Why Are Vibes So Bad This Cycle w/ Fiddy

Rex (00:03.896) Fiddy, welcome to the Signaling Theory podcast. Fiddy (00:07.48) Hello, hello. Thanks for having me. Rex (00:09.774) Of course, So before we get started, let's just do a very brief introduction for people that aren't familiar with your work. Can you just say who you are, how long you've been in this space, and just some of the places that you've worked at that give you the perspective that you have? Fiddy (00:26.286) Yeah, so I started, I wouldn't say I started, I'm a DeFi OG per se, but I started out around the time of COVID, but I started off as a trench warrior, just like in the DeFi trenches, know, where the true hardcore believers were born. That was my journey. I sort of saw, I can't even remember, but I saw InstaDap. Rex (00:55.629) you Fiddy (00:55.954) And I saw the polygon had like, back in the day when it was called Matic, it had these rewards going and there was a leverage loop. I was a little too late to the whole leverage loop game. I didn't even know that this was a thing. know, like, wow, this is something I can do from my browser. I didn't really expect. And some of the first apps or dApps I used were Curve. is SADAP, Aave. think these were the first few ones and of course, on Polygon. These were the first few ones and I also used Lido, Stakeheath and ENS. These are apps I got quite exposed to. And I was quite exposed to it because, know, Balaji was a huge fan of ENS. Balaji would talk about crypto quite a bit. And Balaji's got some Indian heritage and so do I. And so he reverberated with me. So I was quite interested in his ideas in general. And of course, the fact that he was so spot on with the whole quarantine and COVID and the crisis, that added to his value, I would say, or his name and fame, you know. Rex (02:15.906) Yeah, credibility, yeah. Fiddy (02:17.38) The credibility, yes, exactly, the credibility. So that's how I got into it. And then when I was in the trenches, I started talking to joining random discords, joined random telegram channels. And eventually I found Curve and Convex and all of these protocols. And they had a very lively and vibrant community. And that was basically my introduction to Curve, I would say. And I think, I don't know if you know this, but there was this one weird instance where someone did something very nefarious with the stablecoin pools, where they hardcoded the value of the stablecoin to $1 and they minted a whole bunch of coins out of thin air, all in order to farm for some inflation tokens, right? And when this happened, People eventually found out because this is how open the whole DeFi world is. People found out and well, he rugged a lot of people and so on and so forth and the Curve community thought that this shouldn't happen. Like the fact that some random guy can just appear out of nowhere and create mint unbacked stablecoins out of thin air and more or less steal from the DAO. steal from the DAO's expense, which is like the weekly incentives that it offers to its liquidity pools, it shouldn't happen. So they then set up a whole committee. know BadgerDAO back in the day was there as well. BadgerDAO was huge in forming this committee. And this committee was first called CryptoRisks committee. And eventually CryptoRisks is now rebranded to an entity that is a little bit more familiar. The name is LamaRisk. So LamaRisk now is a premier risk service provider for an entity like Aave. And they're doing quite a great job, would say, especially looking at how things have formed in the past couple of weeks. But I was the first analyst. Actually, was just a risk analyst. And I was picked out of the community primarily because coming from a Web2 background, I was quite shocked. Fiddy (04:45.741) to see that you could just get a whole bunch of data, financial data, transaction data, just for free. It's quite open. And you could do analysis in however way you wanted. This is pre-Dune, pre-whatever. So I just had Jupyter Notebooks that I would share on GitHub. And that's how people found out about me. And then they said, OK, you must be a good analyst, so let's give you this risk role. Bear in mind, I had no risk background whatsoever. I just knew how to look at data. But one thing led to another. I enjoyed looking at all these protocols. Because the whole point of the CryptoRisk team was to look at the stablecoin protocols, out how they were minting. So I looked at Reflexor, I looked at Angle, I looked at all of these cool protocols. I looked at a whole bunch of scams as well. Real estate, DeFi, whatever, like mortgage-backed stablecoins, stuff like that. So it taught me quite a bit about smart contracts and I eventually found a passion for writing these contracts that I was reading. Bear in mind, this is also around the time that I had no idea about smart contracts either. Never written one. And I had no real training, per se. I was good at coding, I would say. And then I, sorry, I left LamaRisk, which is back then called CryptoRisk. And the moment I left... It was, I believe, three o'clock in the morning and I was in India for a holiday. Three o'clock in the morning and I get a message from, this is Charlie. Charlie used to work at Curve, he was a big person here. He used send me, hey, do you want to work for Curve? And that was all the message I got on Telegram actually. Just, hey, do you want to work for Curve? And then I thought to myself, life doesn't give you these kinds of opportunities. that often. I'm not going to say no to this. I'm not even going to ask what they want out of me. I'm just going to say yes. So I said yes. And then I started off at And I still didn't know how to write smart contracts. But then two months later, I learned how to write smart contracts from scratch. And one year later, I was writing the most important smart contracts for Curve. Two years later, I was navigating. Fiddy (07:09.305) the most high profile compiler hack in DeFi history. Yeah, two and a half years later, I was like, basically surviving post hack, refreshing the entire curve infrastructure. And then eventually, at some point, I really wanted to learn a little bit more about the whole DeFi and sort of like decentralized asset issuance space. And I thought who best to join and the decentralized asset issuer in the world, which is Lido. So I joined Lido as a mechanism designer. And now currently I am a strategist here. That's very short summary of a pretty long journey. It feels like 10 DeFi years, a couple of cycles of ups and downs. I've seen a lot. So yeah. And now we stand at the precipice of DeFi heading towards an institutional phase. So yeah, it's been an interesting journey thus far. Rex (08:21.634) Yeah, awesome, man. So very cool. And, you know, all of our stories here are like a little, just like they're all unique and very, like very, we find ourselves in these like brand new spaces, like practicing new skills that, that we didn't have a year ago and somehow are kind of like at the top of our field. So I feel like your story resonates with, myself and I'm sure a lot of listeners, a lot of listeners. So. Thank you, man. I'm really excited for this conversation because I think you bring a view, both as kind of a degen who found your way organically into this space, as well as afterwards someone who has been one of the core builders of this space that we love so much. And so man, the first question I want to ask you is, Just to put it frankly, like why do you think vibes have been so bad this cycle? And you know, we're not really sure if the cycle is over or if the concept of cycles are really relevant in the way that they were before. But like you, I joined in that like 2020, the DeFi era, the story you're telling about, I believe is about Mochi finance and Curr and the Curr wars, all of that. Fiddy (09:43.193) That's correct. Rex (09:46.863) And man, just, remember a different energy and a different enthusiasm and kind of a true belief in the power of innovation and creativity. And that's just something that really since Do Kwon just like took us all down, I feel like I haven't experienced since. So feel free to argue with the premise if you kind of disagree, but. I guess my question to you is, when you compare this cycle to the last cycle, why do think vibes are so bad? Fiddy (10:23.16) I think you raise an interesting observation here that vibes have not been the same since Dohkwon's little heist, I would say. Dohkwon's story and the saga and the details are quite interesting. I would say that from the outside, the intention was quite pure, right? So provide yield. 