Will Agent Swarms Price the Future on Prediction Markets? with Zack Pokorny

Welcome to Galaxy Brains! An infinite amount of cash, cash, and pop. On your host, Alex Thornt, US banking system is sound and resilient. I've been quite meeting new all-time high. If you're not long, if you're not long, you're short. Satoshi's gonna come on there, we have to start quickly, go quiet. I hope the coins will be erased. I've been quite, I've been quite, I've been quite, I've been scripted to lots of pop. Welcome back to Galaxy Brains. I'm your host, Alex Thornt, head of firm wide research at Galaxy. Bitcoin's not zero. Right episode for you this week. Zach McCorney from Galaxy Research joins us. A long interview with Zach. Zach is looking at a lot of interesting things. We sort of break this discussion up into four parts. We talk about the lending markets. He's the author of our quarterly excellent, widely read lending report. And he'll give us some details on the new numbers that report comes out next week. Then we talk about how AVE governance and governance in DeFi and how autonomous organizations are able to act in the real world. It's actually quite similar to the problems that AI agents have acting in the real world. Then we'll talk about prediction markets and base coin bases roll up taking its code base in house and what that portends. Of course, we'll also check with our good friend Bimnet, a BP from Galaxy trading. As always, talk a lot about geopolitical tensions and the AI impact on markets. Great conversation. Before we get to any of that, I need to remind you to please refer to the link to the disclaimer in the podcast notes. And note that none of the information in this podcast constitutes investment advice or an offer, recommendation or solicitation by Galaxy or any of its affiliates to buy or sell. Any securities. We've got a long episode for you here. 20 minutes with Bimnet and 55 minutes with Zach. It's a great one though. So let's hop right into it with Bim. Let's go now to our friend Bimnet, a BP from Galaxy trading. As always, Bimnet, welcome to Galaxy brains. Thanks for having me. We're basically in the same spot as we were last week. Bitcoin slightly higher, which we'll talk about, but again, in the range. Fear is still about AI. Will it take all the jobs if it's successful? Actually, is it not likely to be successful? And we've been overspending in CapEx to build it out? Or crap, we need to spend a lot more to build it out. And is there enough capital to keep all this very anxious and other things? But is that that those fears haven't changed this week? They have not. In fact, the biggest kind of talking point this week was a piece put out by Satrini, kind of thinking about what the world looks like in 2028. And he's talking about S&P down 30%, 40%. And the unemployment rate at 10% plus and all kind of intellectual capital becoming kind of like worthless. And he said all payments come and he's down huge because the future uses stablecoins. Yeah, absolutely. But that was a good, it was sort of like satire, it was fiction. Yeah. It was a research note from 2028 that the imagined might be sent about the economy. And he did say it was not there, it specifically wasn't there, but it isn't there prediction. It's just a thought of version of the future. And you have to put a reasonable probability on it. But I think the labor side of things is super clear to me, right? Like you will need less people between robotics and AI. And AI that is exponentially getting better. I mean, yes. I have month on month it keeps getting better. And so what is it going to look like six months from now? What is it going to look like two years from now? It will make people obsolete. And you combine that with robotics. It's really hard to see a future where you don't need a lot fewer people employed. Yeah, I agree. And the markets, it was funny. That went around on X and on sub stack, the Satireening Research piece. But actually, I hadn't been between the storm in New York and other stuff that I've been busy with this week. I didn't see a lot of mainstream content this earlier this week. But I caught a glimpse of CNBC that morning after that came out where they were directly blaming like the downmarket of the day on that piece. So apparently that's good. No, I've moved a lot of people. Yeah. I mean, I think the nerves were already there. I mean, that the Friday, you know, Claude came out with this thing for cybersecurity and all the cybersecurity stocks, like took a huge hit. And on that Monday, you know, Claude came out and said they could do fucking the cobalt stuff. Yeah, cobalt. And IBM sold off like 100%. And it's just like, wait, and on that Monday, you also had financial selling off aggressively. And that seemed like more of a positioning dynamic around private credit and some concerns there. But yeah, there are pockets of the market that are, you know, an uncharted territory. It's kind of crazy. Like aren't the aren't the like the market shouldn't be playing whack a mole every time one. Shouldn't it be broadly pricing in like it's pretty clear that you know today it was it was cobalt and then it was, you know, this other industry cyber security. And then it's going to be some other like it shouldn't we just broadly be repricing anything that involves labor like at this point, which is most effective. I mean, that is effectively what's happening. And like the companies that are doing faster, the companies that apparently are going to eat market share from the existing companies. Right. So the Googles of the world, right. And everybody's going to be using acid. I literally I literally vibe. I've been paying $2.99 $2.99 cents a month for like seven years for this great app on iOS called meme. Medic just that makes it really easy to do memes, meme imagery and stuff. And I just vibe coated myself one this weekend in cursor. And now I don't need it. I literally canceled it. Literally it's the exact same app. Like I made the exact app like basically for myself. Well, I mean, not for free, but you know again, you know, this is where the world's had it. And you know, I think these tensions culminating with, you know, the geopolitical risk that that's present in the market. You know, like leads to a lot of nervousness. And that's why you've got VIX like reasonably elevated. It was on a, you know, 20 plus handle. It's come off a little bit. But you know, that there's a lot of stuff that essentially should increase the variance of the market. Yeah. Right. Or like the distribution of outcomes is so crazy that like the pricing right now, like it might not be reflecting, you know, truly what that distribution looks like. It's so interesting. Like we said this in our Bitcoin prediction, which I, you know, sold like in salt with you weekly on the show. Yeah. We decline. I declined to put out a Bitcoin price prediction for this year. Just because and one simple way to point to us is looking at the options market in Bitcoin and showing that they were like equal likelihoods. Traders were pricing at the time and equal likelihood of like 50 or 250 by the end of the year. And I'm like, that's just too wide a band. It's like too chaotic of an environment. Let's talk about the geopolitics you brought up. Yeah. Of course, we're talking about this massive move of American military hardware into the Middle Eastern theater. And the anticipation that Trump, President Trump may or may not order some military action against Iran in this ongoing dispute about its nuclear program. Have we had any meaningful developments? I think it talks, right? And yeah, they're supposed to be more talks tomorrow. And you know, the administration has been putting different timelines to bang on who you talk to. But you know, it was like 10 days like a week ago. It was like a couple days, you know, at some point. But actions speak louder than words. And the actions are we have deployed a ton of military resources into the area. We have warned people have warned citizens in like Syria and other places in the region. Get out and like, you know, like that. That should seem high. It should seem high. And then the other headlines are like, you know, I think the Iranian response to a limited strike is more aggressive than it has been historically. Yeah. At least that's kind of what we're anticipating what like, you know, US bases in the region type of stuff like that. It used to be like, oh, you know, you strike my military target. Oh, I strike your base when there are no people there. Yeah, yeah. It's a personal attack. Yeah, a personal response. Correct. And I think at this point in time, you know, the Iranians are like, no, we need to have like, you know, a significant response to a limited strike. They're trying more deterrence, trying to be more. Yeah. So, and then also that like there are headlines being like the Chinese might sell them their anti aircraft carrier missiles. And then apparently the Iranians did a $500 million dollar like arms deal like with the Russians. And so it just gets really weird. And if you really think about it from the standpoint of like, like Israel really does want to go in super aggressively. And I think it's understandable like to have like a large nation this