governance system. That's pretty cool to see. I think we'll see more structures form. Some might even be like more centralized and like have explicit like CEO type or like hegemon type. And I think that like, if you zoom out, like all the things that we're building DAOs for right now are like toys and prototypes. Like, the cool things is like when, you know, when is the United Nation on-chain?

• 48:43Speaker 01

  Right?

• 48:46Speaker 01

  It's like, that's like our sort of like terminal, you know, like when are, when are like international agreements on-chain? Like, I started reading for fun about the ancient DAOs, like the Greek city-state agreements that, that they made, the Peloponnesian League and the like Delian League, and these are the Athenian and Spartan-led DAOs that they used to coordinate ancient Greece. And they have like interesting policies, like Sparta, Sparta ran theirs differently than how Athens ran theirs. Like Sparta is like, we're the hegemon, we're gonna have a deal with every city-state and like, you sign a deal with us, we might not even like really tell anybody else the terms, but like, uh, you agree to have the same enemies and allies that we do.

• 49:30Speaker 01

  Is the sort of foundation of all of these. And then the Athenian version, there's a little bit more democratic. They have like a council, you know, within Athens that they like vote on proposals for. And then like if those proposals pass, they like go to like the the greater council with all the other city states. And then, you know, they try to pass them there and like Athens would often abstain and like it's interesting things about how how they manage them. And I I think that's like where this is going, right? Like, we don't, like, maybe we aren't paying attention to it as much. But like, like, if it's not going there, like, I'll be really surprised.

• 50:11Speaker 01

  Because this stuff is so useful that it will naturally find a home in like the most high stakes, you know, environments. Eventually, once, once we've built these narratives and once we've done this infrastructure work and all that.

• 50:24David Hoffman?

  And really what you're talking about is like Ethereum as like this like neutral middle ground between nation states or between like the largest coordinating entities in the world. Is that is that the image that should be in listeners heads?

• 50:37Speaker 01

  Yeah, a global settlement layer, coordination platform for humanity. You know, these kinds of things, like when we say that, you know, we kind of mean, yeah, it'll like also settle your crypto punks. You know, and and like that stuff, but like, like the goal, you know, if it like, why do we care about censorship resistant? Right? It's like, why do we care about neutrality? Like, the reason we care about these things is because we're trying to build a system that doesn't give specific advantages to one nation, state, or, you know, religious group or whatever, right? And it, you know, just sort of runs on math and does math things and like can operate, you know,

• 51:22Speaker 01

  virtual machine and settle contracts, but like, doesn't care too much about contents of those contracts and so forth. Right? And that's sort of what you need to. Allow for like, I don't know if I talked about this with you, but like, maybe we like when I watched Vikings and like the ancient game theory between kings is like, they just have these hostage trades with their children, right? It's like, you know, ancient like coordination in that era was like, I will make you, you know, the way to make our behavior more mutually predictable to each other is to deposit our children into a two of two multi SIG, such that we both need to work together to unlock the children. And if we fail, they die.

• 52:08Speaker 01

  It's like, what?

• 52:14Speaker 01

  Everyone just went along with that because that was like the best system that had ever existed to that point. It's like savage, right? But it worked and it's like,

• 52:25David Hoffman?

  You're just talking about like, all right, like you've got a daughter, I've got a son, we're gonna put them in the same room, they're gonna have babies and we're gonna stop hating each other. Is that what, that's what you're talking about?

• 52:36Speaker 01

  I'm talking about like, you know, I give you my son to raise and like you give me your daughter to raise. But like, a lot of times they did also do, like, like marriage contracts was like down the road and it was like, we'll raise your daughter for a time, you'll raise, you know, and then, or they'll both be in our place for three years and your place for three, you know, and then it doesn't serve as much for the two of two multi SIG. But yes. And like, if you could coordinate better, like you might survive better because like you would out coordinate the other guys who like couldn't put their sons in a multi SIG, and therefore had a smaller army.

• 53:18Speaker 01

  Right? It like, sounds dumb to say like that, but like, that's, that's like, That's like how things worked, right? And that was like, the people were like, yeah, right. Like, you know, whatever. Like, and like, if you didn't put your kids in a multi-sig, you're like, bro, this alliance is suspect.

• 53:36David Hoffman?

  Our kids are not in multi-sigs together. There's nothing aligned here.

• 53:40Speaker 01

  Yeah, basically. And so like, the question for things like Ethereum is like, can we do this without being savages? Like, can we put ETH into a 2:2 multi-sig? But can we make ETH neutral enough, you know, that like, people trust it enough to work as this like, you know, bearer bond, like neutrally enforced by like, the system based on some, you know, contract? So like, in the future, maybe peace treaties or alliances or non-aggression pacts would be seen as suspect if they don't have an on-chain bond in a neutral currency.

• 54:20David Hoffman?

