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Learn more at aka.ms/offweb the 
center welcome to epicenter. 

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I'm Sonia Agarwal and I am free.
Canst. 

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And today we are talking with 
room Christensen of maker, Dow, 

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and talking about many of the 
exciting development and things 

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that have been going on with 
Diane and the etherium 

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ecosystem. 
And, you know, about stable 

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coins and the governance of the 
maker Dow itself. 

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So it's a really exciting 
episode before that though, we 

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have a couple of announcements, 
many of them to do with the 

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Berlin blockchain week. 
The first one has to do with 

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adapt console. 
Of particular given that gnosis 

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is one of the, you know, 
co-organizers of it. 

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Would you like to talk a little 
bit about that? 

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Defcon is one of the 
conference's at Berlin 

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blockchain week. 
It's starts August 21st, and is 

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until August, August 23rd. 
And we have a 20% discount code 

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for epicenter listeners. 
So, the discount code is 

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epicenter. 
Def con 20, 19, no spaces. 

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We will also record a second 
edition of epicenter life with 

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myself sunny and Sebastian at 
the def con conference. 

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The last one that we had at The 
Interchange conversations was 

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Really nice. 
Yeah. 

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And then a lot of us will be 
attending at many different 

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events throughout the week at 
Berlin boxing week. 

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I'll be there at the better 
cartel demo day as well as the 

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web three Summit and East 
Berlin. 

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So you know we I think it should
be a really exciting week. 

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So I heard many people to show 
up and we'll actually be having 

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our own epicenter event during 
that week as well. 

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Where we'll be having our small 
Meetup similar to the one that 

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we've had a couple of times 
that, you know, Dave. 

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Khan for, and at UCC, for be a 
drink speed up with the host and

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other listeners, it will be on 
Thursday, August 22nd. 

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The location is still to be 
determined, but it will be 

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pretty close to the location 
where Defcon is. 

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So, you know, it'll just be a 
quick walk over from the from 

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the venue over to the Meetup 
location that day. 

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Finally, the last announcement I
have is not for Berlin 

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blockchain week, but for SF 
blockchain week, which is quite 

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a bit further. 
Out near the end of October, but

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the Cesc conference crypto 
economics and security 

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conference. 
That's basically it's the UC 

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Berkeley academic content box 
and Conference that. 

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And when we launched a curry 
throws annually, we're currently

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accepting papers for submission.
And so if you just go to Cesc 

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dot IO from that site, you'll be
able to find the link for how to

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submit papers. 
And so, you know, we're open to 

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papers on, you know, any topic 
within the field of the period. 

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Economics or systems designed 
Game Theory and so we encourage 

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as many people to participate as
possible. 

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I'm going to be I'm on the 
program committee. 

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So I look forward to reading all
of y'all's papers So without 

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further Ado, we'll go to the 
interview with Ronan. 

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Welcome back to epicenter. 
And today we have on with us a 

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guest room. 
Christensen who is the CEO of 

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the maker foundation and the 
founder of the maker Dow 

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protocol and so many people are,
you know, probably pretty 

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familiar with maker do 
especially, you know, it's 

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probably one of the most popular
products on the etherium 

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ecosystem with the dice table 
coin. 

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And so ruin has been on the 
episode once before, Our bat all

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the way back in 2016 before died
had even launched. 

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And, you know, since then dye 
has, you know, grown to become 

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this massive project that as 
come, you know, very successful.

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And so, you know, we thought it 
was time to bring ruin back on 

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the shore to talk a little bit 
about how their project has 

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changed and what's new and how 
this massive surgeon adoption 

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has gone. 
So, welcome back onto the 

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showroom. 
Can you give yourself? 

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Can give listeners a little bit 
of an intro about yourself in 

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case, you know, some of them may
have not seen the last episode 

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given that it is all the way 
back in 2016. 

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Yeah, absolutely. 
And yes, thanks for having me 

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back here. 
It's pretty wild to sort of look

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back three years in time and the
crypto space. 

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So this is a very interesting 
opportunity. 

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I think and just quickly about 
myself. 

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So basically, I did a lot of 
attempts of startups when I was 

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younger and And worked a lot of 
quick. 

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Lord worked a long time in Asia.
When I then discovered 

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blockchain technology and first 
going to bitcoin good really 

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into Bitcoin. 
You know became like a real 

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Bitcoin type back in 2011 2012 
but then over time I discovered 

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like I got somewhat dissolution.
Buy Bitcoins volatility really 

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and sort of the fact that it 
wasn't seeing less kind of the 

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mainstream adoption that people 
predicted initially. 

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And I think to a large extent 
that was because of the 

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volatility right in because it's
not it's more useful as gold 

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rather than regular currency. 
So I got into stable coins. 

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And I discovered bitshares which
was the first decentralized 

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stable Grant project. 
But unfortunately, due to many 

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reasons, bitshares, never really
gained the kind of traction that

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we hoped for and instead me and 
a couple of other people from 

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the bitches Community, 
eventually pretty much switched 

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over to etherium and kind of 
Took the Stephen component from 

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pictures and try to implement it
on a theorem. 

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So will you actively involved 
with like the development of the

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church? 
No, you could say I was a very 

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active Community member and in 
Russ. 

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I mean, many of these like 
fundamental ideas around, make 

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it all come straight from from 
the pitched like from the idea 

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of pitchers in particular, 
right? 

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How like you have regular 
community members ultimately 

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being like, despite not being 
sort of an official developer of

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the project, right? 
I still was very deeply involved

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in sort of the core of the 
governance of it. 

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Which is exactly what was the 
part of what is so powerful 

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about blockchain Technologies, 
right blockchain? 

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It's tease. 
So the picture system, you know,

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they used their contract for 
difference system, you know, can

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you tell us a little bit about 
some of the things that why it 

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shares you know maybe didn't 
work and how that kind of 

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contributed to your design of 
the maker system with the cdp's.

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Yeah so there's really Couple of
reason I'm saying this is really

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three major reasons why like I 
mean, the three major things 

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that to some extent got 
ambitious way, right? 

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So first of all, was that 
pitchers, was this, it was not 

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like aetherium smart contract 
platform rather. 

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It was kind of like a Swiss army
knife sir. 

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So it's like a single platform 
or like a single project that 

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tried to do many different 
things, right? 

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So it's both it did, save all 
coins which is mainly, like, was

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kind of this main product, 
right? 

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And really, they're the biggest 
Innovation of the project but it

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also did things like privacy and
like a very Advanced privacy 

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system and things like account 
names, which is a time. 

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Like, instead of having the long
strings, like, having actual 

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account names was like, very 
revolutionary and just like a 

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whole range of other things like
decentralized exchange, there 

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was even like some music related
stuff which is I think is funny.

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It's like it's kind of related 
to what ended up happening with 

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our chain many years later. 
But I mean there's just there 

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was a lot of try to do a lot. 
Things and as a result it didn't

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really like mr. 
Will on any one specific product

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at least within the very early 
like big window of opportunity 

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that it had back even before we 
throw him launched and then 

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secondly, the were some 
fundamental problems with its 

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table coin design. 
Still chiefly that the stable 

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coins were based on a single 
collateral type, right? 

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So they were only collateralized
by the pitch years as it is. 

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Itself. 
So, actually similar to the 

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current design of single metal 
die. 

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And the downside with that 
approach is that it really 

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limits the level that the system
can scale. 

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Because once you get to a 
certain size, you cannot create 

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the systemic risk, where the 
stable current failing could 

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take down the entire platform. 
And that's of course, like 

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that's the really big innovation
that we brought to the table in 

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that, we actually figured out. 
How do you take this basic 

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approach with a single little 
time? 

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And you actually did design a 
system that has many different 

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collateral types, which can then
diversify, and really mitigate 

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the risk That's the so like 
that's inherited having just a 

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single little type and even 
Branch out the use. 

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Case Way Beyond what was 
originally envisioned in terms 

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of like even accessing 
real-world assets and all sorts 

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of even more sort of futuristic 
stuff. 

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And then I think the final point
that I think is also like has 

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been really critical for our 
development and really a big 

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part of how maker has evolved is
that the pitchers community and 

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some of the pictures Philosophy 
was quite extreme in that it was

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really like hardcore anarchism 
in many ways, and really by to 

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some extent totally detached 
from reality which then ended up

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just like, you know, turning off
a lot of people who otherwise 

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have been interested in, but who
simply, we're like, turned off 

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by like the the idea that if you
want to use this super awesome 

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technology, you also have to 
like, subscribe to all this 

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ideology right which is not 
always. 

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In fact, it's a pretty bad 
strategy for trying to get 

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business adoption. 
So So maker did start off like 

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very much derived from that and 
I kissed Philosophy for sure, 

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but it was with the mindset that
the end. 

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The goal is to make change in 
the real world and and that 

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perspective then letters on this
like ability to essentially grow

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up alongside the rest of the 
ecosystem, right? 

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Because really today the 
blockchain space is just very 

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different from what it was even 
less a back in 2016. 

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Yeah, absolutely. 
And we are deep dive into how 

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exactly the stability mechanism 
Works in a second, but just as a

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catch-up, can you can you give 
us the 90 second version of what

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happened since we last had you 
on the show? 

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Yeah. 
I mean, it's, I think it is 

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really mind-blowing. 
If you could go back to 2016 and

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then tell people what the 
landscape looks like today would

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like make her out in the world 
and things like that. 

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Impound another DIY projects all
working together, but just the 

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very basic Milestones, right? 
Is obviously the launch of 

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single collateral died which was
really, to some extent. 

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The the first launch of like a, 
like the first successful launch

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of a major dep and Then followed
immediately by the trial by 

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fire. 
As it had to survive, a 95% 

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crashing, its collateral, right?
Just study immediately from its 

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launch and actually single felt 
I was able to, you know, totally

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like brush, Alright, so that was
that complete creche in 2018 and

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at no point in time, they did in
any ways of come close to 

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threaten the stability of die or
threaten the Integrity of the 

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pig. 
So that really created this 

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critical proof point that the 
technology didn't affect worked 

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work in the way it was supposed 
to work, which then led to just 

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this greater sense of trust and 
system and ultimately adoption 

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of follower that, right? 
So in summer, 2018, Seen the 

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system, had its initial debt 
ceiling of 50 million and the 

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governance had to actually raise
it beyond that. 

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And then it went all the way to 
about 80 million dollar in 

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circulation, which is where it's
sits today as well as something.

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Like, I think it's more than 300
million dollars worth of 

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ethereal blocked as collateral 
in the system right now. 

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And then what came next was the 
proliferation of the defy 

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ecosystem, right? 
So, this sprawling ecosystem of 

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startups, that could really be 
made by, Anyone right? 

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Like and I can fit together 
seamlessly and because they have

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died as their source of 
decentralized ability, they can 

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actually provide very useful 
products and very useful 

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services without giving up or 
sort of compromising on the 

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decentralization which is 
otherwise often what you see is 

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00:13:21,500 --> 00:13:25,100
the the trade-off with for 
instance something let me just 

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with Bitcoin for it. 
So I tried a lot of very 

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00:13:26,600 --> 00:13:30,500
interesting stuff you do that or
just other Other systems that 

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00:13:30,500 --> 00:13:33,100
are that don't up that aren't 
based around smart contracts. 

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00:13:33,500 --> 00:13:36,400
You very often have to give up 
decentralisation to get more 

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advanced functionality and I 
think this might be the first 

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time where we've seen this. 
Like, we've seen the opposite 

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where we've actually seen that 
decentralization. 

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In fact, adds to the 
functionality and adds to the 

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convenience of using these apps 
because they all fit together 

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seamlessly, right? 
Which is I mean it is really my 

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blur I think and it's not many 
people think about that also 

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00:13:56,200 --> 00:13:59,500
because maybe many people didn't
really weren't around and So 

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2015 2016 when the theorem 
started but it is pretty crazy 

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that the ecosystem has actually 
been able to deliver on that 

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promise of like this seamless 
interconnection between you 

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know, trustless and 
permissionless financial 

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services. 
And then finally, I think this 

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has been a little bit more than 
90 seconds now. 

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But the final and perhaps the 
well in my opinion, the most 

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critical Milestone is that the 
community was able to bootstrap 

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the decentralized. 
Tons of the single flat or die 

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protocol and actually begin 
controlling the system. 

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Directly through them 
cartographers in a very active 

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and very well somewhat efficient
manner although with a few 

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pitfalls here and there. 
But but that's has really been. 

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I mean, that is the most 
incredible thing of all because 

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of all the things, it is really 
the decentralized governance 

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00:14:51,500 --> 00:14:57,000
that collect defines the mega 
project the most and it is the 

256
00:14:57,200 --> 00:15:01,200
critical value proposition and 
the Critical feature of the 

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system that really makes it 
interesting because it promises 

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to deliver something that's 
completely different from 

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existing Financial systems. 
Write that are all like 

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00:15:10,600 --> 00:15:15,000
incredibly lockdown and and with
with this like inherent lack of 

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00:15:15,000 --> 00:15:18,700
transparency and and very often 
contradicting incentives built 

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00:15:18,700 --> 00:15:21,200
into the system. 
I mean, this also just one of 

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the things that many people 
didn't believe it was even 

264
00:15:24,600 --> 00:15:27,200
possible, right? 
Like, I mean, in fact, we didn't

265
00:15:27,200 --> 00:15:28,700
even really. 
I mean, we weren't really sure 

266
00:15:28,700 --> 00:15:30,500
if it was you Owing to be 
possible to do, right? 

267
00:15:30,500 --> 00:15:34,900
If you could actually launch a, 
like a, like a sustainable 

268
00:15:34,900 --> 00:15:38,500
Financial system, and then just 
let it be controlled by random 

269
00:15:38,500 --> 00:15:41,000
strangers over the internet, as 
long as they have, the right 

270
00:15:41,000 --> 00:15:43,700
incentives by holding the right 
token, but it has actually 

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00:15:43,700 --> 00:15:45,900
played out, right? 
And and nowadays we've reached a

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00:15:45,900 --> 00:15:50,400
point where on a weekly basis, 
the a whole is actually manage 

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00:15:50,400 --> 00:15:55,300
the system actually, This 
episode of epicenter is brought 

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00:15:55,300 --> 00:15:57,700
to you by Cosmos. 
The internet of blockchains 

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00:15:58,000 --> 00:16:00,900
Cosmos is live and we couldn't 
be more excited to see so many 

276
00:16:00,900 --> 00:16:04,200
projects already building on it.
Blockchain Technologies are 

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00:16:04,200 --> 00:16:07,400
evolving fast and development 
shouldn't be one-size-fits-all 

278
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as a dab. 
Developer you need the tools 

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280
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which allows you to customize 
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282
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needs. 
It's powered by ten Army Corps 

283
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in advanced implementation of 
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284
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protocol Cosmos, takes care of 
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285
00:16:27,900 --> 00:16:30,200
allows you to focus on building 
your application, in your 

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00:16:30,200 --> 00:16:32,800
language of choice. 
If you're in smart, contracts 

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00:16:32,800 --> 00:16:35,700
will be supported soon. 
And the SDK makes it simple for 

288
00:16:35,700 --> 00:16:38,200
you to connect to other block 
chains in the cosmos network. 

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00:16:38,500 --> 00:16:40,900
If you have an idea for adapt 
and would like to learn more 

290
00:16:40,900 --> 00:16:44,200
about the cosmos SDK or if you'd
like to connect your existing 

291
00:16:44,200 --> 00:16:48,600
dot the cosmos visit Cosmos dot 
Network / epicenter for 

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00:16:48,600 --> 00:16:50,800
represent our listeners, the 
cosmos team will reach out to 

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00:16:50,800 --> 00:16:52,900
answer your questions and help 
you get started. 

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00:16:53,500 --> 00:16:56,000
We like to thank Cosmos for 
their support of epicenter. 

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00:16:57,200 --> 00:17:00,100
Can you explain to us how the 
system makes sure that one day 

296
00:17:00,100 --> 00:17:03,600
is always 1 US dollar. 
So I mean just for just just for

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00:17:03,600 --> 00:17:06,900
the larger picture there are 
other stable tokens such as you 

298
00:17:06,900 --> 00:17:11,300
SEC and the Gemini dada and 
tether that are supposedly 

299
00:17:11,300 --> 00:17:15,900
backed by a dollar in the bank. 
For each one of these coins that

300
00:17:15,900 --> 00:17:18,900
are issued. 
So die actually works 

301
00:17:19,400 --> 00:17:23,000
differently and that it's backed
by crypto collateral. 

302
00:17:23,599 --> 00:17:27,599
So how does that work? 
And how Do you keep, how do you 

303
00:17:27,599 --> 00:17:31,100
Peg the value to the dollar? 
Yeah, very important question. 

304
00:17:31,500 --> 00:17:33,300
There's kind of two mechanisms 
to right? 

305
00:17:33,300 --> 00:17:36,300
There's two sides to it. 
So, there's the, there's the 

306
00:17:36,300 --> 00:17:41,600
long-term question of 
fundamental solvency and I 

307
00:17:41,600 --> 00:17:43,600
guess, you can say resilience of
the system, right? 

308
00:17:44,000 --> 00:17:47,700
Which is like, can it like, is 
it really is a real value there?

309
00:17:48,000 --> 00:17:50,700
Behind the tongue or is it all 
just like hot air, right? 

