PANEL: Censorship Resistant Dollars: A New Frontier for Foreign Policy

all right great okay cool uh nice to see everyone thanks for coming after to this really excited we get to talk about censorship resistance I feel like this is uh regrettably under appreciated in crypto and uh I think a lot of the talks today have been about how we can get yield from trafi and bring it on chain uh we're going to be talking about the opposite of that today and uh how we can do censorship resistant defi censorship resistance stable coins and I'm really excited to introduce the panelists here if everybody could give a brief introduction um I'll do mine first I'm Nate I'm the founder of token Dynamics we're a protocol design firm with an emphasis on economic security and I'll introduce the panelists here let them give a quick intro of themselves hi everybody I'm Kirk I'm the founder of the ethereum credit Guild which is a small recently launched Oracle free lending pool but setting that aside I also have a real passion for D5 privacy and something I've read a lot and written a little about so yeah happy to to be here today yeah I'm mman um I helped start uh dhed which is an onchain vaults protocol and uh flat money that's decentralized flat coin essentially the complete antithesis of real world asset it's purely onchain not P to the US dollar which is also something that's you know uncommon at the moment um and basically a native onchain yield bearing asset hey uh I'm Nick I'm the founder of Chronicle uh Chronicle is an oracle protocol um it was actually the first Oracle protocol on ethereum uh kind of dating back to the launch of uh D in June of 2017 and uh we secure around 8 billion in tvl and defi right now making us the the second largest Oracle after Chain Lake hi Michael I'm the CEO of liquid um we are the Builders of um one of the most Sovereign stable coins L USD awesome um yeah so thanks for joining the panel today guys it's going to be a more of a a free flowing conversation and I'm GNA call on people if I need to but i' would love for you guys to just jump in whenever you're interested to answer the question and so to to frame this conversation I want to start by asking why is censorship important a censorship resistance important in crypto and in Defi and maybe as it relates to stable coins or is censorship resistance important to you because each of you have built your protocols in a way that's taken on additional design constraints it's much more difficult to build something that is censorship resistant so feel free to answer the question in either of those two ways maybe Herman can you go first yeah sure I can start I mean um you know the the the dream to build I guess internet money started even before crypto before Bitcoin back in the era uh you know PayPal that was one of the original mission statements and you know they were just too early and you know if you fast forward say to the 2017 era when there was a lot of you know Grand ideas that were happening many of them you know failed but you know what if you told me back then that what would be used as essentially onchain money today what would be used for Value transfer mostly what would be the main unit of account if you told me that was US dollars that are that are sitting in Banks I I wouldn't have believed you at the time um yet kind of here we are and obviously stable coins you know found Market fit um with with leverage um and also the ability to escape volatility on chain early in the defi days but it feels like that's kind of no longer a critical factor and you can see some of the topics um today are more about yield bearing uh you know again US dollars to try and sort of take things to the to the next level um but but the narrative is we need your real world assets we need you know tradire systems to actually facilitate that to give legitim legitimacy to to the onchain world but I think we've only just started scratching the surface of kind of what what we're capable of to do onchain and I really think it is possible to create um New Primitives pure onchain Primitives that are orders of magnitude better than than the traditional Financial system um and and you know you know backing I don't want to take up too much time but you know backing um a stable coin with e like what what liquid is done many people have said oh well that doesn't that doesn't scale you know there's there's a real problem there you have limitations of eth but I think that's completely wrong and what what they actually mean is you know the volatility of eth is too high so when you Min a stable coin you know like liquidy LUSD You Are by default riding the volatility of eth that's great in the bull market as we've seen a lot of a lot of growth but in the bare Market you know uh the the minor you know risk liquidation and that's not so good uh so at flat money what we've decided to do is build an onchain delta neutral um strategy um backing with rocket pool stake teeth the which we think is the most decentralized um LST to not so when you me the stable coin or the flat coin you don't have to ride that volatility of your collateral and we want to back it with the Best Collateral that we can that's great I appreciate the the insight there and something you mentioned is that um there are you know there's a different use case maybe for censorship resistant stable coins than there is in centralized stable coins where the centralized stable coins are used for remittances and things like that maybe as un units of account um what is the like why build a censorship resistance stable coin I'd like Michael to answer this actually Nicholas you went for it so go first and then I want to hear from Michael after well I I just want to I I would love for you to answer this question next but I just want to like frame this conversation in the context of what does censorship resistant and non censorship