Welcome to The Chopping Block! Crypto insiders Haseeb Qureshi, Tom Schmidt, and Robert Leshner chop it up about the latest news in the digital asset industry. In this episode, Hasu, the gourmand of governance and Rune Christensen, chief mischief maker at MKR, discuss how to manage a DAO, their respective visions for MakerDAO, and much more. 

Show topics:

Hosts

Hasu

• Twitter: https://twitter.com/hasufl

Rune Christensen

• Twitter: https://twitter.com/RuneKek

Episode Links

MakerDAO

Real World Assets:

The stablecoin trilemma: https://fluid.ch/stablecoin-trilemma/#:~:text=A%20deeper%20dive%20into%20the,decide%20on%20the%20stablecoin%20supply.

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Layne Haber, Co-founder of Connext Network, discusses the Nomad bridge hack, how it happened, and what can be done to prevent these exploits. 

• what Nomad is and how it works
• how the hack occurred and what the vulnerability was
• how much TVL the protocol had and how much of it was drained
• why the Nomad hack was unique
• how this exploit resembled the DAO hack on Ethereum
• the bounty program that Nomad offered and how hackers responded to it
• how Nomad is working with law enforcement, and the reasons why law enforcement has decided to get involved
• how Nomad has partnered with TRM Labs to help with tracking the hackers
• whether privacy developments in the crypto ecosystem will make it harder for law enforcement to track down hackers
• why cross-chain hacks happen so often
• what Layne thinks can be done to improve bridge security
• what mechanism can be implemented to prevent errors that enable these types of mass looting
• what Layne expects to see in the next few weeks around the Nomad exploit

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

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

Oasis: https://oasisl.ink/3Bo612R

• Twitter: https://twitter.com/LayneHaber

• https://www.theblock.co/post/160731/nomad-cross-chain-crypto-bridge-suffers-possible-exploit
• Sam Sun explaining the hack: https://twitter.com/samczsun/status/1554252024723546112?s=20&t=SHIZQRqJ00mmuZVXFKXuZg

• Chainalysis article: https://blog.chainalysis.com/reports/cross-chain-bridge-hacks-2022/

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Kevin Zhou, co-founder of Galois Capital, comes to talk about the possibility of a Proof of Work chain on Ethereum after the Merge, the LUNA death spiral, how he plans to play the Merge, and much more... 

• how Kevin got started in crypto 
• what Galois Capital is and what its investment thesis is
• why Kevin was more vocal than most about the possibility of the LUNA death spiral
• whether Kevin made money out of the Terra collapse and what was his strategy
• what the difficulty bomb in Ethereum is
• the potential scenarios that could arise after the Merge
• whether the public is not considering the risks of the Merge
• how the fact that everybody was telling the same narrative about ETH made Kevin suspicious
• how Chandler’s statement about forking Ethereum made it a lot more likely that it would happen
• the groups behind the encouragement of a proof-of-work Ethereum chain
• whether there is a value proposition for a Proof of Work chain
• how Kevin used The Cryptopians to remember how the DAO fork went
• what replay protection is and why it is important when forking a chain
• why anyone would want to keep the difficulty bomb in a potential proof of work chain
• Kevin’s predictions about the market cap of the potential Ethereum forks
• how a proof of work chain of Ethereum would function without the biggest stablecoins like USDT and USDC
• whether Tether is going to support Ethereum 2
• why Kevin writes using metaphors related to history and gaming and how those analogies relate to Ethereum
• how Kevin wanted to “stick it” to the Ethereum Foundation by offering his services
• whether Vitalik trolled Kevin on Twitter
• whether Kevin will apply the same strategy he used with ETC after the DAO fork

1inch:  https://1inch.io/

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

Twitter: https://twitter.com/Galois_Capital

What is the Merge?: https://ethereum.org/en/upgrades/merge/

Kevin’s analogy: https://twitter.com/Galois_Capital/status/1554053321165512705?s=20

Haseeb’s answer to Kevin’s arguments: https://twitter.com/hosseeb/status/1554163977806000128?s=20

Chandler Guo’s proposal: https://decrypt.co/106409/prominent-chinese-ethereum-miner-wants-to-resist-merge-create-fork

Kevin’s consulting offer: https://twitter.com/Galois_Capital/status/1553090706708856832?s=20

BitMEX researchers on the possibility of an Ethereum PoW chain: https://blog.bitmex.com/ethpow-vs-eth2/