310
00:17:51,200 --> 00:17:54,000
And that's where the answer is. 
It comes from the Unchained 

311
00:17:54,000 --> 00:17:56,200
collateralization, right? 
So the reason why you know, that

312
00:17:56,200 --> 00:17:59,400
there's Is real value in your 
thigh is because you can go to 

313
00:17:59,400 --> 00:18:02,000
the blockchain. 
You know, right now go to a 

314
00:18:02,000 --> 00:18:06,200
tools for instance and you can 
actually, you know, on your own 

315
00:18:06,200 --> 00:18:10,200
do if complete audit of every 
single aspect of the system in 

316
00:18:10,200 --> 00:18:12,400
real time, even, right? 
And you can ensure that there's 

317
00:18:12,400 --> 00:18:15,500
always this like, there's always
this fundamental and inherent 

318
00:18:15,500 --> 00:18:19,300
solvency in the system as well 
as a safe level of over 

319
00:18:19,300 --> 00:18:23,100
collateralization, so that 
despite the system right now 

320
00:18:23,100 --> 00:18:27,500
being backed by only eith, And 
the inherent volatility of East,

321
00:18:28,300 --> 00:18:31,500
the still able to remain stable,
even in situations, such as the 

322
00:18:31,500 --> 00:18:36,200
2018 crash, because the risk 
parameters. 

323
00:18:36,200 --> 00:18:40,300
So the kind of like the, the 
safety logic of the system that 

324
00:18:40,300 --> 00:18:45,300
keeps it safe from things like 
Crash from, a crash rate is set 

325
00:18:45,300 --> 00:18:48,000
correctly, so that you could 
have a, you know, you can have a

326
00:18:48,008 --> 00:18:51,000
significant fall in the price of
eath, but that's fine because 

327
00:18:51,300 --> 00:18:54,800
there's about five times as much
value of Ethan the system as 

328
00:18:54,800 --> 00:18:56,400
there. 
Is outstanding died in the 

329
00:18:56,400 --> 00:18:58,600
market, right? 
So you could really live system 

330
00:18:58,600 --> 00:19:02,400
can handle a very big Crush. 
So, that's the best kind of like

331
00:19:02,400 --> 00:19:04,200
the lot. 
You know, that's the fundamental

332
00:19:04,900 --> 00:19:06,900
like value in the system. 
That means that there's a 

333
00:19:06,908 --> 00:19:10,500
potential here for pursuit of 
for stability, right? 

334
00:19:10,800 --> 00:19:14,700
But then the other question is, 
how do you create short-term 

335
00:19:14,900 --> 00:19:17,200
stability in one hand? 
So like packed price? 

336
00:19:17,300 --> 00:19:18,600
Right? 
Let's like that stays at the 

337
00:19:18,600 --> 00:19:21,600
same price point, but even more 
importantly, how do you create 

338
00:19:21,600 --> 00:19:23,300
liquidity, right? 
So how do you make it possible 

339
00:19:23,300 --> 00:19:29,200
to move large amounts of do? 
Into East or into another stable

340
00:19:29,200 --> 00:19:31,100
coin or even cash it out for 
Fiat. 

341
00:19:32,000 --> 00:19:36,000
And the answer is that it's it 
is like you said, it's kind of 

342
00:19:36,000 --> 00:19:38,700
the system, keep this stable but
perhaps a better way to think of

343
00:19:38,700 --> 00:19:41,300
it is that it's the government's
that keeps the keeps it stable 

344
00:19:41,300 --> 00:19:44,100
and then actually make it takes 
care of this because it is 

345
00:19:44,200 --> 00:19:49,500
managed through the like 
adjusting the rates in the 

346
00:19:49,500 --> 00:19:53,100
system. 
So basically the the cost of 

347
00:19:53,200 --> 00:19:57,600
generating that I primarily is 
how How it works right now in 

348
00:19:57,600 --> 00:20:01,200
the future, it will also be the 
savings rates. 

349
00:20:01,200 --> 00:20:07,100
Like the games you get from 
holding die but it's not going 

350
00:20:07,100 --> 00:20:09,300
to be available until a future 
version. 

351
00:20:09,300 --> 00:20:12,400
So right now it's actually 
purely done on the the 

352
00:20:12,500 --> 00:20:17,900
generating die side which is 
really it's similar to changing 

353
00:20:17,900 --> 00:20:22,200
the cost of borrowing. 
Let's say US Dollars which is 

354
00:20:22,200 --> 00:20:25,700
exactly how the let's say, the 
Federal Reserve Central banks, 

355
00:20:25,700 --> 00:20:29,100
in general, they maintain the 
value of their currencies. 

356
00:20:29,400 --> 00:20:32,200
So, what they do is they modify 
the interest rates, and as a 

357
00:20:32,200 --> 00:20:35,000
result, they basically change 
How likely it is. 

358
00:20:35,000 --> 00:20:38,000
Someone in the market is going 
to borrow money, which expands 

359
00:20:38,000 --> 00:20:39,900
the food supply, right? 
Because when you borrow money in

360
00:20:39,900 --> 00:20:43,100
a fractional Reserve System, you
you're essentially creating new 

361
00:20:43,100 --> 00:20:46,900
money or other, or will do the 
opposite, right? 

362
00:20:46,900 --> 00:20:49,900
Pay back their loans and 
actually just hold onto money if

363
00:20:49,900 --> 00:20:51,300
the interest rates higher, 
right? 

364
00:20:51,500 --> 00:20:55,200
So it's the same thing that the 
maker system doesn't That 

365
00:20:55,200 --> 00:20:58,200
governance controls is they 
modify, What's called the 

366
00:20:58,200 --> 00:21:03,700
stability fee, which is the fee 
that someone pays to essentially

367
00:21:03,700 --> 00:21:09,000
borrow die or generate die by 
depositing collateral into the 

368
00:21:09,000 --> 00:21:12,400
system and then utilizing the 
smart contract system to to 

369
00:21:12,400 --> 00:21:15,600
essentially print you die. 
And then the stability is the 

370
00:21:15,600 --> 00:21:17,300
price. 
You have to pay for this for 

371
00:21:17,300 --> 00:21:20,900
this service and it's cut and 
that's what I was referring to 

372
00:21:20,900 --> 00:21:24,100
that this is what's be actively 
changed like actively modified 

373
00:21:24,400 --> 00:21:28,500
every single Right now by the 
decentralized governance, this 

374
00:21:28,500 --> 00:21:32,500
stability fee has gone up from I
think initially something like 5

375
00:21:32,500 --> 00:21:36,500
or 7 percent to currently over 
20%, what do you make of that? 

376
00:21:36,500 --> 00:21:41,100
So what what what do you think 
this means for the ecosystem? 

377
00:21:41,100 --> 00:21:46,700
Not in terms of how expensive it
is to borrow money, but in terms

378
00:21:46,700 --> 00:21:48,600
of, what does this say about? 
The ecosystem? 

379
00:21:48,600 --> 00:21:50,600
What has changed? 
What's the underlying metric 

380
00:21:50,600 --> 00:21:53,300
that has changed? 
Yeah, that's it. 

381
00:21:53,300 --> 00:21:57,000
Started at 0.5% when the system 
was launched and the Very like 

382
00:21:57,000 --> 00:22:01,600
the very basic assumption that 
turned out to be wrong, is that?

383
00:22:02,800 --> 00:22:06,300
It did assumption was that 
there's going to be incredible 

384
00:22:06,300 --> 00:22:07,900
demand for decentralized stable 
fine. 

385
00:22:08,500 --> 00:22:11,400
And which is kind of like the 
simple use case rather than sort

386
00:22:11,400 --> 00:22:14,400
of the basic value proposition 
of the maker protocol. 

387
00:22:15,100 --> 00:22:19,200
And then this the secondary use 
case of generating day which is 

388
00:22:19,200 --> 00:22:22,300
a much more advanced type of way
to interact with the system. 

389
00:22:22,300 --> 00:22:25,400
Right which is its and it's 
similar to its similar to 

390
00:22:25,400 --> 00:22:29,000
borrowing money in the bank, or 
taking out a mortgage or even 

391
00:22:29,000 --> 00:22:32,400
margin trading in some 
situations where you deposit. 

392
00:22:32,600 --> 00:22:36,600
Laterally into the system and 
you generate diorite and yeah, 

393
00:22:36,600 --> 00:22:39,200
it was just the first of all the
interface to do, this was 

394
00:22:39,200 --> 00:22:41,900
incredibly complicated and it 
took about seven etherium two 

395
00:22:41,900 --> 00:22:44,500
sections to even have a CD P go 
through, right? 

396
00:22:45,300 --> 00:22:48,600
And it was just all. 
So like is a very Advanced and 

397
00:22:48,600 --> 00:22:52,200
completely Cutting Edge and new 
type of service, right? 

398
00:22:52,200 --> 00:22:56,200
Like the very first defy app and
that had never been done before 

399
00:22:56,200 --> 00:23:00,500
the term defy even existed. 
So we naturally assume that it 

400
00:23:00,500 --> 00:23:02,500
was going to be more difficult 
to people to do that. 

401
00:23:02,600 --> 00:23:06,400
It whereas it will be easier to 
get them to use the most symbol 

402
00:23:06,400 --> 00:23:08,200
and approachable stable coin 
functionality. 

403
00:23:08,600 --> 00:23:11,800
And this was also the case very 
in the very beginning, but very 

404
00:23:11,800 --> 00:23:15,400
quickly. 
The I like the idea of defy of 

405
00:23:15,400 --> 00:23:20,800
being able to in a decentralized
system actually access financing

406
00:23:20,800 --> 00:23:24,500
for your inventory and taking on
decentralized Magic positions 

407
00:23:24,900 --> 00:23:27,200
was act. 
Like it was a very powerful idea

408
00:23:27,200 --> 00:23:30,600
and it's essentially spread like
wildfire with people teaching 

409
00:23:30,600 --> 00:23:32,400
each other. 
I guess, how to do. 

410
00:23:32,600 --> 00:23:36,100
How do you use this, right? 
Even in the very first stage. 

411
00:23:36,100 --> 00:23:38,500
We were so different views. 
So, what ended up happening is 

412
00:23:38,500 --> 00:23:43,200
that there were way more people 
interested in using the advanced

413
00:23:43,600 --> 00:23:46,700
degeneration functionality, 
right to to borrow and borrow 

414
00:23:46,700 --> 00:23:50,700
Diane open cdp's. 
Then there are people using die 

415
00:23:50,700 --> 00:23:53,200
naturally. 
And then what the system does is

416
00:23:54,100 --> 00:23:55,400
it because what this affects 
right? 

417
00:23:55,400 --> 00:23:57,200
It's like the, it's the supply 
and demand, right? 

418
00:23:57,200 --> 00:24:00,100
So, you have sort of the de 
Madrid I, which sits some 

419
00:24:00,100 --> 00:24:02,400
particular level, and then you 
have the supply of die. 

420
00:24:02,700 --> 00:24:05,000
Which, which sits somewhere 
else, and they're kind of 

421
00:24:05,000 --> 00:24:07,300
independent of each other. 
As in people holding by are 

422
00:24:07,300 --> 00:24:11,000
people who want to go out and 
use a stable coin, maybe spend 

423
00:24:11,000 --> 00:24:15,400
it people who open cdp's, have a
different, a completely 

424
00:24:15,400 --> 00:24:18,300
different Demand right. 
They're interested in leverage 

425
00:24:18,300 --> 00:24:21,300
their just financing. 
So the way you and what do you 

426
00:24:21,308 --> 00:24:23,500
have to what has to happen is 
they have to meet exactly in the

427
00:24:23,500 --> 00:24:25,000
middle. 
So they have to be exactly the 

428
00:24:25,000 --> 00:24:28,000
same because if they're not the 
price won't be $1. 

429
00:24:28,200 --> 00:24:31,600
So if let's say supplies higher 
and demand is lower, the price 

430
00:24:31,600 --> 00:24:33,500
will be below a dollar. 
And if it's the other way 

431
00:24:33,508 --> 00:24:35,300
around, the price will be above 
it, all right? 

432
00:24:35,400 --> 00:24:38,200
And so what governance does 
fundamentally to kind of like 

433
00:24:38,200 --> 00:24:42,400
tie them into sink is to adjust 
the stability fee. 

434
00:24:42,400 --> 00:24:46,100
So it so what that means is 
adjusting on the supply side, 

435
00:24:46,400 --> 00:24:51,100
how look like, how interesting, 
how, how, how, yeah, just like 

436
00:24:51,100 --> 00:24:53,500
the terms on which you can 
generate that, right? 

437
00:24:53,700 --> 00:24:56,700
Because if the stability of 
these higher it costs way more 

438
00:24:56,700 --> 00:24:58,900
to generate die unless people 
are going to be interested in 

439
00:24:58,900 --> 00:25:01,200
it. 
So that's why and that's then 

440
00:25:01,400 --> 00:25:04,600
how you how we know Oh that what
happened is that they were tons 

441
00:25:04,600 --> 00:25:06,400
of demand for generating diet, 
right? 

442
00:25:06,400 --> 00:25:10,200
Because the stability features 
shut up which meant that without

443
00:25:10,200 --> 00:25:12,900
like if the disability has 
stayed the same the system 

444
00:25:12,900 --> 00:25:16,300
probably wouldn't be in sync. 
Today will probably be like 

445
00:25:16,300 --> 00:25:18,500
they'll be way more die 
outstanding but also the price 

446
00:25:18,500 --> 00:25:25,100
would be below $1. 
So why was the stability Theory,

447
00:25:25,100 --> 00:25:29,000
the only way to modify the 
supply? 

448
00:25:29,200 --> 00:25:34,100
I mean, in a way, what should we
expect that, you know, back when

449
00:25:34,100 --> 00:25:38,100
the dye price dip to like, you 
know, 80 cents or something? 

450
00:25:38,300 --> 00:25:41,200
Shouldn't we expect that the 
difference from the shelling 

451
00:25:41,200 --> 00:25:46,500
point of $1, should provide the 
CDP creators enough incentive to

452
00:25:46,500 --> 00:25:49,700
Arbitrage that and you know, 
maybe buy a bunch of die close 

453
00:25:49,700 --> 00:25:52,400
their cdp's. 
Allow the system to go back up 

454
00:25:52,400 --> 00:25:57,400
and then reopen the cdp's when 
the dye prices back to a dollar.

455
00:25:59,000 --> 00:26:01,900
Yeah that and that's the basic 
Assumption of how it's a very 

456
00:26:02,000 --> 00:26:04,000
micro scale, the system remain 
stable, right? 

457
00:26:04,000 --> 00:26:08,900
But the thing is that that 
assumption depends on The like 

458
00:26:08,900 --> 00:26:11,700
another subject right? 
Which is that governance will 

459
00:26:11,700 --> 00:26:14,000
actually act to deal with the 
balance, right? 

460
00:26:14,400 --> 00:26:18,200
And that's, that's of course, in
the early stages of system, 

461
00:26:18,200 --> 00:26:21,100
that's there's less proof that 
got the governor's actually 

462
00:26:21,100 --> 00:26:23,200
works, right? 
So the fact that the shelling 

463
00:26:23,200 --> 00:26:26,700
Point even is one dollar isn't 
really as established compared 

464
00:26:26,700 --> 00:26:29,500
to, you know, after basically 
today, right? 

465
00:26:29,500 --> 00:26:32,200
Where people are a lot more more
willing to trust the fact that 

466
00:26:32,200 --> 00:26:35,700
the price will go back to $1. 
You think part of the issue 

467
00:26:35,700 --> 00:26:39,900
might be that the set of Who are
able to participate in? 

468
00:26:39,900 --> 00:26:44,000
Arbitrage is limited where are, 
you know, I guess what I was 

469
00:26:44,000 --> 00:26:46,500
first learning about die. 
Like it didn't guess. 

470
00:26:46,500 --> 00:26:48,000
It didn't hit me. 
And then when I was looking at 

471
00:26:48,000 --> 00:26:51,700
it again, like, you know, like a
couple years ago, it took me a 

472
00:26:51,700 --> 00:26:54,400
while to realize that oh, wait, 
the die holders. 

473
00:26:54,400 --> 00:26:57,000
Actually don't have any claims 
to underlying collateral 

474
00:26:57,000 --> 00:27:00,600
assuming, you know, except in 
the case of triggering a global 

475
00:27:00,600 --> 00:27:03,700
settlement but because it's not 
possible for the die holders to 

476
00:27:03,700 --> 00:27:07,600
actually, you know, go against 
the basically, you know, the 

477
00:27:07,600 --> 00:27:10,200
only people People who are able 
to Arbitrage, it are the CDP 

478
00:27:10,200 --> 00:27:14,700
holders, and they have to over 
collateralize, so heavily, and 

479
00:27:14,700 --> 00:27:19,200
so that heavily limits, the set 
of potential arbitrageurs, thus 

480
00:27:19,200 --> 00:27:21,300
making it a much more 
inefficient Market. 

481
00:27:22,400 --> 00:27:25,600
What's actually being a rest and
this is what's what's, I mean, 

482
00:27:25,600 --> 00:27:28,100
this is the part that can be 
very difficult to to sort of 

483
00:27:28,108 --> 00:27:30,900
wrap your head around, right? 
But it really is the cost of 

484
00:27:30,900 --> 00:27:34,900
capital. 
So it's not a quick because 

485
00:27:35,100 --> 00:27:37,900
they're like there is no 
fundamental claim in any way to 

486
00:27:37,900 --> 00:27:40,400
$1 it. 
Unless, in the situation that 

487
00:27:40,400 --> 00:27:41,800
you described the global 
settlement, right? 