20 % yield, whatever that is, risk free or whatever to people. People really have solid it up, believe that the vibes are quite immaculate back in the day. The problem, however, is that I think there is quite a bit of extractive elements in the space. And the extractive elements are now even in the mainstream level. but they are hidden in ways that you can't even see. DeFi has always had this problem of being the wild west. And let's forget about DeFi for a little bit also. For example, when we had meme coins, meme coins were also heralded as, I would say, a fun thing. I remember Pepe and Doge, these are fun things. They were not like things that you took seriously for a very long time. And things looked very different post-COVID. think COVID effectively changed everybody's perspective in the entire world. During COVID, we had this quantitative easing, unrealistic expectations and evaluations. And on a deeply personal level, also people's lives changed. that is very hard to express the impact of. I think a lot of things change. So I think it doesn't just have to do with Doqqan. has to do with like the... Yeah, I would say a lot of things happening at the same time. COVID, Doqqan, there's a whole bunch of grifters trying to... I think the meme coin saga also... Fiddy (12:46.2) resulted in the rise of, of course we can't forget, we can't forget FTX. FTX had a big, big hand in, yeah, the adding Tinder to the fire, I would say. Then we had things like Pumped Fun and so on and so forth, which is just purely extractive elements in the space. And purely extractive elements are only reductionist. Rex (12:51.756) Mm-hmm. Fiddy (13:15.148) Because at the end of the day, are extracting from hapless victims. They don't know. These are people who are trying to do meme coin trading, right? To make more money. why are they doing that? I think if you, what is the need for somebody to get rich quick? think deep down there is a greed element to it as well. There's people who don't have money who want to get rich quick, because they've seen other people get rich quick. Unfortunately, If you look at the distribution of wealth creators in pump fun or any of these things, it seems to be an extreme Pareto distribution where very few of them actually make money and the rest of them don't. But people are willing to take the chance and try to get richer, trying to improve their lives slightly. So there is this deep... Rex (14:06.922) Yeah. mean, let me just like push back a little bit on you for this because like when I think of when I got into this space, like the best example of just pure extraction that everyone kind of understood was pure extraction or at least the insiders understood as pure extraction was OME, right? Olympus style. And like what... Fiddy (14:30.999) No. Rex (14:33.262) What I'll say about that is, you at the end, like, unless you were one of like the first few guys, right? Like you probably lost like a very significant amount of money and like looking back, just everything smelled bad, right? Like 10,000 % APYs and all this. But like, man, the vibes back then were better. They just were. Like people were still willing to like come to the table with... like a positive attitude and a belief that there might be some innovation here. And like, what I feel like is really missing is that next layer of people that said like, okay, this is an interesting idea. How do we take the learnings of the things that aren't going well and build on top of it? And like, I don't know, man, from everything from just the vibes on crypto Twitter to like all of my group chats, like, where is it? There's no energy. There's no energy at all. There's no positivity at all. It just feels like we're in a doom loop. And I don't know if that's how you feel, but what are your thoughts? Fiddy (15:36.388) I see what you mean. think you're right that extractive elements always existed even in Ethereum. I NFT, NFTs, everybody has owned an overpriced JPEG. I have, by the way, as well. And I know NFT teams which are totally honest and they believe in the, they believed it and whatever. Yeah, it's, I think these extractive elements always existed. So you're right in saying that they existed but the vibes were better. I think eventually what happened was the extraction reached a fever pitch. I think there's a certain limit beyond of how much you can extract, of how many scams that can happen, how many outright drugs that can happen. Things like FTX, like DoCon, they do matter. These events do matter. What also doesn't help is the framing of these opaque instruments as DeFi. I think that didn't help also. The media portrayal, things like Gensler, so on and so forth, didn't help. They didn't help whatsoever. And liquidity eventually dried up, I think, from the retail side. If you look at meme coins, the frenzy of meme coins, is totally gone, I would say. And with good reason, I would say, also. But It is a reflection of how much retail liquidity truly is available as we speak. I would still say that there is innovation happening. It's not the case that innovation has dried up. It's not the case that people have stopped building. I don't think that's the old guard still builds. Aave is still coming out with new stuff. Curve is still coming out with new stuff. Yeah, so people are still doing quite a few things here and there. And if you look far and wide, you might still find young people who are trying to come up with excellent new ideas for stuff that is unsolved. For example, uncollateralized loans. There are some interesting ideas here and there that are floating around. So they exist. There are good attempts out there. Sorry, go ahead. Rex (17:59.053) No, no. Yeah. I hear you. And I don't think like we're dead. I just think that energy is different and you know, I definitely want to get to like, what are the things that you're bullish or excited about? or at least see some spark of like there's when somebody solves this, we're really going to unlock something. in a moment, but I, you know, I have a theory or at least a couple things that are outside of our control that I really believe are contributing to like the current. malaise like the current situation in crypto. And I want to hear your thoughts. And these are two things that are completely outside of our control. One, I think we lost something. Like very important when Elon took over Twitter and just changed the algorithm. I remember like in 2020 to 2022, when, you know, I was like really entering the industry and coming into my own. Like, I feel like the types of stuff that did well on Twitter were much more about research and education and trying things out. like, I got to 25,000 Twitter followers writing threads on. like how Ethereum worked, right? And today I don't think that's possible. I think what does well on Twitter is conflict and get rich quick. I mean, it's just, it's a