CoinDesk article: https://www.coindesk.com/layer2/2022/08/03/who-will-mine-ethereum-after-its-gone/

Poloniex’s announcement: https://twitter.com/poloniex/status/1555085757450272768?s=21&t=jkjNGieNXdY5SgT2e9xhoQ

Justin Sun’s support of ETHW: https://twitter.com/justinsuntron/status/1555112296006922240?s=21&t=jkjNGieNXdY5SgT2e9xhoQ

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Lyn Alden, founder of Lyn Alden Investment Strategy, and Mauricio di Bartolomeo, cofounder of Ledn, discuss how inflation could affect the digital asset industry. Show highlights:

• how Mauricio’s upbringing in Venezuela and firsthand experience with inflation led him to Bitcoin
• what a “long-term debt cycle” is and why Lyn thinks the 2020s could be similar to the 1930s and 1940s
• the difference between inflation and hyperinflation
• how inflation changes consumer investing and purchasing decisions
• what the impact of inflation is on Bitcoin
• how Russia’s war on Ukraine will continue to impact inflation
• how rising interest rates will affect Bitcoin and stablecoin adoption 
• what type of economic environment is worst for BTC growth
• whether Bitcoin is an inflation hedge
• why Lyn is long-term bullish on stablecoins and Bitcoin
• what effect a global recession would have on Bitcoin
• how global inflation has changed adoption rates for BTC in developing economies
• how Venezuelans use and perceive Bitcoin 
• why Lyn and Mauricio are excited about Lightning Network in developing countries
• what Lyn and Mauricio think about El Salvador’s adoption of BTC and its billion dollar BTC bond
• how Ledn, as a lending company, was able to navigate the Celsius/Voyager crash
• how Lyn analyzes the risks associated with firms like BlockFi
• what lessons Lyn and Mauricio have learned in 2022 about digital assets and the economy

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

Ava Labs: https://www.avax.network/ 

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

• Twitter: https://twitter.com/LynAldenContact 
• Website: https://www.lynalden.com/

• Twitter: https://twitter.com/cryptonomista

• https://www.lynalden.com/ecb-trapped/
• https://www.lynalden.com/investing-during-stagflation/
• https://www.lynalden.com/may-2022-newsletter/
• https://www.lynalden.com/the-area-under-the-curve/
• https://www.lynalden.com/blockfi/

• https://www.nytimes.com/2022/07/02/opinion/bitcoin-el-salvador-bukele-crypto.html?searchResultPosition=1
• https://unchainedpodcast.com/bitcoin-in-el-salvador-why-would-cypherpunks-support-government-mandated-bitcoin-adoption-ep-375/

• https://twitter.com/nic__carter/status/1538909209022058498
• https://www.reuters.com/business/imf-cuts-global-growth-forecasts-warns-high-inflation-threatens-recession-2022-07-26/
• https://www.youtube.com/watch?v=hGCxEMgnMco&list=PL9flMWibV82fmwt5vd0YROikG2msYYphX

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Welcome to The Chopping Block! Crypto insiders Haseeb Qureshi, Tom Schmidt, and Tarun Chitra chop it up about the latest news in the digital asset industry. In this episode, Balaji Srinivasan discusses his latest book, “The Network State, how different digital tools like crypto will help empower network states, and analyzes how crypto fits into the current political environment. 

• why Balaji wrote a book and why he is so enthralled with a digitized future
• what a “network state” is, and what components of crypto are embedded into the idea
• why Balaji is interested in “re-centralization”
• why Balaji believes that networks states need to be recognized by real nations
• what makes a network state better than a physical nation or digital community
• why Balaji thinks a community of people who eat a keto diet could be the first network state
• why Balaji thinks the network states will be a good thing
• where Bitcoin maximalism fits into the left vs. right political divide, woke culture, and Christianity
• what the overlap between politics and crypto will be going forward
• what is the best way to learn, read, and debate “The Network State”
• where crypto tools and communities have gone wrong so far and how the industry can improve going forward
• what lessons Balaji learned from the tech bubble in the early 2000s
• what Balaji’s over-under is for when the first network state will arrive
• Balaji’s pitch for a 50:50 BTC/ETH portfolio (note: not investment advice)

• Haseeb Qureshi, managing partner at Dragonfly Capital
• • https://twitter.com/hosseeb
• Tom Schmidt, general partner at Dragonfly Capital
• • https://twitter.com/tomhschmidt
• Tarun Chitra, managing partner at Robot Ventures