488
00:27:41,800 --> 00:27:45,700
Which is a very like Niche, each
case that isn't actually meant 

489
00:27:45,700 --> 00:27:49,000
to even happen. 
My point, is that even a CDP 

490
00:27:49,000 --> 00:27:51,600
holder? 
Doesn't have some like, direct 

491
00:27:51,600 --> 00:27:54,000
way of If I have one day, it's 
automatically. 

492
00:27:54,000 --> 00:27:56,000
Unlocks one dollar value 
elsewhere. 

493
00:27:56,100 --> 00:27:58,500
I mean you could, it does of 
course, apply on the actual 

494
00:27:58,500 --> 00:28:00,400
liquidation ratio. 
Sure. 

495
00:28:00,400 --> 00:28:04,200
But it doesn't like, I mean in 
the end it's a different concern

496
00:28:04,200 --> 00:28:06,600
compared to kind of like the 
risk management at the better 

497
00:28:06,600 --> 00:28:09,300
larger scale right. 
And in reality what they're what

498
00:28:09,300 --> 00:28:11,800
they're really looking at is the
cost of capital. 

499
00:28:11,800 --> 00:28:15,400
So what they're they're 
interested in is How likely are 

500
00:28:15,400 --> 00:28:16,900
they going? 
Like, I think going to make more

501
00:28:16,900 --> 00:28:20,100
money if they hold onto the CDP 
and they hold onto the leveraged

502
00:28:20,100 --> 00:28:21,700
position of ether instance in 
there. 

503
00:28:22,800 --> 00:28:26,200
And despite and paying whatever 
cause they have to pay on the 

504
00:28:26,200 --> 00:28:31,100
both on the you know on 
disability fee side but also on 

505
00:28:31,100 --> 00:28:34,700
whatever potential you know 
Arbitrage gain that would be. 

506
00:28:35,200 --> 00:28:38,900
And the thing is that in many 
cases you know the even if the 

507
00:28:38,900 --> 00:28:43,400
Arbitrage potentially huge it 
might not actually outweigh the 

508
00:28:43,400 --> 00:28:46,100
the sort of imagined again, I 
like the projected gains, I'm 

509
00:28:46,100 --> 00:28:49,500
sleepy holder so that there's 
just so many Dynamics playing 

510
00:28:49,500 --> 00:28:54,500
into this where There's only one
solution and that is very 

511
00:28:54,500 --> 00:28:57,400
proficient management of the 
stability fee and the monetary 

512
00:28:57,400 --> 00:28:59,700
policy of the system. 
But with that in place they're 

513
00:28:59,700 --> 00:29:03,300
actually like it should 
theoretically be exactly as 

514
00:29:03,400 --> 00:29:05,900
efficient as the current 
monetary system is in this 

515
00:29:05,900 --> 00:29:09,300
regard but of course with the 
extra benefit of also being even

516
00:29:09,300 --> 00:29:11,900
more seamless and blushing based
and so on. 

517
00:29:12,900 --> 00:29:15,400
So to make it as efficient as 
the current monetary system that

518
00:29:15,400 --> 00:29:20,800
would make the claim that the 
mkr holders are as proficient at

519
00:29:20,900 --> 00:29:24,300
monitor. 
Policy as the, you know, the 

520
00:29:24,600 --> 00:29:27,600
people at the Federal Reserve 
who are, you know, generally 

521
00:29:27,600 --> 00:29:30,900
much, you know, trained 
Economist and stuff, two 

522
00:29:30,900 --> 00:29:34,100
questions here one, which is a 
question I've had for a long 

523
00:29:34,100 --> 00:29:36,400
time and I unfortunately 
couldn't find any good 

524
00:29:36,400 --> 00:29:40,700
resources, answering it on the 
Internet is how was mkr 

525
00:29:40,700 --> 00:29:44,800
distributed because, you know, 
there was never any sort of Ico 

526
00:29:44,800 --> 00:29:47,500
or anything done for mkr. 
Yeah. 

527
00:29:47,500 --> 00:29:48,900
Kind of how does that 
distributed? 

528
00:29:48,900 --> 00:29:52,100
What percentage of it is still 
in the hands of the Nation as 

529
00:29:52,100 --> 00:29:56,800
well as VCS or and then what 
percentage up is in the hands of

530
00:29:56,900 --> 00:30:00,200
The Wider public. 
And then to how do we make sure 

531
00:30:00,200 --> 00:30:04,700
that the people who are holding 
this, mkr are necessarily the 

532
00:30:05,000 --> 00:30:08,000
most sound monetary policy 
decision makers. 

533
00:30:09,400 --> 00:30:12,200
Yes, this is really the 
fundamental question of the, the

534
00:30:12,200 --> 00:30:14,300
system, right? 
Because like I said earlier, the

535
00:30:14,300 --> 00:30:19,500
decentralized governance is the 
cool feature and the I mean, the

536
00:30:19,500 --> 00:30:23,900
basic underlying assumption is 
that If you have a proper like 

537
00:30:23,900 --> 00:30:29,800
open and like equal playing 
field, I guess you can say for 

538
00:30:29,800 --> 00:30:33,400
the science and the knowledge 
related to monetary policy. 

539
00:30:33,600 --> 00:30:36,500
You always be able to beat any 
amount of experts, right? 

540
00:30:36,500 --> 00:30:39,400
Because you will have the entire
Global body of knowledge 

541
00:30:39,400 --> 00:30:40,900
participating directly in 
governance. 

542
00:30:41,600 --> 00:30:45,000
Which means that you could even 
have, let's say, central banks 

543
00:30:45,000 --> 00:30:47,200
participating potential, right? 
And they would all have the 

544
00:30:47,200 --> 00:30:51,000
exact same point of access in 
the SEC, same framework to 

545
00:30:51,000 --> 00:30:54,000
participate, as Well, every 
other Central Bank or every 

546
00:30:54,000 --> 00:30:58,100
other Commercial Bank or we all 
the like random econ dirt 

547
00:30:58,400 --> 00:31:00,500
sitting in the basement, I kind 
of like thinking about 

548
00:31:00,700 --> 00:31:04,100
Innovative new, you know, ideas 
around it, right? 

549
00:31:04,300 --> 00:31:07,500
And the thing is that in the end
it's very hard to sort of say, 

550
00:31:07,500 --> 00:31:12,800
who is like it's very hard to 
pick kind of like this genius 

551
00:31:12,800 --> 00:31:15,100
person, who knows how to like 
Run the World economy, right? 

552
00:31:15,100 --> 00:31:19,600
Because it's kind of it's, you 
know, Global like macroeconomics

553
00:31:19,600 --> 00:31:23,800
and monetary policy is it Silly 
to some extent a bit similar to 

554
00:31:23,800 --> 00:31:28,000
Voodoo in that it's not totally 
like it's not, you know it's 

555
00:31:28,000 --> 00:31:32,000
like white fluid and it's quite 
to some extent, an art form as 

556
00:31:32,000 --> 00:31:35,300
well, right? 
So what that means is that it's 

557
00:31:35,300 --> 00:31:38,200
not really guarantee that kind 
like highly-decorated Ultra 

558
00:31:38,200 --> 00:31:41,100
expert, is the guy that will 
prevent the financial crisis 

559
00:31:41,100 --> 00:31:43,300
from happening. 
It could just as easily be 

560
00:31:43,300 --> 00:31:46,000
someone who's just seen 
something that no one else saw 

561
00:31:46,000 --> 00:31:48,100
because they all were locked in 
their old way of thinking, or 

562
00:31:48,100 --> 00:31:52,000
something like that, right? 
And the core. 

563
00:31:52,100 --> 00:31:54,400
Year of the maker doubt, 
decentralized governance, is 

564
00:31:54,400 --> 00:31:57,300
that what we want to do is we 
want to create? 

565
00:31:59,000 --> 00:32:02,300
I mean, what we really think of 
as something like something 

566
00:32:03,100 --> 00:32:04,900
similar to a scientific 
Community right? 

567
00:32:04,900 --> 00:32:09,400
Where there is a free, Again 
like a free playing field and 

568
00:32:09,400 --> 00:32:14,200
free sort of open framework for 
all ideas to participate in a 

569
00:32:14,400 --> 00:32:17,600
like a like an unbiased Forum, 
right? 

570
00:32:17,600 --> 00:32:22,700
Where you can have like where 
every perspective gets a chance 

571
00:32:22,700 --> 00:32:24,900
to participate, right? 
So whether it's established 

572
00:32:24,900 --> 00:32:30,100
Central Bank or the sort of the 
the the more radical and more 

573
00:32:30,100 --> 00:32:32,900
modern or whatever new 
Innovative approaches, of 

574
00:32:32,900 --> 00:32:36,400
course, there has to be like, I 
mean, once you've done of open 

575
00:32:36,400 --> 00:32:38,800
that Pandora's There's so many 
questions, there's a gif 

576
00:32:38,800 --> 00:32:41,700
moderation and like priority. 
And so on, right that needs to 

577
00:32:41,708 --> 00:32:46,300
be considered and in the end and
that's maybe also like a, like, 

578
00:32:46,300 --> 00:32:49,300
a critical other piece of it is 
that you have to, of course, you

579
00:32:49,300 --> 00:32:53,000
have to ground yourself in a 
conservative mindset, right? 

580
00:32:53,000 --> 00:32:55,000
Because of course, if you just 
go out and so do radical 

581
00:32:55,000 --> 00:32:57,800
monetary policy, you will 
quickly end up looking like 

582
00:32:58,200 --> 00:33:00,000
Venezuela or turkey or 
something, right? 

583
00:33:00,000 --> 00:33:03,700
Where people try to defy 
gravity, which, of course you 

584
00:33:03,700 --> 00:33:05,200
can't do, right? 
Yeah. 

585
00:33:05,200 --> 00:33:09,300
Like the base, the answer really
is that You could say that like 

586
00:33:09,300 --> 00:33:13,500
even if the FED had the world's 
top economists and monetary 

587
00:33:13,500 --> 00:33:17,800
policy gurus, they will still 
just be a subset of the people 

588
00:33:17,800 --> 00:33:20,100
who will be able to participate 
and have direct line. 

589
00:33:20,100 --> 00:33:23,000
Like both have direct access and
line of sight to make a 

590
00:33:23,000 --> 00:33:25,500
governance. 
But also have that direct 

591
00:33:25,500 --> 00:33:28,700
ability to actually influence 
the government itself. 

592
00:33:28,700 --> 00:33:31,500
This then comes back to the 
question of decentralized 

593
00:33:31,500 --> 00:33:34,200
governance and a holders and how
you actually implement this in 

594
00:33:34,200 --> 00:33:38,000
practice rate because many 
people People think that. 

595
00:33:39,000 --> 00:33:43,400
The basic idea of make a comment
is just a card holders, just 

596
00:33:43,600 --> 00:33:45,100
vote and decide whatever they 
want, right? 

597
00:33:45,100 --> 00:33:48,300
They basically do whatever they 
want and that's the end but it's

598
00:33:48,300 --> 00:33:50,200
actually a much more 
sophisticated framework where 

599
00:33:50,200 --> 00:33:52,700
it's more. 
It's more than a holders have 

600
00:33:52,700 --> 00:33:58,100
this role of trying to surface 
that you know, like the key 

601
00:33:58,300 --> 00:34:03,700
rational points made in this 
scientific framework and and 

602
00:34:03,700 --> 00:34:07,100
only sort of by going for this 
rational approach and try to 

603
00:34:07,100 --> 00:34:10,100
reach something that's as 
objective and as is vetted as 

604
00:34:10,100 --> 00:34:12,900
possible. 
Are you able to actually reach a

605
00:34:12,900 --> 00:34:16,300
selling point where you can even
get consensus around the direct 

606
00:34:16,300 --> 00:34:19,699
approach before we dive into the
governance? 

607
00:34:19,800 --> 00:34:23,600
Sonny asked earlier? 
So how are the maker tokens 

608
00:34:23,600 --> 00:34:26,500
actually distributed initially. 
So who are these people who 

609
00:34:26,500 --> 00:34:31,100
actually Howard maker? 
There was initially 1 million a 

610
00:34:31,100 --> 00:34:35,900
took right created by me really 
under and a couple of other guys

611
00:34:35,900 --> 00:34:40,199
in the early days and we knew 
like we knew from the very 

612
00:34:40,199 --> 00:34:44,000
beginning that because again 
like they've called it gets our 

613
00:34:44,000 --> 00:34:47,199
goals are not meant to kind of 
like run the system through a 

614
00:34:47,199 --> 00:34:49,800
popularity contest, but they 
are, of course, very important 

615
00:34:50,199 --> 00:34:52,500
in that with the wrong set of 
stakeholders. 

616
00:34:52,500 --> 00:34:54,800
You could have like you could 
easily see how the system could 

617
00:34:54,800 --> 00:34:57,000
fail, right. 
So we knew very early on that. 

618
00:34:57,000 --> 00:34:58,700
It would be too risky to just do
for instance, nice. 

619
00:34:58,900 --> 00:35:03,300
Go and try to pump the token and
get a bunch of speculators in, 

620
00:35:03,300 --> 00:35:04,700
right? 
But rather it's all about 

621
00:35:04,700 --> 00:35:06,300
choosing the right set of 
stakeholders. 

622
00:35:06,800 --> 00:35:10,800
So the very first approach was 
to to distribute it. 

623
00:35:10,800 --> 00:35:13,700
Directly to people who 
volunteered to work on the 

624
00:35:13,707 --> 00:35:19,400
project contributing with like, 
with like science or 

625
00:35:19,400 --> 00:35:23,400
engineering, or to select 
various forms of contributions, 

626
00:35:23,800 --> 00:35:26,600
to the project. 
And then also selling directly 

627
00:35:26,600 --> 00:35:30,500
to to some like Engaged 
community members. 

628
00:35:30,900 --> 00:35:33,400
That were kind of like 
essentially like a part of the 

629
00:35:33,400 --> 00:35:35,500
early. 
It's of the core engaged group, 

630
00:35:35,500 --> 00:35:37,200
right. 
Which is very different from how

631
00:35:37,200 --> 00:35:41,000
I see you operated because the 
early major project actually 

632
00:35:41,100 --> 00:35:44,000
distinguishes Itself by sort of 
almost doing - marketing like 

633
00:35:44,000 --> 00:35:46,300
five club-style. 
Like it was actually meant to 

634
00:35:46,300 --> 00:35:49,400
kind of be a bit of a secret 
Club where the right people 

635
00:35:49,600 --> 00:35:52,400
needed to get some space to get 
their head around it before the 

636
00:35:53,100 --> 00:35:56,700
masses came in, I guess you'd 
say right and of course after a 

637
00:35:56,707 --> 00:36:00,100
while the system grew to a point
where the Really felt confident 

638
00:36:00,100 --> 00:36:04,600
enough to kind of open up wider 
and make the project more widely

639
00:36:04,600 --> 00:36:08,900
known, which actually coincided 
with, then when I did those very

640
00:36:08,900 --> 00:36:12,200
early podcasts, including here 
on epicenter, right? 

641
00:36:12,600 --> 00:36:15,200
This came at the same time as 
like the increased scrutiny of 

642
00:36:15,200 --> 00:36:19,400
the blushing space as well as 
new regulation and new kind of 

643
00:36:19,400 --> 00:36:22,800
like concerns around. 
You know especially totem 

644
00:36:22,800 --> 00:36:23,500
distribution. 
Right. 

645
00:36:23,500 --> 00:36:28,700
So so basically once like once 
we reach that point it became 

646
00:36:28,800 --> 00:36:32,800
I'm very clear to us and from 
the perspective of a legal 

647
00:36:32,800 --> 00:36:35,900
strategy that the only 
reasonable way to distribute 

648
00:36:35,900 --> 00:36:39,400
tokens like a total, like a, I 
would be to sell it to like 

649
00:36:40,000 --> 00:36:45,900
essentially like, you know, 
like, like established and just 

650
00:36:45,900 --> 00:36:47,600
like that, you know, very, very 
proficient. 

651
00:36:47,600 --> 00:36:51,700
It's tution Investor's, right? 
So, so in the u.s. accredited, 

652
00:36:51,700 --> 00:36:54,800
investor Spencer, that's right. 
And just in general, the kind of

653
00:36:55,300 --> 00:36:59,200
like the kind of stakeholder 
where you can you could You 

654
00:36:59,200 --> 00:37:02,700
could sell them a token and they
could go totally poof be worth 

655
00:37:02,700 --> 00:37:05,400
nothing and everyone would be 
like. 

656
00:37:05,500 --> 00:37:07,500
That was your own fault, right? 
Because you knew what you were 

657
00:37:07,500 --> 00:37:10,500
getting into and you did your 
own research write and on the 

658
00:37:10,500 --> 00:37:12,800
other hand, if you actually try 
it again like if you try to sell

659
00:37:12,800 --> 00:37:14,400
to the masses and thanks blew 
up. 

660
00:37:14,400 --> 00:37:17,300
It's a little bit different like
there's a level of trust there. 

661
00:37:17,300 --> 00:37:21,100
That's kind of expect it to be 
to be maintained when you do it 

662
00:37:21,500 --> 00:37:25,600
which is also where we saw the 
whole Ico craze go wrong, right?