  Right, right, right. And so like, my head has gone to like, sweet, we are definitely beyond the barbaric era of like, using children as collateral. So like, we're now in democracies. But actually, we have like, nuclear missiles pointed at every single corner of the globe. And like, people forget about that when they just are going about their like, day-to-day basis. But like, you know, using children as collateral, definitely barbaric. But if that's barbaric, and we're using that as like, a facetious example of like, how to force coordination upon warring tribes, what the hell is this like, push-button nuclear Armageddon that we have? Like, how is that not just barbarism to the nth degree? And that's because like, this physical nation-state world

• 55:04David Hoffman?

  is based on like, physical rules of who's more powerful than the neighbors. And you already gave the example of just like, you know, we can't really just globally demilitarize because that just leaves the most brutal military as the one that's left standing. But that's because that's the physical world, right? Like, in Ethereum and Bitcoin, there are no, there is no stick. There are only carrots to incentivize coordination. Because Bitcoin incentivizes coordination by paying you Bitcoins to mine it, right? Ethereum incentivizes security by like, locking up your Ether, and then it will punish you if you like, try and attack the blockchain. And then DAOs, as we've said, DAOs are like...

• 55:46David Hoffman?

  So long as there's a rage quit mechanism built into them and that's kind of like table stakes for DAOs, that like there's no stick in the system, there's only opt-in incentives. And so like, I don't know how we get all global like tribes to coordinate with Ethereum, but whatever it is, it has to be by definition like an opt-in carrot-based system that doesn't, because they don't have sticks. Ethereum doesn't give you a stick because it's stuck inside of the internet.

• 56:15Speaker 01

  Yeah, at the protocol level Ethereum doesn't have sticks. It only gives out carrots. You can think of like a stick as like slashing, but like that's a, you know,

• 56:24David Hoffman?

  But you can opt out of that, you don't have to stake.

• 56:26Speaker 01

  Right.

• 56:27David Hoffman?

  You opt into the slashing, you don't have to opt out of the slashing.

• 56:32Speaker 01

  If there was like a war treasury as part of the protocol fund, you know, then maybe Ethereum could have a stick. The United States started without a stick too, in some sense, because it started not collecting taxes, like at the federal level. Didn't have a federal tax. It only added that later on. I don't think it's likely that Ethereum adds protocol, you know, level funding. I think it's even less likely that if we have it, it goes towards funding sticks.

• 57:10Speaker 01

  But yeah, that's what you would need to do. So yeah, it doesn't seem likely.

• 57:15David Hoffman?

  Right.

• 57:17Speaker 01

  The US dollar is a protocol with a stick, a really big stick, you know? It doesn't even really speak softly anymore.

• 57:27David Hoffman?

  Right. Right.

• 57:30Speaker 01

  Yeah, we like to like blow up, like the whole like dollar demand, you know, propping it up, petrodollar thing is kind of weird. I went on a bunch of rants about this after the tornado stuff because I was angry and people were like talking about how tornado was like the bad guys and how like, you know, crimes are bad. And it's like, I agree that crimes are bad.

• 57:58Speaker 01

  There's just like nuance there.

• 58:03Speaker 01

  Because like a lot of things that were crimes like aren't crimes anymore. Or we like look back at them and we're like really ashamed of them being crimes. And you know, we like, don't do the thing where we like reward the entrepreneurs for their like taking on the risk of like breaking those crimes or laws or whatever. And in order to like normalize and make progress for the rest of it. Like I order marijuana in a store, I pay taxes, it's FDA approved to make sure it's like very high concentration. And there's like people still in jail for, you know, having small amounts of it like years ago.

• 58:43Speaker 01

  A lot of times in the dollar bubble, we're like, we're the good guys.

• 58:48Speaker 01

  Because like we, you know, we're America, but like we also do questionable things to enforce dollar demand, like blow up Iraq to enforce the petrodollar, you know, steal everybody's gold. Stop, you know, doing dollar redemptions. And then I'm getting the chronology a little bit out of order here, but.

• 59:06David Hoffman?

  And it's just, it's a long list, so.

• 59:09Speaker 01

  Yeah, it's a long list and it's, it's not just the US, it's like every country sort of does this thing. So this is, this is maybe a segue into RAI. Like my other project, RAI is a fork of MakerDAO, you know, trying to

• 59:27Speaker 01

  try to see if we can make stablecoins without explicit pegs to the dollar. And so it is pegged to like a dollar denominated number, but it's allowed to float. And RAI has been great so far because of what it's been able to teach us.

• 59:43Speaker 01

  Where like, you know, what we're doing on Ethereum, like we, we wanna like,

• 59:50Speaker 01

  we, we wanna believe that like the systems that we're building are like improvements over the status quo, right? Bitcoin gets to say that like because of 21 million, you know, they're transparent and you know, it's not inflationary, you know, and the inflation doesn't like benefit a specific cartel, right? Ethereum gets to make similar statements, not quite as hard on the currency side. But like, you know, we, we take some liberties because we, we have the utility of the smart contract platform. And so we optimize for making that as useful as possible. But we haven't like.