resistant money look like in not crypto right and there's a spectrum right uh cuz you can say oh you know US Dollars they're not you know censorship resistant like well if you have cash they kind of are right um the US is not a country that really has strong Capital controls right yes you need to abide by sanctions right you can't send your money to North Korea or Lans and donet right um but for the most part right US Dollars can flow fairly freely um to give an example of something you know that's not censorship resistant I think you should take a look at you know all of these countries that have Capital controls uh you look at I don't know uh Venezuela Argentina um turkey has Capital controls South Korea has Capital controls um and and there's there's many many more countries like this right Iran has Capital controls um and what that means is you can't take your money out of the country right um it's forcing you to spend your money domestically and only invest it uh domestically and essentially trapping you and so what essentially happens is as soon as you try to stop people from being able to do this right um now everyone's like heading for the exits right they're trying to get out in whatever way possible um and that typically leads to uh a lot of inflation or it's a more maybe a chicken and egg scenario right of like does the inflation you know cause Capital controls or do the capital controls lead to inflation right um so that's that's a problem that was almost like solved by uh by crypto in a way and so if you look at where crypto adoption is highest it's in those countries with capital controls right it's in uh Argentina it's in Venezuela it's in Turkey right um those have the highest users per capita of crypto Baron way more than the US way more than Europe right because that's that's the real use case of censorship resistant money and so with that I'm going to shut up and and let you bring it back to stable coins but I just wanted to frame this uh conversation more and like what do censorship resistance actually mean and how is it valuable to people and I picked it up you know um to be very blunt I think it's the wrong framing we shouldn't and a dangerous one we shouldn't be talking about censorship resistant for me it's about Financial Freedom why we build kind of what we build is to give everybody the tools to have this freedom to have the choice do I want to have a state issues uh dollar or something else and I'm in belief that money also belongs to the people I'm fine if state has people but I want to have options and I think that's the driver that's what this technology enables having optionality and the freedom to choose what you think is right and not being dependent on anybody and and I think that's the beauty and that's for me the more important more powerful framing yeah I think that's a a more generative framing I really like that the um the positive aspect rather than defining ourselves by what we're against defining ourselves by what we're for and I think within that there's a sort of a broad spectrum in crypto of like what is uh maybe Freedom promoting money or or you know what choices there are on the what we would call the sensorship resistant side of the spectrum and then the censorable potentially potentially censorable side of the spectum spum like Nicholas talked about Capital controls we've got ofac other agencies that are trying to shut down people's ability to transact uh in different parts of the world and for a variety of reasons it's not just criminals it's people that governments will Define as criminals like Julian Assange it's not just people that are trying to wander money through uh various venues but um so in that Spectrum I mean where where do where do you guys think I think we heard from Michael um a bit that we want to be on the freedom promoting side of the spectrum we're here talking about censorship resistance stable coins what are the other um major points on the Spectrum like from uh very censorable and very centralized to very decentralized like what are the things that stand out within that spectrum that we can speak to Kirk we haven't heard from you yet well I guess what I'd like to bring into this conversation is a part of censorship resistance that is in my opinion neglected in the industry which is privacy and so in terms of the point on the Spectrum this is going to be one point further than what we have now in the sense that um as sorry Nicholas was that as Nicholas mentioned there is really nothing in crypto that is a true digital cach today that you can you know a Bitcoin is not like a gold coin right that you can melt down and recast into a new gold coin and no one will know that you ever did that even with privacy mixers like tornado cache there's always this stain that oh it passed through this privacy mixer right we know that you have done something to try and hide its origin and this presents a real challenge you know when Satoshi wrote the Bitcoin white paper it was never intended to be a store of value or a speculative asset right he was talking about censorship resistance through the removal of trusted intermediaries and that's what also um you know non- USD collateralized stable coins like liquidity or flat money have done right they focused on removing custodians centralized intermediaries from the collateral chain but the one thing that's missing in my opinion for stable coins to truly be a digal cash is the normalization of privacy and unfortunately this is not a technological problem but rather a political problem right we know how to make private transactions the problem is that they're being persecuted and criminalized so I think that that's a an area for advocacy and for legal work um and should be a more and more important conversation for us yeah absolutely 100% agree with that I I would love to see more privacy on on ethereum in