different medium, right? And the other thing, which I don't think we, of course it existed, but it didn't exist like it does today, is gambling. And I think that the same people that came with so much energy and enthusiasm, Fiddy (19:15.703) Mmm. Rex (19:42.191) to crypto before, including those marginal dollars and like, quote unquote, retail liquidity, that has somewhere else to go that like frankly is more understandable to people who like are not like 100 % bought in, right? Like if you're just some kid who is like on the internet and like kind of looking for ways to make money, before you might've found crypto, you might've like. done essentially gambling, like lost some money, gained some money, whatever, but like really fell in love with the space. And today it's just, it's so much easier to like take that time and energy and do sports betting or do election betting or whatever else is going on on like Cal-Sheer or Polymarket. And so those are the, like, when I think about how things have changed, those are the two things that jump into my mind. Does that resonate with you or do you think I'm just a little bit? like, I don't know, maybe even looking for other people to blame. Fiddy (20:44.054) It could be, I mean this is your lived experience. So who am I to judge your lived experience? I will say that the Twitter aspect of your observations are something that I resonate with for sure. It's become a platform of hate to a large extent in the sense that hate seems to propagate really well, I would say. And before this was not the case indeed. You wouldn't find blatant racism around on Twitter at all. And today it's like, it's just out there, out in the wild, out there. It's given... a platform for even government officials to propagate extremely racist content and sway people's opinion and so on and so forth. It's become a misinformation. It's funny because you have something, the concept of community notes. By the way, I'm pretty sure these community notes people don't get paid for what they do. I'm pretty sure they don't. So they're basically offering indentured. I think it's optional, it's opt-in, it's community, right? So you can extract as much value out of community. But there is no payment for that as far as I'm aware. So it's a platform for misinformation and at the same time you have community nodes. I don't know how these two things coexist so well with each other, but they do. think that there's a funny paradox there. With regards to other gambling opportunities, I think... There is something there. I think, well, at least the election betting was quite popular during Trump. And I think that volume has kind of gone away, I would say. There is still some volume here and there, I think. But the election betting around Trump, Trump time was, that was a time when polymarket really was shining, I would say. And if you have used, I don't know if you've used, have you used polymarket yet? Rex (22:52.454) when it was like almost certain that Kamala was about to lose and she had like 3 % odds, was like, Hmm, might've like, I'll give it a shot to 33 X my money. and so I threw some money that got burned there and I considered betting on, Andrew Cuomo again for, like potentially a 20 X there. but I I've learned whether it's through. Like meme coins or even alt coins or gambling or whatever the second. think it's a good idea is the moment I know that I'm about to lose money Fiddy (23:29.718) Yeah, but the interface is quite nice. I must say the interface is so smooth so easy So I would say intuitive you don't even realize that you're using crypto underneath and I think those kinds of interfaces are In the old-school DeFi interface where you have to it's still it's still like Aave. It's still clunky to use I would say Even curb I would say it's still clunky to use these things have kept their age old I would say shine, the old school shine, I would say. And new age defies just or new age crypto applications, you barely even notice, I think. I think that also has something to do with it. Yeah. Rex (24:14.158) For sure. For sure. Yeah. mean, I think you're hitting on something really important here, which is, you know, the next phase of crypto, I think, is going to be so much less about what can we do on chain and the crypto is the product and is going to be so much more about what products can we build on top of crypto where crypto is like almost entirely obfuscated or abstracted away. Like Polymarket is a perfect example, which is like, yes, it's backed by crypto, but, you know, I think you can come to that website, like with a credit card and like not even understand that you're using crypto or engage with it at all. And that's kind of like where I see the future of this going forward, which is like, at the end of the day, we did create payment rails. Like let's start using payment rails for, for things in the real world and not just. Fiddy (25:00.171) Mm-hmm. Rex (25:13.656) kind of like, you know, things that exist on chain for speculative reasons that like really kind of don't have a purpose beyond that. Fiddy (25:26.902) Yeah, I agree. think the less dependence, the more infra-like you're offering, the better, I would say. Because you do more infrastructure, you are less visible to the users, you bring your DeFi crypto expertise, and users just don't really care. I think that's basically it. Also, you're not going to change. think the world is not going to change its opinion about crypto for very good reasons. I unfortunately agree with the world in which I think to most people, crypto is more or less a scam. The whole thing is a scam. It's bucketed under a single bucket. It makes it hard for me to associate myself with crypto out there in a proud way. That's also very difficult to do. It's become much harder to do over time. Rex (26:17.87) Mm-hmm. Fiddy (26:22.325) five years ago, you could say that I'm in crypto and stuff like that. And people wouldn't look at you like you're weird. I think now if I tell people, hey, I do actually work in crypto, they look at me like, hey, this person seems to be nice, but he said he works in crypto. So what's happening here? So I have to say something like I work in FinTech or I work in blockchain and stuff like that. So I think the right approach is just to... have invisibility, would say, like use. And then that's something that you start to see, for instance, what Stripe is doing, you know, with Tempo, which is basically they're going full blown infrastructure that will power Stripe's businesses in the future. And I think people will not even know that they're using Tempo underneath. So some of the things that they're working on looks like, looks quite fascinating. So I'm quite excited to see. what they can teach the Ethereum and the rest of the world, communities around the rest of the world, how to build cool stuff, know, so. Rex (27:29.806) Yeah. No, man, totally, I'm with you that I think there's something very interesting happening here where, you know, like the people like you and me, the people who came to this thinking DeFi kind of was the product and there's something special here. You know, I think that was kind of the story of last cycle and the story of this cycle. Again, if we are even believing in these cycles anymore, but is. We're really seeing the big players to be, I hate this word, right, but institutions that exist outside of crypto that are looking at opportunities to use crypto technology for their experiences, right? And whether that's Stripe and Temple, like you're saying, or something I'm pretty interested in and bullish about is MasterCard acquiring ZeroHash for $2 billion, which... If don't know what zero hash is, they essentially do all of the banking relationships for almost