• 1:00:31Speaker 01

  You know, like solve money and money is like the scam that like every country runs on its citizens. And we have like the privilege in the United States of like not having it be as bad as most countries. Where the inflation is like pretty bad and like often, you know, increases unexpectedly. And like, we don't, you can't like ask central bankers how to operate a central bank like right now. Because the way that they do it is so like bastardized from like how it in theory should be done. Because they just have to like manage their, like, most of them didn't come up with the scheme that they're just like inherited some Ponzi that they're trying to keep alive for as long as possible. And that's like what they're judged, you know, on their, their job.

• 1:01:17Speaker 01

  And, and so like with Ethereum, with, with things like DAI, the original idea was that it's like-

• 1:01:22David Hoffman?

  That's such an awesomely like reductive way of explaining what the Fed does is just like prop up the Ponzi and good, good feds promote the longevity of the Ponzi.

• 1:01:33Speaker 01

  Yeah, yeah.

• 1:01:37Speaker 01

  I'll, I'll come back to that point, but uh, yeah, we, we haven't like, we haven't like gotten past the dollar, right? Like we have our USDC, we're like, yeah, we're DeFi, you know? We had our DAI, it was backed by ETH at first, we're like, yeah, you know, we, we've decentralized finance. But like, it's still mostly dollars, right? And so we, we want to look at it and we want to be like, well, how do we get away from dollars? And there's a couple of ways, right? There's one which is like, well, back it with something else, right? You can, you can have a dollar denominated instrument, but that doesn't come with, you know, the like the USDC block lists. For example, if like you use DAI or something, you know, or, or even like fracs.

• 1:02:18Speaker 01

  But, but uh, with, with DAI, it was like, originally it was like, well, let's back it by Ether and then, you know, the collateral can't be frozen. But then they back it with USDC and then you're like, okay, well shit, uh, now what? And so that's why with RAI, it's backed only with ETH, but it's still like dollar denominated, you know? So it's still somewhat subject to the esoteric policies of the, you know, Federal Reserve. It just like can float. You know, around it.

• 1:02:42David Hoffman?

  You mean, it's dollar denominated in the sense that like, if I asked you the price of rye?

• 1:02:47Speaker 01

  Yeah, it's a dollar and like the interest rate is expressed in dollar terms.

• 1:02:51David Hoffman?

  Right, right, right.

• 1:02:52Speaker 01

  Yeah, yeah. So, um, and then, uh, like, you know, it started at 3.14, it's like floated down. I think it's like 2.85 now. Um, and so it, it has a negative interest rate, uh, fairly consistently, uh, since the crash to incentivize people to deposit ETH to help bribe, you know, holders, uh, or borrowers get out if they need to. That's what the elevated ripe signal in the market, um, tells the system to do automatically. We don't have to have meetings about this. We just let the controller run, sets the rates automatically. So, um, this kind of thing is nice, uh, because what Rye is, is it's like sort of a central bank in a box, you know, and like, you can like operate your little thing on the blockchain, your toy first principles developed,

• 1:03:35Speaker 01

  you know, central bank thing. And then you can use it and then look at theirs and be like, how the fuck did you get there? Uh, like what, what series of, you know, what, like what monstrosity have you wrought? Uh, you know, like, like, like you guys, like, if you try to explain, you know, how you get to the Fed and like make or doubt, you know, like, starting from something like make or doubt, you're like, okay, so first you have to rug pull the collateral.

• 1:03:57David Hoffman?

  Right.

• 1:03:58Speaker 01

  Uh, you, you really, you know, Nixon wants to drop bombs on Vietnam. Uh, you told everybody that the dollars were pegged to gold, including all the foreign countries that you promised that you would redeem. Uh, so we lie to everybody. Uh, we really want to bomb Vietnam. So we print a bunch of dollars, bomb Vietnam, but now there's more dollars, same amount of gold. You know, uh, France comes calling with their battleship, maybe it's someone else, but, uh, they're like, hello, Fort, yeah, Fort Knox, like, give us the gold. And then Nixon's like, public announcement, uh, in order to defend the integrity of the US dollar, we are ending redemptions.

• 1:04:34David Hoffman?

  Right. He, he did that because he heard that Charles Dugall, the third or somebody, sent the battleship to go get the gold. And so the battleship was on the way to go get the gold. And Nixon was like, I'm closing the window. So you guys didn't make it in time. Sorry. We're closed. We're closed for business.

• 1:04:53Speaker 01

  Yeah. Right. Uh, and then basically everybody scrambled. People started selling their dollars. And then, uh, the US came up with the petrodollar scheme. Uh, and so this was like the, let's like, pump the Ponzi on the demand side. You know, let's find our like pool two. And so their pool too is in Saudi Arabia. And they made deals with the Saudis and you know, the other oil producing nations to sell them, sell oil exclusively for dollars and they give you know, discounts to allow the Saudis to reinvest in bonds and stocks and whatever and they get you know, military bases and F-15s, you know, and so forth.