663
00:37:26,400 --> 00:37:31,200
But the biggest of the like the 
biggest event of when we started

664
00:37:31,200 --> 00:37:35,600
this new approach of selling and
care to latch, establish 

665
00:37:35,600 --> 00:37:40,800
stakeholders was, of course, 
when we sold, actually a total 

666
00:37:40,800 --> 00:37:45,000
of six percent to address 
Horowitz which was among their 

667
00:37:45,000 --> 00:37:51,800
very first purchasers of digital
assets and to this day is kind 

668
00:37:51,800 --> 00:37:55,600
of like one of the absolute core
pieces of their of the crypto 

669
00:37:55,600 --> 00:37:58,200
portfolio. 
That also really put the project

670
00:37:58,200 --> 00:38:00,100
on the map. 
Because it was a huge stamp of 

671
00:38:00,100 --> 00:38:03,700
approval in the more established
VC and like crypto world and 

672
00:38:03,800 --> 00:38:07,200
even wider Financial space or 
text-based to get addressed 

673
00:38:07,200 --> 00:38:10,300
Horowitz, buying into this 
project and also participating 

674
00:38:10,300 --> 00:38:14,700
directly right? 
Like in terms of promoting it 

675
00:38:14,700 --> 00:38:17,100
and sort of talking about the 
implications of the project kit.

676
00:38:17,100 --> 00:38:21,300
And as well as supporting the 
foundation, in all sorts of 

677
00:38:21,600 --> 00:38:26,600
activities, we were doing. 
So, like it mean, today, it's 

678
00:38:26,600 --> 00:38:30,500
basically a mix of kind of like,
Early Community contributors 

679
00:38:30,900 --> 00:38:34,600
early Community, like buyers, 
like people who've bought on the

680
00:38:34,600 --> 00:38:39,000
secondary Market especially in 
the early days, there's 

681
00:38:39,500 --> 00:38:42,900
particularly a lot of Chinese 
people who did poop ball in like

682
00:38:42,900 --> 00:38:44,500
that. 
So there's a actually, a very 

683
00:38:44,500 --> 00:38:47,900
significant Chinese community in
the make it our ecosystem. 

684
00:38:48,800 --> 00:38:54,900
And then there's a lot of these 
institutional stakeholders, 

685
00:38:55,400 --> 00:38:57,600
including addressing Horowitz, 
which is one of the biggest but 

686
00:38:57,600 --> 00:39:01,500
then also actually, a lot of 
other sort of smaller, like, I 

687
00:39:01,500 --> 00:39:07,100
guess you can say, medium-sized 
institutional stakeholders, This

688
00:39:07,100 --> 00:39:09,700
episode of epicenter is brought 
to you by Microsoft and the 

689
00:39:09,700 --> 00:39:12,500
Azure blockchain workbench. 
Getting your block chain from 

690
00:39:12,500 --> 00:39:15,400
the Whiteboard to production can
be a big undertaking and 

691
00:39:15,400 --> 00:39:17,500
something as simple as 
connecting your blockchain to 

692
00:39:17,500 --> 00:39:21,400
iot devices or existing Erp. 
Systems is a project in itself. 

693
00:39:21,900 --> 00:39:23,700
Well, the folks at Microsoft had
you covered. 

694
00:39:24,000 --> 00:39:26,500
You already know about the Azure
blockchain workbench and how 

695
00:39:26,500 --> 00:39:28,800
easy it makes bootstrapping your
Block Chain network 

696
00:39:28,800 --> 00:39:31,400
pre-configured with all the 
cloud services you need for your

697
00:39:31,400 --> 00:39:34,200
Enterprise app. 
Their new development kit is the

698
00:39:34,200 --> 00:39:37,700
IFTTT for blockchains. 
You want to collect data from 

699
00:39:37,700 --> 00:39:41,500
someone in a remote location via
SMS, and half that data package 

700
00:39:41,500 --> 00:39:43,700
in a transaction for your hyper 
Ledger fabric. 

701
00:39:43,700 --> 00:39:46,600
Blockchain the development kit 
allows you to build this 

702
00:39:46,600 --> 00:39:49,800
integration in just a few steps 
in a simple drag-and-drop 

703
00:39:49,800 --> 00:39:51,900
interface, here's another great 
example. 

704
00:39:52,200 --> 00:39:55,300
Perhaps your institution, 
working with etherium and rely 

705
00:39:55,300 --> 00:39:59,500
on CSV file sent by email one. 
Click in the dev kit and you can

706
00:39:59,500 --> 00:40:02,500
parse these files and have two 
data embedded in transactions. 

707
00:40:03,300 --> 00:40:07,000
Whatever you're working with the
dev kit can read transform and 

708
00:40:07,000 --> 00:40:09,700
act on the data to learn more 
and to build your first 

709
00:40:09,700 --> 00:40:13,700
application and less than 30 
minutes, visit aka.ms/offweb 

710
00:40:13,900 --> 00:40:17,400
Ascender and be sure to follow 
them on Twitter at msft. 

711
00:40:17,400 --> 00:40:21,000
Blockchain would like to thank 
Microsoft and Azure for their 

712
00:40:21,000 --> 00:40:25,100
support of epicenter. 
Before we dive into what exactly

713
00:40:25,100 --> 00:40:29,900
governance means in this 
instance and what mkr coders can

714
00:40:29,900 --> 00:40:35,000
actually do with their make a 
tokens, the stability fee. 

715
00:40:35,000 --> 00:40:38,700
That is generated currently 
still goes to make a holders, 

716
00:40:38,700 --> 00:40:40,900
right? 
It doesn't go to the die or as 

717
00:40:40,900 --> 00:40:43,000
it goes exclusively to make a 
holders. 

718
00:40:43,200 --> 00:40:45,400
What was the rationale behind 
that? 

719
00:40:45,400 --> 00:40:49,000
Designed it behind that design 
decision when you made it? 

720
00:40:50,500 --> 00:40:53,300
It's really, the fundamental 
economic Dynamic, on a system 

721
00:40:53,300 --> 00:40:56,600
that kind of makes the makes it 
go round in a sense that it 

722
00:40:56,600 --> 00:41:00,100
aligns, it said it was between 
the different participants in 

723
00:41:00,107 --> 00:41:02,600
the system, right? 
So it really it's very basically

724
00:41:02,600 --> 00:41:06,500
that a holders. 
They sit sort of at the guess 

725
00:41:06,500 --> 00:41:10,200
you can say this at the core of 
the system and the they 

726
00:41:10,300 --> 00:41:13,500
fundamentally perform, the 
governance function system, 

727
00:41:13,500 --> 00:41:15,800
right? 
So they decide really how like 

728
00:41:15,800 --> 00:41:18,200
the business logic of the system
and what it's actually doing. 

729
00:41:18,800 --> 00:41:21,700
So it's includes like 
Stabilizing the price of diet. 

730
00:41:21,700 --> 00:41:25,700
So one by levying a stability 
fiancée DP holders but also in 

731
00:41:25,700 --> 00:41:28,500
the future other more advanced 
functionality such as those 

732
00:41:28,500 --> 00:41:34,100
setting, the die savings rate 
which and a whole range of other

733
00:41:34,100 --> 00:41:39,300
stuff or Advanced governance. 
But most crucially, the thing 

734
00:41:39,300 --> 00:41:40,900
that they like they're doing 
right? 

735
00:41:40,900 --> 00:41:44,400
Is that they're setting, the 
collective risk parameters and 

736
00:41:44,400 --> 00:41:47,000
sort of the logic around. 
How do we keep the system safe 

737
00:41:47,000 --> 00:41:49,500
from a crash, right? 
So how do we make sure that we 

738
00:41:49,500 --> 00:41:53,000
don't put all the In one basket 
so that we only relying on, you 

739
00:41:53,000 --> 00:41:56,900
know, a single cryptocurrency as
collateral even when we are at a

740
00:41:56,900 --> 00:41:59,100
scale of several billions. 
Because that's when you really 

741
00:41:59,100 --> 00:42:00,900
get that systemic risk, right 
there, could you see the whole 

742
00:42:00,900 --> 00:42:03,700
thing wiped out? 
And also the ratios are set 

743
00:42:03,700 --> 00:42:07,300
correctly so that you know, like
I mean do you have the right 

744
00:42:07,300 --> 00:42:11,800
amount of buffer, you know it 
exists of a particular position 

745
00:42:11,800 --> 00:42:14,600
the system where you've put in 
some collateral to generate die 

746
00:42:15,100 --> 00:42:18,300
and you can hold us? 
Then make sure that when you do 

747
00:42:18,300 --> 00:42:22,400
that, The excess collateral that
you put in is enough to cover 

748
00:42:22,400 --> 00:42:24,200
the volatility of that asset, 
right? 

749
00:42:24,700 --> 00:42:28,500
And if and then the, and then, 
the key aspect is that if they 

750
00:42:28,600 --> 00:42:31,800
set this incorrectly, right? 
So if they failed to correctly 

751
00:42:31,800 --> 00:42:35,900
predict the system from excess 
risk, they have to absorb that 

752
00:42:35,900 --> 00:42:40,000
excess risk. 
So let's say that they allow a 

753
00:42:40,500 --> 00:42:42,900
cryptocurrency. 
That's not particularly good 

754
00:42:43,500 --> 00:42:45,700
into the system as collateral 
and they allow it in with like a

755
00:42:45,700 --> 00:42:47,900
very small Gap, right? 
So you can generate a lot of die

756
00:42:47,900 --> 00:42:50,800
from that cryptocurrency. 
And then just like, goes poof, 

757
00:42:50,800 --> 00:42:52,100
right? 
It's gone, there's no money 

758
00:42:52,100 --> 00:42:54,400
left. 
Then what you what you end up 

759
00:42:54,400 --> 00:42:59,300
with is it's bad that right on 
uncollateralized unpacked that 

760
00:43:00,200 --> 00:43:02,900
and in and without any other 
measure you actually have 

761
00:43:02,900 --> 00:43:05,200
insolvency in that case, right? 
You actually have a situation 

762
00:43:05,200 --> 00:43:09,300
where there's no longer 
guarantee that all dies backed 

763
00:43:09,300 --> 00:43:14,500
by on chain collateral, right? 
But then that's where the a took

764
00:43:14,500 --> 00:43:18,600
steps in and takes the loss, 
essentially through an 

765
00:43:18,600 --> 00:43:21,500
automatic. 
Fully autonomous mechanism that 

766
00:43:21,500 --> 00:43:25,300
what it does is it's just that 
sprinting a to raise funds. 

767
00:43:25,300 --> 00:43:27,600
So basically it prints have care
like automatic. 

768
00:43:27,600 --> 00:43:30,200
Like the system detects that 
there is a loss, write the text 

769
00:43:30,200 --> 00:43:34,200
this is a shortfall then it 
prints MPR and then it 

770
00:43:34,200 --> 00:43:39,000
automatically sells in the 
market to race to race died from

771
00:43:39,000 --> 00:43:42,800
the market, right to? 
Yeah, basically raised the same 

772
00:43:42,800 --> 00:43:45,400
amount of dye as there's a 
shortfall in the system and then

773
00:43:45,400 --> 00:43:48,400
it uses the dye that is raised 
to essentially cancel out the 

774
00:43:48,400 --> 00:43:52,900
shortfall Bye-bye burning the 
day, like by removing the dye, 

775
00:43:52,900 --> 00:43:56,100
from circulation, so that it can
kind of like they have the two 

776
00:43:56,100 --> 00:43:57,600
things equal out, and make sure 
that. 

777
00:43:57,600 --> 00:44:02,200
Now, the amount of collateral is
in the system is congruent with 

778
00:44:02,600 --> 00:44:04,400
the amount of dollars in 
circulation. 

779
00:44:05,000 --> 00:44:08,700
So, is this lender of Last 
Resort functionality actually 

780
00:44:09,000 --> 00:44:13,300
implemented on the current live 
maker contracts. 

781
00:44:14,200 --> 00:44:17,500
Now so instead of a little die, 
there's actually this additional

782
00:44:17,500 --> 00:44:22,500
mechanic called pith and all of 
this logic is implemented more 

783
00:44:22,500 --> 00:44:29,200
on the kind of like the like the
he's CDP holder side with a I 

784
00:44:29,207 --> 00:44:31,600
mean it's actually it's a it's 
a, it's like it's a 

785
00:44:31,607 --> 00:44:34,700
functionality that that sounds 
very complicated when you 

786
00:44:34,700 --> 00:44:39,200
explain it, which is like that, 
that this aspect of the force 

787
00:44:39,200 --> 00:44:43,200
dilution of kind of like the 
underwriter of the system sits 

788
00:44:43,200 --> 00:44:44,900
with the people. 
Also hold collateral in the 

789
00:44:44,908 --> 00:44:48,700
system in the event of a serious
crash. 

790
00:44:48,700 --> 00:44:52,200
So I guess my question is that 
in the moment in the single 

791
00:44:52,200 --> 00:44:56,200
collateral die instance, is 
there any risk that the mkr 

792
00:44:56,200 --> 00:44:58,300
holders? 
Take on because currently the 

793
00:44:58,300 --> 00:45:02,500
lender of Last Resort our risk 
is passed on to the the CDP 

794
00:45:02,500 --> 00:45:06,600
holders. 
So what is the risk that the mkr

795
00:45:06,600 --> 00:45:08,900
holders are currently being 
rewarded for? 

796
00:45:10,000 --> 00:45:13,700
Yeah, this is a very I mean this
is a very common concern I 

797
00:45:13,700 --> 00:45:14,900
guess. 
You can a point made about the 

798
00:45:14,908 --> 00:45:17,600
system, right? 
But if you really think about 

799
00:45:17,600 --> 00:45:20,300
it, then right now as a napkin 
holder, you're taking more risks

800
00:45:20,300 --> 00:45:22,700
that you ever will write. 
Because at this stage in the 

801
00:45:22,700 --> 00:45:26,400
system's life cycle, there's a 
way larger probability that will

802
00:45:26,400 --> 00:45:28,600
just completely and outright 
fail, right? 

803
00:45:28,900 --> 00:45:33,000
And that's the big, like that's 
the big additional Dynamic of 

804
00:45:33,100 --> 00:45:37,000
same cartoon today, right? 
That because you're acquiring a,

805
00:45:37,000 --> 00:45:39,600
that's, I guess, you'd say 
freshly made, right, because the

806
00:45:39,600 --> 00:45:42,800
system is brand-new. 
There's a way bigger risk that 

807
00:45:42,800 --> 00:45:45,800
you're not really, you know? 
You're just buying into an 

808
00:45:45,800 --> 00:45:49,600
experiment, right? 
And not of course it is by far 

809
00:45:49,600 --> 00:45:52,000
the most established experiment 
on ethereum, right? 

810
00:45:52,000 --> 00:45:54,900
But if they're him still is just
I mean, D5 really. 

811
00:45:54,900 --> 00:45:58,500
Is this still like it's thing 
that has yet to fully prove 

812
00:45:58,500 --> 00:46:02,800
itself. 
So from that perspective, I mean

813
00:46:02,800 --> 00:46:06,500
a whole is really ever. 
I mean, they still take by far 

814
00:46:06,500 --> 00:46:08,600
the largest risk of anyone in 
the system, right? 

815
00:46:08,600 --> 00:46:12,900
Because I would say that there's
a bigger risk of mkr. 

816
00:46:13,400 --> 00:46:16,100
I mean, it's Like etherium as a 
whole is obviously better 

817
00:46:16,100 --> 00:46:18,900
established than a, right? 
So the demand dynamics of the 

818
00:46:18,908 --> 00:46:23,200
system itself still doesn't 
directly impose a loss on a 

819
00:46:23,200 --> 00:46:26,200
whole is right, but of course if
you had the system Wipeout, it 

820
00:46:26,200 --> 00:46:29,400
would sort of a guess as a 
second order effect. 

821
00:46:29,400 --> 00:46:33,900
Also just wipe out the a to. 
But I mean the thing is that 

822
00:46:33,900 --> 00:46:36,700
none of that really it doesn't 
really matter that much, right? 

823
00:46:36,700 --> 00:46:39,700
Because we're just talking about
the very early stage, it's sort 

824
00:46:39,700 --> 00:46:43,800
of microcosm of the system and 
its Really, you know? 

825
00:46:43,800 --> 00:46:48,700
It's like it's yeah, it's like 
it's kind of like initial face 

826
00:46:48,900 --> 00:46:50,400
where it hasn't yet scaled, 
right? 

827
00:46:50,400 --> 00:46:53,100
So these Dynamics become a lot 
more important. 

828
00:46:53,100 --> 00:46:56,300
Once we exit hate a larger scale
where you have to, you know, 

829
00:46:56,300 --> 00:46:59,700
whether also is a real job for a
hose to do in this in the sense 

830
00:46:59,700 --> 00:47:03,100
of doing proper risk management 
by diversifying different 

831
00:47:03,100 --> 00:47:06,800
assets. 
So let's talk about what the mkr

832
00:47:06,800 --> 00:47:09,800
holders, what the scope of their
governance currently is. 

833
00:47:09,800 --> 00:47:13,400
So there's a couple of 
parameters that Can be set and 

834
00:47:13,400 --> 00:47:16,700
reset in the system. 
Can you describe what they are 

835
00:47:16,800 --> 00:47:20,500
and how this voting casting a 
spell happens. 