particular I mean we really don't see it um you know people are are being persecuted and prosecuted for their advocacy and for their work in privacy um and that is one of the the most important essential components of censorship resistance if people you we saw this with uh tornado cach participants of all types even the relays dropped off because they didn't have the Privacy that they needed to continue participating in this protocol and so when a protocol is designated as something to be censored its privacy that enables participation to continue there um so to tie this back around I mean we can speak about the user profile of those users that would use censorship resistance stable coins like who are those people let's talk about that we talked about Capital controls in Venezuela uh in Iran in other places um you know why do they need uh to really ham their this point home why do they need censorship resistant dollars or do they need censorship resistant dollars maybe it's not dollars at all or I'd be interested to hear your take on this um yeah it is interesting um yeah agree with lot of the sentiment here but yeah I kind of wonder if if people in in the countries um where you know inflation is rampant whether is is it a censorship resistance problem a freedom problem uh or is it a you know preserving purchasing power problem so I mean the data is clear on that so you know in places like like Argentina uh you know they're not using eth which you think you know this would give you the the biggest kind of Freedom optionality censorship resistant they're using usdc they want to be paid um they want to hold assets that can preserve their their purchasing power um and you know I think that's that's that's probably an improvement depends on each individual and where they are but I mean usdc and it's you know increasingly deeply ingrained within defi as well and we've seen with Silicon Valley Bank just as just a small sort of snippet of of you know what what the future can hold where you know One Bank basically there's a bank run and you know the whole of you know crypto and defi you know catches that cold from that single sneeze and you know the the the government stepped in bailed them out but it's like at at what cost it's like what what has sort of come out of that what's the message that that sends and and for me that message is if you are a bank in the US and you are deemed too big to fail uh you can take risk and you can make bets and you can take chances and if it doesn't work out you will be bailed out um so so what's happening essentially in in the tradire system the it's not becoming you know you know more resilient to the sh it's actually becoming more fragile and I think that's a real risk anyone else Michael yeah I agree you know kind of if you look at Argentina with whom are they banking with Justin son and usdt at the at the end so and I don't want to blame them you know it just solves the problem and the problem is uh yeah I think having inflation hedge so I think the censorship resistant stable core coins cater mainly to people that are moving to crypto and crypto only just kind of if there the belief I don't want to be reigned on a currency that is inflating and so on and that have shifted kind of their wealth and future into that and for example need liquidity for that or just feel better that they don't have to exit the Fiat Trail up to the FED like Sebastion has shown really this nice pyramid of L and LOE they just feel better to say hey I believe in Bitcoin or I believe in in if and just from a dollar diversification point of view you know it can make a lot of sense because such stable coins like L USD have a totally different risk profile um than all other stable coins so I think these are more the the use cases um otherwise probably the the demand would be already bigger and and kind of these solutions that are cheaper yeah because these people can't kind of afford the transactions on ethereum are using right now just out of necessity other things that are solving that problems um more cheaply there's a little nugget of wisdom that originates in Internet Forum moderation is that if you make a website whose main value proposition is we don't ban witches is the term that they use you get a website where every user is a witch um and this is not meant to be an aspersion in this case but part of the problem is that the average person who's using a bank or using a stable coin isn't thinking about the worst case scenarios of censorship resistance they're thinking about ease of use ease of access um and so a big question for me and for people who are building in this space is how can we make it just as easy and well integrated to use censorship resistant stable coins as it is to use usdc or usdt or conversely how can we make those existing stable coins more censorship resistant also yeah that's a really important point I think it's um and it's it's tough because in a lot of cases you see the things that are most censorship resistent and more privacy oriented are really highly Technical and they don't abstract anything away they want a Linux command line and for the average user to use just it's impossible they're never going to get argentinians or Venezuelans using these kinds of things so i' I'd kind of love to get a temperature check on like yield bearing stable coins um because i' I've heard them described in like uh I mean a bunch of different ways but I think there's like two main ones and the first one is that like they're a trojan horse right it's like how it's like if uh you go to like a normie and you're like well you can have this physical dollar here or you can have this like digital dollar you know that will acrew you you know 5% risk-free rate yield you know annually at least with current monetary policy right and this is how you get normies on board right because it's like oh like I can make