• 1:05:38Speaker 01

  And so we did this to prop up the dollar in the face of, you know, the, and so then it's like, the reason I bring all of this up is because like, you need all this context in order to have a moral conversation about the dollar. Because without all that, it's just like, dollar good, you know, alternatives to dollar bad. You know, and it's just like, oh my God. Like, let's go down the list and like, you know, you, like, the reason I like to bring this up with Americans is because there's, there's sort of like two places that you get to. You know, when you, when you start thinking this through, you're like, okay, either we're like, full real politic, like, fuck yeah, America, you know, World War I, World War II,

• 1:06:23Speaker 01

  back to back champs, right? Like, um, dollar Ponzi forever, right? Like, it's the best Ponzi ever, like, we're winning, right? Like, that's the mentality, you know, and like imperialism, we're the best at it, right? Versus the other, which is like, acknowledging the dollar as like a cost and you're like moral balance sheet, because you have to like occasionally go blow up Iraq because Saddam is selling, you know, oil for euros and we don't like that and we want to set an example and you know, uh, like, maybe, like, the US empire is like a good thing, you know, good thing, like generally for the world, like, in terms of our ability to combat China,

• 1:07:06Speaker 01

  our ability to thwart Russia, like, if the US wasn't as powerful, Ukraine would have a much harder time, possibly also be Russia right now, right? And so like, it's a good thing that the US has the strength to fight off these like, you know, despotic invaders and authoritarian communists and, you know, these types of things. And, and but like,

• 1:07:33Speaker 01

  Then like at least you've put the like dollar Ponzi thing into like a moral cost. You know, you're like, ah, the, the cost of doing this is like, we have to do this stuff in order to, you know, be able to, and then, and like, you know, at least that's like a more reasonable conversation you can have out of that, because then you can be like, well, what happens when the US stops being like a good policeman internationally or something, right? Like, maybe this isn't, uh, you know, able to be propped up. Um, uh, like, you know, it's not morally, uh, worth it, uh, or something.

• 1:08:07David Hoffman?

  But you're, but you're, what you're saying is that at least you are having to consider the worth of it, as in, at least we are not just dumbly saying dollar good. We are actually doing a cost benefit analysis on this thing.

• 1:08:20Speaker 01

  Yeah. And like, there's other things, you know, around this too, where it's like the dollar being strong in the sense that like post 1970s petrodollar, dollar as the world reserve currency, uh, hollowed out a lot of American manufacturing and like middle class jobs and shipped them over, uh, overseas because, uh, you know, that's, uh, like the, the currency valuations were more favorable for that. And so like the US became a net exporter of dollars. And so the entire financier class made a killing, uh, and everybody else

• 1:08:54David Hoffman?

  The manufacturing class took the L. And I actually remember explicitly asking Lynn Alden if the Triffin dilemma, what we're talking about here, the, the fact that the dollar is the global reserve currency, was that the main, main source, main reason why Donald Trump got elected? And she was like, yes, I do believe that that's why that happened. Because Donald Trump ran on that platform of manufacturing in Pennsylvania, like all the, all these high manufacturing, uh, states that flipped red and elected Donald Trump, they lost all their manufacturing jobs because we just started exporting dollars for free because we were printing them. And then, you know, the, it's like that, that domino meme, you know, down the line because of, because we have to export our dollars because of the

• 1:09:38David Hoffman?

  petrodollar. Like we lose all of our internal manufacturing jobs and then we elect Donald Trump because we're aggrieved.

• 1:09:45Speaker 01

  Yes.

• 1:09:47Speaker 01

  Hundred percent.

• 1:09:50Speaker 01

  Yeah. These are like the things that are like downstream of the like, you know, currency like scams and, and you know, the discontents of the the currency manipulation. Like that's the decision that the US made as an empire was like, we're gonna switch to being like a financial thing. You know, we're gonna

• 1:10:12Speaker 01

  just export dollars and play with money. And then, and then it becomes really important to prop up demand for the dollar, right? Right. And like the only real collateral we have because there's so much dollars is dollar denominated debt. Real bad. Yeah. Right, right. There, there's a story that I like to tell.

• 1:10:33Speaker 01

  And this is about Thomas Jefferson and slavery. And like, the reason I tell this story is because like, when we think about this, we like, we think about this as like a problem that like, you know, it's almost intractable, right? Like, like you couldn't go protest this, right? Like,

• 1:10:56Speaker 01

  like, okay, well, a lot of times when I talk to people, they, they seem to think that like, working inside the system is like, the best option for making change, right? And that like, almost every problem you can like, you know, solve eventually by working inside the system. And I like to bring up like, the American South and slavery and civil war. Thomas Jefferson, the, the guy who, you know, wrote like, All Men Are Created Equal. He also came up with this like, really fascinating financial instrument, slave collateralized debt. He basically made make or doubt for your slaves. So he rolled up to a bank and was like, yo, I've got all these slaves, I need money.