836
00:47:22,500 --> 00:47:24,800
Yeah. 
So I want to explain all the 

837
00:47:25,200 --> 00:47:27,200
parameters that can be modified 
by Governors because there's 

838
00:47:27,200 --> 00:47:30,700
actually a huge amount in a 
system is incredibly modular. 

839
00:47:31,300 --> 00:47:33,700
But the the sort of standard 
risk parameters, right? 

840
00:47:33,700 --> 00:47:38,800
To the standard things that a 
whole is, they they deal with in

841
00:47:38,800 --> 00:47:42,100
the current system is. 
So there's this stability fee, 

842
00:47:42,500 --> 00:47:43,900
right? 
Which is the the cost of 

843
00:47:43,900 --> 00:47:47,100
generating died from a CD P. 
Then there's the debt ceiling 

844
00:47:47,100 --> 00:47:49,500
which is the total amount of 
data can be generated out of 

845
00:47:49,500 --> 00:47:51,300
Eve. 
And then there's a liquidation 

846
00:47:51,300 --> 00:47:55,700
ratio, which is Is the the so 
the buffer between deaths and 

847
00:47:55,700 --> 00:47:58,000
collateral, you need to have an 
STD pee before the system, 

848
00:47:58,000 --> 00:48:02,900
liquidate your position. 
And and so governance, really, I

849
00:48:02,908 --> 00:48:05,700
mean it the job of government is
to modify all of these 

850
00:48:06,000 --> 00:48:08,000
primarily. 
Obviously, it's the stability 

851
00:48:08,000 --> 00:48:10,500
for you, because that's how you 
stabilize that I market price in

852
00:48:10,500 --> 00:48:12,700
the wild. 
And then there's a debt ceiling 

853
00:48:12,700 --> 00:48:15,800
which is more like of a. 
It's like, a routine thing you 

854
00:48:15,800 --> 00:48:18,400
do as a system grows, you kind 
of like evaluate the overall 

855
00:48:18,400 --> 00:48:22,800
risk to allow it to grow to a 
larger Sighs. 

856
00:48:23,400 --> 00:48:27,400
And you would still I mean you 
would very rarely see something 

857
00:48:27,400 --> 00:48:31,200
like the liquidation ratio be 
adjusted in the in the wild in 

858
00:48:31,200 --> 00:48:36,300
single level died because of the
significant Direct effects. 

859
00:48:36,300 --> 00:48:39,200
It will have on CP holders who 
are actively building a sleepy. 

860
00:48:39,300 --> 00:48:42,100
Who could have the effect 
effectively have the rug pulled 

861
00:48:42,100 --> 00:48:44,600
out from under them, right? 
So so it would be it would be 

862
00:48:44,600 --> 00:48:47,400
quite unlikely. 
They were actually see the 

863
00:48:47,400 --> 00:48:50,600
liquidation ratio changed and 
then there's also some other 

864
00:48:50,600 --> 00:48:52,100
like some other Mo 
administrative. 

865
00:48:52,800 --> 00:48:57,100
Things that them careless could 
do such as changing the set of 

866
00:48:57,100 --> 00:48:58,900
oracle's right in choosing 
picking. 

867
00:48:58,900 --> 00:49:02,300
The Oracle providers, that 
hasn't happened yet though. 

868
00:49:02,300 --> 00:49:04,800
So the oracles that exists in 
the system today are the same 

869
00:49:04,800 --> 00:49:06,900
oracle's that it was launched 
with. 

870
00:49:08,800 --> 00:49:11,800
And then there's also another 
very critical functionality, 

871
00:49:11,800 --> 00:49:15,400
which is emergency shutdown. 
So the ability to shut the 

872
00:49:15,408 --> 00:49:17,500
system down in the face of some 
sort of. 

873
00:49:18,100 --> 00:49:22,400
Like, I mean the main reason is 
you want to use that in the Face

874
00:49:22,400 --> 00:49:26,100
of a crypto economic attack or 
perhaps a book found in the 

875
00:49:26,100 --> 00:49:28,800
system or some other significant
problem, or maybe even a run on 

876
00:49:28,808 --> 00:49:32,600
the bank, which is where you 
then, establish this direct 

877
00:49:32,600 --> 00:49:35,400
ability to turn the dye into 
underlying collateral. 

878
00:49:36,400 --> 00:49:40,300
So, how does the voting system 
itself work? 

879
00:49:40,700 --> 00:49:44,100
If I'm a make a token Hodor, how
do I participate in the 

880
00:49:44,100 --> 00:49:46,700
governance? 
There's two aspects to that, 

881
00:49:46,700 --> 00:49:48,400
right? 
So there is the unchanging 

882
00:49:49,800 --> 00:49:52,700
Infrastructure, which is very 
simple. 

883
00:49:52,700 --> 00:49:55,900
So, it's basically a constantly,
it's like a vote that's 

884
00:49:55,900 --> 00:50:00,000
constantly happening inside this
my country called the chief 

885
00:50:00,600 --> 00:50:04,400
where what the governance 
participants do is they 

886
00:50:04,400 --> 00:50:07,900
essentially, you can say they 
steak the steak there and Care 

887
00:50:07,900 --> 00:50:09,400
answer to Chief. 
Although that's not real. 

888
00:50:09,400 --> 00:50:11,500
Like it's better to think of it 
as they just participate in 

889
00:50:11,500 --> 00:50:14,600
voting and it's just like a 
technical defect. 

890
00:50:14,600 --> 00:50:17,200
Like I said, it's a technical 
detail that they actually move 

891
00:50:17,200 --> 00:50:20,400
their mkr into the chief, but 
But once they've done that, then

892
00:50:20,500 --> 00:50:25,100
them care is able to vote and 
then they're actually able to 

893
00:50:25,700 --> 00:50:29,400
essentially Point their votes on
any smart contract, on the 

894
00:50:29,400 --> 00:50:33,200
entire theorem blockchain and 
the system then is costly, 

895
00:50:33,200 --> 00:50:37,000
keeping track of like which 
smart contractor which is the 

896
00:50:37,008 --> 00:50:39,300
area mattress has the most 
votes. 

897
00:50:40,700 --> 00:50:45,600
And whichever has like this the 
single address as my contract 

898
00:50:45,600 --> 00:50:47,900
that has the highest number of 
votes on the entire Block, in 

899
00:50:47,900 --> 00:50:51,900
above all the votes in that's 
happening in the system, is then

900
00:50:51,900 --> 00:50:54,900
given direct admin access into 
the causing. 

901
00:50:54,900 --> 00:50:59,700
Well, do so the way that you, 
for instance, modifies the 

902
00:50:59,700 --> 00:51:04,100
Builder fee is that you the way 
it works is that you do have a 

903
00:51:04,107 --> 00:51:08,600
smart contract that basically 
says, Target the like it says, 

904
00:51:09,300 --> 00:51:15,500
send a message To the core of 
single day that says racist 

905
00:51:15,500 --> 00:51:17,300
ability fee by 2% something, 
right? 

906
00:51:17,300 --> 00:51:20,300
Or else that disability fee to 
14 percent if that's what you 

907
00:51:20,300 --> 00:51:23,900
want to do, right? 
And then once that's my 

908
00:51:23,900 --> 00:51:27,100
contract, gets the highest 
number of votes in the system. 

909
00:51:27,100 --> 00:51:30,800
So it gets the admin axis. 
Then anyone can go and poke it 

910
00:51:30,800 --> 00:51:33,000
essentially, which is called 
casting a spell because it's 

911
00:51:33,000 --> 00:51:36,400
like a technical term for this, 
kind of smart contract is Spill,

912
00:51:36,400 --> 00:51:40,100
right? 
So what happens is anyone is 

913
00:51:40,100 --> 00:51:44,600
able To then just like trigger 
The Proposal from like trigger 

914
00:51:44,600 --> 00:51:47,200
the execution of the proposal 
and the transaction is then 

915
00:51:47,200 --> 00:51:50,900
inserted into the system to 
modify the internal state of the

916
00:51:50,900 --> 00:51:54,000
system. 
So, that's the, and that's the 

917
00:51:54,000 --> 00:51:55,900
smart contract infrastructure, 
right? 

918
00:51:55,900 --> 00:51:59,000
So then just very briefly, 
there's a layer on top of the 

919
00:51:59,000 --> 00:52:01,200
Reese's, this user-friendliness 
layer, right? 

920
00:52:01,400 --> 00:52:04,100
And right now, it's the 
foundation is only one who 

921
00:52:04,100 --> 00:52:06,800
maintains this kind of front 
end. 

922
00:52:06,800 --> 00:52:09,200
But really what it is is like a 
voting dashboard where you can 

923
00:52:09,200 --> 00:52:12,600
like see different options for 
voting and like you can see 

924
00:52:13,400 --> 00:52:16,300
different like there's even like
a bow that this both the polling

925
00:52:16,300 --> 00:52:19,800
system, so sort of like a pre 
vote and then there's the actual

926
00:52:20,700 --> 00:52:24,900
like like Voting as well where 
you actually execute on 

927
00:52:25,000 --> 00:52:28,300
decisions made in the community 
and it's then presented through 

928
00:52:28,300 --> 00:52:32,100
it, like an easy and secure 
interface, that allows a larger 

929
00:52:32,100 --> 00:52:36,500
amount of the community to 
participate who what percentage 

930
00:52:36,600 --> 00:52:41,500
of makers typically pointed. 
At proposals, that then become 

931
00:52:41,500 --> 00:52:46,300
the front door front, runner and
become implemented. so right now

932
00:52:46,300 --> 00:52:52,700
is typically between 5 to 10% 
and you also have at like you 

933
00:52:52,700 --> 00:52:56,600
have this important Dynamic of 
around and also five to ten 

934
00:52:56,600 --> 00:53:00,500
percent of people are always 
voting at, as kind of like the 

935
00:53:00,500 --> 00:53:04,100
current active proposal, which 
then sets the bars, like you 

936
00:53:04,100 --> 00:53:06,900
have to get at least as a seven 
percent of the work to be able 

937
00:53:06,900 --> 00:53:11,800
to to like trigger a new 
proposal in the system and kind 

938
00:53:11,800 --> 00:53:15,400
of like it really acts as a 
quorum in that sense. 

939
00:53:17,000 --> 00:53:20,700
You said earlier that 
Andreessen, hold six percent of 

940
00:53:20,700 --> 00:53:24,600
the maker tokens and there's a 
couple of other maker waves as 

941
00:53:24,600 --> 00:53:26,700
well as well, right? 
So basically, it would it would 

942
00:53:26,700 --> 00:53:30,900
only take one or two of those to
actually force a proposal 

943
00:53:30,900 --> 00:53:34,700
through, right? 
Yeah, I mean, theoretically, 

944
00:53:34,800 --> 00:53:38,200
it's possible for someone to in 
the current system, try to like 

945
00:53:38,200 --> 00:53:42,100
pass a minister proposal, right?
And then the reaction, I like 

946
00:53:42,100 --> 00:53:45,500
the response to that would be to
then trigger an emergency 

947
00:53:45,500 --> 00:53:47,500
shutdown, right? 
Actually, Try to shut down to 

948
00:53:47,500 --> 00:53:50,800
system from the, from the crypto
economic perspective, right? 

949
00:53:50,800 --> 00:53:56,000
But the challenge in the system 
right now, is that whereas in 

950
00:53:56,100 --> 00:53:59,400
the multi-level died, when the 
final version of the governance 

951
00:54:00,100 --> 00:54:03,800
system is implemented, right? 
There's actually some incredibly

952
00:54:03,800 --> 00:54:06,400
strong game theoretic checks and
balances in place. 

953
00:54:07,000 --> 00:54:08,600
That makes this kind of 
behavior. 

954
00:54:08,600 --> 00:54:11,800
Even if you had, let's say, 
like, Anonymous actors holding, 

955
00:54:12,400 --> 00:54:14,000
let's say 50% of the tools, 
right? 

956
00:54:14,000 --> 00:54:16,300
Or even like all this opens. 
Well. 

957
00:54:16,300 --> 00:54:18,100
Okay. 
I mean just like significant 

958
00:54:18,100 --> 00:54:21,800
amounts of the toes, right? 
You still have just like like 

959
00:54:21,800 --> 00:54:24,900
incredibly rigorous 
game-theoretic systems in place 

960
00:54:24,900 --> 00:54:27,400
that prevent anyone from 
actually acting maliciously, in 

961
00:54:27,400 --> 00:54:30,600
the system, in the current, in 
the current state of the system,

962
00:54:30,900 --> 00:54:36,100
rather the like a key defense 
comes from the fact that it's 

963
00:54:36,100 --> 00:54:38,500
known to the foundation. 
For instance, like the forever, 

964
00:54:38,500 --> 00:54:41,000
rather the foundation has been 
very careful in who has sold to 

965
00:54:41,000 --> 00:54:45,900
these like least large blocks to
write and it's and it doesn't 

966
00:54:45,900 --> 00:54:49,000
involve play. 
See a nation state action which 

967
00:54:49,400 --> 00:54:51,800
could for some reason decide 
that they want to shut down the 

968
00:54:51,808 --> 00:54:54,200
system, right? 
And kind of like vandalize it 

969
00:54:54,500 --> 00:54:59,900
rather, it is just very rational
economic actors, that, you know,

970
00:54:59,900 --> 00:55:03,200
wouldn't wouldn't have their 
themselves by burning the system

971
00:55:03,200 --> 00:55:05,300
down. 
But the, like, I mean, it's, 

972
00:55:05,300 --> 00:55:08,100
that's always a dynamic of all 
decentralized system, right? 

973
00:55:08,100 --> 00:55:11,200
And all these centralized 
governance is that, by the very 

974
00:55:11,200 --> 00:55:14,100
nature of having the governance,
be fully decentralized and 

975
00:55:14,100 --> 00:55:17,800
having the, the, the sort of the
the Final and the fundamental 

976
00:55:17,800 --> 00:55:20,100
controller system being 
available to decentralize 

977
00:55:20,100 --> 00:55:22,400
community. 
You always have this element of 

978
00:55:22,400 --> 00:55:25,500
like allowing people to shoot 
themselves in the foot if they 

979
00:55:25,500 --> 00:55:28,800
want to the question always is 
what percentage of people 

980
00:55:28,800 --> 00:55:31,500
actually have to glue to shoot 
everyone in the foot. 

981
00:55:32,000 --> 00:55:37,200
And one would wish that in a in 
a system that creates so much 

982
00:55:37,200 --> 00:55:40,500
value and hold so much money, it
would have to be more than 5 to 

983
00:55:40,500 --> 00:55:43,200
10%. 
So can you tell us what's going 

984
00:55:43,200 --> 00:55:45,900
to change for the new governance
model that that you talked 

985
00:55:45,900 --> 00:55:47,500
about? 
Yes. 

986
00:55:47,500 --> 00:55:49,700
It's really likes is a wave with
that. 

987
00:55:49,700 --> 00:55:52,100
We saw this problem, right? 
It's really based on two 

988
00:55:53,400 --> 00:55:56,400
fundamental approaches, right? 
Like fruit to fundamental 

989
00:55:56,400 --> 00:55:58,700
constructs. 
The first is What's called the 

990
00:55:58,700 --> 00:56:02,200
governance security module. 
So this idea that, all right, 

991
00:56:02,200 --> 00:56:06,300
this is like a smart contract 
where it's kind of sits between 

992
00:56:06,300 --> 00:56:09,600
the voting system and then, the 
core system itself as kind of a 

993
00:56:09,600 --> 00:56:14,900
security buffer, right? 
A firewall in a way and it works

994
00:56:14,900 --> 00:56:17,400
quite simply, it's that when you
create A proposal that you 

995
00:56:17,400 --> 00:56:20,800
execute a proposal in the voting
site, then passes into the 

996
00:56:20,808 --> 00:56:23,600
governor's security module and 
then sits there, for some 

997
00:56:23,700 --> 00:56:26,700
predetermined amount of time 
which initially would likely be 

998
00:56:27,100 --> 00:56:29,300
between 24 hours and up to a 
week. 

999
00:56:30,200 --> 00:56:32,700
And then once it has sort of run
its course in the government 

1000
00:56:32,700 --> 00:56:36,400
security module and and B 
subject to the security delay, 

1001
00:56:36,400 --> 00:56:38,900
it then executes and enters the 
core system. 

1002
00:56:39,700 --> 00:56:44,500
And so you have this this 
approach combined with What's 

1003
00:56:44,500 --> 00:56:46,600
called the emergency shutdown 
module. 

1004
00:56:46,600 --> 00:56:49,000
So which is really just an 
upgrade of how emergency 

1005
00:56:49,000 --> 00:56:50,700
shutdown curly functions in the 
system. 

1006
00:56:51,200 --> 00:56:54,600
And what the emergency shutdown 
module does is it allows a much 

1007
00:56:54,600 --> 00:56:59,400
smaller like it, it allows a 
fixed and and quite small 

1008
00:56:59,600 --> 00:57:02,900
potentially percentage of a 
holders to trigger an emergency 

1009
00:57:02,900 --> 00:57:07,400
shutdown, which right now it's 
at launch, it's going to be five

1010
00:57:07,400 --> 00:57:09,700
percent. 
And so what that means is that 

1011
00:57:10,400 --> 00:57:14,400
any like any consolation in the 
community that's able to 45 

1012
00:57:14,400 --> 00:57:18,200
percent of the total and cast 
Supply will be able to counter a

1013
00:57:18,207 --> 00:57:20,600
malicious proposal that's 
sitting in a government security

1014
00:57:20,600 --> 00:57:21,000
module. 
Right? 