military arm that, you know, funds people doing all full things. It's reasonable to see them as a threat no doubt. Yeah. It's super reasonable. And yeah, I just don't see all this military build up and nothing happening. And it's like a lot of pieces. I mean, again, we don't know, but there's a lot of the open source intelligence, you know, counts and in websites that have been showing substantial movement. You can see them on flight radar and stuff like that. I mean, I have all the awareness and stuff in the region too, which is, I mean, one of them has a toilet problem. Yeah. Yeah, so that the market is what I don't think it's properly appreciating that because like the, you know, like, like, that's not being like essentially at all time highs again. Like, guys, like there is a major conflicts in the Middle East that is brewing and like all it takes is like, you know, like one bad comment or one wrong action step or miscalculation. It's so true. I studied conflict a lot in college when I was studying political science and international relations. And even in the case that both sides intend not to escalate to bad escalatory conflict spiral is very possible and even likely to occur, you know, once these things get going. A lot easier to start a war than anyone, you know, so very, very risky. And I, to be honest, I, I don't know what the US calculus is. I understand that, you know, a nuclear arm to ran is not something that anyone wants. But I also think that a huge Middle East conflict is also not something people want. So it's stuck between a rock and a hard place. And in terms of like what markets do on this type of stuff, it's like, it's hard to say because as long as it's like offshore, like it's not going to impact like every day Americans. It's not like people are still going to buy all the NVIDIA chips that NVIDIA is able to produce right like people are still going to need health care people are still going to need, you know, this is something presidents have made use of. Or it's why they like the missile so much right like it's obviously you start sending people's sons and daughters in a harm's way like that has major domestic political ramifications. You know, you're just drone strike in here and there like presidents have gotten away with this type of activity, even in cases without the approval of Congress. Yeah, because it's sort of out of sight out of mind for the average amount. But it's just like, you know, the, the tail risks of the stuff is just that's right. You know, like that Chinese and like there's already existing trade tensions and. You know, like I don't think the Europeans are really on board with like a strike. I think the UK apparently was like you don't use a military basis for you know, or any operations like it is. It's very hard situation and you know, like could you be talking about like massive mines going into the straight of four moves and. Right. And the case is definitely greater for moves like that disrupts all global oil and 20% of oil goes through there that's enough to stabilize the entire. I had the price forecast I've seen are like over $100 a barrel and we're away now like 70 or like 70. Yeah, Brent crude. Yeah, but that's a major increase 30% increase. So potentially if a bad conflict so that further uncertainty in the market. There's just a lot. A real quick on Bitcoin. Let's go to Bitcoin. So we we got about as low just a day or two ago is in like the 63. Yeah, 63. I think I say 62s. Didn't quite retest the 560K, which was really the flat. I think on Coinbase it was 60,000.00 was the 50.50. Low it now drifted higher today. We were up about 5% almost a 70 K. That's on a day where stocks were green crypto stocks were all up as well. Pretty much. Yeah. Is that just drift is that that's just in the range that noise. I think it's just noise. I mean a lot of like the alt charts, for example, it's like, oh, you know, something goes from like, you know, $16 to like $2 and goes from $2 back to 230 or 240. Like 20% from a very low. Yeah. Right. And so you have a base of base effects at play. Yeah. Because stuff is sold off so much and same thing on the crypto equities. Right. Like, oh my god. Like, yeah. Like Coinbase is up a lot today. Well, did you see where it was to start the year? Yeah. Yeah. It was down a lot. It was down a lot. Right. So these moves look like huge moves percentage wise. And that's totally reasonable. But like for people that were long this stuff, like it's not really like that. If you were long at 100 for Bitcoin, you're not feeling that much comfort that it went from 62 to 68. Yeah. Basically, it's nothing. Where was Solano to start the year? Yeah. Like you're back to 88 bucks. Yeah, be. I think you probably started the year like 130. Yeah. 120 and James. So no material change in your mind from what we're seeing right now. I think right now, right now, it's a range and historically in bear markets and crypto. You've had periods where you've rallied 20 to 40% at times off the lows before ultimately making lower lows. And so I do think that if you're trading from the short side, like these are not great levels. Right. Right. Like even if you're over the view that you're going to 50 or lower eventually. Like you just have to know where Max Payne is at any point in time. And so I think it's feasible to get a rally as high as like 80, 85 even. It's totally possible. And what you'll see happen is narrative will follow price. Right. And so the moment, you know, you start getting back in the 70s, people will be like, oh, it's back. I risk on 75 K. Like, oh my god, it's digital gold. The dad's flywheel starts again. And then it makes sense. And then yeah. Yeah. And so you think it's more of a to the extent it goes lower. It's more of a drift and a chop. It's not a, you know, we don't see, I mean, I guess the main one being of all of a sudden, equities correct, like significantly lower than then you could get it. But ultimately, like the way this market works is like you need to have like people start to get long again. Yeah. Right. That's right. Uh, in order for you for a taxi and people, they probably have been people playing this volatility by in a 62, thinking that's cheap and then selling the 69 clips of mine. That's a good trade. Right. But that's not the type of activity that carries us higher in the long term. Right. You need structural long structural long. And we honestly see right now all the like there's so much volatility in the equity complex and so much dispersion. Right. That being a stock picker right now is it's a phenomenal time if you're good. Yeah. Yeah. Obviously. Yeah. Uh, and if you're in the sectors that do well, but it's like there's so much to do that like crypto, but for a lot of like main street folks. It's not the most interesting thing right now. Still. It's what happened the last year to AI, quantum, uh, gold, these other things to my share now stocks. You're right. You have the days where IBM moves 10% IBM. Yeah, it's crazy. Like, yeah, Microsoft. I like that. I'm talking about the way. I'm talking about all is been insane. Yeah. So it's like, why do people like all and tokens usually because of all the wall and so like this. All right. Well, that's very interesting. This is a great one with you, Bimnet. I hope you have a great weekend. We will see you next time. Thank you, Bimnet. Amazing. Thank you. Let's go now to our guest, Zach Bacorni from Galaxy Research. Zach, welcome back to Galaxy brains. Yeah. As always, happy to be here. Yeah. You've been working on a bunch of interesting stuff. So I thought it'd be cool to give our audience some discussion and insight into what those things are. I wanted to ask you about lending in general. You're the author of our excellent and widely read quarterly lending report and the new, uh, the Q4 update from 25 comes out and, you know, within the next week. And I also want to talk about prediction markets. You're an avid user and follower and author about prediction markets. A bunch of interesting stuff happening. And then also want to talk to you about base coin bases, optimistic roll up that they are now removing from the op stack, the OP stack and the super chain. Want to own it themselves, the code base. And whether or not more things that portends more changes coming for that. So let's start with lending. What is the update here on the numbers? I mean, I think last quarter was the biggest ever, right? It eclipsed all prior in terms of the amount of loans outstanding to both centralized and decentralized lenders. What happened this quarter? Yeah. I mean, last quarter we hit an all time high upwards of like $80 billion. This quarter we obviously came down a bit just with. So that was Q3. That was yes. 2025 was the biggest quarter for outstanding loans. We've ever had primarily driven by on chain lending. Yeah. We kind of had a positive reflexivity loop with trading activity being so high prices appreciating people doing these like yield based looping strategies. Created a big not bubble just a lot of demand and economic possibility for these types of loans. But in Q4, you know, we had 10 10 negative price action. So it was really a story of negative reflexivity on chain and off chain resiliency. We actually