every single on and off ramp. And then you see all this stuff about major banks and all this stuff. And I really do think that the institutions are coming and starting to build here in a major way. just think it's happening. Fiddy (28:25.301) Wow. Fiddy (28:34.686) Okay. Rex (28:51.798) at least so far in ways that are not propagating value and interest and usage back to the DeFi protocols. you know, with that as kind of a preface, I love to kind of get your take on or your thoughts on, is that a good thing for crypto? Is that kind of a scary thing for this space that we love? I mean, when you see someone like Stripe being like, we're going to build this chain and, you know, the implication is they are going to bring a ton of real users that may or may not ever touch our protocols. Like, is that a bullish thing to you? Or are you worried about the future of this like credibly neutral, open source, like space that kind of captured us and changed our lives over the last five years? Fiddy (29:41.14) Yeah, I think credible neutrality and concepts of privacy, for example, these are not cyclical. are, yeah, they are immutable, you know, human rights to a large extent. Everybody deserves to have a blockchain that settles very quickly. Everybody deserves to have privacy, so on and so forth. Nobody deserves to be censored. And in this, This need may or may not exist at Tempo or other corporate chains or ARC, Bicircle or whatever. May or may not, you don't know. Neutrality is also very, important here because these companies that we just mentioned are US based. But the world is much, much bigger than the US. I think people tend to forget that the world is much bigger than the US. the world is now heading towards a multipolar state. I think because of the decisions the US has made in the past year or so, it has set in motion certain changes in the world order. And in such a paradigm, neutrality is quite sought after commodity. So regardless of what happens, I think the ideas, the values of Ethereum, you're headed towards censorship resistance through Fossil, which is one of the EIPs. There is privacy that is in the roadmap and so on and so forth. These values are endearing. They will last lifetimes. And what is amazing about Tempo is that they have some of the best and the brightest who are working on things that are relevant for Stripe. And Stripe is no small business. It's a huge business. It has real users that can onboard merchants onto Tempo without them even noticing. And Tempo and Ethereum can be connected. it's not, it's a, I think it is going to be a relationship where, so the world benefits from credible and neutral infrastructure. Fiddy (32:06.782) The world benefits from whatever innovations, Paradigm and Tempo and Stripe too. think Paradigm is a great, great venture capitalist firm. Stripe is amazing. And I think they will do great stuff and Ethereum will benefit from that. So I generally tend to be bullish. I just coming back to your question about, so I think it is inevitable that we head towards this institutional phase. I think it will take some time to wash the sins of the past. It will take some time. It will take some rewiring of the way we think. The trenches are gone, I would say. But that doesn't mean that... And the vines are looking not so immaculate right now. But I don't think this is something that is... I think it's just a natural part of... maturing as an ecosystem. I think a lot of people are headed towards institutions because they seek legitimacy. It's natural to seek legitimacy. I think people are tired of being associated with crime. Now, the problem is, crime also exists on the institutional level. there are things that you have to, by the way, I think you do it justice when you make a caricature of the word institutions. Rex (33:15.054) You Fiddy (33:31.284) I think it's very hard to define what institutions actually are. Who is in this issue? Are we talking about BlackRock? Are we talking about Securitize? Are we talking about JP Morgan? What are we talking about? And I think in Rex (33:31.31) Thank Rex (33:41.752) Well, my favorite is when we talk about institutions and we include family offices of like people who made their money from crypto. Like what do you you're not an institution. You're just rich. Fiddy (33:53.045) They are called HNWI, high net worth individuals. Yeah, that's right. Those are not institutions. Those are just people. Yeah, you're right. I think institutions generally you could define, I think you can define it a little bit more opportunistically, right? you are like institutions for crypto are entities that can give, that can offer us credibility in return for our innovations. Rex (33:56.866) Yeah. Fiddy (34:21.734) So we are busy out there selling our innovation for a slice of credibility. So for a slice of looking serious, you know, and that is the point that we've come to today. So I think this is natural. think the direction that we're heading in is the right approach. As long as we don't forget that we have certain values. These values are very fluid, by the way, and they change over time. And so you have to constantly remember what these values are, redefine them. As long as you don't forget the core human nature, things like that, I think you need a very good steward for that. And I think that there are no better stewards than I am biased in Ethereum, toward Ethereum. I think the leadership of Vitalik, Aya and so on and so forth, these are the kind of people that can guide, that can steward this towards the right values. They are the ones who have to make the hard choices that are unpopular. They have to take all the blame. They have to suffer all the shame. But so long as the values are propagated to the next generation, think eventually Ethereum will still remain irrelevant while, of course, collaborating with blazingly fast innovators such as folks at Temple. Rex (35:54.031) For sure. And you know, my opinion is, you I'm with you that Ethereum is kind of the, maybe I'll say it's stronger than you would, or maybe you agree, but like, I think Ethereum is the point of what we're trying to build in crypto, right? Which is one credibly neutral system on top of which we can build more layers that make different trade-offs, but like, we're trying to create the internet native property layer and... I mean, man, I Solana has done some cool stuff, but like, don't see any credible neutrality in Solana or even, even any value of credible neutrality in Solana. then you go below Solana and it's just a joke. Right. And so I think, as you said earlier, these core values about credible neutrality or censorship resistance or these kinds of things, like these are not cyclical. These are. the point of crypto and, you know, there's a way to look at tempo to say, like, is, that really a blockchain or if, like, if you control all the nodes, isn't that just the equivalent of like creating something and putting it on AWS in like five different regions? and so yeah, man, I, I, I'm with you that, that like Ethereum. Fiddy (37:14.983) Thank you. Rex (37:23.156) is kind of what keeps me around and is the delivery of the vision that I think Satoshi started with Bitcoin and Vitalik said, like, okay, like this kind of like money thing is good, but like, if we can upgrade to general purpose compute and then build that as a credibly neutral system, then we've built something actually new and useful and interesting. And as long as like we kind of protect that, we're Fiddy (37:47.361) Mm. Rex (37:52.438) you know, there's still something of value here. Fiddy (37:55.846) Yeah, that's very well put. think over time Bitcoin, obviously, the cult around it is still strong and eventually Bitcoin did institutionalize. I