money right great and now they're used to transacting in crypto right and you can like crypto pill them like further uh the other way I've heard them describe the m is that uh there're a bastardization of a censorship resistance stable coin uh because the yield tier tends to be funded by treasury bills uh which automatically means right you have the stable coin that went from like decentralized reserves to now like censorship prone reserves right and so you've uh you've forsaken the uh purist ideals of censorship resistance for you know growth hack you know quote quote so so I'm kind of curious like how how do the rest of you like see this like do you think we can do both yeah I think it's totally neutral I mean with liquid V2 we're going to have a stable coin that should have a market rate so at PO with treasury which is kind of pure onch yield from other crypto borrowers so we just haven't built the Alternatives so they could be there and I think it's also fair to say if um you have something where safe and then just kind of the the stable coin is the rail to access uh that yield which I think is fine too like a paas dollar um is a very safe dollar if he gives me the 5% and I think that's a totally valid use case to get that with a stable coin really easy you know because it's much harder for me as a retail user um in a bank so for me it's less how easy it is if the yield stable coin is is is also a tro and horse I think what's underestimated that people don't understand the different risks that are behind you know nobody has an idea probably that if they hold dollars in their bank account how much risk they are holding they think they're sitting there while some crazy bank managers are investing in real estate in China with it they never would do that you know and they don't understand it and I had to learn it too and a stable coin like the pexa one is probably the safest one you could hold if you want to have ties into trfi and they wanted to ban it in the US so I think for me it's really also a bit an understanding where are the risk in the systems and how can I can I deal with it and what what am I holding yeah it's it's uh tall order to ask the average Venezuelan to look into the risks of various stable coins um I'm I'm curious and I think that I'm curious whether you guys think we're going to see a um you know an influx of of those types of users using either censorship resistance stable coins or yield bearing stable coins for you know and what would trigger that event like is that something you guys consider is how to capture this large total addressable Market of of uh censorable stable coin users I think in some sense that Genie is already out of the bottle in that so this will be me putting my economic historian cap on so stop me if I get into too much jargon but um there's a concept in banking called the deposit franchise and this is what the business of a bank really is is they want to acquire users who are not interest rate itive right who are using the banking for the payment rail utilities or maybe you have a mortgage at that bank so you also keep your balance at that bank and that sort of thing U and when someone buys a bank that is really what they're buying the set of idle Capital that is sticky and which is a revenue generator but now even outside of crypto with the rise of you know banking apps Mobile Banking and there's been much lower friction for users to switch products uh you know there's been a big bloom in non- crypto finex and I think there's a trend worldwide towards users being more cognizant of mobilizing their Capital um and switching between opportunities and this is only being further driven by our shift into a more inflationary monetary regime which shows no signs of going away in the foreseeable future uh so I think that there's a a big opportunity there for crypto as far as um offering lower risk to people in many countries with the same types of yield that people can easily access you know in the developed world there's many countries that don't have highquality local bank systems uh that still have those same type of interests yeah maybe looking into the future I I see it very black and white I think we'll have a lot of regulated stuff like you see mik or than fully decentralized stuff I think all the gray area we have today will start to disappear it will be very hard to move around ones us has also regulation and other stuff so I think it's going to be the the two extremes and it's fine to have both I think I'm a fan of of the choice and so you have the regulated ones and the decentralized ones which I hope and I think should um be there as long as they are decentralized and which then have the benefits that um they are more modular can be used more freely um yeah and I I mostly see these two use cases how how it evolves and then on the regulated centralized side then it's more kind of this Direct new rails which I think great which makes it much easier to move stuff around more freely around borders so if that works yeah I think that's that's great too yeah I like that perspective and I like your original framing of the freedom promoting uh aspect of having many different stable coins it's freedom of choice is enabled by having a censorable stable coin with a white list or a black list and a completely censorship resistance stable coin that might not even be pegged to anything like money um but and it's kind of a tricky it's a tricky issue for those of us that would want to see more censorship resistance stable coins because to the degree that the sensor censorable stable coins work for people you don't need the censorship resistance stable coin I'm curious whether you guys see the the world evolving more toward the need for censorship resistance broadly and if you think these kinds of stable coins are likely to catch on more in the future for a variety of reasons