• 1:11:38Speaker 01

  Can I use the slaves as collateral and get cash? And the bank was like, huh, interesting idea, we're down. And like, fast forward fifty, sixty years, the entire South was like, using huge amounts of loans, like backed by slave collateral.

• 1:11:58Speaker 01

  And so like, uh, like this was basically a slave Ponzi that went out of control. Like they were yield farming, like literally, you know, yield farming, right? And that you'd like leverage up, right? Oh, I got some money. Let me buy more slaves. Let me get more debt, you know?

• 1:12:13David Hoffman?

  Use the yield of the slaves to, to get more money, to get more slaves, to put more slaves as collateral and recycle it to back up.

• 1:12:20Speaker 01

  The, the slave population of, uh, West Virginia, I think, was like 60% and, uh, maybe it was like South Carolina was 60%. And like Virginia was like 40%. So the slave populations had grown a lot. And like every founding father, like the, the banks were trading these, uh, contracts, like fast forward 50, 60 years as if they're like mortgage backed securities today. Like they bundled, you know, like, you know, and so it's basically this like bank enforced Ponzi at that point. Right? Because it's not like the banks are going to let you off the hook, right? The banks aren't just going to allow you to jubilee. Right? Uh, so this is one of those cases where it's like, even if the political will existed,

• 1:13:04Speaker 01

  even if the moral will existed within that context, within the South, it didn't matter. Because the economic reality was that you couldn't get everybody to pay back their debt at the same time, in order to like release their slaves. Uh, and, and not only that, they were like terrified of their slaves, like because of how, you know, poorly they'd been treating them. They're like, this is why they made the Klan and stuff after is to continue terrorizing them. You know, it's like a first strike.

• 1:13:31Speaker 01

  But, uh, every founding father died, uh, knowing that this war, the civil war was inevitable. Uh, because there is no way within the system, uh, to get out of that slave debt Ponzi. Right? Uh, if you're a person in the South.

• 1:13:53Speaker 01

  And you're like, hey, guys, I think this is a bad idea. We should stop doing this.

• 1:14:02Speaker 01

  You don't get very far. Everybody sort of has to be opposed to you, even if they don't like, even if they agree with you. Like, you know, they, they, they can't help you. Like, like Malik has gone too far, right?

• 1:14:18David Hoffman?

  Right.

• 1:14:18Speaker 01

  And so like

• 1:14:19David Hoffman?

  The only, the only path out is a, is a financial crisis.

• 1:14:23Speaker 01

  The only path out is a financial crisis where the collateral, the slaves are liberated at gunpoint. You know? Like, that's the only way out of that system. Like, it's, you know, it, it, it can't stop itself.

• 1:14:39David Hoffman?

  Right.

• 1:14:40Speaker 01

  And, and so like, the mental model, like, is, you know, that comes out of that is like, sometimes wars have to be fought to end Ponzi's.

• 1:14:49David Hoffman?

  Right.

• 1:14:50Speaker 01

  You know?

• 1:14:50David Hoffman?

  Oh, shit. I think I, I think I see where this is going.

• 1:14:54Speaker 01

  You might see where this is going. Because then it's like, huh, do we, as Americans, have the political and moral will to end the dollar Ponzi within the United States?

• 1:15:07Speaker 01

  Because if we don't, then like, we should expect that people will try to end it for us.

• 1:15:14Speaker 01

  And that's going to look like war. And we probably deserve that war. You know, because it's not like we were going to do it ourselves. Right? That's like an awkward conclusion to come to. As a good guy.

• 1:15:33David Hoffman?

  Okay, so what, what is this metaphor here? So like, there's a ton of debt out there. And we have been printing dollars to pay for like, you know, cheap Chinese goods and paying for cheap, you know, Philippine labor. Like, who are the, who are the, who are the, like, the, if we've been printing this dollar? And like, who are the, who are the people that really want this system to end?

• 1:15:56Speaker 01

  So everybody that isn't the United States that has to use the dollars like uh like doesn't benefit from their own seniorage as much as they could, right? Like to the extent that like we go, you know, blow up a rock or something, we sort of like, you know, like to the extent that the dollar is the dominant reserve currency, like we have exorbitant privilege with our seniorage, our printing has a much larger market to absorb, you know, our printing. And so we're sort of taking that value from every other country, you know, that would otherwise be benefiting from their own seniorage in an increased capacity.

• 1:16:39Speaker 01

  But of course, it also, you know, it's more about strategic rivals, right? Like Russia and China want to, you know, they're promoting transacting using the renminbi and the Russian currencies. So, yeah, uh, like, people also say like, there's no alternative, like what else would you do, right? And I think that's like, like the thing that you else would, like the other thing you would do is like not invade a rock to prop up the dollar, you know, like you would just allow the dollar to like not.

• 1:17:19David Hoffman?

  Lose value.