• Twitter: https://twitter.com/balajis 

The Network State

• ​​https://thenetworkstate.com/ 

Technological Revolutions and Financial Capital

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Marisa Tashman, policy counsel at Blockchain Association, analyzes the US Securities and Exchange Commission’s (SEC) decision to name nine tokens as securities and investigate whether Coinbase lists securities. Show highlights: 

• why the SEC named tokens as securities in an insider trading case where no exchanges or token teams are listed as defendants 
• what happens if the Coinbase insider trading case is settled or goes to court
• why the SEC’s actions should be considered “regulation by enforcement” 
• whether there is any process to force the SEC to reveal its reasoning for calling a token a security
• why Marisa thinks the SEC is actively harming US investors with its crypto policy
• how Coinbase is handling the SEC’s investigation
• what Marisa thinks of Coinbase’s listing process
• why the Cynthia Lummis-led crypto regulatory framework is a good start
• what Marisa believes will happen in the crypto regulatory landscape in the near future

1inch: https://1inch.io/

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

• https://twitter.com/mtash

• SEC investigation into listing unregistered tokens: https://www.bloomberg.com/news/articles/2022-07-26/coinbase-faces-sec-investigation-over-cryptocurrency-listings

• CFTC Commissioner: ​​https://twitter.com/CarolineDPham/status/1550159347984044033

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Two crypto law experts, WassieLawyer and Adam Levitin, analyze the bankruptcies of 3AC, Celsius, and Voyager. Show highlights:

• the difference between Voyager and Celsius “custody” and “earn” deposits
• why Celsius commingling customer custody and earn deposits could make it harder for creditors to get their money back
• what similarities and differences the Voyager and Celsius bankruptcies have
• how Chapter 11 bankruptcy works
• why Wassie and Adam believe Celsius might have engaged in shady business practices, whereas they believe Voyager was just an irresponsible lender
• what the latest is on the 3AC bankruptcy and the location of Kyle Davies and Zhu Su
• what Celsius and Voyager can clawback from 3AC
• how Alameda fits into the Voyager bankruptcy case
• whether creditors will receive funds back in crypto or dollars
• the three types of ways creditors can “claw back” funds in a bankruptcy case
• why Wassielawyer and Adam believe Celsius’ Chapter 11 plan to restructure around mining is so weird
• whether the founders from 3AC, Celsius, or Voyager will see jail time

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

Ava Labs: https://www.avax.network/ 

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

Adam Levitin 3AC/Celsius/Voyager Content

• https://twitter.com/AdamLevitin/status/1549935271323607040

WassieLawyer

WassieLawyer 3AC/Celsius/Voyager Content

Celsius Content

• https://www.coindesk.com/policy/2022/07/19/celsius-lays-out-mining-focused-reorganization-plan-at-first-bankruptcy-hearing/

Voyager Content

3AC

Other

• Kirkland and Ellis are running both bankruptcies

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Adam Cochran, partner at Cinneamhain Ventures, discusses the impact of 3AC’s impending liquidation. Show topics:

• why 3AC founders (and family members) are listing themselves as creditors
• what the “corporate veil” is and why it matters regarding 3AC
• where retail investors stand in the pecking order of creditors 
• why Adam doesn’t believe we know the full story about 3AC’s downfall, despite liquidators leaking a 1,000-page report about it
• what creditors might do with 3AC’s yacht
• why Adam is less worried about the health of GBTC in light of recent 3AC filings
• what effect 3AC’s fall will have on Genesis and Digital Currency Group
• why creditors might prefer liquidations to be paid out in equity compared to cash in this environment 
• how 3AC’s liquidation is impacting retail investors at Voyager and Celsius
• why there could be a crypto credit crunch coming soon

1inch: https://1inch.io/

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

• Twitter: https://twitter.com/adamscochran 

• Adam Cochran Twitter thread on 3AC liquidation: 
• • https://twitter.com/adamscochran/status/1543253799929876480
• Adam Cochran Twitter thread on 3AC contagion:
• • https://twitter.com/adamscochran/status/1546477191420170240
• 3AC founders subpoenaed

• Wassielawyer on 3AC, Celsius, and Voyager
• • https://unchainedpodcast.com/three-crypto-bankruptcies-3ac-celsius-and-voyager-what-happens-now-ep-374/

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Nelson Rauda, Salvadoran journalist for El Faro, comes to talk about the impact of Bitcoin in El Salvador, the needs of Salvadoran people, Bitcoin City and the Bitcoin Bond, and much more. 