saw see five loans continue to climb. Which is actually something we mentioned the last time I was on here, like in a bear market or bearish conditions. We thought it was likely to see see five lending continue to grow. While on chain kind of balters. That's just the reflexivity loop of on chain lending in the nature of it. But yeah, we only came down about $8 billion. So like 10% and then see five lending kind of filled the gap. So what mostly flat quarter over quarter? Downally 10% we lost like $8 billion worth of open loans, but still nothing crazy. I mean, we obviously saw the DeFi share fall a little bit. But that's just. Yeah, I mean the value of collateral goes down people. People close loans people get liquidated. Yeah, one of the biggest stories we talked about now for a while in the lending space has been the ascendancy and resiliency of DeFi as a permanent is DeFi still the bigger than C. I know it has been for a quarter or two at least right like is it is it still leading in terms of share versus the centralized lenders. Yeah, it's about a 57% market share give or take so like the majority of loans are still incredible. Yeah, I mean it makes sense. It's there's no gates to entry. The applications can be way more nimble than centralized lenders like the whole like Pendle PT looping phenomenon can only really originate on chain. I mean, maybe some C. file. Lenders are starting to do that stuff or thinking about it, but it can't just become a thing and then get implemented off chain. Like on chain is where the experimentation happens and all of these assets for the most part are native. So blockchains like we're starting to see some RWA looping stuff, but these are primarily crypto native synthetic assets that people are using here. Yeah, I think but the resiliency to like when you look at the like in 22 and 21 when we had all time highs and spot prices and in lending. That was mostly C. file right that was the block by Celsius Genesis Galaxy right et cetera. And now you know, first of all very few of those are still around. It's a different cohort of centralized lenders obviously Galaxy still around, but. D. file wasn't that big then what like what has changed like why what is supported its rise the composability or describing makes sense, but it's trust right. It's trust and like you mentioned all the major C. file under has got wiped out so is like anybody who wanted to borrow against their Bitcoin or their ether whatever. Where were you going to go or big period yeah like the largest applications made it through the bear market no issue yeah for the most part. Whereas all the C. file under got crushed and that was kind of the interesting thing I was looking at when I was putting all the data together was like it really was like one quarter C. file lending just evaporated right. And even in the wake of super negative price action the biggest liquidation event in in perps market history. And I think that's a testament to the practices of a lot of these C. file under is the industry's ability to self regulate in the absence of actual rules and even maybe hostile rule makers right. But yeah the resiliency of off chain lending has been has been huge and I mean maybe there'll be some decay in q one. But I anticipated to be more steps down not taking the elevator smart. And resting I want to ask this a little bit of adjacent but you also put a report a couple weeks ago now talking about the impact the correlation or connection between. Staking and lending on a network when you just give that the high level of what the thesis is there in the conclusion you came to. Yeah I mean it's really a story of collateral asset access. Like all the lending on chain is is collateralized over collateralized so without quality collateral assets you really don't have lending markets. And every user on chain who holds like each soul whatever which are the bedrock of each of their respective chains they can stake for yield they can deposit into defy whether that's just directly lending through. Like a pooled lending app or whatever or through some kind of like synthetic yield bearing product like a pheno to create new collateral some of the two staking you essentially just cut down on the pool available collateral and. And then you can just lending market struggle to kind of grow in that setting also the it's like you can get a I don't know make this up if the chain is paying 5% inflation and rewards for staking then. But the borrow market for that for your assets only paying three you wouldn't but lend yeah you just have less incentive like speaking is relatively less risky the yield is much more stable like it's it's programmatic and known. And you're just not taking the application risk yeah it's like it seems to make the argument though that if you want more robust lending markets on your chain you should have a lower inflation right lower staking rewards basically yeah certainly helps I mean there's ways to get around it you can try to import assets for other chains like Bitcoin obviously. But then those you I was thinking that but your collateral point like that like a Bitcoin on Salona is much much worse collateral than a Bitcoin on Bitcoin right you think of other wrapper issues and whatnot yeah I mean. Of those been sold yeah people are working on getting loans on like if you're even salon against native Bitcoin. But I think the issue is mostly like there's only so much Bitcoin circulating that wants to be deposited right into a lending application not very available yeah and just. The nature of lending activity it's it's very sticky like if I have a US DC loan and out against my Bitcoin on my application it's going to be very hard for you to dislod it. Especially if I have a lot of trust in that application which we have with Ave and some of the Ethereum based applications like they're not actually incentivized even if they're worth cheaper what is mentioned Ave. I continue to get that but what is going on with Ave governance can you explain what's happening. Yeah I mean we've kind of been seeing this revolution in the way people look at Dow structure and like what the tokens actually are it took a few years of super negative price action to come to this conclusion but essentially people are asking like. Hey like what do I actually own is it the underlying application is it the treasury like are the people who I trust to run the application build out the protocol. Do I have like legal recourse against them like does my voice even matter I mean I think what people found for the most part was that. The token isn't really connected to anything and you don't have much of a voice like there's no legal contract that says like oh me as a token holder wants this implemented we pass the vote like they have to go do it. And it's also an asset control thing we kind of seen this bifurcation where you have these legal entities that hold like IP and tangible assets and other things which we're learning are very valuable like in all of these acquisitions we've seen. So they're not just a kind of trackwise and otherwise they're buying the equity and the IP and the marketing type assets they're not actually buying the tokens and the tokens don't have any connection to those things. But now what we're starting to see is token holders and Dow say like wait we actually built this entire thing we have like maybe some legal wrapper that helped us build like front end product but they didn't actually build the protocol which is like the big money making thing like especially in the case of the. Like 120 million dollars a year labs is doing much less than that and the Dow is starting to ask like hey why don't we own the IP and all these other things so like super healthy conversation to be having I think this is going to be significant in terms of like getting us out of the bear market and like making tokens investable. But it's very disruptive and we're just going to have to work through those growing pains but healthy otherwise very interesting to a date the most important lending D5 app. The biggest yeah most important lending app. Yeah so like having a major but when where's that landing now in the sort of in ins and outs of that debate like rights of the labs what owns the IP and like they control the Treasury but the token holders are the Dow and technically they want to own the IP and the Treasury. Yeah I mean the Dow already owns the Treasury and like Ave tokens allow you to vote on like allocation and protocol direction stuff like that but they want the IP yeah and like that's the part that people who would go acquire like Ave equity like that's what they're going for yeah. I think I give it over like is there any sense of compromise emerging I mean the two sides seem to be talking to each other there's like maybe a stroke of hostility but I think that's just the nature of of this game. But yeah with Ave it's interesting because they have V4 coming out which for like any application migrating from a previous version to a new one is already challenging like uniswap I think is a test to that yeah they launched V4 they couldn't get really any activity yeah or liquidity to migrate to V4 from V3 so they're also going to be going through that at some