and or not yeah I think there's been some interesting kind of questions raised in the panel um for me when I look at say yield bearing uh Stables you can compare say the um Argentinian peso to the US dollar in terms of inflation we might look at the US dollar in terms of like yield bearing stable coins flight coins float coins in the future as well but the question is risk and like even even for crypto natives it's like it's hard to assess the risk let alone you know people who are looking at it from the outside and especially you know how do you evaluate um tailor risk in particular you know black swor events happen from from basically not picking up those tail risks um you know I couldn't tell you what the US regulatory policy in crypto is going to be next year let alone in five years or or 10 years um you know I couldn't tell you what I can what we can see is the data which has been sort of brought up is you know the the US is running deficit year after year um at which point do do the US government bold hold as treasur holders have to take a haircut um and you know what's the impact of that and and these are really you know the risks that are not being you know thought about today but you know these things can can come very quickly and I think that's where the freedom of choice um really come into play and we should set up for that future the other thing I just wanted to throw in there in this regard um bringing back in more of a political than a technological question is I'm sure we're all familiar with the concept of a tax Haven um but there's also the idea idea of perhaps a regulatory Haven or a privacy Haven um and so we're just at the early early stages of regulatory competition in crypto right where different states realize that there's money to be made by making a more attractive environment for crypto owners crypto businesses to operate in um so I'm that's one thing I'm hopeful for in the future is that it's really the the large and Wealthy states that have an interest in performing censorship um whereas small nations may have an interest instead in taking the opposite Tack and offering um shrin legal rights to privacy and things of that nature and we can have a little bit of back and forth over it and you know there I see really the potential of Define because it's very interesting if you look what happens with usdc now they're running under mik and in the US but they are fungible that's somehow crazy now you have even another tax Haven and they want to cater to that jurisdiction at the end they need to cater to 20 jurisdiction keep that thing fible that's crazy imagine I don't know what they do if everybody redeems in the US what then the M Regulators so regulation makes it very complicated because the crossb stuff and if we can keep and there we should fight for that if it's truly decentralized it should be borderless that would be really kind of the the proposition where defi can shine because now a stable coin can still be Global which will be much harder for the regulated ones if they need to cater to 120 jurisdiction at the end and keep the thing fungible then their stable coins become kind of liquidity crunch where the defi stable coins could kind of shine interesting perspectives yeah I think that again going back to the there's there's sort of like two types of decentralization at play here there's the um a decentralization that comes from the many different choices and there's the individual's ability to choose and then we are also in a lot of cases for censorship resistance stable coins baking decentralization into the protocol in some way on like a more micro level to um you know effectively create that censorship resistance but in both cases freedom of choice is preserved um want to Circle this back around and give each of you the platform to speak a little bit about how you've built censorship resistance into your protocol and what the additional design constraints were for designing decentralized or sensorship resistant stable coins um how does that complicate the design process and what were some challeng es that you faced anyone can step up first but uh expecting Michael and in particular yeah I mean I mean for us we we really wanted to we we saw the the the issues and kind of with the CDP U model and we wanted to really try and move away from that so yeah as mentioned earlier you know if you if you want a low volatility asset and you want to be able to Mint this low volatility asset um you shouldn't be taking on more volatility um that that's one of the downfalls and that's been discussed in in previous talks as well um so what we've done is put on chain a delta neutral position where you're long stacked eth and short stacked eth at the same time so on on one side there's basically High volatility side and then the lower volatility side which is the flat coin um yeah and and we wanted to make sure to to not have ties to any any traditional Finance um so there's a lot of you know new stable assets and underneath when you through the layers it's like oh this is like usdc or or something along those lines um so we wanted to just really back it with with e or or state eth as I mentioned we're using rocket pool's our e um to make it sort of as resilient as possible and I have a question for you because you know designing it and you want to give as much power to the user I think the elephant in the room right now in Def oracles you know at the end I think that's the biggest uh tie and K he huh it's the Achilles heal of any protocol yeah you can shut down defi by pulling the kill switch so I I'm wondering how how you see that I think that's the biggest challenge to um kind of deliver on our vision in defi sure so uh I I would say that Oracles in general today are much too centralized right um I I I think regardless of whether you've intentionally designed it this way or not I think every