• 1:17:20Speaker 01

  Yeah, you just like be okay with some, you know, probably serious loss in purchasing power, which would look like, you know, high inflation for a while. But at the end of it, you know, like, like a fair system has America extracting as much value from the global market as it has actually earned with, you know, its contribution to the market, not like over and above its contribution to the market because it's extracting, you know, a rent for basically the rest of the world using dollars as the currency and the American, you know, financial system.

• 1:18:00David Hoffman?

  So like the allowing the dollar to inflate if we hadn't invaded Iraq, sounds like, okay, we'll throw up the flag and just we won't let this Ponzi perpetuate. But instead, we chose the path where we kicked the can down the road because we want the Ponzi to perpetuate as long as possible.

• 1:18:16Speaker 01

  So this is the thing that's weird, right? It's like, why did we invade Iraq? You know, like, like, this is what we were saying about voting and coercion and like, democracy. And it's like, you know, I didn't vote to invade Iraq. Everybody who was in favor of invading Iraq lied about it. They said there were weapons of mass destruction. They printed it in the New York Times. We believed it. They said, like, I remember, I was 10, I saw, I listened to this on the news every day, weapons of mass destruction for years and years, and nothing happened. Right? So like, who, it's like, maybe, right? The Russian people didn't invade, vote to invade Ukraine. Putin decided to, you know, invade Ukraine. Maybe the Embarican people didn't vote to invade Iraq.

• 1:18:59Speaker 01

  But like, the pattern of maintaining the dollar dominance, you know, as managed by the Federal Reserve is why we invaded Iraq. How is that different than me as a US citizen be being controlled by the Federal Reserve dictatorship? You know? If, if, like, if that is the pattern of war in this country, then like, you know, like,

• 1:19:27Speaker 01

  like, it's not like, you know, somebody actually threatened America. Like, that was all lies. It was like, they threatened the dollar Ponzi, and so we blew them up.

• 1:19:36David Hoffman?

  Right.

• 1:19:37Speaker 01

  Right?

• 1:19:37David Hoffman?

  Right.

• 1:19:37Speaker 01

  So like, that makes me feel like I'm living in a Fed dictatorship.

• 1:19:42David Hoffman?

  Right. And then, this has been, the question I've been waiting, kind of like circling around, like, the...

• 1:19:50David Hoffman?

  Jerry Brito, unrelated to all this conversation, Jerry Brito and I talked to him about like the tornado cash thing, which was one department out of the global, the larger United States government, one department, the treasury banned tornado cash. Like it had nothing to do with the FDA, it had nothing to do with like Congress. It was just like one part of this broader machine. And so he said, he said, the United States is not a monolith. It is just this one and part of this broader system that did this one thing. But then if you like zoom all the way out and kind of get a little bit more, you know, satellite view of like the whole entire incentive structure of the broader American system, yes, the US government

• 1:20:34David Hoffman?

  is not a monolith. It is a modular set of interwoven agencies and representatives. But at a incentive level, you can talk about the nation state, both the United States nation state, other nation states, as a holistic system, and it works out like most of the time. As in, if you assume agency by a nation state, you can kind of predict what it's going to do as a whole. And that is weird to me that you can do that, but it works pretty damn well a lot of the time.

• 1:21:08Speaker 01

  One of my favorite models for this is like, some like democratic processes I model by being like, oh, they react too late and then they overreact. So like if that's like all you knew about the United States, you could like model our COVID response pretty well. You know, we're just going to pretend like it's not a problem and then we're going to shut everything down. Right? It's like you can often do that. And that's like typically our control system as like humans, like when we think of like, oh, Malik, you know, we like global warming, right?

• 1:21:49Speaker 01

  We're going to ignore it.

• 1:21:51David Hoffman?

  Sick.

• 1:21:51Speaker 01

  And then we're going to overreact. And then it's going to be like austerity measures for everyone. Right? So it's like, it's pretty common, like this.

• 1:22:01Speaker 01

  So like you, you can model things using. Like just get like, what kind of control system is this? Like, what is, what is the feedback, you know, response to?

• 1:22:14Speaker 01

  Things that come up and like, yeah, that helps you predict it. So.

• 1:22:18David Hoffman?

  Holistically, like tribes, organizations, governments, they're not a monolith. They're independent parts, but they kind of have like agency, right? Like there's the, uh, who wrote, who wrote, um, the Leviathan? Thomas Hobbes Leviathan where like, it's actually like all, all the interdependent parts are part of this like larger creature. And it's, it's like the United States has agency because it has its own wants and desires and like desire to live. And it's really the dollar that I think is like one of the main things that needs to have value. Cause as soon as a dollar goes to zero, the United States falls apart. And so it's like the dollar that's keeping things together. So it's like the dollar has its own like demand to live, desire to live.

• 1:23:01David Hoffman?

  And it creates this incentive structure out of that demand.

• 1:23:07David Hoffman?

  So how, how does that, how does that relate to the, the democracy ignores it? And then, um, and then overreacts? How does those, how do those things relate?