• Nelson’s story and how he began covering BTC
• what kind of politician and president Nayib Bukele was before BTC
• what the financial reality was for Salvadoran people before the implementation of BTC
• the reasons for the high rates of unbanked people in El Salvador
• how Bukele changed the monetary policy with what Rauda says was very little discussion
• why Rauda believes the BTC law is not meant for Salvadorans, but instead is a PR stunt
• how people reacted after the announcement of BTC as legal tender, and how it resembled the dollarization of the economy in 2001
• how Nelson did not even understand BTC at the moment of the announcement and how he says there was not an effort from the government to educate the population
• whether BTC was successful in attracting investments and tourism, and how there’s no hard data about it
• why Nelson believes Bukele was trying to hide the scandals when he adopted BTC
• whether BTC has been used as a PR stunt
• why bitcoiners are enthusiastic about an authoritarian government adopting BTC as legal tender
• how Bukele might be undermining his own authority by adopting BTC, a type of money that is not controlled by a state
• whether the Chivo wallet is a surveillance tool
• why Nelson believes BTC does not represent a solution for the needs of average Salvadoran people
• whether the $30 dollar initial gift to download the BTC wallet was seen as just another subsidy
• the status of Bitcoin City and how Nelson believes it represents the most spectacular PR stunt from Bukele’s administration
• how the expensive prices of electricity in El Salvador make the country not the best place for mining
• the significance of Bitcoin Beach
• what the BTC bond is, what Bukele tried to achieve with it, and why it has been postponed
• whether El Salvador will default on its debt and what the impact of the BTC price has on the national finances and on how Salvadorans perceive Bitcoin
• how Nelson believes people in El Salvador do not have political freedom and how it contradicts the narrative of financial freedom that BTC aims to provide
• what Nelson thinks about Bitcoin and whether governments should adopt it as legal tender

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

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

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

• Twitter: https://twitter.com/raudaz_

• PwC report: https://www.pwc.com/gx/en/financial-services/pdf/el-salvadors-law-a-meaningful-test-for-bitcoin.pdf

• Research paper on El Salvador by the NBER: https://www.nber.org/papers/w29968

• https://www.coindesk.com/business/2022/03/25/bitcoin-city-el-salvadors-dreams-for-utopia-on-hold/
• El Salvador postpones BTC bond: https://www.reuters.com/technology/el-salvador-postpones-bitcoin-bond-issue-expects-better-conditions-2022-03-22/

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In a highly educational conversation, Wassielawyer, a lawyer specializing in restructuring and insolvency, discusses the bankruptcy and liquidation of Three Arrows Capital, plus sheds light on similar processes unfolding with Celsius and Voyager. Show highlights:

• Wassielawyer’s experience as a lawyer and his professional background
• what the liquidation process looks like and what drives a company to get into this situation
• what the creditors of 3AC can expect from the liquidation process and who will be paid first
• why he doesn’t think the liquidators breached their fiduciary duty by not exercising the Starkware token warrants
• what Chapter 15 bankruptcy is and what it means for a company
• whether Zhu’s and Davies’ unknown whereabouts affect the liquidation process and whether they are likely to cooperate
• whether 3AC counterparties will get anything back from the credits they provided
• how Chapter 11 bankruptcy differs from Chapter 15 
• what Chapter 11 bankruptcy filing means for Celsius and its account holders
• what are the similarities and differences between Celsius and Voyager filings

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

Ava Labs: https://www.avax.network/ 

• Twitter: https://twitter.com/wassielawyer

• Wassielawyer’s threads:
  • https://twitter.com/wassielawyer/status/1543238225338454016?s=20&t=kXB2gr4UCkAz5p09LD24XA
  • https://twitter.com/wassielawyer/status/1538167831946473472?s=20&t=kXB2gr4UCkAz5p09LD24XA
• Unchained Newsletter: https://unchainedpodcast.com/3ac-files-for-chapter-15-bankruptcy/

• Wassielawyer’s thread: https://twitter.com/wassielawyer/status/1545827666590601216?s=20&t=kXB2gr4UCkAz5p09LD24XA

• Wassielawyer’s thread: https://twitter.com/wassielawyer/status/1536192639112183808?s=20&t=kXB2gr4UCkAz5p09LD24XA

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