Oracle provider knows uh uh either through a button or what sequence of actions they would have to take right that would bring the the Oracle down right uh and so that's already a big problem right an oracle that doesn't update right uh stale data now a stable coin could go in solvent right given the right kind of Market volatility or or movements right um then you have the whole aspect of like well can you actually manipulate the price um which is is a much worse problem right because now you can actually just like drain all of the assets out of out of a protocol so yes so on the Oracle front I mean we have to take the um I I wouldn't necessarily call it censorship resistance but I would say decentralization extremely seriously because um if we don't then it doesn't matter what everybody else does in terms of like complex mechanism design on the end protocol if your Oracle is not decentralized like you it it's all for nothing right um so uh while there's a lot of different factors I play at play here I'd say like the litmus test you can do with many of the oracles is just kind of like who are the validators and like how many are there um and what you'll find is a lot of the Oracle protocols like they they are their own validator and it's like one of one or they're like no but we run four and like yeah but all four of them are you right uh so so what we've what we've done is we've um essentially created a network of like uh validators that are just what we consider like the influential like projects in the space that users already have some kind of like trust relationship with so for example like uh we have nosis as a validator right so maybe as a user you have a nosis safe right you're like okay I trust nosis or we have ether scan as a validator or INF fura or gitcoin right so maybe you've contributed to gitcoin Grants right and so it's not about as a user that you trust any of them individually but just saying that as a set like yes I do trust this consensus of this set and and so actually uh and and I was going to announce this like later this week but um I I'll just say it now we're actually onboarding a new wave of validators at the end of this week and it's going to be eth Global uh bankless mantle and Oiler and uh that's just going to be the first wave of many and we're going to be integrating um more and more and more on a monthly basis and so the end goal that we want to get to is this almost like Community like crypto Community powered Oracle where you say like okay I trust the consensus of this Oracle because it was made by this you know basically by the crypto industry and if the industry were ever to have consensus against itself I mean that's just cannibalism um it's it's possible but highly improbable it's really interesting because it's kind of like an alternative to proof of stake mechanism where you have the business and the the reputation of a company that is essentially backing the reliability of the data they're providing exactly yeah and then the only thing you have to be careful about is who holds the ability to add or remove validators from this set because again if it's just that Oracle company then the Oracle is still centralized right and this is just decentralization theater and who gets to push to the GitHub repo I'm kidding a bit but um yeah it's a very hard problem trying to maybe even an impossible problem to make a fully trustless stable coin that has no manipulability in the price feed so this is something that I'm very interested in at a technical level we have an oracle free lending protocol not a stable coin um because it's a little bit different than trying to guarantee a precise exchange rate like something like liquidy if you wanted to offer redemptions which is a very good mechanism but you can't do that with the type of like auction style model that we would have instead of um an oracle price feed um there's been a lot of really cool work recently with amm and different types of amm um time weighted average prices including liquidity waiting and other things like that so I think there's some promise there the issue with that is that there's a tradeoff with with any stable coin only a certain percentage of it will ever be in onchain liquidity pool right and so if you're trying to manipulate that pool you know that the amount of value you have to Target will always be so small compared to the total size of the protocol so there are all of these limits and I won't go into too long and Technical of a rant on that but um really encourage everyone to read um Michael from Oilers Publications about um tat manipulation and costs um but I'm interested to see with some of the new style amm that are coming out and like Unis SWAT V4 how we can keep pushing that forward definitely okay so I don't know how much more time we have but um I would like to get into maybe solving some of these problems or what what do you each of you feel is the the necessary step or the set of steps that needs to be taken to get more adoption of censorship resistant stable coins or if you want to answer a different related question um how can we get more people building censorship resistance stable coins because that might be one of those Solutions yeah some of the points that that were touched on I think um oracles play a really really critical role uh within Defi and and obviously right now there's this kind of um New Wave of Oracle free um Oracle less um protocols I almost feel like if if we didn't have Oracles in the early stages and we only just now introduced oracles we' be talking about all the efficiency G G that oracles can kind of bring on board and and the ease of use for end users that that it enables cuz what we don't want is in my opinion is just to make it more complicated for end users where only sophisticated actors can kind of play where they have to you know manage their own parameters and