• 1:23:17Speaker 01

  Um, sure. So like, let me, let me try to apply that theory, right? It's like, um, maybe like we don't see the like egregiousness of the US dollar. Right now, like as citizens within the country, so we ignore it, right? In the same way that like, it takes a while for us to like, decide that slavery is worth fighting a war over. Right? It has to like grow big enough and oppressive enough.

• 1:23:47Speaker 01

  And so like, maybe one day, you know, uh, We realize that like the way we're managing the dollar is like not great. Also, I just want to like pull apart a couple of things, right? Not liking the dollar and like not liking America are somewhat different. Like you could be a dollar Ponzi minimalist, right? And be like, we should not be, you know, have this reserve currency that we like try to prop up demand for artificially and like still like America and like be a US citizen and like be a patriot even. In fact, I think it's patriotic to want a future for the US that is separate from the dollar Ponzi that we're fighting wars to maintain.

• 1:24:29Speaker 01

  Uh, I think a better use of America's people, uh, you know, armed for like, it's like not throwing them, you know, to, to help prop up the dollar Ponzi. But what do I know, right? But like, maybe, you know, in the future, it could be that we like overreact, right? And then we were like, no country can operate the reserve currency, you know, and we like, we, we go all in on neutral reserve currencies or something and like we, we start propping up Bitcoin or Ethereum as like collateral.

• 1:25:03Speaker 01

  That's like one. Or it's like the, the, you know, we ignore BTC and ETH for so long and then we overreact by like banning them completely, right?

• 1:25:16Speaker 01

  They're, they're both like outcomes that I think are, you know, possible for, for the government.

• 1:25:24Speaker 01

  The, the idea is to try and come up with systems that anticipate, you know, um, problems and like can work to overcome them. The problem is that it's hard to get people to coordinate around doing that when it's like, uh, not immediately apparent, then that's, that that's a problem, right? So, uh, the, the hope for things like Ethereum is that they can actually solve these global coordination problems. Like, why are we fighting over, like, the world is on fire, you know, like, uh, we have a global climate crisis, right? Like, things are only going to get more scarce. Supply chains are only going to break down on their own. Like, we could spend our, you know, effort to, uh,

• 1:26:09Speaker 01

  Try to solve some of these problems, you know, put our heads together, figure out how to clean water, clean air, you know, restore things, but instead we're like fighting over Ukraine, right?

• 1:26:23Speaker 01

  It's like, uh, maybe one day there's like a, you know, radicalist environmentalist league or something. Uh, and they like have their own, uh, you know, proposals to like boycott things or like protest things or, you know, there's a bunch of people like sitting in the forest in Germany and they like wouldn't get down from the trees. So like they couldn't cut them down.

• 1:26:47Speaker 01

  That was pretty cool, you know, like things like that or get, you know, throwing wrenches in the way of people destroying the environment. Although that's not great either because now, you know, we're like, everybody's dependent on Russian gas. And the reality is that like, that's, you know, fueling the war in Ukraine now. It's like, so even sometimes when you try to get away from these things, they still come back.

• 1:27:12David Hoffman?

  And so to tie a bow on this conversation, how does Ethereum fix all this?

• 1:27:20Speaker 01

  Ethereum fixes all this by inspiring people to try and think about how Ethereum fixes all this. And

• 1:27:29Speaker 01

  step one, obviously, uh, motivational equilibrium.

• 1:27:34Speaker 01

  But, but I, I, I mean that like half jokingly and I like, I actually mean that seriously too. Like there is now like things like Vitadove, uh, that's doing like longevity research on the blockchain where they have like NFTs as like IP and you can invest in that and help fund, you know, longevity things that you want.

• 1:27:55Speaker 01

  Like, okay.

• 1:27:58Speaker 01

  It's gonna sound, this is gonna sound weird. Um, so like every empire is basically a join or die Ponzi. Like one of the funny, uh, contracts, uh, that like Athens, you know, as part of the Delian League made, I think it was Isle of Lesbos. And this is pretty funny. Uh, maybe it was another one, but like, like the reason Lesbos, like lesbian, it's like, they basically like showed up to this island and we're like, you guys can join the league or we'll kill you all. Uh, and they were like, we will not join the league. And they were like,

• 1:28:32Speaker 01

  Fuck it, you know, we're gonna climb the walls, kill all the men, sell everybody to slavery, and like, sell all the women to slavery. And like, Lesbos has no more men. That's why it's Lesbos. But like, you know, uh, what happens when somebody puts a join or die Ponzi on chain?

• 1:28:55Speaker 01

  Like, what if the join or die Ponzi on chain is like more efficient than, uh, the way empires work? Like, the, the thing that citizenship sells you, uh, like, like in the, in the Maslow's hierarchy of needs of citizenship, the base level is deterrence, right? Like, I agree to be a citizen of the United States because like, if I go somewhere and somebody hurts me, like, you know, they'll maybe get hurt worse, right? Like, it means something to me. I feel safe and protected, you know, domestically and abroad, right? Uh, and so like, your, your main, like, service,

• 1:29:35Speaker 01

  your main offer as a nation-state is deterrence. So like, when I think of Coca-Cola, you know, I see like sugar water. When I think of a nation-state, I think of like, an assassination guild with a public goods department, right? You're like, like, imagine trying to operate a nation-state without an assassination guild, you know? Uh, like, you're gonna have a really hard time doing any deterrence.