point in the not so distant future adding the governments debate you can't complicate it but I mean I think Ave as a protocol is so trustable. The protocol is so trusted and so widely used that like most people who use the application probably don't even hold the token so like as long as the application works I think you may not see too much disturbance in that regard but yeah nonetheless it's I mean the main dev shop that develops the Ave protocol announced that they weren't going to renew their contract in their walking way. So like that does bring some kind of uncertainty into maybe not V4 but beyond that like who's going to fill that role because they've literally built the biggest and that is it like labs the labs organization paying devs or grants for devs or is it the Dow that's the Dow yeah but I mean like right I mean that's the some of that bifurcation I think it's regulatory in origin said oh the token it can't be too good or might be an illegal security. And separately we'll decentralized like control of the token or whatever but the labs is the equity entity that venture investors probably invested in right and they're trying to keep the tokens separate from the venture backed equity which is a security private security and maybe like the regulatory reforms that have been happening in crypto make it much more palatable and less risky to have your token actually have the equity like features. Yeah I mean I don't think it's a coincidence that this is happening right now yeah like bad regulation or just the complete absence of any regulation is what landed us on the current design and the more like forgiving regulatory environment is definitely giving people some runway to experiment and yeah I mean at the end of the day this is like a legal regulatory thing like most of the innovation happening around this whole deal is a legal thing yeah and like novel legal structures for Dow's and giving them like legal recognition and letting token holders at the end of the day. And letting token holders actually have binding binding rights to the treasury and the people who are running protocol. It's very interesting how people wonder you know how bad really was it say under Gary Gensler at the SEC right I mean you could quite a minute well time high actually right after he became chairman in 21. Okay but you know your business survived not all of them did but one of the counters is you have to understand the downstream effects to regulatory decisions and like how it warps people's behavior people follow incentives and one great example that's been talked about a lot that I've talked about is that like FTX setting up offshore it's kind of directly the result of it being effectively illegal to run a very useful exchange in the US at the time. And that de facto unenforceable prohibition it just they literally moved 90 miles offshore and set it up there Americans used it right whereas if they had made like workable rules that a business could genuinely come in and get and and and follow then you would have had better investor protections here here to is another one like because of you know fears of you know ICO and enforcements against 2017 ICO later like token launches like formed in Switzerland or other jurisdictions or offshore bifurcated their tokens are only sold the tokens to inside investors you know elite VCs right so you had much more centralized networks and weird structures where the tokens not connected to the applications revenue like in the case of AVE very to you know you hate to see it this is a good example of just bad regulation by the way didn't stop AVE from launching a coin and didn't stop FTX from launching offshore so also didn't work yeah I mean I've launched like like nine years ago I was a long 20s but but again you know like those structures it didn't stop like you know the L1s from being launched in the tokens trickling from the professional investors ultimately into the retail like it doesn't even work for the if you're trying to ban it or not allow it you failed at that also yeah I mean we had probably tens of millions of tokens built over the last five years yeah the ICO component that I think is like under discussed a big issue with like token price and what kind of brought us to the mind so we have now is like the down only price action which partially as a result of divergence in value that the private market assigns these things the public market yeah so like applications or protocols can go to the private market and raise $500 million for this crazy idea that they have but maybe if they had a token and it was an ICO the public market would effectively say like actually you probably only need like $50 million yeah and the discrepancy to like with the lockups and stuff and the opacity of the private sales create all these overhangs whereas like you can just like take a theory I'm right like there's like they just bought you pre bought the the idiom tokens in Bitcoin by the way and there's not a giant pile of like who's holding what like technically all those people can sell ether over the years if it goes up like there's overhang but it's not the like monthly online you wouldn't need a website like you know token on token on a list token on a list or whatever it's called right the tracks on locks and you know the whole meta VCs dumping on a quote and quote is like a direct result of the you know water pathways that token launchers had to find because you know if there had been a regulated way to sell safely to retail both safer the issue or in the retail that's a much more decentralized and egalitarian structure that widely disperses the coins much better than selling you know the use of your network tokens to three VCs yeah or I mean even worse projects sell their equity and then they also give the same investors tokens yeah so the token is like the effectively like the exit liquidity on the equity in the event that like you can't sell it or doesn't get acquired so you also have the dual structure where like you actually might have been more incentivized to push the value to the equity in the token was just kind of like my quasi liquid representation of my stake there yeah but yeah I mean VCs I think it kind of demonized and on locks do as well like I think inherently you need both of them like without people to fund crazy ideas you don't get any of what we have yeah and at the end of the day you need to incentivize the people to build the stuff so like teams should get token allocations they should unlock on some cadence but maybe there should be like a KPI based on lock where it's like maybe you get 10 tokens five of them unlock over the next X number of years but then the other five the other 50% the unit actually create value maybe it's like a market cap threshold or user threshold or revenue threshold like whatever it might be which we're actually starting to see with a lot of these projects that are raising under these new frameworks now it's like the team may get like a little bit of linear unlock but at the end of the day if the token price doesn't go up you don't actually get paid so it's like a yeah it's like an incentive alignment pretty straightforward because you don't want giant amounts of supply hitting while like in a bare market basically coins are going to be a lot of time to get out of the market. When coins are going down that will be every now just reflexively cause more dumping is that ownership coins the new frameworks you're referencing or metadow or other similar yeah exactly I mean metadow kind of trailblaze the idea and have like at least the first working implementation of it but we're starting to see forks and clones and people experimenting with the idea across all the ecosystems now and there's just so many cool moving parts of this like few talking decision markets are so important so we're seeing a lot of innovation around that stuff like we used to just have these binary like yes no decision markets and now it's like we can actually have 10 outcomes and we can like price things more effectively and find like the most optimal decision so like purely using markets to decide outcomes not just words and like a written proposal and then yet people are also getting creative with the legal structures themselves like internet capital markets are I think proving to be a valuable thing and they're leaning on them but they also acknowledge that like we're not purely living in the world where all value exists on the internet just yet so building novel legal structures that let people launch on chain is like an ownership coin or whatever we want to call them and then go launch into the real world and be like a regular LLC or whatever. So it's kind of getting interesting in that regard it's like legal innovation. Yeah I don't know if we'll get to the other topics because it's very interesting too but we've talked about that's been a question particularly in the context of DOWS how they might be recognized in the real world as an entity or legal entity if they solely exist on chain right and like I think Wyoming had an interesting DOW law gave Shapiro and Metalex have like an interesting way of doing this I think even Delaware law where you know many companies are incorporated has