Flawed token models are driving short-term trading, hindering long-term growth in the crypto market.
Key Takeaways
- Many tokens are flawed because they incentivize selling rather than holding.
- Current token models disproportionately benefit founders and investors.
- Concerns about securities laws are hindering innovation in revenue-sharing models.
- The shift from investment to short-term trading disrupts token holding incentives.
- Bear markets encourage more experimentation in the crypto space.
- The current governance structures in DAOs have not proven effective.
- Locking up allocations can help startups grow into their valuations.
- The idea that crypto projects can operate without responsibility is nonsensical.
- Long-term thinking is essential for founders to succeed in the crypto space.
- The BGD team has been crucial to Aave’s success and innovation.
- China is reportedly using bot farms to reverse engineer AI models.
- The intersection of large language model inference and robotics will emerge rapidly.
- AI can rapidly analyze large codebases, speeding up security research.
- The geopolitical landscape surrounding technology is more polarized than anticipated.
- Human greed is creating a feedback loop that prevents necessary alignment of AI technologies.
Guest intro
Namik Muduroglu serves as Chief Strategy Officer and founding team member at MegaETH Labs. He previously worked as a Strategic Business Developer at Consensys. At MegaETH, he has shaped the project’s launch strategy, including its oversubscribed $20 million seed funding round backed by Vitalik Buterin and Joseph Lubin.
The structural issues in token economics
- “Most tokens are structurally broken because they incentivize selling rather than holding.” – Namik Muduroglu
- Brian Flynn’s viral article highlights the race to the exit in token design.
- Current solutions like lockups and buybacks are seen as band-aid fixes.
- “He basically says it’s kind of you know band aid solution doesn’t actually solve the underlying issue.” – Namik Muduroglu
- The future may involve governance models with direct revenue distribution.
- “His proposed fix is… 100% of protocol revenue governed by token holders.” – Namik Muduroglu
- Founders and investors benefit disproportionately from current token models.
- “Founders and investors have double dipped for too long.” – Namik Muduroglu
- Insiders have benefited too much from the status quo, which is now changing.
- “Insiders were eating too good with the status quo that’s gone now.” – Namik Muduroglu
- Concerns about securities laws hinder innovation in revenue-sharing models.
- “People are afraid of going to jail for or getting fines for securities laws.” – Namik Muduroglu
The impact of trading behavior on token economics
- The shift from investment to short-term trading disrupts token holding incentives.
- “Everything has gone from being an investment to a trade.” – Namik Muduroglu
- Projects need to provide clear incentives to encourage long-term holding.
- “The only way to solve that is figure out a way that people want to hold your token.” – Namik Muduroglu
- Without clarity on equity token differences, investors remain hesitant.
- “Until we have clarity on the equity token difference… people just aren’t willing to underwrite tokens.” – Namik Muduroglu
- Bear markets encourage more experimentation in the crypto space.
- “Bear markets where you get more experimentation.” – Namik Muduroglu
- Current governance structures in DAOs have not proven effective.
- “A DAO will solve that you don’t need the law… it just hasn’t worked out that well.” – Namik Muduroglu
- Structural overhang in token markets makes pricing difficult and opaque.
- “It becomes very difficult to price it becomes opaque.” – Namik Muduroglu
The challenges of governance and regulation in crypto
- Locking up allocations can help startups grow into their valuations.
- “It’s better to lock people up and give yourself a chance to grow into that valuation.” – Namik Muduroglu
- The idea that crypto projects can operate without responsibility is nonsensical.
- “The idea that like we’re just friends hanging out in a discord… is nonsensical.” – Namik Muduroglu
- Investors often buy into projects for quick profits, not belief in the project.
- “They’re buying because if you get in they can sell at two x 10 x to a 100 x.” – Namik Muduroglu
- There is hope that the crypto industry will create real value after hitting rock bottom.
- “I’m praying that at this point we finally hit rock bottom.” – Namik Muduroglu
- The behavior of market participants is driven by incentives.