1015
00:57:21,000 --> 00:57:25,300
So so someone tries to let's say
yeah it is like burn down the 

1016
00:57:25,300 --> 00:57:27,500
system or steal all the 
collateral or somehow like try 

1017
00:57:27,500 --> 00:57:32,200
to Harness System. 
Then they will need to you know 

1018
00:57:32,200 --> 00:57:34,900
they will need to first of all, 
let's say by 51 percent of all 

1019
00:57:34,900 --> 00:57:38,000
them care or maybe there's only 
15 percent voting than 50 

1020
00:57:38,000 --> 00:57:38,800
percent of them go. 
Right? 

1021
00:57:38,800 --> 00:57:43,200
But some significant amount of 
in care and then they use that 

1022
00:57:43,200 --> 00:57:45,600
to trigger the proposed. 
It'll but then it just goes into

1023
00:57:45,600 --> 00:57:48,400
the governor's security module. 
And the meantime, the honest 

1024
00:57:48,400 --> 00:57:53,300
actors in the system can then 
essentially rarely and respond 

1025
00:57:53,300 --> 00:57:55,400
by triggering an emergency 
shutdown of the system. 

1026
00:57:56,300 --> 00:57:58,400
And what then happens is the 
system shuts down, right? 

1027
00:57:58,400 --> 00:58:01,000
It totally unwinds. 
Everyone is able to exit the 

1028
00:58:01,000 --> 00:58:04,300
position at the technical 
blockchain level, but in 

1029
00:58:04,300 --> 00:58:07,600
practice the way it plays out is
that you immediately deploy a 

1030
00:58:07,600 --> 00:58:11,600
new system and then you provide 
what we call a smooth 

1031
00:58:11,600 --> 00:58:15,000
transition, right? 
So we provide this What's really

1032
00:58:15,000 --> 00:58:17,600
more like an upgrade process 
where you can transition from 

1033
00:58:17,600 --> 00:58:20,500
the old system that is now shut 
down and then to the new 

1034
00:58:20,500 --> 00:58:22,800
deployment as seamlessly as 
possible. 

1035
00:58:23,300 --> 00:58:25,600
And this is also how we for 
instance, do the upgrade from 

1036
00:58:25,600 --> 00:58:27,500
single-level die to multilateral
diorite. 

1037
00:58:27,500 --> 00:58:30,700
The point is obviously to make 
it as painless and as seamless 

1038
00:58:30,700 --> 00:58:35,100
as possible for the end user, 
but the really critical game 

1039
00:58:35,100 --> 00:58:38,300
theoretical piece to this, is 
that in the new deployment 

1040
00:58:38,300 --> 00:58:40,200
because anyone is able to do a 
new deployment, right? 

1041
00:58:40,200 --> 00:58:43,900
It's just an open, you just 
deploy some open source code. 

1042
00:58:44,000 --> 00:58:45,400
Right. 
But the community will 

1043
00:58:45,800 --> 00:58:49,500
ultimately will in most 
situations reach consensus and 

1044
00:58:49,500 --> 00:58:54,300
kind of like equilibrate towards
a single successful deployment 

1045
00:58:54,300 --> 00:58:57,500
that then just becomes the new 
maker system and this deployment

1046
00:58:57,500 --> 00:59:00,800
could in response to for 
instance let's hacker just blend

1047
00:59:00,800 --> 00:59:03,300
it. 
Blatantly trying to attack the 

1048
00:59:03,308 --> 00:59:05,600
system, right a steel, the 
collateral or harm system in 

1049
00:59:05,600 --> 00:59:07,400
some way. 
And using a significant amount 

1050
00:59:07,400 --> 00:59:10,400
of a for that in response to 
that as heck, you can actually 

1051
00:59:10,400 --> 00:59:13,400
just burn their and Care on the 
new deployment like choose to 

1052
00:59:13,400 --> 00:59:15,900
what you call. 
Honor the care of everyone else.

1053
00:59:15,900 --> 00:59:18,400
Would you can choose to kind of 
like lit everyone else is a 

1054
00:59:18,400 --> 00:59:22,200
transition over but obviously 
there's not really a good reason

1055
00:59:22,200 --> 00:59:25,800
to allow at clearly malicious 
attacker who has voted to harm 

1056
00:59:25,800 --> 00:59:28,300
the system from Gaining 
governance power, right? 

1057
00:59:28,600 --> 00:59:31,700
So what do you think get is? 
You get stronger governance with

1058
00:59:31,700 --> 00:59:36,200
the bed exercise, cut out of the
system and you also get a like a

1059
00:59:36,207 --> 00:59:39,300
significant, a burn, right? 
So you get a significant 

1060
00:59:39,300 --> 00:59:42,100
reduction in total Supply which 
then makes up for all the 

1061
00:59:42,100 --> 00:59:45,200
friction that having to go. 
Go through this whole process 

1062
00:59:45,200 --> 00:59:47,400
cost you, right? 
And the same Dynamic also 

1063
00:59:47,400 --> 00:59:50,600
actually exists for someone who 
abuses in the first place, its 

1064
00:59:50,600 --> 00:59:52,600
power to do an emergency 
shutdown, right? 

1065
00:59:52,900 --> 00:59:55,400
So someone goes on, kind of like
let's have some fun and shut the

1066
00:59:55,408 --> 00:59:59,400
whole thing down because it's 
quite easy to the barrier for 

1067
00:59:59,400 --> 01:00:04,000
doing that is still in 
initially, for instance, 50k, a 

1068
01:00:04,000 --> 01:00:07,200
right? 
So, it is still, which will then

1069
01:00:07,200 --> 01:00:09,800
not be honored in the new 
deployment, if it was purely a 

1070
01:00:09,800 --> 01:00:12,300
troll attack. 
And then you, again, you have 

1071
01:00:12,300 --> 01:00:16,000
this Dynamic where ya like, The 
attacker did manage to shut the 

1072
01:00:16,000 --> 01:00:19,000
system down, but there was a 
smooth transition to a new 

1073
01:00:19,000 --> 01:00:22,100
system and it cost them a ton of
money and that money actually 

1074
01:00:22,100 --> 01:00:24,700
went to a Elders. 
So who do you say? 

1075
01:00:24,700 --> 01:00:29,500
It's whether a shutdown was, in 
fact, a troll attack whether a 

1076
01:00:29,500 --> 01:00:32,900
proposal it was malicious 
because there could have been 

1077
01:00:32,900 --> 01:00:37,100
just a bug in it or the people 
honestly thought that the system

1078
01:00:37,100 --> 01:00:39,300
was under attack. 
So who actually determines 

1079
01:00:39,400 --> 01:00:42,200
whether to penalize, make a 
holders or not. 

1080
01:00:43,900 --> 01:00:48,600
So it's quite a complex question
really, rather probably complex 

1081
01:00:49,200 --> 01:00:51,400
issue, right? 
But the basic answer is that the

1082
01:00:51,400 --> 01:00:54,500
community decides, right? 
Because, because anyone can 

1083
01:00:54,500 --> 01:00:57,200
deploy and maker system at any 
point inside, right? 

1084
01:00:57,200 --> 01:01:00,000
Because the code is open source,
you could actually very easily. 

1085
01:01:00,000 --> 01:01:02,400
Imagine that immediately after 
the merger shut down, there 

1086
01:01:02,400 --> 01:01:05,300
might be for 10 or like a 
thousand two deployments, right?

1087
01:01:05,600 --> 01:01:08,800
And everyone saying, this is my 
fault, super awesome deployment 

1088
01:01:08,800 --> 01:01:12,200
right where I haven't, you know,
and then maybe I mean there 

1089
01:01:12,200 --> 01:01:14,800
might be People trying to like 
give themselves extra and Care 

1090
01:01:14,800 --> 01:01:17,100
are, there might be people to 
try to like, cut out and care of

1091
01:01:17,100 --> 01:01:18,600
people didn't like or something,
right? 

1092
01:01:18,900 --> 01:01:22,200
And the question is, which new 
mkr distribution is able to 

1093
01:01:22,200 --> 01:01:27,000
basically, you know, get the 
faith of the overall community 

1094
01:01:27,000 --> 01:01:30,600
and the economic majority of 
the, of the ecosystem, right? 

1095
01:01:31,100 --> 01:01:34,700
And in most cases, like in 
clear-cut cases such as someone 

1096
01:01:35,700 --> 01:01:38,300
Blatantly attacking system. 
It's really obvious that you 

1097
01:01:38,300 --> 01:01:41,300
have is, I mean, you essentially
have the, like a governance 

1098
01:01:41,300 --> 01:01:43,000
convention on me. 
You can even call the Social 

1099
01:01:43,000 --> 01:01:47,200
convention that if you try to 
attack the system, you don't 

1100
01:01:47,200 --> 01:01:49,800
deserve your own care, right? 
And, and there's a good reason 

1101
01:01:49,800 --> 01:01:53,600
to migrate to A system that 
doesn't include a holders that 

1102
01:01:53,600 --> 01:01:56,100
have proven that their militias 
to the system, right? 

1103
01:01:56,500 --> 01:01:58,700
So, it really comes down to, 
like, the Dynamics of. 

1104
01:01:58,700 --> 01:02:02,500
What do the users of the system?
Think is best for them when 

1105
01:02:02,500 --> 01:02:05,400
they, when they're picking what 
system to migrate to. 

1106
01:02:05,900 --> 01:02:09,400
And that's also actually end up 
like that is actually like what 

1107
01:02:09,400 --> 01:02:11,600
the maybe the most fundamental 
point of maker governance. 

1108
01:02:11,600 --> 01:02:13,800
Right. 
Because that is the point where 

1109
01:02:14,300 --> 01:02:17,600
you actually see that the power 
of a holders is an infinite. 

1110
01:02:17,600 --> 01:02:19,900
They don't actually decide 
everything like the kind of run 

1111
01:02:19,900 --> 01:02:21,500
the system on a day-to-day 
basis. 

1112
01:02:22,900 --> 01:02:26,000
Until the moment that a very 
significant event happens, 

1113
01:02:26,000 --> 01:02:26,700
right? 
Until it. 

1114
01:02:26,700 --> 01:02:29,800
Like to the point where the 
governance has to kind of like 

1115
01:02:30,200 --> 01:02:33,600
fracture and reassemble itself 
and then what happens is, the 

1116
01:02:33,600 --> 01:02:36,500
power actually falls back to the
economic participants themselves

1117
01:02:36,500 --> 01:02:38,700
and a girl does become totally 
powerless. 

1118
01:02:39,500 --> 01:02:41,500
And the only thing they can do 
is cut like, point to the Past 

1119
01:02:41,500 --> 01:02:43,800
actions and say, hey, I was so 
good at governing system, right?

1120
01:02:43,800 --> 01:02:46,300
So I should totally be a part of
the new deployment. 

1121
01:02:46,500 --> 01:02:49,100
So what's the worst thing that 
they could get away with? 

1122
01:02:49,100 --> 01:02:52,500
So could they, for example, 
steel all the collateral by? 

1123
01:02:52,600 --> 01:02:56,200
Like setting the stability to 
100%, stability fee, to 100% in 

1124
01:02:56,207 --> 01:02:59,500
that, get away with that. 
Like what would be the potential

1125
01:02:59,500 --> 01:03:01,800
reward that they could get away 
with with an attack? 

1126
01:03:02,400 --> 01:03:06,500
Like if there was no response 
from the community, yeah, you 

1127
01:03:06,500 --> 01:03:08,500
could actually be anything like 
it could be printing. 

1128
01:03:08,500 --> 01:03:11,700
Like, I mean this system is like
because the system completely 

1129
01:03:11,700 --> 01:03:16,200
relies on this Dynamic of, you 
know, triggering an emergency 

1130
01:03:16,200 --> 01:03:20,400
shutdown within the time frame 
allotted by the governor's 

1131
01:03:20,400 --> 01:03:23,500
security module like because it 
would be impossible regardless 

1132
01:03:23,500 --> 01:03:26,100
like so there's no attempt to 
kind of like restrict what kind 

1133
01:03:26,100 --> 01:03:28,800
of take your Lexus Governor's 
already has right? 

1134
01:03:29,100 --> 01:03:33,200
The question is Is that outcome 
ultimately going to be better 

1135
01:03:33,200 --> 01:03:36,000
for like the average user and 
the average a holder in the 

1136
01:03:36,008 --> 01:03:38,500
system, right? 
And anything that isn't 

1137
01:03:38,600 --> 01:03:41,400
following the regular governance
process, right? 

1138
01:03:41,400 --> 01:03:43,700
So like actually tried to 
scientifically optimize the 

1139
01:03:43,700 --> 01:03:47,700
system and following the 
consensus of the community is 

1140
01:03:47,700 --> 01:03:49,800
always going to make people 
worse off, right? 

1141
01:03:49,800 --> 01:03:52,300
Because it breaks the 
fundamental social contract. 

1142
01:03:52,500 --> 01:03:55,900
And so, this Dynamic of like a 
blatant attack also works on 

1143
01:03:55,900 --> 01:04:00,200
sort of smaller levels, right? 
Because the, you know, it's not 

1144
01:04:00,200 --> 01:04:03,400
just that It's not just a 
dynamic where, you know, you 

1145
01:04:03,400 --> 01:04:05,100
want to protect the system, 
right. 

1146
01:04:05,100 --> 01:04:07,700
Like you want it from from very 
powerful attacks. 

1147
01:04:08,400 --> 01:04:12,400
You also actually want to kind 
of like police and and try to 

1148
01:04:12,400 --> 01:04:15,700
catch people from breaking the 
social contract and sort of 

1149
01:04:15,700 --> 01:04:17,800
catch them in the act of doing 
something. 

1150
01:04:17,800 --> 01:04:21,400
Where the situation where the 
users most likely wouldn't like,

1151
01:04:21,400 --> 01:04:25,000
will most likely actually 
consider this Behavior like, 

1152
01:04:25,200 --> 01:04:27,200
like negligent or malicious to 
them. 

1153
01:04:27,700 --> 01:04:31,700
And as a result, my crew to a 
system where this actor The a of

1154
01:04:31,700 --> 01:04:35,600
the sector is included because 
that's then you have this very 

1155
01:04:35,600 --> 01:04:37,700
strong Dynamic, right? 
Where people have to be very 

1156
01:04:37,700 --> 01:04:41,100
careful about like carelessly 
track to push some proposal 

1157
01:04:41,100 --> 01:04:44,000
through that could actually get 
the whole system shut down and 

1158
01:04:44,100 --> 01:04:46,700
maybe even get the penalized for
being responsible for it. 

1159
01:04:48,000 --> 01:04:50,000
Quit. 
So that two very significant 

1160
01:04:50,000 --> 01:04:53,200
updates coming to the makers of 
some soon. 

1161
01:04:53,500 --> 01:04:56,200
The first one is the interest 
generating die. 

1162
01:04:56,200 --> 01:05:01,000
Can you talk about what that is 
and what made you roll that out?

1163
01:05:02,500 --> 01:05:07,100
Yes, so the dye savings rate, 
which is what allows you to hold

1164
01:05:07,100 --> 01:05:10,900
die and actually get a, like, 
get a savings return on it as 

1165
01:05:10,900 --> 01:05:13,600
you, hold it in. 
Your wallet, for instance, is a 

1166
01:05:13,600 --> 01:05:17,000
really fundamental feature 
because it's kind of the 

1167
01:05:17,000 --> 01:05:19,000
counterpart to the stability for
you, right? 

1168
01:05:19,300 --> 01:05:22,000
So right now when the system is 
balanced, you have like you can 

1169
01:05:22,000 --> 01:05:24,800
only change this Billy fee and 
then you can modify the supply 

1170
01:05:25,100 --> 01:05:28,000
and then the dark side of that 
is that that means that when the

1171
01:05:28,000 --> 01:05:30,300
system really gross, but the 
supply grows more than the 

1172
01:05:30,300 --> 01:05:34,000
demand, your only option. 
Is to pull down on Supply. 

1173
01:05:34,000 --> 01:05:37,500
So you kind of have to let the 
system, become a victim of its 

1174
01:05:37,500 --> 01:05:40,200
own success writing and 
artificially restrain, the 

1175
01:05:40,200 --> 01:05:42,400
growth of the system which is 
what's happening right now where

1176
01:05:42,400 --> 01:05:46,500
the interest, like the stability
fee is just incredibly high, 

1177
01:05:46,500 --> 01:05:49,400
right? 
And it's actually really, yeah, 

1178
01:05:49,400 --> 01:05:52,500
it is kind of create a lot of 
people coming, you know, why are

1179
01:05:52,500 --> 01:05:56,000
people even generating died? 
When the fee is just that crazy 

1180
01:05:56,000 --> 01:05:58,200
high, right? 
And it's amazing to see the 

1181
01:05:58,200 --> 01:06:03,000
people still are using it, but 
the problem is that That the 

1182
01:06:03,000 --> 01:06:07,200
system has no way to Spur diadem
and right is no way to kind of 

1183
01:06:07,200 --> 01:06:09,000
like make it more attractive to 
hold die. 

1184
01:06:09,500 --> 01:06:11,400
And that's what the die savings 
rates solves. 