think that's a very good way of looking at it. I Bitcoin eventually was, it's an incorruptible algorithm, I would say, but the cult around it is definitely corruptible. And so is Ethereum. So it's constantly you have to remind yourself that there are forces that will corrupt you and you have to stay steady against those forces. And by the way, the Ethereum foundation is not infinite. It is finite, very, very, very finite. And it could be that Solana Foundation simply outlasts the Ethereum Foundation. It could very well be that case. But... The victory will happen if the Ethereum Foundation or the people in Ethereum are able to germinate enough seeds in this gigantic, infinite garden. So some of the things that happens, for example, are new students learn about smart contracts. From a very young age, I don't know if you know this, but they teach to great detail smart contracts. DeFi and so on and so forth in Swiss universities. I'm not Swiss myself, I don't go to Switzerland. But I shared a meme recently, one of my ex-colleagues at Curve, he's from EPFL, so EPFL Lausanne. And they're huge in crypto, like they're huge, huge, like lots and lots of students all over DeFi come from EPFL. So the meme goes like, so this ex-colleague at Curve, They're literally standing outside the university gates waiting to snipe a couple of new students fresh out of university, straight into the cult of crypto. I think those kinds of things, they work really well. can radicalize them. You get them why they're still young. You show them these values and they find their own path. Like University of Waterloo, for example, is another example in Canada. Very, very bright students coming out of there. Fiddy (40:19.315) I know Tim Rothgarden. I don't know if you know him, but he is head of research at A16Z. He is one of the authors of 1559, the free learning infrastructure. He's, believe in NYU and he is doing quite a bit of mechanism. have like, as I speak in front of you, have like a couple of his books that I still have to read. I'm just like a big fan of his work. So these are the people who are basically stewards, you know, of the future. And that's the only way you can do it. That's the organic way of distributing the Kool-Aid, you know, that's the only way to do it. And it is a global effort. It isn't localized to the US, I would say. And Rex (40:51.01) Mm-hmm. Rex (41:05.144) For sure. Yeah, I mean, I think it's like how, you the internet is not predicated on having some like powerful internet foundation that makes sure that things keep moving forward and blah, blah, blah, right? Like, of course there are pillar entities that do important things like, you know, ICANN does like domain registrations and that kind of stuff. But at the end of the day, the internet is what it is because... Fiddy (41:21.245) enough. Rex (41:32.92) there's no real one owner and it grows organically and we all through our participation kind of decide how it works. Fiddy (41:43.367) Yeah, and by the way, I don't know if you know this, but the Ethereum Foundation keeps quite close contact with the World Wide Web, the WWW Foundation. There is a foundation called the Long Now Foundation. I don't know if you know about this. It is an American foundation, and their ideas are so amazing and unique. They talk about, their whole idea is that they think long term. in millennia and so on and so forth. And the people who are from the Long Nath Foundation have had a lasting impact on the leadership at the Atheism Foundation, have had a very lasting impact. For example, but it's not just the Long Nath Foundation. It's like many things. if you go, if you're done the deep dive research into Atheism Foundation as I have, you start to see even spiritual elements coming out, you know. So for example, There is a actually very famous, professor of religion, unfortunately passed away. But he wrote a book called Finite and Infinite Games. His name is James Carrs. He was a professor emeritus of religious history, not religion. He wrote this book called Finite and Infinite Games. And Rex, I will tell you one thing right now. If you read that book, you will get very, it will just set you in a different path in life. The moment you start reading that book, you start to realize, wow, now you can recognize the kind of people who read it. You can recognize the leadership who read it. It's like if you start to recognize it in, for example, companies like Shopify, where they start to see the same lingo, same language is being thrown around, and so on and so forth. And the book talks about an infinite garden. Well, there's an infinite game. And there is a concept of horizons and boundaries. So there's a concept of culture versus society. And there is gardens. And the Ethereum Foundation's vision, if you have never heard of this before, I think you've heard of this constantly people talking about this garden, this infinite garden, and so on and so forth, right? It comes from this book. So there's a deeply, deeply religious and spiritual aspect to it. And it's like these kinds of mind viruses that Fiddy (44:03.82) are so well, that germinate so well into this deep psyche of people, especially the dreamers, you know. They associate themselves with weird symbols like infinite, like a garden, like horizons. These are weird symbologies and they're very infectious and they're really mind viruses, you know, and they start to associate that with the culture of Ethereum and a culture which is very fluid, you know, it's not like well defined. I think you can, it's very hard to say what the culture of Ethereum is. Rex (44:11.522) Yeah. Fiddy (44:32.562) It's like, even Vitalik tried to do this, tried to define explicitly what the culture is, but he couldn't really definitively say what the culture of Ethereum is. these kinds of mind viruses actually propagate so well into the deep psyche of the dreamers that it keeps the power alive, you So when you go into the spiritual journey of these books, start to see, you start to feel a little bit like, okay, you know what? Things should be fine. Vibes suck for sure. But things will be fine. The dream will keep on. The dreamers will still keep on coming to Ethereum or will still keep on coming to crypto, still keep on innovating and doing all sorts of cool stuff. I think that will never stop. So I'm generally, I know you were a little bit, I think we began our talk, you were a little bit down in the dumps, I would say, about the vibes and you are not wrong in your observation and it sucks, but. I think there is a lot of hope in the horizon, you know. Rex (45:38.744) For sure, man. think a lot of, I think, we like to think that crypto is its own little world. You know, if we're like going to be spiritual for a second, like everything on this planet, especially everything that humans touch, right? But everything is so interconnected and like part of the reason vibes are so bad right now specifically is because of vibes are pretty bad across the globe. Like for like geopolitical reasons, economic reasons, you know, and I'm American, so I look at everything through American views. Like we're, we clearly have problems here, right? But I, you know, I know it's not Fiddy (46:06.651) Yeah. Fiddy (46:15.538) Mm-hmm. Rex (46:19.882) you know, everyone has their own flavors at home. And so I think part of the reason the vibes are so bad is because vibes are pretty bad right now. And, you know, if anything, we should look at that as like a real endorsement of what we're trying to build here, which is something outside of the system that has led us to this, this state. And we're trying to build something. Fiddy (46:30.29) Yeah. Rex (46:48.234) like the internet that really upends, you know, for better for