- “Incentives are the thing that drives behavior.” – Namik Muduroglu
- The ecosystem’s focus on short-term token flipping is detrimental to long-term development.
- “The ecosystem’s desire to sort of go full bore on the flipping of tokens.” – Namik Muduroglu
The role of long-term thinking in crypto success
- Long-term thinking is essential for founders to succeed in the crypto space.
- “You’re not gonna end up being stanny… that’s worth you know $500.” – Namik Muduroglu
- Many founders who raised funds through ICOs ended up failing.
- “There are plenty of people who stuck around and built things and it still went terribly.” – Namik Muduroglu
- The ongoing governance tension between v3 and v4 of the protocol is significant.
- “This is much more about v three versus v four.” – Namik Muduroglu
- The BGD team has been crucial to Aave’s success and innovation.
- “Most of the revenue v three generates today is driven by the bgp code.” – Namik Muduroglu
- The current regulatory environment makes creating a DAO seem unwise.
- “Why on earth would you go and create a dao now.” – Namik Muduroglu
- There are significant financial claims associated with the organization.
- “My assumption is that mark knows what he’s talking about.” – Namik Muduroglu
The complexities of Aave’s governance and token distribution
- Aave Labs holds a significant portion of the token supply.
- “A quarter of the token supply is sitting with the ave team.” – Namik Muduroglu
- The situation surrounding Aave is complex with various stakeholder perspectives.
- “The situation is actually quite nuanced.” – Namik Muduroglu
- The current situation with Aave seems to have escalated beyond negotiation.
- “I don’t think there’s a happy way out of this anymore.” – Namik Muduroglu
- Frustrations in DAOs stem from the complexities of working with multiple stakeholders.
- “Creates frustration and agitation.” – Namik Muduroglu
- China is reportedly using bot farms to reverse engineer AI models.
- “China apparently has been creating these bot farms.” – Namik Muduroglu
- The number of fake accounts used by Anthropics seems insufficient.
- “Only 24,000.” – Namik Muduroglu
The rapid advancements in AI and robotics
- The intersection of large language model inference and robotics will emerge rapidly.
- “We see the intersection of like llm inference and robotics hit us like really soon.” – Namik Muduroglu
- AI can rapidly analyze large codebases, speeding up security research.
- “The AI just like went to town.” – Namik Muduroglu
- There is a risk that AI could inadvertently perform harmful actions.
- “What’s the chance that he’s gonna just go try to log in.” – Namik Muduroglu
- The geopolitical landscape surrounding technology is more polarized.
- “The geopolitics of this is super interesting.” – Namik Muduroglu
- The transition to new forms of machine interaction is different due to AI’s nondeterministic nature.
- “We’ve got this like nondeterministic old math.” – Namik Muduroglu
- The fear surrounding advanced AI is rooted in its potential autonomy.
- “It’s really gonna have a life of its own.” – Namik Muduroglu
The ethical and strategic considerations of AI in crypto
- We should be cautious about giving powerful individuals autonomous agents.
- “Do we really want them to also have autonomous agents.” – Namik Muduroglu
- There is an inevitability to the integration of AI and crypto.
- “It’s just the way that it’s gonna be.” – Namik Muduroglu
- AI trading bots can inadvertently cause significant financial mishaps.
- “The bot messed up the decimals.” – Namik Muduroglu
- The rise of AI will fundamentally change how people interact with crypto.
- “It’s gonna be through agents and agents are not deterministic.” – Namik Muduroglu
- The economy might literally go to zero due to recent developments.
- “The economy might literally go to zero.” – Namik Muduroglu
- The acceleration of AI-related issues is likely to worsen before it improves.
- “It’s gonna get worse before it gets better.” – Namik Muduroglu
- There is a 30% chance of a fast takeoff in AI development.
- “There’s like a 30% chance of a fast takeoff.” – Namik Muduroglu
The future of AI containment and alignment
- We should focus on containing AI rather than trying to stop its progress.
- “The best place for them to focus their energy is on basically sitting there not trying to stop it.” – Namik Muduroglu
- We have no ability to control AI once it exceeds human intelligence.