actually does also recognize DOWS if they as an entity but this brings me to the second question there's I think tons of innovations still happening there don't A.I. agents face the same problem like because they aren't like don't we need a structure for A.I.s to have legal personhood theoretically. Yeah this is something we've been talking about on the desk it's like a world where companies are just purely run by agents I don't think is like that crazy right like somebody just prompts an agent tells it to go build an app a company like do the whole thing who's legally responsible for that like am I like an agent of the agent and like whatever it goes and does like I'm responsible for yeah or can I just disperse like thousands of agents and they're all legally liable for something and you see the agent like does the agent have money can he have to forfeit it and like I I mean I have no idea if you think about it even just like this really like for people who aren't deep in the like the you know virtual A.I. agents like rabbit hole which is an amazing one by the way you should be learning about using but think about like a humanoid robot like let's say I was to get like one of the first Tesla robots or something and it's mostly inside my house the first one let's be real I'm going to have it fold laundry most of the time right but like then I send it out to get the mail now it's walking out there neighbors see it could they become scared okay but it's still on my property can I send it around the you know down the street to target to pick up some batteries and some paper towels is it allowed to walk into the building at all can it go in this self check out and pay are they going to call the cops is going to be arrested like what is the framework for like agents operating or robots in the physical sense like just in the real world like are they allowed to do that I don't know maybe waymo and those guys and SF with those cars have figured this out a little bit at least in the context of those cars but like not even just like can it be legally responsible which is obviously very important as well what is it is it a person like can it steal let's say it decides to steal from target will it be arrested they're going to put it in the car and drive it to the police station like what is that society is not actually made it a lot of progress at all in figuring out let alone the legal questions but also the societal questions on this. Yeah I mean I think the capabilities of AI like especially over the last couple weeks has I mean we just never thought about these things like up until this point like maybe we have been like in our own not much little but it's pretty early in thinking about it but it has been recent yeah like I don't think we've had much of a reason to actually think about these things but now like clotted chat GPT or just one shouting everything and it's like well actually like this thing could build like a real product and if it does that like and it starts its own company because even on like the legal innovation side like they're making it so that you could just go spin up like a boilerplate legal document or like an operating agreement for a company with like stable coins on a blockchain no human intervention at all right like technically these things can go start launching like real company they can and then yeah then like in that case like what is the I mean you literally just handed an LLC and give a control over the documents like then yeah and the product that it builds you have a personal LLC like you can just assign it to the agent to work on like then you still own the LLC so it's actually your company the agent just does all the work and that you can do today like that's that you can easily do the question I guess guys the agent itself wants to own it itself is that even possible what a court even recognize that I don't know I yeah I don't think anybody I don't think anybody knows but it seems like we're not to figure that out and and anyway it's interesting with the ownership coins actually quite a similar friend takes something that's virtual and such like a Dow or a you know virtual a i agent and give it legal standing I don't do we need laws for that and the other thing I was thinking is by vibe code an agent or a bot that steals Bitcoin as a business model which is one thing people have talked a lot about because the AI is pretty good at like some more contract vulnerabilities and stuff like that surely if I create it and send the bot out to do it for the purpose of getting me Bitcoin or ether then I would be responsible if it does you that just from a first principle standpoint seems to make sense however we're largely not saying that like in the rest of society at the moment right like if you upload code to get up but you don't do it it's not usually you're protected if you make an encrypted messaging app that the terrorists happens to use like it's not your job you're not capable of intercepting or prohibiting their access it's open source right there's the blockchain regulatory certainty act which is the protections for developers presumably like with how if an agent is doing it on your behalf and you programmed it like can't be protected in the same sense either way we need some clarity yeah I mean I think eventually it's going to become like a real question and it's also like what if your agent makes another piece of software that does something negative like your agent makes an agent and then that one what if you do know two hops away from you is going and doing some crazy stuff yeah like what if you didn't know at all and and because you didn't know you couldn't have had intent either your agent farms out work that it came up with you didn't observe and that work is legal or breaks the law it's I mean one I don't think you should be held accountable if you didn't knowingly do it with the intent to do bad how can you be guilty but to society doesn't want to have now these semily semi guiltless bad actors if AI agents do start creating them like we still want to prevent that from happening the best way we typically prevent bad things from happening is by creating consequences for the people who would do the bad thing that disincentivized them from doing it but if you don't even know if it's happening and you passively even by mistake enabled it right like that that is you can see where the backlash to AI is going to one of the many areas it's going to come it's going to be it's almost like the three laws and like minority report or I robot right like I will show not hurt or human or whatever like is that even something we can encode I'm pretty sure that's straight fiction and we can't uniformly encode these types of rules. I mean maybe again but again like it's still software and things can go wrong and all that stuff but yeah I think these questions that might sound crazy today are likely to become relevant in the future especially as the technology progresses and it gets implemented more widely like I don't think we've seen like massive AI penetration into companies and businesses just yet there was that graphic going around you probably saw it was like a good chat you like 0.06 percent of the world so almost nobody is using it like yeah and that was just like I think individuals personally that wasn't like organizations and companies that were doing things for commercial purposes where like the right now I feel like it's especially in terms of like the societal understanding of these issues impossible desire to get into a policy conversation whether it's backlash or promotion or whatever is is not really happening because it's not you're not seeing it in your everyday life you might be seeing it at work it's mostly like enterprises and startups and professionals that are seeing how much can be done like we use AI a lot here already making bots scraping data right analyzing documents but that's why I kind of feel like I like to use the humanoid robot example because like surely when you start seeing robots walk around if it hasn't already that will be a catalyst for holy shit we need to have a big giant policy discussion about AI right I mean you're seeing some backlash to like data centers among the you know degrothers and anti you know energy people but like no big conversation yet unlike what should AI and robots be allowed to do yeah yeah I think it's only a matter of time honestly yeah let's talk about another gray area we've been talking we love to talk about and cover prediction markets and over the last several weeks along there've been some interesting questions about market manipulation or insider trading probably most famously at the super bowl I think the market was whether or not was it Cardi B or someone which was going to be like the first celebrities would appear on stage during the halftime show and because there usually are many who appear but aren't listed as being and I guess what somebody who was a dancer like had knowledge and voted they use that knowledge and voted for someone I can remember who was they appeared. There's also the guy that ran on the field and many people but he had previously apparently done event markets like through Vegas about running on a field it's not