1185
01:06:12,000 --> 01:06:15,200
So instead of just pulling down 
on the stability for the side 

1186
01:06:15,200 --> 01:06:18,600
when the system is growing, you 
can pull up on the demand side 

1187
01:06:18,600 --> 01:06:20,100
as well, right? 
So if you had like the mismatch 

1188
01:06:20,100 --> 01:06:23,800
like this, you can pull it into 
sink like here and actually see 

1189
01:06:23,800 --> 01:06:26,600
overall growth of the system. 
The actual effect of that in 

1190
01:06:26,600 --> 01:06:31,500
practice could very well be 
quite, you know, quite a Quantum

1191
01:06:31,500 --> 01:06:33,800
Leap in terms. 
Terms of hitting some sweet 

1192
01:06:33,800 --> 01:06:37,000
spots and product Market fit 
where the system suddenly 

1193
01:06:37,000 --> 01:06:39,100
becomes interesting to a lot 
more people, right? 

1194
01:06:39,400 --> 01:06:43,300
Because on one hand you get, you
get the the CDP functionality 

1195
01:06:43,300 --> 01:06:45,300
which is right now, incredibly 
popular, even with these 

1196
01:06:45,300 --> 01:06:49,500
ridiculously high fees, you can 
get that down like you can well 

1197
01:06:49,500 --> 01:06:52,900
rather you get because you can 
you can get that down to a much 

1198
01:06:52,900 --> 01:06:56,000
lower rate because you can now 
suddenly make die incredibly 

1199
01:06:56,000 --> 01:06:58,400
attractive, right? 
Because when the stability fee 

1200
01:06:58,400 --> 01:07:05,100
of twenty, 20% for instance, on 
on generate day, theoretically 

1201
01:07:05,100 --> 01:07:06,900
enemy. 
This is a than educate. 

1202
01:07:06,900 --> 01:07:08,200
Like it wasn't wouldn't actually
happen, right? 

1203
01:07:08,200 --> 01:07:12,200
But if you're ready, there is a 
20%, like they're sort of 20% 

1204
01:07:12,200 --> 01:07:14,800
available to give to dial is, 
right? 

1205
01:07:14,800 --> 01:07:18,000
So imagine if holding the, I 
gave you a 20 percent return and

1206
01:07:18,000 --> 01:07:20,300
this was without any additional 
risk whatsoever, right? 

1207
01:07:20,300 --> 01:07:22,100
It was just like holding a 
regular die. 

1208
01:07:22,100 --> 01:07:24,900
Like it is gave you this massive
return, right? 

1209
01:07:24,900 --> 01:07:27,300
You would immediately see tons 
of people moving their the 

1210
01:07:27,300 --> 01:07:29,700
savings into this because they 
would want to take advantage of 

1211
01:07:29,900 --> 01:07:32,200
Very high savings rate. 
Quick question about this 

1212
01:07:32,200 --> 01:07:36,300
though, like about how this 
works, doesn't isn't the 

1213
01:07:36,300 --> 01:07:43,800
stability Faith, be paid in mkr 
and then the diag savings rate 

1214
01:07:43,800 --> 01:07:46,900
would be accumulated in die. 
How does that work? 

1215
01:07:46,900 --> 01:07:50,200
The transition from the 
stability from mkr? 

1216
01:07:50,200 --> 01:07:53,100
Does it have to go through some 
exchange or something to be paid

1217
01:07:53,100 --> 01:07:57,300
out? 
The feature of the fee being 

1218
01:07:57,300 --> 01:08:00,700
paid directly name Kia and 
single that will die is, it's 

1219
01:08:00,700 --> 01:08:04,000
kind of one of the features that
were in the end not done for 

1220
01:08:04,000 --> 01:08:08,600
any, like business reason, or 
any, any sort of user facing 

1221
01:08:08,600 --> 01:08:09,700
reason. 
But rather, because it was 

1222
01:08:09,700 --> 01:08:12,400
easier to implement. 
So it was easier to get single 

1223
01:08:12,400 --> 01:08:17,100
little it done and get the get 
the, you know, system live and 

1224
01:08:17,100 --> 01:08:20,600
rolling, and sort of see it play
out in the real world, right? 

1225
01:08:20,700 --> 01:08:24,100
Wasn't any place in every aspect
of mkr because the fee is bird 

1226
01:08:24,100 --> 01:08:25,800
also. 
Important to the economic 

1227
01:08:25,800 --> 01:08:27,700
design. 
Oh yeah, absolutely. 

1228
01:08:27,700 --> 01:08:30,700
But the way it's going to be 
implemented in multi-level to is

1229
01:08:30,800 --> 01:08:34,300
just a more like a most that 
like a better approach are all 

1230
01:08:34,300 --> 01:08:35,700
right? 
Which is that the system takes 

1231
01:08:35,700 --> 01:08:40,200
in fees and die and then what it
does is it accumulates kind of a

1232
01:08:40,300 --> 01:08:43,100
pool of dye called buffer and 
when the buffer hits a certain 

1233
01:08:43,100 --> 01:08:47,100
size it triggers what's called a
surplus surplus auction. 

1234
01:08:47,399 --> 01:08:50,700
And the surplus auction is then 
where they a burnt and then what

1235
01:08:50,700 --> 01:08:53,000
the means is that buffer is also
available as kind of like an 

1236
01:08:53,000 --> 01:08:57,000
account where I can also be 
taken out of, and put into the 

1237
01:08:57,008 --> 01:09:02,399
dye savings rate for instance. 
And actually today, you can also

1238
01:09:02,399 --> 01:09:07,100
pay your stability for your CDP 
with die because it is actually 

1239
01:09:07,100 --> 01:09:08,800
super frustrating. 
It was one of the biggest 

1240
01:09:08,800 --> 01:09:11,500
concerns all the users head that
they had to let go. 

1241
01:09:11,500 --> 01:09:14,200
And, you know, they have to use 
eith to open the CDP and then 

1242
01:09:14,200 --> 01:09:15,800
they get die. 
The second token and then they 

1243
01:09:15,800 --> 01:09:19,300
also have to go and get a third 
token, like some dust mkf dust 

1244
01:09:19,300 --> 01:09:22,600
right to then pay the fee to 
retrieve their collateral out of

1245
01:09:22,608 --> 01:09:24,100
it, right? 
And it's just like incredibly 

1246
01:09:24,500 --> 01:09:28,800
You know, user unfriendly really
and as a result the feature to 

1247
01:09:28,800 --> 01:09:32,300
pay the stability will die was 
added to the front end and kind 

1248
01:09:32,300 --> 01:09:35,500
of like me is that it takes care
of automatics go and buy a on an

1249
01:09:35,500 --> 01:09:38,300
exchange and then pay the 
stability for you. 

1250
01:09:38,700 --> 01:09:42,500
But that that convenience 
functionality is moved into the 

1251
01:09:42,500 --> 01:09:44,899
core of maker in multilateral 
die. 

1252
01:09:44,899 --> 01:09:48,500
So the release that that also 
supports the die savings rate 

1253
01:09:48,700 --> 01:09:53,600
and is then fundamental to 
facilitating the die savings 

1254
01:09:53,600 --> 01:09:57,300
rate and the flows of Any that 
that really go from from CP 

1255
01:09:57,300 --> 01:09:59,600
holders, paying the stability 
for you, right? 

1256
01:09:59,600 --> 01:10:02,200
And then the part of that going 
to die holders and another part 

1257
01:10:02,200 --> 01:10:05,500
of it going to a holders. 
What happens if people don't 

1258
01:10:05,500 --> 01:10:10,000
actually use this ability fee 
and so you know you promised the

1259
01:10:10,900 --> 01:10:15,100
the lock die, there's interest 
rate but then it turns out 

1260
01:10:15,100 --> 01:10:18,900
there's not enough people 
actually you know, closing their

1261
01:10:18,900 --> 01:10:21,500
CDP and so this you don't 
actually have the money. 

1262
01:10:21,600 --> 01:10:24,800
Like is there other critiques 
concern here like you know, what

1263
01:10:24,800 --> 01:10:26,300
happens if you don't have the 
money to actually pay out the 

1264
01:10:26,308 --> 01:10:29,900
interest rates that were 
promised Yeah, that would be if 

1265
01:10:29,900 --> 01:10:33,100
you used the current model where
you pay all the fee at when you 

1266
01:10:33,100 --> 01:10:36,000
close this EP, but in the next 
version of the system they're 

1267
01:10:36,000 --> 01:10:39,000
counting is continuous. 
So, you actually see the die. 

1268
01:10:39,400 --> 01:10:44,800
Like, rather than scdp accruing,
you could say like a fee 

1269
01:10:44,800 --> 01:10:46,500
overtime, right? 
This will sit there and has to 

1270
01:10:46,500 --> 01:10:50,100
be paid what a silly P does in 
multilateral dice actually 

1271
01:10:50,300 --> 01:10:53,500
continuously generate more and 
more data, so it doesn't kind of

1272
01:10:53,500 --> 01:10:57,200
like a cumulative fee. 
You have to pay it just Generous

1273
01:10:57,200 --> 01:10:59,300
die on your behalf that is then 
sent to the buffer. 

1274
01:10:59,900 --> 01:11:02,400
So what that means is that it's 
just like the direct link when 

1275
01:11:02,800 --> 01:11:07,000
the DSR pays out, that died has 
been directly generated out of 

1276
01:11:07,000 --> 01:11:08,300
the city piece at that moment in
time. 

1277
01:11:08,300 --> 01:11:11,500
So there's always like real-time
solvency in the system, right? 

1278
01:11:11,500 --> 01:11:13,700
Because of course that's 
necessary or you could run into 

1279
01:11:13,700 --> 01:11:16,600
these weird edge cases. 
That sounds like a very major 

1280
01:11:16,600 --> 01:11:18,600
upgrade one thing I'm curious 
about. 

1281
01:11:18,600 --> 01:11:21,200
So in my understanding to 
actually generate have your die,

1282
01:11:21,200 --> 01:11:25,400
generate interest, you have to 
put it in a particular smart 

1283
01:11:25,400 --> 01:11:27,900
contract. 
And only then, does it does? 

1284
01:11:27,900 --> 01:11:31,100
It generate interest? 
Why was that design decision 

1285
01:11:31,100 --> 01:11:33,300
made? 
Why don't you just have all died

1286
01:11:33,300 --> 01:11:39,900
in existence, generate interest,
or at least have a tokenized 

1287
01:11:39,900 --> 01:11:45,000
claim against that died in that 
smart contracts, similar to what

1288
01:11:45,000 --> 01:11:49,600
compound is doing with seed? 
I did because that would let 

1289
01:11:49,600 --> 01:11:53,900
people's not just have died 
sitting there but also let them 

1290
01:11:53,900 --> 01:11:58,600
be able to use it in depth. 
Yes it's really the short answer

1291
01:11:58,600 --> 01:12:02,700
is that it's for the sake of 
like use of friendliness because

1292
01:12:03,100 --> 01:12:07,000
while it sounds great to always 
have like it's dies 

1293
01:12:07,000 --> 01:12:09,500
accumulating. 
There might be many situations 

1294
01:12:09,500 --> 01:12:11,700
where for instance if you're 
trying to write a small app or 

1295
01:12:11,700 --> 01:12:14,400
you're trying to like create a 
smart contract or you're sending

1296
01:12:14,400 --> 01:12:19,100
some amount or like there could 
be a lot of situations where you

1297
01:12:19,100 --> 01:12:21,800
don't, you know, you just need 
to send an exact amount of money

1298
01:12:22,200 --> 01:12:26,300
and you don't really care about 
getting some small savings for 

1299
01:12:26,400 --> 01:12:28,900
for like, let's see, a couple of
days or a couple of hours or 

1300
01:12:28,900 --> 01:12:30,400
something. 
Also the, I feel that there 

1301
01:12:30,400 --> 01:12:31,900
might be an issue here, you 
know? 

1302
01:12:31,900 --> 01:12:35,600
Just, you know, we've had issues
like this in design of Cosmos as

1303
01:12:35,600 --> 01:12:39,400
well where it's like, you don't 
want to iterate over all die 

1304
01:12:39,400 --> 01:12:43,400
holders every single time you 
want to pay out interest and the

1305
01:12:43,400 --> 01:12:46,600
problem is, you know, okay maybe
you can pick it so you add it to

1306
01:12:46,600 --> 01:12:48,200
a pool. 
And what actually happened is 

1307
01:12:48,200 --> 01:12:51,600
die holds have shares in a pool 
but then the problem is then die

1308
01:12:51,600 --> 01:12:53,800
is not stable anymore. 
That that defeated the whole 

1309
01:12:53,800 --> 01:12:56,300
point of what we were trying to 
do with creating this. 

1310
01:12:56,400 --> 01:12:58,900
Table coin. 
So I am not sure how it would 

1311
01:12:58,900 --> 01:13:02,900
actually be possible to have it.
Go to all die holders in a 

1312
01:13:02,900 --> 01:13:06,700
computationally efficient way. 
And then a lot of use cases 

1313
01:13:06,700 --> 01:13:08,600
where currently you're locking 
up. 

1314
01:13:08,600 --> 01:13:12,100
Dies over instance, a you'll use
it in a prediction Market, as 

1315
01:13:12,100 --> 01:13:16,300
collateral, for instance, and 
you really wanted to be in, to 

1316
01:13:16,300 --> 01:13:19,400
be to be generating interest in.
Don't you kind of push people 

1317
01:13:19,800 --> 01:13:24,300
into compound and into using 
compound die for this instead of

1318
01:13:24,700 --> 01:13:28,100
interest and rating die. 
Yeah. 

1319
01:13:28,100 --> 01:13:30,800
I mean, that would be a, that 
could totally be concerned. 

1320
01:13:30,800 --> 01:13:33,900
But the thing is that it is 
actually implemented in a way 

1321
01:13:33,900 --> 01:13:35,300
where that is completely 
possible. 

1322
01:13:35,300 --> 01:13:38,700
So you would see, you know, you 
would see, let's say, the 

1323
01:13:38,700 --> 01:13:42,900
prediction Market implement on 
there and the like an 

1324
01:13:42,900 --> 01:13:45,600
integration where the moment you
deposit down to the platform. 

1325
01:13:45,600 --> 01:13:48,800
It's automatically sent into 
earning the die savings rate. 

1326
01:13:49,100 --> 01:13:52,500
And on top of that, it is even 
technically possible to create 

1327
01:13:52,500 --> 01:13:57,200
this concept of the, of the, you
know, the CD with the data where

1328
01:13:57,200 --> 01:13:59,400
you actually. 
Actually can use the die 

1329
01:13:59,400 --> 01:14:01,100
directly in. 
The DSR is tokens. 

1330
01:14:01,700 --> 01:14:05,500
And the long-term vision is in 
fact that like, one day far out 

1331
01:14:05,500 --> 01:14:07,200
in the future, right? 
When the ecosystem is way more 

1332
01:14:07,200 --> 01:14:11,900
mature and the, you know, the 
standards are able to handle 

1333
01:14:11,900 --> 01:14:14,000
this and collect the accounting 
systems, and even the 

1334
01:14:14,000 --> 01:14:16,200
accountants can sort of wrap 
their heads around it. 

1335
01:14:16,600 --> 01:14:18,600
You would have all died in real 
time. 

1336
01:14:19,000 --> 01:14:21,200
Always generate the savings 
rate, right? 

1337
01:14:21,200 --> 01:14:23,800
Because rationally, there's no 
reason to do it. 

1338
01:14:23,800 --> 01:14:27,000
If it's if there's no friction 
in doing it, but the fact is 

1339
01:14:27,000 --> 01:14:30,100
just that If you try to force it
on people, it would like it 

1340
01:14:30,100 --> 01:14:33,000
would create more losses through
friction and confusion that it 

1341
01:14:33,000 --> 01:14:36,000
would create like that it was 
over you know create the gains 

1342
01:14:36,000 --> 01:14:39,800
of like let's say you know like 
when you're sending dodgy a 

1343
01:14:39,808 --> 01:14:42,900
friend instead of like pulling 
it out of the die savings rate, 

1344
01:14:42,900 --> 01:14:45,600
sending it to him and then a day
later he puts it into the die 

1345
01:14:45,600 --> 01:14:47,300
semi-sweet, right? 
Like sure. 

1346
01:14:47,300 --> 01:14:51,500
You can you can save. 
You can save like, oh you can 

1347
01:14:51,500 --> 01:14:55,500
still gain one day extra of 
interest earned by just sending 

1348
01:14:55,500 --> 01:14:58,200
it directly. 
But the problem is that, what 

1349
01:14:58,200 --> 01:15:02,000
you then create is like a much 
bigger burden on the wallets to 

1350
01:15:02,000 --> 01:15:05,300
properly, incorrect integrate 
and implement this. 

1351
01:15:06,100 --> 01:15:09,400
So that's really, that's the big
trade-off in the beginning, 

1352
01:15:09,400 --> 01:15:10,800
right? 
That is actually simpler 

1353
01:15:10,900 --> 01:15:14,400
technically to deal with kind of
this fixed idea of the die 

1354
01:15:14,400 --> 01:15:16,800
savings rate where you deposit 
your day into and you pull it 

1355
01:15:16,800 --> 01:15:19,400
out when you're, they want to 
send it around rather than you 

1356
01:15:19,400 --> 01:15:23,800
always have to account for the, 
the savings rate of cooling. 

1357
01:15:23,800 --> 01:15:27,200
Because it is actually, it is, 
it is implemented it Exactly the

1358
01:15:27,208 --> 01:15:32,100
way, you know, you describe, 
right? 