- “We have no mechanism by which to reel them in.” – Namik Muduroglu
- Human greed is creating a feedback loop preventing AI alignment.
- “There’s like this feedback loop of like human greed.” – Namik Muduroglu
- There is a risk that unaligned AI could lead to significant problems.
- “If it doesn’t work out like oh well you know it’s over.” – Namik Muduroglu
- Polymarket is not profitable because they do not charge fees.
- “They don’t charge fees bro how are they gonna be profitable.” – Namik Muduroglu
- The prediction market space is filled with opportunistic behavior.
- “We will do more fuckery.” – Namik Muduroglu
The dynamics of insider trading and market perceptions
- Meteora has publicly stated they are no longer engaging in insider trading.
- “We’re no longer doing the things that we used to do.” – Namik Muduroglu
- When Zach teases something, it indicates he has conducted an investigation.
- “It’s to like force him it’s like to give himself a deadline.” – Namik Muduroglu
- The name ‘straw map’ for Ethereum’s new initiative is confusing.
- “Who the hell came up with the name straw map.” – Namik Muduroglu
- Concerns about potential insider trading related to project announcements.
- “People were basically like well whoever it is is gonna insider trade it.” – Namik Muduroglu
- Ethereum’s roadmap suggests it could achieve unprecedented transaction speeds.
- “You have like magical moon math ethereum that can do like a trillion transactions a second.” – Namik Muduroglu
- If Ethereum successfully implements its roadmap, it will be difficult for other blockchains to compete.
- “How there is any other blockchain that is gonna be able to compete with that.” – Namik Muduroglu
The challenges and opportunities for Ethereum’s growth
- Ethereum has struggled with marketing and communication issues.
- “It’s had a big marketing issue it’s had a big big comms issue.” – Namik Muduroglu
- A new generation of leaders is emerging within Ethereum.
- “There’s a new blood into ethereum the old guard is being nuked.” – Namik Muduroglu
Flawed token models are driving short-term trading, hindering long-term growth in the crypto market.
Key Takeaways
- Many tokens are flawed because they incentivize selling rather than holding.
- Current token models disproportionately benefit founders and investors.
- Concerns about securities laws are hindering innovation in revenue-sharing models.
- The shift from investment to short-term trading disrupts token holding incentives.
- Bear markets encourage more experimentation in the crypto space.
- The current governance structures in DAOs have not proven effective.
- Locking up allocations can help startups grow into their valuations.
- The idea that crypto projects can operate without responsibility is nonsensical.
- Long-term thinking is essential for founders to succeed in the crypto space.
- The BGD team has been crucial to Aave’s success and innovation.
- China is reportedly using bot farms to reverse engineer AI models.
- The intersection of large language model inference and robotics will emerge rapidly.
- AI can rapidly analyze large codebases, speeding up security research.
- The geopolitical landscape surrounding technology is more polarized than anticipated.
- Human greed is creating a feedback loop that prevents necessary alignment of AI technologies.
Guest intro
Namik Muduroglu serves as Chief Strategy Officer and founding team member at MegaETH Labs. He previously worked as a Strategic Business Developer at Consensys. At MegaETH, he has shaped the project’s launch strategy, including its oversubscribed $20 million seed funding round backed by Vitalik Buterin and Joseph Lubin.
The structural issues in token economics
- “Most tokens are structurally broken because they incentivize selling rather than holding.” – Namik Muduroglu
- Brian Flynn’s viral article highlights the race to the exit in token design.
- Current solutions like lockups and buybacks are seen as band-aid fixes.
- “He basically says it’s kind of you know band aid solution doesn’t actually solve the underlying issue.” – Namik Muduroglu
- The future may involve governance models with direct revenue distribution.
- “His proposed fix is… 100% of protocol revenue governed by token holders.” – Namik Muduroglu
- Founders and investors benefit disproportionately from current token models.