actually clear if you bet on this one but had he bet whether someone ran it would run on the field and then he did it himself to cause the market to resolve his favor that that's an interesting one obviously of mentioned markets you know Brian Armstrong listing out all those words the end of his Q3 earnings call which just happened to be the words that he's going to be a real big deal. It happened to be the words that people were betting on whether or not he would say right and then they had the IDF soldiers who knew presumably new inside information about when Israel would attack Iran and profit it off of it all of these slightly different but like maybe before we debate some of the like which ones are bad and which ones aren't. This one I'll mention is there was the guy who sat outside the Super Bowl the where was that Santa Cruz Santa Clara Santa Clara and heard them practicing the halftime show another parts of it and there was a market for exactly how long would the national anthem be well he like sat outside and could hear it while they were practicing days before and was able to bet correctly all of these different but before that maybe you've written about how surface. So that's the surface of the public is a huge benefit of prediction markets explain what you mean by that. Yeah I mean that's kind of their purposes to incentivize people to bring forth information that would otherwise just. Or yeah I mean like the purpose of the markets is to provide incentive for people to service information that you just can't otherwise do through like mainstream news outlets or otherwise like I think the guy sitting outside the Super Bowl stadium is the perfect example of that like if he couldn't have made any like economic gain on knowing like how long. The national anthem would be he wouldn't have gone inside outside and that no one would know nobody would know different insiders yeah exactly like it's kind of a silly example but well it's only silly because. Like there's not necessarily a huge societal need for us to know the exact second. The national anthem would be but you could imagine this in and much more interesting and also not in a various ways like you could say like you know what would the price of oil be and people could look at open source satellite imagery and see where the oil tankers are which they do right like. And find information smart people could actually learn that the again for an open global commodity they may smart people might have a view and express it which could move the market and thereby tell the market that there's something happening with oil right and that's useful information for the average person your gas might go up you know. I can probably think of other more societal and official ones but yeah so but the but but that obviously has a conflict with this concept of insider trading because oftentimes the people that are in a position to know. Then betting right like that's for the most part restricted and other markets like securities markets but that's the people you want to come out and do the bet so that the market will learn right yeah I mean. These markets are also just so different like mentioned markets is like not something that like is Trump going to say the word Bitcoin during the state of the union yeah and that when you look at 30% chance at one point last night. Yeah people were making funny jokes like if he says like gesture maxing like I'll be able to retire my family yeah bring that information forth you're saying there are there are new types of ones where there's probably no societal benefit. Yeah I mean I don't maybe it's there could be some actually what I mean with the mentioned markets it's interesting because there is like the first amendment that protects you from saying right so there's like actually other like maybe superior laws that protect you from let's talk about that Brian Armstrong one where he said all these words they happen to be. I don't know if he was aware I don't have that knowledge I think many people assume he was aware that these were words in the poly market of there was a market that said what words will Brian Armstrong say during the earnings call and at the end of the earnings call he said something like I just before I want to wrap I want to say the following words Bitcoin's taking web three Ethereum etc. Right and it caused a bunch of those to resolve a certain way now I assume he didn't have a position in that market I'm assuming also it's hard to get historical poly market data. So I don't like can't like pull it up on my phone now because this market is long expired but there probably wasn't a lot of volume on that market either but he if we assume he was aware of the market we know that he explicitly caused it to resolve in certain ways. He was absolute as the market was about whether he would say something he was uniquely in a position to manipulate the market putting that air quotes so I don't really think it can be but on the other hand if he didn't profit on it and it's imposed upon him he didn't make the like create the market can you really say oh well because saying the words intentionally would cause it to resolve now he can't say the words. Now you can say he I could open a market right now that's a Zack of a corny will answer this question as soon as I stop talking and I because you're aware of yes you're not allowed to answer like it's right like it imposes to prevent to make it illegal to do a Brian did would impose serious first amendment restrictions on him right. Yeah and I mean in some cases these markets can also be produced permissionlessly like Calcium Polymarket regulate what markets go up but there can be like any number of other platforms that spin up and then what if like every single application covers every single like word that ever exists like he literally just can't say anything yeah I mean it's a very like nuanced and interesting thing but I think like the biggest takeaway from all this is that. Prediction markets are so unique that they just push the definition of yeah insider trading and market manipulation to its limit like maybe it requires new regulation maybe it doesn't right but we are certainly pushing the the limit of the definition yeah you have to assume part of the reason we've been thinking a lot about this is Mike C like the CFTC chairman has come out and said they will do rule making on prediction markets and of course he's also claiming that the CFTC is sold. Exclusive jurisdiction over regulating prediction markets you know where we prediction markets are going to dispute with the states over sports gambling or sports event contracts and who controls those and he joined a suit so like he will have to rule make and you have to imagine intent is going to have to come in here because it's like you know if Brian just did it for fun to be funny maybe he knew about it didn't profit so he knew about it and he did anyway but he didn't do it. To manipulate like his intent was to promote prediction markets by you know what I mean like that is like hard to prove very hard to prove but I think it matters like because like let's say he didn't know and didn't have intent but he did cause it to I mean they have to prove that he knew I mean like you know again you can't if there's a market I'm not even aware of and I don't have the intent you can't restrict my speech obi I think that's obvious somehow intent stand over very hard to prove what one last one I think is worth talking about to the idea of so. So they they bet on a date that Israel would strike Iran by so they they used classified information clearly a misuse of that information but they didn't actually have the ability to take the general pushing the button though right so while they profited from insider information they didn't really manipulate the market the way like a person resolving their own mentioned market did or the man running on the field causing the market to right so more of a question more of like an equivalent to like mnpi like if you're out of company and you happen to know the financials but you're not a position to affect them but you trade on it which is illegal and securities markets. So yet a different like situation with nuance and a standard they're going to figure out like how they want to handle that to me that's not a problem for the market and if anything it's the exact thing you're saying the markets good for the world has an interest in knowing if and when an attack on a country will occur. Yeah allows people to like actually express an opinion in a meaningful way right like I go back to like election polls on this one because it's just such a clean easy example yeah like no poll wants to be wrong like elections are essentially always called 50 50 until state start being called as it's happening and then at that point the information is useless like I want to know like an opinionated stance yeah three months six months a year out and putting your money where your mouth is which is what prediction markets require. I mean that's what it lets you be right to be opinionated and because you can make money on you can profit but also as an observer of the market you know that that market is people who cared enough to actually put money