1359
01:15:32,100 --> 01:15:36,400
That it is this. 
It is a share in, like a pool. 

1360
01:15:36,900 --> 01:15:40,900
I mean, that's a very rough and 
like, very simplified 

1361
01:15:40,900 --> 01:15:44,100
explanation of it, right? 
But it's like, it's it on the 

1362
01:15:44,100 --> 01:15:46,100
back end. 
It doesn't actually change over 

1363
01:15:46,100 --> 01:15:48,400
time, but the front end kind of 
updates the value. 

1364
01:15:48,400 --> 01:15:51,800
So it looks like it's kind of 
like a transaction that's 

1365
01:15:51,800 --> 01:15:54,100
happening, right? 
But in reality, it's really just

1366
01:15:54,600 --> 01:15:57,900
kind of like numbers. 
That's If I did and you know, 

1367
01:15:57,900 --> 01:15:59,900
various ways but which is 
exactly actually how this 

1368
01:15:59,900 --> 01:16:01,900
ability feet works right now. 
So stability. 

1369
01:16:01,900 --> 01:16:05,500
Feet doesn't actually update 
individually on every CTP it 

1370
01:16:05,500 --> 01:16:08,800
just looks that way and in 
reality it's a single number 

1371
01:16:08,800 --> 01:16:11,700
called accumulator. 
That's that's updating and then 

1372
01:16:12,100 --> 01:16:15,000
it's displayed across all cdp's 
when it gets updated. 

1373
01:16:16,400 --> 01:16:21,100
Do you think that over time that
you know, currently what what 

1374
01:16:21,100 --> 01:16:25,200
maker Dow essentially is, is 
this like decentralized s 

1375
01:16:25,300 --> 01:16:27,200
central bank right at the 
Central Bank? 

1376
01:16:27,300 --> 01:16:30,000
Do you think that over time, 
maybe, there might be competitor

1377
01:16:30,300 --> 01:16:34,000
to central banks that kind of 
compete with the maker system 

1378
01:16:34,000 --> 01:16:36,800
and, you know, maybe they claim 
that their government. 

1379
01:16:36,800 --> 01:16:39,600
Whatever their governance 
processes that they use might be

1380
01:16:39,600 --> 01:16:42,500
more better than what the maker 
Dow system does. 

1381
01:16:42,700 --> 01:16:45,500
I think this is actually kind of
what the Libra project from 

1382
01:16:45,500 --> 01:16:47,600
Facebook is. 
Kind of going down that route a 

1383
01:16:47,608 --> 01:16:50,000
little bit. 
And so how do you think the 

1384
01:16:50,000 --> 01:16:58,100
maker ecosystem will react to 
Alternative the central bank's 

1385
01:16:58,100 --> 01:17:01,100
able coin designs whether that 
you know a copy of the maker 

1386
01:17:01,100 --> 01:17:05,000
system with you know different 
governance system or you know 

1387
01:17:05,000 --> 01:17:08,200
even a different system 
altogether, kind of more like 

1388
01:17:08,200 --> 01:17:12,300
The Reserve System which uses 
you know slightly different 

1389
01:17:12,300 --> 01:17:18,100
mechanics Yeah, I always 
expected that we would see the 

1390
01:17:18,100 --> 01:17:22,200
copycats and competitors and 
similar types of systems much 

1391
01:17:22,200 --> 01:17:24,000
earlier, right? 
And it would really be this like

1392
01:17:24,000 --> 01:17:27,000
big space and there would be 
just like a lot of different 

1393
01:17:27,000 --> 01:17:31,200
versions all competing. 
And it's quite interesting that 

1394
01:17:31,200 --> 01:17:35,100
the reality ended up being that 
maker pretty much became the 

1395
01:17:35,100 --> 01:17:37,300
only decentralized stable cloud 
with decentralized governance 

1396
01:17:37,300 --> 01:17:40,700
and then the whole ecosystem of 
centralized stable coins was 

1397
01:17:40,700 --> 01:17:42,600
what ended up completely 
exploding. 

1398
01:17:43,800 --> 01:17:47,600
But you're totally right that 
like that, the way that like the

1399
01:17:47,600 --> 01:17:50,800
thing that that makes maker 
though, unique is a 

1400
01:17:50,808 --> 01:17:53,200
decentralized governance and the
way that you would sort of have 

1401
01:17:53,200 --> 01:17:55,000
something that would actually be
a competitor, they would 

1402
01:17:55,000 --> 01:17:58,700
actually operate in the same 
space as make it would be by 

1403
01:17:58,700 --> 01:18:01,000
having a different type of 
decentralized. 

1404
01:18:01,000 --> 01:18:04,200
Governance that could somehow 
add add more to the table, 

1405
01:18:04,200 --> 01:18:07,700
right? 
And be more efficient, or better

1406
01:18:07,700 --> 01:18:11,600
manage risk or something like 
that and I mean I don't think 

1407
01:18:11,600 --> 01:18:13,800
that's so far. 
There's There's really nothing 

1408
01:18:13,800 --> 01:18:15,300
like it yet. 
I mean, there's no attempt at 

1409
01:18:15,300 --> 01:18:19,000
actually, creating this type of 
self self organizing and 

1410
01:18:19,000 --> 01:18:21,800
sustainable community that we're
trying to bootstrap, right? 

1411
01:18:22,300 --> 01:18:24,800
And if you look at something 
like Libra, for instance, I 

1412
01:18:24,800 --> 01:18:27,400
would say that like it is 
actually quite different. 

1413
01:18:27,700 --> 01:18:31,700
So based on my, why not? 
Totally, perfect understanding 

1414
01:18:31,700 --> 01:18:33,700
Libra. 
It has a bit more of, kind of 

1415
01:18:33,700 --> 01:18:38,600
like a fixed, like, monetary 
policy where it's collect, 

1416
01:18:38,600 --> 01:18:42,700
predefined, and based on the 
individual actions of of the, 

1417
01:18:42,700 --> 01:18:45,900
the Events in the in ecosystem 
so they're not really, they 

1418
01:18:45,900 --> 01:18:50,300
don't have the same like it. 
Prioritizes the quickly as I see

1419
01:18:50,300 --> 01:18:54,700
it but it what it what it 
sacrifices is, kind of like a 

1420
01:18:54,700 --> 01:18:58,100
coherent and unified monetary 
policy so you end up having a 

1421
01:18:59,100 --> 01:19:01,700
the end of having a collateral 
portfolio and you end up having 

1422
01:19:01,800 --> 01:19:06,200
an inflation rate and a pic 
that's a little bit more random 

1423
01:19:06,300 --> 01:19:09,000
because you're prioritizing this
ability for anyone to always 

1424
01:19:09,000 --> 01:19:12,300
create them by with, you know, 
by pledging collateral into the 

1425
01:19:12,308 --> 01:19:15,500
system without any Any sort of 
framework to do that within and 

1426
01:19:15,500 --> 01:19:17,700
that's what I think. 
I mean ultimately I think that's

1427
01:19:17,700 --> 01:19:19,100
what is by far the most 
powerful, right? 

1428
01:19:19,100 --> 01:19:22,500
Because that's what also what 
you know, thousands of years of 

1429
01:19:22,500 --> 01:19:24,900
traditional Finance, coalesce 
that, right? 

1430
01:19:25,500 --> 01:19:29,800
And what you need to then do to 
make something that's better 

1431
01:19:29,800 --> 01:19:34,200
than maker is you need to get 
better at still playing with, 

1432
01:19:34,200 --> 01:19:36,800
you know, like creating like the
operating within that framework 

1433
01:19:36,800 --> 01:19:38,800
and kind of like setting that 
framework correctly. 

1434
01:19:38,800 --> 01:19:41,800
So that you do get this like 
Optimal the quiddity optimal 

1435
01:19:42,100 --> 01:19:46,600
pick, An optimal inflation and 
best risk management. 

1436
01:19:46,800 --> 01:19:49,300
The question is, whether you can
kind of, like, innovate on top 

1437
01:19:49,300 --> 01:19:53,800
of this idea of having token 
holders, ultimately, curating 

1438
01:19:53,800 --> 01:19:56,500
the decisions, right? 
Maybe there's something like 

1439
01:19:56,500 --> 01:20:02,100
paying for votes or like, paying
for like, are rewarding activity

1440
01:20:02,100 --> 01:20:04,800
or paying experts or something. 
And all of these ideas is 

1441
01:20:04,800 --> 01:20:07,300
actually also something that 
maker governance is very heavily

1442
01:20:08,100 --> 01:20:09,800
focused on trying to innovate, 
right? 

1443
01:20:09,800 --> 01:20:11,900
Because, of course, this is only
the very beginning of 

1444
01:20:11,900 --> 01:20:17,300
decentralized governance. 
Let's fast forward, maybe five 

1445
01:20:17,300 --> 01:20:21,800
or ten years so you just added 
six tokens for Mighty collateral

1446
01:20:21,800 --> 01:20:24,200
die. 
The choice of tokens or the move

1447
01:20:24,200 --> 01:20:27,900
to add exactly. 60 seconds makes
me think this is the first of 

1448
01:20:27,900 --> 01:20:32,000
many additions to come. 
So basically, if you look at the

1449
01:20:32,000 --> 01:20:35,900
market cap of the six tokens 
that you are, adding their only 

1450
01:20:35,900 --> 01:20:39,300
on the order of a few percent of
what the theory of market cap 

1451
01:20:39,300 --> 01:20:42,800
is, so the collateral that was 
already available that version 

1452
01:20:42,800 --> 01:20:45,600
of the system that was 
Technically much simpler. 

1453
01:20:46,000 --> 01:20:50,800
What are you plans for expanding
the scope of collateral in five 

1454
01:20:50,800 --> 01:20:53,900
years? 
Will I be able to use my house 

1455
01:20:54,000 --> 01:20:59,000
as collateral on on maker? 
Yeah. 

1456
01:20:59,000 --> 01:21:02,000
The short answer is that yes 
that would absolutely be the 

1457
01:21:02,200 --> 01:21:02,800
trim. 
Right? 

1458
01:21:02,800 --> 01:21:09,300
That where the project is going 
is that it's kind of trying to 

1459
01:21:09,300 --> 01:21:14,800
break beyond the boundaries of 
blockchain and crypto and just 

1460
01:21:14,800 --> 01:21:17,200
got like I mean to some extent 
the bubble that crypto still 

1461
01:21:17,200 --> 01:21:20,300
lives within right? 
But instead try to reach out to 

1462
01:21:20,300 --> 01:21:22,900
the real world and integrate 
with real Financial system, the 

1463
01:21:22,900 --> 01:21:28,900
real global trading system and 
most importantly have real 

1464
01:21:28,900 --> 01:21:32,500
assets and real value in the 
real world actually back die. 

1465
01:21:32,600 --> 01:21:35,900
Right? 
So it's not just hot crypto are,

1466
01:21:35,900 --> 01:21:39,700
but it's, I mean, which actually
does have its own in very unique

1467
01:21:39,700 --> 01:21:42,100
benefits and very really unique 
risk characteristics, right? 

1468
01:21:42,100 --> 01:21:46,200
But ultimately, you want as much
diversification you want as much

1469
01:21:46,200 --> 01:21:49,100
kind of like like as many 
different perspectives and 

1470
01:21:49,100 --> 01:21:53,100
avenues of stability as you 
possibly can behind a stable 

1471
01:21:53,100 --> 01:21:57,000
coin, right? 
So and there is actually some ID

1472
01:21:57,100 --> 01:22:01,100
Credibly exciting and quite a 
fast-moving Innovation happening

1473
01:22:01,300 --> 01:22:04,000
exactly within the space of like
figuring out. 

1474
01:22:04,000 --> 01:22:07,800
How do you, how do we make it so
that You know, five years this 

1475
01:22:07,800 --> 01:22:08,900
may be a little bit optimistic, 
right? 

1476
01:22:08,900 --> 01:22:11,900
But potentially five years from 
now you can cut like open an app

1477
01:22:11,900 --> 01:22:15,400
on your phone and then you click
a button and that app uses some 

1478
01:22:15,400 --> 01:22:20,800
sort of third party service to 
legally, connect the ownership 

1479
01:22:20,800 --> 01:22:24,400
and the deed of your house to 
token, which is then directly 

1480
01:22:24,400 --> 01:22:26,900
set to some sort of automatic or
automated. 

1481
01:22:27,400 --> 01:22:30,600
You know, risk assessment 
function that connected to maker

1482
01:22:30,600 --> 01:22:33,200
that kind of like, does an 
assessment of your house and the

1483
01:22:33,200 --> 01:22:36,300
value of your house and the risk
associated with that house, And 

1484
01:22:36,300 --> 01:22:41,700
then ultimately create a new c 
d-- p type unique to you and 

1485
01:22:41,700 --> 01:22:45,200
kind of like your house and your
risk parameters and you're sort 

1486
01:22:45,200 --> 01:22:51,700
of conditions as a Septa, right?
And then ultimately, you can 

1487
01:22:51,700 --> 01:22:54,200
deposit the toting. 
Again, with a single, click on 

1488
01:22:54,200 --> 01:22:58,100
your app into make a directly 
and generate die directly and 

1489
01:22:58,100 --> 01:23:00,800
go. 
And you know, like really well 

1490
01:23:00,800 --> 01:23:03,200
maybe refinance your current 
loan or something like that with

1491
01:23:03,200 --> 01:23:05,100
it, right? 
I mean that is certainly like 

1492
01:23:05,100 --> 01:23:07,800
very cyberpunk and Like a really
cool. 

1493
01:23:07,800 --> 01:23:11,200
I like very concrete way that 
you could think. 

1494
01:23:11,200 --> 01:23:13,300
Like you could actually imagine 
that you know, the bomb and 

1495
01:23:13,300 --> 01:23:16,900
pup-pups of the future would 
like have blockchain directly in

1496
01:23:16,900 --> 01:23:20,300
the face because that's how they
would do their, you know, their 

1497
01:23:20,300 --> 01:23:21,200
mortgages. 
Right. 

1498
01:23:21,600 --> 01:23:26,000
But of course, the steps along 
that way are most likely going 

1499
01:23:26,000 --> 01:23:29,500
to be a lot more about kind of 
integrating on the back end of 

1500
01:23:29,500 --> 01:23:31,900
existing Financial 
infrastructure is right. 

1501
01:23:31,900 --> 01:23:35,600
So it's a tough stretch to take 
it to the end user and really 

1502
01:23:35,600 --> 01:23:39,300
make it like Usable and 
accessible and Powerful for the 

1503
01:23:39,700 --> 01:23:44,000
sort of the regular in a retail 
credit secret right but it's a 

1504
01:23:44,000 --> 01:23:47,900
lot easier if you start trying 
to implement it to something 

1505
01:23:47,900 --> 01:23:51,500
like life scale, trade Finance 
or even just like large-scale 

1506
01:23:52,500 --> 01:23:54,900
Securities, abundance, repo 
markets. 

1507
01:23:54,900 --> 01:23:59,800
Because there's so much like 
institutional capture and like 

1508
01:23:59,800 --> 01:24:02,000
luck end of the platforms right 
now in those spaces. 

1509
01:24:02,000 --> 01:24:05,800
And there's so much mean really 
like paperwork and bureaucracy 

1510
01:24:05,800 --> 01:24:11,600
and Like old thinking around it 
that it's it's you know it's 

1511
01:24:11,600 --> 01:24:15,800
incredibly ripe for disruption 
by by just water technology. 

1512
01:24:16,400 --> 01:24:20,000
Maybe let's end on this very 
cyberpunk notion. 

1513
01:24:20,000 --> 01:24:23,500
I think those are fantastic 
closing words thank you so much 

1514
01:24:23,500 --> 01:24:27,100
for being on the show. 
This was super interesting and I

1515
01:24:27,100 --> 01:24:30,600
apologize to our listeners for 
going over a little bit. 

1516
01:24:30,600 --> 01:24:34,300
I hope you're all still here. 
Yeah. 

1517
01:24:34,600 --> 01:24:37,500
Sorry that that happens quite 
often from me. 

1518
01:24:38,900 --> 01:24:41,200
That's the nature of maker being
so complicated. 

1519
01:24:42,600 --> 01:24:45,500
Thank you. 
But thanks a lot for the quick 

1520
01:24:45,500 --> 01:24:48,100
questions and great 
conversation. 

1521
01:24:49,400 --> 01:24:51,900
Thank you guys for listening and
see you next week. 

1522
01:24:53,900 --> 01:24:55,800
Thank you for joining us on this
week's episode. 

1523
01:24:56,100 --> 01:24:57,700
We release new episodes every 
week. 

1524
01:24:58,300 --> 01:25:01,000
You can find And subscribe to 
the show on iTunes Spotify, 

1525
01:25:01,100 --> 01:25:04,200
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1526
01:25:04,500 --> 01:25:07,300
And if you have a Google home or
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1527
01:25:07,308 --> 01:25:10,300
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1528
01:25:10,300 --> 01:25:13,400
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1529
01:25:13,400 --> 01:25:16,000
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1530
01:25:16,000 --> 01:25:18,800
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1531
01:25:18,800 --> 01:25:22,200
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1532
01:25:22,200 --> 01:25:25,100
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1533
01:25:25,100 --> 01:25:27,800
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1534
01:25:27,800 --> 01:25:31,100
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1535
01:25:31,100 --> 01:25:32,300
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