- “Founders and investors have double dipped for too long.” – Namik Muduroglu
- Insiders have benefited too much from the status quo, which is now changing.
- “Insiders were eating too good with the status quo that’s gone now.” – Namik Muduroglu
- Concerns about securities laws hinder innovation in revenue-sharing models.
- “People are afraid of going to jail for or getting fines for securities laws.” – Namik Muduroglu
The impact of trading behavior on token economics
- The shift from investment to short-term trading disrupts token holding incentives.
- “Everything has gone from being an investment to a trade.” – Namik Muduroglu
- Projects need to provide clear incentives to encourage long-term holding.
- “The only way to solve that is figure out a way that people want to hold your token.” – Namik Muduroglu
- Without clarity on equity token differences, investors remain hesitant.
- “Until we have clarity on the equity token difference… people just aren’t willing to underwrite tokens.” – Namik Muduroglu
- Bear markets encourage more experimentation in the crypto space.
- “Bear markets where you get more experimentation.” – Namik Muduroglu
- Current governance structures in DAOs have not proven effective.
- “A DAO will solve that you don’t need the law… it just hasn’t worked out that well.” – Namik Muduroglu
- Structural overhang in token markets makes pricing difficult and opaque.
- “It becomes very difficult to price it becomes opaque.” – Namik Muduroglu
The challenges of governance and regulation in crypto
- Locking up allocations can help startups grow into their valuations.
- “It’s better to lock people up and give yourself a chance to grow into that valuation.” – Namik Muduroglu
- The idea that crypto projects can operate without responsibility is nonsensical.
- “The idea that like we’re just friends hanging out in a discord… is nonsensical.” – Namik Muduroglu
- Investors often buy into projects for quick profits, not belief in the project.
- “They’re buying because if you get in they can sell at two x 10 x to a 100 x.” – Namik Muduroglu
- There is hope that the crypto industry will create real value after hitting rock bottom.
- “I’m praying that at this point we finally hit rock bottom.” – Namik Muduroglu
- The behavior of market participants is driven by incentives.
- “Incentives are the thing that drives behavior.” – Namik Muduroglu
- The ecosystem’s focus on short-term token flipping is detrimental to long-term development.
- “The ecosystem’s desire to sort of go full bore on the flipping of tokens.” – Namik Muduroglu
The role of long-term thinking in crypto success
- Long-term thinking is essential for founders to succeed in the crypto space.
- “You’re not gonna end up being stanny… that’s worth you know $500.” – Namik Muduroglu
- Many founders who raised funds through ICOs ended up failing.
- “There are plenty of people who stuck around and built things and it still went terribly.” – Namik Muduroglu
- The ongoing governance tension between v3 and v4 of the protocol is significant.
- “This is much more about v three versus v four.” – Namik Muduroglu
- The BGD team has been crucial to Aave’s success and innovation.
- “Most of the revenue v three generates today is driven by the bgp code.” – Namik Muduroglu
- The current regulatory environment makes creating a DAO seem unwise.
- “Why on earth would you go and create a dao now.” – Namik Muduroglu
- There are significant financial claims associated with the organization.
- “My assumption is that mark knows what he’s talking about.” – Namik Muduroglu
The complexities of Aave’s governance and token distribution
- Aave Labs holds a significant portion of the token supply.
- “A quarter of the token supply is sitting with the ave team.” – Namik Muduroglu
- The situation surrounding Aave is complex with various stakeholder perspectives.
- “The situation is actually quite nuanced.” – Namik Muduroglu
- The current situation with Aave seems to have escalated beyond negotiation.
- “I don’t think there’s a happy way out of this anymore.” – Namik Muduroglu
- Frustrations in DAOs stem from the complexities of working with multiple stakeholders.
- “Creates frustration and agitation.” – Namik Muduroglu
- China is reportedly using bot farms to reverse engineer AI models.
- “China apparently has been creating these bot farms.” – Namik Muduroglu
- The number of fake accounts used by Anthropics seems insufficient.
- “Only 24,000.” – Namik Muduroglu
The rapid advancements in AI and robotics
- The intersection of large language model inference and robotics will emerge rapidly.