where their mouth is right and so you you assume that. It's incentivizing better information right so you have an interest but if you can't so that's why I like for the idea guys I don't think they can that isn't really a question of market integrity that the CFC should look at I don't think it's it certainly may be one that the government of Israel wants to punish them for misusing the classified information like loyalty to your yeah that's fine or if I was at a company and I don't move the market on a prediction and I do use inside information well the company can be mad at me and I might be invited. I don't think if they're not disrupting the market in fact they're kind of doing exactly what the market wants. Yeah and I mean tricky questions though even making the assumption that like the regulator will view it as disrupting the market then it's like well how much do I need to move the market in order for it to be meaningful like do the odds going from like yeah five to 10% constitute like meaningful disruption or is it just like a one percent. Yeah and if the idea of soldiers obviously they you know mail email the information directly to Iran's leadership that's literally leaking the information that's treason leaking it directly to the enemy but if they merely bet on it and let's say the price didn't even move after they bet. Have they even given the information away and it didn't wait no signal and just maybe made money if it was that you're quite yet but let's say they did move it substantially. Is that giving away is that is it now a leak because they move the market 20 30% whatever it is yeah and then the definition of substantially is right like very arbitrarily finger in the air like oh it's 2% today yeah like you effectively told the world because you move the market so much okay. Like where's that that's why I think like you know when we were talking about having this discussion like you were saying like you're not an expert in securities mnpi laws norm i was like I think we really just have to think of this from first principles like the regulator and by we I also think my see league in the cfdc they really just have to try to game out what they think the market should look like. And write the rules from there maybe where they land on certain aspects of it will take info and cops from other you know modality or securities laws in our country or others but like a bunch of weird nuance here if you want to promote the good growth of. You know prediction information markets which are very good for hedging we were even talking about this even sport you know they say sports gambling sports markets are surely not a good example because that's just pure speculation that's not true you know who is a huge interest in whether the patriots or the you know rams when the sewer or the sea ox win the sewer like t shirt vendors in Boston you will sell jerseys sports equipment anyone that sells hot dogs near a game right like. Yeah they're very unique hedging instruments that you can buy to literally any event like no there's a lot of the the patriots organization itself theoretically might want to hedge its future income based on by shorting its own self theoretically and I think even some people are made or lose billions of dollars yeah I think people already do that through like Vegas like I think there was like the mattress guy in Houston yeah who like did the like if the asteris when the world series like I give away like mattresses for free or something like that. So yeah so to was called mattress Mac let's go for a win. Yeah good. Yeah but like if they win though like a lot of people might go out and buy more mattresses or something yeah it's the same thing to was like you know the guy there was a guy and I forget what business it is in Boston remember it was like if you hit the logo on the green monster. You know you get give away a ton of stuff and it's like but. It would have to be doing like a playoff game or something with the thing is it's like kind of right way risk is like the red socks win then like everyone's going to go on celebrating by stuff to or something you know interesting markets there. Yeah I mean people are also starting to build even more sophisticated more information rich products on top of what are they building what are you seeing out there. The most fascinating one I've come across is impact markets which is essentially just using the same. Sort of structure like if this event happens like what what does it mean for asset prices so instead of looking at this event has a 50% probability of happening it says this event has this impact on the price of Bitcoin. But what will be interesting is you will need prediction market probabilities to feed into the models to price these things because it's actually a secondary market built on top not a replacement for the binary out yeah I mean they're just going to be sources of information for models of more sophisticated more direct asset information rich instruments. And if you put in some regulation that degrades the signal of the prediction markets like you actually kind of kill a decent amount of innovation for all the things that are being built on top of it. Mostly markets related stuff but I think at the end of the day like. If people watching the election can have like a super opinionated stance beforehand like I think that's important and it kind of highlights the flaws with. So it's a lot of the more personal sources of quality market was very accurate in the 24 presidential very yeah I think it was like 60 40 or like 65 35 for a while but that's still infinitely more signal rich and opinionated then right. Yeah yeah yeah yeah yeah yeah when you have opinionated signal underneath you can kind of let it flow up to the top and well like now we can actually price assets better we can hedge our risks better and I tend to think that's where this is going just given the success of obviously like polymarketing calcium all that. And then we have a decision market some people's willingness to use these things in alternative use. Yeah you've written a lot about that so go check out that stuff on a few turkey and prediction markets on galaxy dot com slash research. Before you wrap I know we said we talked about this although we this has been plenty fascinating already. Let's talk about one last topic base it's the biggest theory melt to by volume and users I think. Potentially by a lot right I mean I think I think by like almost 80% of all transaction value on roll ups or sorry on a theory melt to use is on base. They put out announcement coin based saying they were leaving the optimism tech stack. And what they call the super chain which is the what the Federation collection of people of of roll ups that use the same tech stack together makes a lot of sense by the way as part of the ideas anyone can spill spin up a roll up and we'll give you the full. And you get upgrades from us when we upgrade them all they all stay safe together and blah blah blah abstract out the technology aspect of the actual L2. But when they says they're going to bring the code base in house they're going to develop themselves with her saying. And like but they haven't I don't seem like they haven't said. They said they want to own the code ship upgrades on their own cadence perhaps faster. They haven't actually said if they plan to materially change the design have they I mean their blog post said that they were going to remain in an Ethereum roll up. Yeah and just migrate away from the OPS back to the base stack for the exact reasons you said they want a control shipping cadence they want a control feature implementation and all that stuff. But I think what's most important here is like in what they didn't say like one what was the reason like was it the talus blog post about the future of roll ups for scalability I think that's probably the least likely one. But then we also have clarity coming down the the gauntlet in in Congress and other exchange back roll ups moving to decentralized like crack and I think is the most notable one in that regard moving to the most decentralized structure you could have as a roll up. Which is base sequencing. Like in that event you're as decentralized as the Ethereum L1 Validator set in effect. So there's like a number of reasons why they might have done it. But they didn't say any of those. If they if it's true that they're going to stay and it quote a theory and roll up and maybe the base sequencing is the way they'll go. I think the reason I you and I've been following this and we're I would say magging them pretty hard over the last summer on Twitter it's not decentralized base single sequence optimistic roles they're not decentralized. Yeah it's not a base specific. No it's not true. And but that doesn't mean they're not necessarily safe. People always kept mad at me they're like somebody was complaining comparing it to a Wi-Fi router like first of all that's a terrible comparison. But I get that like there is the forced inclusion unilateral exit capability from this so like it can't steal your money in that sense. But like they can if they could be sandwiching for all they know I mean we know they're not but like they control ordering they can