worse, right? Like I think you can say the internet led us to a lot of the places that we're at, right? But we're looking for a step change and a lot of the problems you see today like really can be addressed or maybe even solved, whether it's through Ethereum or just through credibly neutral systems. I think, I think it is true. But I wanna... a little bit more on what you're saying about how you can really see, of course, the DNA, but you understand why the Ethereum Foundation has all these spiritual elements. And specifically what I want to ask you about is, up until the beginning of this year, there was just so much conversation about how the Ethereum Foundation has lost its way and is thinking about all the wrong things. And then we got... new co-directors and a lot of that chatter has died down. People seem more bullish on the foundation. But as someone who has done just so much research and works with the foundation and really kind of understands it better than just reply guys on Twitter, how do you understand, like, what do you understand the role of the Ethereum Foundation to be? And do you think that this kind of drama around what it was doing was well deserved and we really needed this kind of new energy and new pivot or Do you think it's all kind of overblown? mean, I guess just to put it high level like what's your take on the Evolution of the Ethereum Foundation over the last let's say two or three years Fiddy (48:36.517) Yeah, I think so I can speak about the I found the rhetoric around the previous director quite incendiary. I think people were very unhappy with the idea that Ethereum Foundation had competitors who had money who were doing business deals trying to get entities to like deploy on Solana for example. I'm just giving an example of Solana. I can be candid here, I hope. But yeah, so I think people were very frustrated because they're they're just coming and taking our innovations away and just copying us and throwing a whole bunch of money and incentives at it and doing better. Why is our foundation on doing the same? Rex (49:13.838) No. Fiddy (49:32.886) I think that was the general reaction of the community. And it is not necessarily a wrong reaction. It is, it's one of the first, you know, initial reaction against the stress. what do we do? the line is coming. This bear has been attacking me. What do do? So it was a kind of like a knee jerk reaction. That's how they say it in English. I keep forgetting. So I think the, but it was not the hatred towards the ex previous director was not, I didn't like it. I didn't like how I think people started saying weird stuff about Vitalik's choice in women, for example, or how Aya was not a very good leader. Under her leadership, the way, Ethereum has gone to great heights. So I didn't understand this irrational hatred for this person. And my interest in the foundation actually increased significantly since the change because Aya wrote a farewell letter more or less. She is now the president. So there's two presidents. One is Vitalik, one is Aya. And now we have two co-directors, Tomas and Shauway. And Shauway is from the old guard, right? Shauway is the old EF person. Tomas is new, comes from another mind, much more scrappy, I would say. So there is a little bit of an old new guiding the foundation. And whereas the old guards are steps back and does things much more as, you know, like the shepherds or like evangelists, so to speak, you If you look at the farewell letter and if you read it deeply, actually that's where I learned more about these books. Because if you look at the, that's a big art. the moment you open the new chapter in the Infinite Garden, I think that's the title of the blog post. That's how I wrote it. I took some time to write that piece of article. And in that piece of article, there's this art piece that she commissioned somebody. And there are two Easter eggs hidden there. There's a book in that art piece, and there are a couple of pages. And there are illustrations on the pages. Fiddy (51:58.225) I saw this illustration and I was like, this is very interesting. There is an easter egg hidden in the art. So this person is, she comes from a culture of, she's Japanese descent. She comes from that kind of culture where there's a lot of emphasis on symbolism, spirituality, and so on and so forth. That art, that blog post had mention of two books. One of which was Finite and Infinite Games. And the other one was not necessarily a book, but it was more of a concept called Paste Layering by... Stuart Brand from the Long Now Foundation. Stuart Brand, by the way, also just recently wrote a book with Stripe Press, which I'm very curious to read. I believe now it is being edited, so I'm curious to acquire it and read it. But these are ideas that shaped the foundation, Aya, quite a bit. And these ideas permeated throughout the entire community. I took it upon myself to go through these books, actually go through these ideas. And it was a very enlightening journey. And I understood some things behind Ethereum quite a bit more. Quite a bit more. think it's, personally, I find it to be a must read. I've been telling everybody, I know that you have to read this. You have to these books. It's basically radicalized. It will radicalize you. finite infinite games and the pace layering. Pace layering is just an article, that's it, not much. So I thought that the knee-jerk reaction, I understood the knee-jerk reaction. I didn't understand the hatred, irrational hatred towards Aya. Yeah, I didn't know her very well. I think, you know, we have spoken a little bit also. I've had the honor of speaking to Aya, that was very cool. I think there is a necessity, however, that there was a need for change, there was a need for structure. So, if he went through deep, deep restructuring, the foundation went through deep, restructuring and re-prioritization of ideas, I think they realized that the community's anger or community's angst is, it's not unfounded. There is something behind it. Fiddy (54:20.162) And the foundation must act to serve its community. And they have done that. I think the noise has died down because people are working tirelessly behind the scenes. Tirelessly. You cannot imagine. I spoke, I think, for an hour or so today with one of the folks at Ethereum Foundation. And these guys are really like... I actually have one meeting with them tomorrow as well. I'm very curious to talk to these people and see their, see the vantage, see the world from their vantage point. Hear the world, hear about their, how they think about what's happening, how they look at the world. I think this is a different breed of people who come from the community, from deep deep within the community. And these are the ones that are now stewarding the Ethereum space towards a certain future and there's a technical future and then there's a cultural future and these people are really trying to go towards that and under the guidance of Tomas under the watchful eyes of Vitalik and Aya and of course Xiaowei as well things are headed towards a certain direction and before it was a little bit lost I would say it was a little bit of a there were shepherds but And they did their best. And they did great, by the way. They did a good amount of work. But unfortunately, when we have viruses in our system, we need to inject ourselves sometimes. We need to inoculate ourselves sometimes. And the hardening of the foundation was a response to external stimulus. And I generally tend to think that this is a good thing. It's good that Core systems are able to respond to external stimuli. If they didn't do nothing, if they did nothing, I think people would have been much more worried. I would have been much more