• 1:29:59David Hoffman?

  You mean a, you mean a monopoly on violence?

• 1:30:03Speaker 01

  That's, that's another way of describing it.

• 1:30:06David Hoffman?

  That's why, that's how we've described it on Bankless before, yeah, monopoly on violence.

• 1:30:09Speaker 01

  Yeah, yeah. So, yeah, it's, it's like, um, it's just like one of those things, like, if, if, like, I could see, you know, uh, citizenship being disrupted, for example, uh, if somebody can offer deterrence as a service more cheaply, right? Uh, if I join something and like, now I know that, you know, I'm protected in this way, like, yeah, I'll maybe pay for it a little extra or something, but, um, you know, like, that's the number one reason. And it's like, maybe you don't need to operate this like massive expensive infrastructure in order to like, operate it, you know, deterrent in 2022. Like, maybe it's a lot cheaper.

• 1:30:52Speaker 01

  Now, I don't think we're gonna see any of that anytime soon. I don't think we're gonna see like, joiner die Ponzi's where people are like, you know, you, this option, but like,

• 1:31:03Speaker 01

  I'm kind of afraid of it. Because like, the, you know, like, when we talk about beating Moloch, we talk about like, these coordination systems, like, what if we unleash, you know, an even better coordination system, right? Something, something like, you know, religion, which I'm like, sort of diametrically opposed, opposed to, given, you know, my upbringing,

• 1:31:25Speaker 01

  sort of had Islamic fundamentals, father, fought a lot. But it's like, religion's like what you get when you solve Moloch for your system. Right? Like, I want the males to not infight over the women. And so, we're gonna make a bunch of rules to like, manage our conflicts internally. And now, like, we're a really, you know, like, highly coordinated and like, more trusting society, and that gives us the opportunity to like, go take everyone else over and impose our, you know, god Ponzi on them, and like, the way we do things on them. And so, it's like, you know, from the inside looking in, you're like, oh, man, how do I solve this problem of like, these monkeys just like, fighting over,

• 1:32:08Speaker 01

  you know, breeding rights and like, resources and shit? Yeah, and like, fucking killing each other over this shit, like, the fuck, animals, you know? And then, and then you make some like, crazy rulebook and you kill everybody who doesn't enforce it. And then you end up with this like, god Ponzi that lasts 2,000 years.

• 1:32:30Speaker 01

  And, and so, I think, I think maybe there's like, positive Ponzi's that like, we should be optimistic for. That it's like, you know, join and thrive or something, like, live in that live Ponzi.

• 1:32:46David Hoffman?

  Right, right, right.

• 1:32:48Speaker 01

  Right, and like, that's, that's what we should be trying to help promote. Is like, I agree to, like, I don't know, like, I agree to not pay taxes would be funny. Uh, like, as a commitment device, you know, uh, I'm not advocating for that. I think paying taxes is important. I just think, like, if you end up at the point that you're like, okay, the government's just blowing shit up and like, not saving the world, like, we need to be saving the world. Uh, government, like, I'm now boycot, you know, like,

• 1:33:20David Hoffman?

  Right.

• 1:33:22Speaker 01

  Like, being able to coordinate, you know, activism, boycotts, uh, movements, um, to, to try and make our systems more accurately reflect our values instead of like, our systems just being Ponzi's that sustain themselves indefinitely, even when they are opposed to our values, is like, uh, the idea, maybe more things need a rage quit. You know, it's like every system, it like, starts out useful and it like, ends up scam. Everything, it's like, exists on a spectrum of like, useful and scam, right? At like, the beginning of its life, it's like, useful, the end of its life, scam.

• 1:33:59Speaker 01

  It's why that we need that, you know, the destructive creativity, uh, to burn down some of these, like, scams that have outlived their usefulness in 2022.

• 1:34:10David Hoffman?

  So, well, I mean, I hope, uh, I hope people's imaginations have been expanded to, uh, what it is we're actually doing here, uh, why things are Ponzi's all the way down, and how it's also just coordination. So, thank you for telling me, uh, helping me tell this very creative story.

• 1:34:29Speaker 01

  Thanks for having me. We always come up with something new when we do this. Uh, it's always fun talking to you, David. Appreciate your contributions to the space and helping educate everybody and raising the army to slay Moloch.

• 1:34:41David Hoffman?

  Well, as the lead general of that army, I've been following you for a while and I'll continue to follow you into this very weird world that eventually people always seem to catch up to you on.

• 1:34:52Speaker 01

  I've been inspired by how much I've been able to learn from the people that I helped inspire. So it's two ways to me. Thanks, David.

• 1:35:01David Hoffman?

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• 1:35:44David Hoffman?

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