set fees on the on the roll up right. They could censor you could get around it but with some effort but take the context of securities and it is that charge fees and transaction ordering and consensus your transaction are like brokers and dealers and exchanges and all of them are heavily regulated right. And so that's why I wonder if they intend to become more decentralized just to further. I don't want to say avoid regulation obviously Coinbase is out here calling for regulation as are we. But they don't want that protocol to have to be regulated the actual like layer two in this case but like you know the blockchain quote unquote they don't want right I think rightly so. But they risk I think this you mentioned clarity there's a section 302 in the clarity act which defines a non decentralized finance trading protocol thing is the thing. Which is basically saying well if it's pretty reasonable overall they're like it's got all these exemptions and until registering with either the SEC or the CFTC or whatever if you're truly decentralized they're saying if you're not truly decentralized then you're centralized. I think a lot of some commentators have wondered among other types of apps and you know centrally controlled defy whatever perhaps centrally sequenced optimistic roll ups might actually consider a non decentralized and the subject of regulation. But no, no indication or anything about whether seeking more decentralization was the cause here. No, I mean the entire thing was essentially around like developer control being able to use like what seemed to be like I'm more effectively with like reducing the developer surface area and all that stuff. Yeah, not much in that regard also no indication of what's going to happen with the fees they pay to the super chain. How much was those fees like over like we looked at this once yeah, I think it was at one point like a few million dollars over the course of like a quarter a half year. Like nothing like it was like 200k a day at one point we saw yeah that's how much like they make and then. Yeah, that's right like 12% or whatever might be which I mean. So percentage they don't pay that now to optimism once they leave they wouldn't be paying. Yeah, I mean if they're not using the tech anymore. And also like what does that do to optimism like I'll big of clear clearly the biggest roll up they had the most volume so they were surely paying the most fee and the biggest share of fees that they're receiving. You know, I don't know the state of their of optimism's you know treasury or whatever but like. From a revenue standpoint of licensing their tech that's going to be a massive loss for optimism right. Yeah, and they were actually just working on a buyback proposal so using some of the revenue to buy back the opi token. But it seems like now the revenue. What are the big optimist optimism super chain members obviously O P or whatever they call it up chain or yeah O P base. I think maybe Zora and and a few others but like there is so many roll ups and nobody really. Other related to base I mean base has a lot of apps on by the way a lot of the AI stuff AI agent. That was built on base but Zora is moving to Solana right. Oh yeah they announced that yeah totally forgot about that. Me too I did too. They remember yeah I'm not like super blogged into like all the social five stuff. No, I mean either I think will on our team is probably the guy for that more his lane but then wasn't also what's the decks like not is a road. Eradrome is an application on base but they also I think it now so they were going to launch an instance on the L one that's right and there was actually leaving base maybe but like I don't know just put these together. Yeah like the two of the biggest apps on base are either leaving or going elsewhere as well. And then base announced this like potential big change or you know the first step is just we're taking control of the code but to me the second stuff is like okay what are you going to do with it now. I mean you wouldn't need to take control of it just to ship little tweaks more quickly like I wouldn't think yeah. Yeah even though that lays the foundation for a much more substantial change. You mean even like the weeks leading up to it there was like a lot of posts from people on Twitter like like I'm leaving base to go like do this other. There were right yeah then there was like the Eradrome thing I also actually kind of forgot about. Yeah that's like the main like decks application powering swaps on on base. Yeah and they announced that I mean they're not like leaving base but right. Well and Jesse Pollock who runs base had a whole post about how like kind of like I was wrong more than I was he clank he's still early but remember he had been big and promoting social trading. Either as a Jesse token or something right that was made that type of stuff that basis for creators and he had a post in the last few weeks also being like actually we probably were early on that it's probably basis for trading. Like all blockchains mostly are today right so you put all this together it's like seems like a bunch of like you know spinning uncertainty. Possible changes in the base world just quite interesting for the largest at the RML to. None of it necessarily like you know. Existential or like catastrophic or even bad for base just all seems like a lot of things yeah there's a lot of things going on and I mean you can even make the argument that it's that it's good like if they do move to decentralized right just have one less centralized chain and. I mean we've been calling for basically we praised ink crackings for doing based roll ups and. I mean I directly accused it of being to centralize to avoid securities laws in the case that they launched tokenized securities on it. So I think they absolutely should decentralized I don't but again that's what's so interesting like really it's tricky you know they. I think if they could solve decentralization in a way it would grow base you know yeah absolutely in like the products that it's this one. It's this one. 22 I think that centralized businesses feel which is like if we give away control like don't we lose money control power over it whatever. It's like we could make more money like it could become that more widely adopted like what a theory I'm have been as big if it wasn't as decentralized with proof of work on its launch almost certainly not right stellar existed made safe coin existed like there were other you know I don't know it's. Coinbase surely knows the decentralization is good yeah I mean in the blog they also mention that like. The use of the optimism stack was like maybe like always kind of like a temporary thing they were like speed and see yeah like this let us get to market way faster than if we were to build this from the ground up ourselves and like now we're migrating yeah so there's also. That element yeah to the whole thing maybe it was always the plan yeah totally fair and I don't want to use them of doing it for one reason or another just. So I'm just going to start with very little information about what appear to be pretty big moves happening yeah you just kind of left to speculate their prediction market on what base will base like switch to L one well because also people have been waiting for like a coin base coin or like base coin and there isn't one and like presumably it's a lot at least based on our past historical regulatory setups like the more decentralized blockchain tends to you know not have its L one asset be considered a security. Whereas if it's just like what's the blockchain oh it's just one computer in our basement like pretty hard to argue in my mind that that it's token if it had one wouldn't be a security so like maybe that would also be a reason they should decentralize if that's something they're considering which they've never confirmed nor denied or denied I don't think there should be a prediction market about whether or not they're going to launch a coin there must be a base coin prediction market is there yeah there's got to be yeah yeah. Well we could go on and on but this is great sack we talked about lending we talked about of a governance and for dows and AI agents. We talked about prediction markets and impact markets and now of course base and the theory of a coin base lot in there I think you know we're fit I think we're going to chop this we got to put the markers you know it's like three separate conversations. That was Zach this is great sack thank you so much Zach Recorder from Galaxy research. Yeah thanks for having me. That's it for this week's episode of Galaxy Brains thank you to my guest Zach Recorder from Galaxy Research and my friend Vimnet ABB from Galaxy Trading everyone have a safe happy weekend we will see you next week. Thank you for listening Galaxy Brains the weekly podcast from Galaxy Research I'm Alex Thorn head of firm wide research at Galaxy follow me on X at Intangible coins follow Galaxy research on X at GL XY research read our written reports at galaxy dot com slash research and don't forget if you like Galaxy Brains to like and subscribe on your favorite podcast platforms like YouTube Spotify Apple podcast and more we'll see you next time.