worried. Rex (56:27.084) Yeah. Yeah, no, I hear you. And I think I agree the hatred and just like the naked, just aggression and yeah, the racism, the sexism, like personal attacks, I think really was an ugly look for our community. And just needs to be like wholly understood as something bad. But I do think. Fiddy (56:36.739) racism. Fiddy (56:41.232) Yeah. Rex (56:55.512) there's always an opportunity to take a look at what you're doing and to improve. if sometimes that includes like making pretty fundamental wholesale changes to structure or to personnel or whatever, that's not something you should shy away from. Just wish like, again, back to my comment about the changes in Twitter. I think we have entered an era that is much more hatred forward and that is... tough for me personally, but I also think that it is something that Ethereum has to push against in a way that some of the other chains in the ecosystem swim with. so, you know, I think it's just a dynamic that is unfortunate, but we have to deal with. We're kind of running out on time here, but... So there's one kind of topic that I want to get your thoughts on before we really close this out. and that's DAOs. So you more than most people I know have like really had these experience, had experience working with DAOs and seeing how they actually work, right? Whether that's through, crypto risk now Lama risk or working directly for the curve Dow or in the Lido Dow. do you think that this is an effective way? to be building, do you think that the positives that DAOs bring are still important? Or, you know, and I'll just kind of show my cards here, right? Like from what I've seen working at DAOs, like I see them as like almost so dysfunctional that they're holding our space back. And I think that's especially even more true as we enter this new phase of institutional engagement and... know, non crypto people coming to use our innovation as tools and not just here to like speculate and play in the pool with us. But I'm really curious to hear like what your thoughts are. What do you think is good about DAOs? What do you think needs to change about DAOs? Do you think that this whole structure is going to be an important way in the long story of Ethereum and crypto of how entities are organized or what are your takeaways? Fiddy (59:15.085) Yeah. I think one thing I'll say is beware of Daos that are actually corporations. think they have to be very careful that I think there are way too many of them, you know? And to be very honest, Daos move slowly, very, very slowly. And I would even say that they should move slowly. And I'll come back to the whole concept of pace layering. But the way it works is governance moves slowly. Innovation happens really fast. Commerce moves really fast. Commerce and fashion. Fashionable trends happen at very, fast time scales. Commerce is something that looks at fashionable trends and tries to meet the demand. And commerce, as commerce slowly grows, for example, fidget spinners. There was a big fad on fidget spinners, right? That was very fashionable. And then people started creating fidget spinners all over the place. So you could find fidget spinners everywhere. That's an example of commerce trying to capture a trend. Obviously it doesn't work if, for example, something is very endearing, if a trend is very endearing, then we need to start building infrastructure for it. So it becomes a lot more wide scale, widespread, it becomes more efficient and so on and so forth. But who decides whether a trend is worthy of infrastructure? It is governance. Governance decides what is worthy of more investment, what is worthy of time and attention. And I think if you just step out of DAOs, for instance, if you just look at government, people are in general very frustrated with governments working too slowly. And unfortunately, that is by design because you need to be slow to ensure that there's a trend or a fashionable trend is endearing, such that you can support it. So I would say that the current model of Thou's, where you have corporations pretending to be Thou's, that, of course, it will not survive. I think in the long run, it will not survive. But the model that might work is decentralized autonomous organizations that don't necessarily take part Fiddy (01:01:37.978) too much in the day-to-day voting activities. Actually, the less, the better. But they are much more of a veto. They're the ones that decide periodically, OK, we are observing this trend. We are noticing a whole bunch of people trying to capture that trend. We are willing to assign some, in the case of Kerr, example, assign some inflation towards that, or so on and so forth. We are willing to. open up a credit line for this facility or whatever. And these are the decisions that a should make. And also there's a concept of accountability, course, provided that the DAO is properly distributed amongst many, people who are interested in actually governing a DAO. Now, that is the challenge. How do you find people who are basically governors, unpaid governance? They're like... governance token holders who are actually interested in governing. I think that is the challenge. And curves sort of accidentally figure it out in a sense that you this VCRV. think many people will not lock their V curve. I think that makes no sense. Nobody has time to wait for four years or whatever, know? Unless if you are a Michael, you have no interest. But then you have entities like Yarn, Convex, TakeTow, and other entities which are willing to do it. And these are entire businesses, entire protocols built on top. And then there are protocols that are being built on top. I think there is something there where you share ownership with other protocols who have aligned visions. And your stakeholdership, the set of stakeholders that are dependent on you, there is an incentive alignment. want you to grow because they will grow themselves, their businesses will also grow. because it's dependent on your infrastructure. So that model might have something to with if you are able to distribute the shareholdership amongst willing and competent and capable protocols. If that can work, I think that works. But this is a very, it's a bottom up grassroots led approach. It takes time. It doesn't form on day one. It forms on day Fiddy (01:03:59.215) 900, I would say. So I would say that is the right model. Rex (01:04:05.612) I hear you. I think I might just disagree. Let's just use an example of a corporation that's masquerading as a DAO. I think Uniswap is probably a good example where everything that is done by Uniswap that matters, it goes through Uniswap Labs and then like, yeah, there's a DAO. Maybe they do grants every once in a while, but let's be real, whatever grants come out of that, like, Fiddy (01:04:28.238) Cough Rex (01:04:34.702) really are decided by the voting power of people that are just so closely integrated into Uniswap Labs. And I think you're absolutely right to point at that and say, that's just a little bit BS. It's not a DAO. And I think we, over time, will see. top calling things like that at Dow. But man, when I look at what Uniswap has accomplished from everything, like being able to truly drive innovation to capture like huge, huge amounts of like business value to like pivot and be agile. And then I, you know, I won't like call any... Fiddy (01:05:06.638) Mm-hmm. Rex (01:05:27.982) I name any names here because this is like pretty harsh criticism, but I look at some of the dows that like both you and I are familiar with and like what I see there and kind of like true dows is like this intense sense of like fiefdom and of like not moving the ball forward because like it's kind of like too hard and just like completely missing