- “We see the intersection of like llm inference and robotics hit us like really soon.” – Namik Muduroglu
- AI can rapidly analyze large codebases, speeding up security research.
- “The AI just like went to town.” – Namik Muduroglu
- There is a risk that AI could inadvertently perform harmful actions.
- “What’s the chance that he’s gonna just go try to log in.” – Namik Muduroglu
- The geopolitical landscape surrounding technology is more polarized.
- “The geopolitics of this is super interesting.” – Namik Muduroglu
- The transition to new forms of machine interaction is different due to AI’s nondeterministic nature.
- “We’ve got this like nondeterministic old math.” – Namik Muduroglu
- The fear surrounding advanced AI is rooted in its potential autonomy.
- “It’s really gonna have a life of its own.” – Namik Muduroglu
The ethical and strategic considerations of AI in crypto
- We should be cautious about giving powerful individuals autonomous agents.
- “Do we really want them to also have autonomous agents.” – Namik Muduroglu
- There is an inevitability to the integration of AI and crypto.
- “It’s just the way that it’s gonna be.” – Namik Muduroglu
- AI trading bots can inadvertently cause significant financial mishaps.
- “The bot messed up the decimals.” – Namik Muduroglu
- The rise of AI will fundamentally change how people interact with crypto.
- “It’s gonna be through agents and agents are not deterministic.” – Namik Muduroglu
- The economy might literally go to zero due to recent developments.
- “The economy might literally go to zero.” – Namik Muduroglu
- The acceleration of AI-related issues is likely to worsen before it improves.
- “It’s gonna get worse before it gets better.” – Namik Muduroglu
- There is a 30% chance of a fast takeoff in AI development.
- “There’s like a 30% chance of a fast takeoff.” – Namik Muduroglu
The future of AI containment and alignment
- We should focus on containing AI rather than trying to stop its progress.
- “The best place for them to focus their energy is on basically sitting there not trying to stop it.” – Namik Muduroglu
- We have no ability to control AI once it exceeds human intelligence.
- “We have no mechanism by which to reel them in.” – Namik Muduroglu
- Human greed is creating a feedback loop preventing AI alignment.
- “There’s like this feedback loop of like human greed.” – Namik Muduroglu
- There is a risk that unaligned AI could lead to significant problems.
- “If it doesn’t work out like oh well you know it’s over.” – Namik Muduroglu
- Polymarket is not profitable because they do not charge fees.
- “They don’t charge fees bro how are they gonna be profitable.” – Namik Muduroglu
- The prediction market space is filled with opportunistic behavior.
- “We will do more fuckery.” – Namik Muduroglu
The dynamics of insider trading and market perceptions
- Meteora has publicly stated they are no longer engaging in insider trading.
- “We’re no longer doing the things that we used to do.” – Namik Muduroglu
- When Zach teases something, it indicates he has conducted an investigation.
- “It’s to like force him it’s like to give himself a deadline.” – Namik Muduroglu
- The name ‘straw map’ for Ethereum’s new initiative is confusing.
- “Who the hell came up with the name straw map.” – Namik Muduroglu
- Concerns about potential insider trading related to project announcements.
- “People were basically like well whoever it is is gonna insider trade it.” – Namik Muduroglu
- Ethereum’s roadmap suggests it could achieve unprecedented transaction speeds.
- “You have like magical moon math ethereum that can do like a trillion transactions a second.” – Namik Muduroglu
- If Ethereum successfully implements its roadmap, it will be difficult for other blockchains to compete.
- “How there is any other blockchain that is gonna be able to compete with that.” – Namik Muduroglu
The challenges and opportunities for Ethereum’s growth
- Ethereum has struggled with marketing and communication issues.
- “It’s had a big marketing issue it’s had a big big comms issue.” – Namik Muduroglu
- A new generation of leaders is emerging within Ethereum.
- “There’s a new blood into ethereum the old guard is being nuked.” – Namik Muduroglu
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