not rely on oracles so I think yeah this this ease of use is just the most important thing and and you know you maybe maybe a single Oracle provider doesn't give you the guarantees that that you necessarily want in your protocol so you can use multiple I think that's the freedom of choice I think and integrating into your protocol multiple um is also a good design decision yeah my take on it is maybe yeah we need more Innovation so pity that the Dave from OA isn't here or kind of we do not more Innovation and exploration how we can do stuff without oracles but on the other hand we can build as much as we want if the demand isn't so big you know and I think the market sends a very clear signal Market doesn't care that much about sensorship resistance um it just need to be convenient do its work so maybe where could the push come from and uh interestingly maybe probably from regulation as I said you you know because kind of the the gray area is is getting tougher and tougher so we need to to build more stuff like that in a decentralized way to keep kind of Defi and this modular Financial system as is so kind of yeah a bit contrarian take but but yeah I think that could force us to innovate even more into that direction because the air in between uh yeah gets less and less yeah I appreciate that take it's it's like um you know with with Micah Mika just coming around recently I think we we look at that a lot of people are saying this is great we're getting clear regulation and it it uh lets you know let's decentralized projects play a little bit more and doesn't have such strict regulation but they don't realize to your point that Circle and all these other you know many other Protocols are now subject to not just ma but the regulations in the US and in Asia and in all these different places and so that the ability to uh work in the gray area shrinks over time because you're not sub to just one set of regulations you're subject to all of them if you have to um you know if you have to comply with one you're probably going to be complying with many and I meant in the gray area if you have ties to tread FY it's just kind of harder because these thread FY players will harder hard time to work with you and you know on the moo let's not call it regulatory Clarity uh Clarity I hate that who wants regulat Clarity we want just kind of Financial Freedom but you know just to give you an example if tedar would have be probably me compliant the stable coin would be worse you as a user wouldn't be better protected because I think mik says you need to have some cash in a bank that's the worst place to have kind of your backing so kind of yeah it's mindboggling and and let's be very careful and then yeah that's for me not regulation Clarity kind of on the day with which M comes into play nobody can say you nobody's there to answer hey what can I use now for me that's a bit a failure we need they need to do better if if they call that regulation Clarity so I I think the original question was like on how can we boost adoption um I I think you know and and I don't want to disappoint anyone but I think we're in for like a decade of consolidation um the the thing with uh new stable coins right is that maybe they have a super ior mechanism right or they have some Innovative new mechanism uh but for an end user are they going to study all that probably not and it just comes down to what is the utility of the money and if that money is not widely accepted um then it's not very useful money and so when you know a user gets introduced to stable coins what are they going to be introduced to they're going to be introduced to the largest ones right the ones that are accepted in in the most places right and it's almost becomes like a a Visa type of situation right where Visa is entrenched not because they have the cheapest fees or or anything right but because their Moe is that they're accepted everywhere right and uh that it's as an engineer as an innovator right like that sucks right like I want to believe that if you build the best thing right that thing will win and unfortunately it's not that right you so really today what you need to succeed is not just to have the best mechanism but also to have like the best growth hacks right and so I mean looking back like uh there was like that stable coin fate right and like you can argue a lot about the mechanism or the execution but the long and short is that they manag to scale a stable coin to the scale of billions within the first week and that's impressive right and so if new stable coins want to succeed right they need to figure out like those growth hacks right um to even stand a chance because the mechanism design alone is not going to cut it yeah Partnerships and marketing are are more important for stable coins I would say than most other protocols you need somewhere to use the stable coin or somewhere that it's accepted and sometimes that's a lending protocol and sometimes that's a you know less often it's a flagship point of sale system right there's not that many people going after uh crypto for Commerce in a b Toc way anymore more um I I will say the nosis pce stuff is really encouraging right because it means that maybe as a crypto stable coin right you can just get nosis paid to integrate you and then the end user doesn't have to care about the integration side well the uh the the uh Merchant checkpoint side of things right but again we're depending on Visa rails and so yeah your ownership of the money is censorship resistant but your spending of it is not if you're if you're using those SP so there's still some work to be done but it it's at least encouraging to to see that happening you brought up exactly what I wanted to say which is that if there's one thing we could do to boost adoption is that I'd love to see a more collaborative industrywide effort around Open Standards for