trends and you know, I don't know. mean, I I like the ideas of dows, but I just think they're dysfunctional. I think Curve is probably the best example of something that is kind of limping along and is kind of working, but I think it's kind of working because Michael has so much authority in that dow that he can almost run it like a corporation. so, I don't know, man, I guess I think. Fiddy (01:06:03.502) Yeah. Fiddy (01:06:11.555) Ha Fiddy (01:06:21.889) and Rex (01:06:25.08) who knows what's gonna happen, but I am kind of of the opinion that when we look back at the history of crypto in like five years, 10 years, 20 years, this concept of DAO, I think is something that we need to move past and it is not something that it's really possible to build good products to evolve over time and to engage with institutions with. Fiddy (01:06:50.334) Now, I would say your criticism is right. would say that, let me be clear here. So Michael has lot of authority, but that authority doesn't come to him on his own volition. People believe in him, they give him the authority, and that is the reason why people follow him. He cannot, for example, make any changes to the protocol without stiff competition. And by the way, I've seen the Rex (01:07:08.878) Sure. Fiddy (01:07:20.268) Discussions forums. I've seen the arguments and it's not an easy battle for him to convince people it takes quite some time Now I think you're right in saying that Dows to set people set protocols behind and indeed curve is limping along I would agree there I think Maybe the what we shouldn't Maybe what we shouldn't do is discard the core concept of a doubt which is shared ownership, Shared ownership, accountability, and so on and so forth. These are the core values that began. what we are facing right now is current implementation. I think current implementation is not very good. So maybe, maybe it is something to iterate upon when the time is right. Rex (01:08:15.096) Sure, but I guess my rebuttal to that would be, let's look at the big thing that we actually think is working and is the truly, credibly neutral thing that we all have shared ownership of, which is Ethereum. And there's no doubt. And I think it says a lot that the thing that most exemplifies what we're trying to build here and what we're... Fiddy (01:08:31.117) you Rex (01:08:44.64) a dow is supposed to give us, like, the thing that is doing that doesn't have a dow. Fiddy (01:08:54.157) It doesn't, but it very well behaves like one. For example, each EIP is fought tooth and nail, you know. There's a lot of behind the scenes activities, these ACD calls. By the way, having been into one of these ACD calls from my journey into crypto, it's one of the trenches all the way to ACD calls. And seeing the whole, I would say, politics behind it, It's a little bit like the duck that looks motionless on top of water, but the legs underneath are flapping like crazy. There's a lot happening. There's a lot of behind the scenes happening. There's stuff happening. And I would say this is basically it. The owls are organically grown. You can do some implementations to have, let's say, voting or days or that or whatever. Rex (01:09:30.473) Sure. Fiddy (01:09:53.646) At the end of the day, people don't want, if competent people don't want to have shared ownership, then it won't work. You need competent people who want to have shared ownership of a public good that they derive value out of through their own businesses. And they are incentive aligned to the success of the Baselayer protocol. So everybody who participates in Ethereum's governance. are businesses that build on top of Ethereum and they're incentive aligned. And if they don't like it, they leave, temple. That's what happens. So. Rex (01:10:34.208) Yeah, I hear you, man. I think all I'll say is that I think the difference between a DAO and what happens in Ethereum or let's be more general, right? Like all open source projects of which Ethereum is just one. Like the difference here is with a DAO involves a token that has a price. And I think what that does is gives an outsized voice. Fiddy (01:10:34.24) Yeah, that's my observation. Rex (01:11:03.438) to people with more money or who happen to be there earlier and takes away the voice of the people that are building and like wanna actually use the protocol, not because they're looking to like make money off the speculation of it, but for utility. And so, know, I, what do I know, right? Like I'm just some guy, but I think that, Fiddy (01:11:06.902) NNNN Rex (01:11:32.134) I wonder if Daoists are actually holding us back because they pervert what's amazing about open source technology with this injection of capitalism that is kind of like veering us into the wrong direction. Fiddy (01:11:50.828) Yeah, but Rex, you are not critiquing DAOs. You're critiquing the current implementation. The current implementation where you have oligarchies and plutocracy, I think that is the right critique. You're right. But I think shared ownership, things like that, these are what eventually, I think we will eventually have a reiteration of the DAO framework somewhere or another. Maybe Ethereum will turn into a DAO. Rex (01:11:56.942) Sure, but when I... Fiddy (01:12:18.957) We won't even realize that we're a part of it. So something like that, I think, is much more likely. Rex (01:12:26.252) Yeah, no, fair enough. And I think that's a hopeful way to look at the state of something that really has some good ideas and some good beliefs underlying it, but is just kind of tough in implementation today and is really maybe not giving us the results that we want today. So yeah, man, I'll take that. I'll take that. Fiddy (01:12:45.153) You hear me? Fiddy (01:12:49.357) Mm-hmm. Fiddy (01:12:53.005) Yeah, yeah. think it's always, I just want to, I know we are out of time, but I just wanted to end it by saying that sometimes you, but I've never sculpted in my life, but a sculpture doesn't really start off looking like anything, you know, it's just a block of marble or piece of rock or a bunch of clay or whatever. And after, you know, some shaving here, some shaving there, it finally starts to see shape, you know, it doesn't really. you don't really see it right away. And if you see it right away, then anybody can see it right away. And then it's nothing special about it. So I would say we are still in the shaping process and let this process keep on going on. And we will see what we shape together, Either if you're cognizant of actively shaping or you're passively shaping it. Regardless, everybody's participating. and how this mold of clay, the bunch of clay, molds into something that is much more tangible and beautiful. So that's how I see it, in a little bit more spiritual sense. Rex (01:14:00.334) No man, awesome, I love that. I think that's really cool and just like such an excellent way for us to walk out on and something like very hopeful and bullish in a time that just doesn't feel that good right now. So, Fady, man, I very much appreciate it. Before I let you go, can you just share with the audience where they can find you, if they're interested in hearing more about your work or the way you think, like what's the best way to learn more? Fiddy (01:14:27.137) Yeah, well, I mean, we spent quite a bit of time shitting on Twitter, but you can find me on Twitter. I am on Farcaster. I am on Twitter as well. My handle is Fiddy Research. Yeah, and then you should be able to find me. Rex (01:14:43.446) Awesome, man. Well, again, thank you so much. This has been truly a pleasure and just a very enlightening and hopeful and just real conversation. So, Fiddy, thank you so much and have a good rest of your day. Fiddy (01:14:59.18) You too, the pleasure was mine.