payment systems right like where is the crypto version of The Little Square card reader you know that all the farmers markets can start using um of course today it wouldn't be physical it would just be an app but um you know I'd like to see something that if we think about us DC usdt and these other stable coins starting to compete for real world payments applications it would be nice to see shared rails and not walled Gardens um and and that's even for ether Bitcoin payments whatever it is right everything can use similar software tools and if we could get Merchants willing to accept payments um you know do clearing with that and cut out the visa fee middleman um that would be pretty cool the friction is low right you can still accept Visa it's just oh I take this and this if you don't have to pay much for it and then there's work to Drive adoption I think there's potential there yeah I'm I'm with Nick and that the um I think we're due for a consolidation period over the next 10 years and I think that's actually a good thing especially for censorship resistance censorship resistance stable coins um and I so I think now now there may be the opportunity for those kinds of businesses to be profitable or those kinds of standards to be created to where before it was who's launching a new protocol that's going to get a billion dollars and have a token that we can dump for 90% uh decrease in its value in the first week to now what kind of business can we build around payments and around a point of sale system and and maybe things like that I think nosis is one of those ecosystems that does a great job at focusing on censorship resistance so want to call that out and I appreciate it being brought up um the thing that I didn't hear brought up I'm curious on your takes about is is our own type of Regulation we have uh you know appraisers like blue chip for example example I think are really critical for the space to move forward and I want to hear if you guys had any other takes on um you know how we can do sort of Regulation but Consumer Reports on behalf of users like regulation is just to ensure quality control and we know governments don't do anything well but uh they you know they certainly are not able to see into the depths of crypto I think we need to do that ourselves um looking for a bit of either push back or uh affirmation on on that idea does anyone want to riff I guess I'll I just because I spotted him in the audience I'll just shout out the chefs at staki and some of the other sort of defi expert groups that do a lot of good work providing dashboards and analytics you know like a a blue chip type of letter rating is one thing but it's another to be able to peel back the books and say oh you know it's backed by this much collateral and here's this borrower position at this much risk um so I hope that you know all stable coin providers will continue to invest and providing those types of transparent tooling for their users um there's quite a few good providers out there these days uh a few of them who are among us today I was thinking um maybe you know we should be looking at using crypto rails to improve the existing regulations to basically have a a magnitude better regulations like even kyc AML for people that sort of dug into it and looked into it it's not super clear just how effective it is but there's a considerable cost on it as well right um so can we actually design better systems on chain um to handle those types of issues do you think the kinds of efficiency gains that you would get from having onchain alternatives to that would be worth it like do you know how expensive do you know how expensive kyc is it's it's ridiculous yeah it's freaking ridiculous what kind of efficiency gains are those like what percentage you think can be offset well well I I think it's more just like the taking the like one toone like relationship of like number of things that you need to kyc to and needing to kyc with each of them uh and converting that into like a one to many right where there's just like one kyc provider you kyc with now you get issued some kind of kyc token to your wallet and now you don't ever have to go through that sluggish expensive process ever again right um and and I think that's just a matter of time right and that that's there's no like big technological hurdle it's just someone needs to get over like the the little kick in the scurve like in terms of growth to to become like the Consolidated player that that everybody uses right because if again if there's just like stable coins if there's 10 competing kyc providers trying to do this great now you're you know doing this kyc thing again and again and again right so a good thing for maay Yoshi son to like brute force with with money so so does that and that kyc provider does that inevitably lead to worldcoin or can we do something different oh I mean uh depending on where on the Spectrum you fall of like regulated to unregulated right you may not care about doing kyc AML right but for the regulated defi yes right let's let's have better ux and let's make it more sustainable so uh you're not paying like between you know 30 to 30 bucks ahead for uh for a kyc yeah I'm not convinced that kyc needs a token but um it does make sense to use zero knowledge privacy preserving Technologies and you mentioned the numbers I mean it's worse than it's worse than $9 spent on compliance cost for every $1 of you know genuinely criminal money stop flowing through the system so it's pretty bad it's a pretty good opportunity there all right um well any closing thoughts for you guys any topics that we didn't hit on today that you guys wanted to talk about or bring up related to censorship resistance and in defi or in stable points all right I think we're going to wrap it up here it's been a pleasure talking to you guys thanks for uh joining us everyone appreciate it