Luke: [00:00:00] From privacy concerns to limitless potential, AI is rapidly impacting our evolving society. In this new season of the Brave Technologist Podcast, we’re demystifying artificial intelligence, challenging the status quo, and empowering everyday people to embrace the digital revolution. I’m your host, Luke Moltz, VP of business operations at Brave Software, makers of the privacy respecting brave browser and search engine.

Now powering AI with the Brave search. API. You’re listening to a new episode of the Bray Technologist. This one features two guests who have both been on the podcast before, but are this time joining together. You’ll hear from Adam Rasinski, who’s a former intelligence professional that has served as an analyst at Interpol and is an intelligence operations judge advocate with the United States Air Force.

Adam’s now the CEO of Inca Digital, a FinTech company that provides data and analytics on the digital asset ecosystem to the government agencies and financial institutions using natural language processing and LLMs. He was joined this week by Austin Campbell, who is the managing partner and founder of Zero Knowledge Consulting [00:01:00] and an adjunct professor at Columbia Business School.

Previously, Austin has run Stablecoin platform and portfolio management at Paxos and was the Chief Risk Officer of Paxos National Trust. In this episode, we discussed the genius Stablecoin bill, why this matters, and the potential impact on stablecoin adoption, the brain drain of crypto excerpts within the banking and financial sector.

And new compliance experiments and why the traditional approach to compliance checking is dead. And now for this week’s episode of The Brave Technologist,

Adam and Austin, welcome back to the Brave Technologist. Thanks for coming back again this time together.

Adam: Thanks for having us. Good to see you, man. Thank you.

Luke: Yeah, I, I thought I would have you both on because there’s been so much going on this year, and you both spend more time in DC for good or bad probably than anybody else.

I know. You know, there seems to be a big shift in, in the regulatory tone in DC since January. Uh, Do you see real change happening or is it just surface level?

Adam: Oh, I think there’s real change happening. [00:02:00] I’m not the best on policy, so like I’ll, you know, have Austin answered that part? But I think substantively on the ground, just from a business operations perspective, Inca has had more incoming requests from now.

I mean crypto obviously, but not just crypto from banks, from other parts of Tradify, FinTech payments than we’ve had, you know, over the past like. Three years combined. It’s crazy how busy it is. I definitely see it just from a business perspective, putting aside the specific policy just an opening up of US markets.

I think a recognition by crypto that you know, that they can access us markets, but then also recognition by. Banks and other fintechs like, Hey, it’s here. It’s time to go hard into crypto. Either actually build what they’ve been planning on building or figure it out. Especially on the, a lot on the Tradify side.

For example, a lot of the big banks, they have crypto divisions with a couple PhDs in them that make MVPs and POCs that never actually go anywhere and are [00:03:00] not profitable. And now they’re like, okay, What do we actually build now that is gonna bring profit to this business? I think the start of that is right now.

Luke: Awesome. what would you say,

Austin: Austin? I would say there are a couple of layers of things that are going on, and here is where, it’s very interesting to me because one layer is, under the previous administration, there was a almost hysterically anti crypto tilt towards things. I mean, we’ve seen it from the SEC.

You saw it from the banking regulators and it really inhibited the ability of people to do any meaningful business in crypto, like in a very ironic way, the proliferation of meme coins is probably the legacy of the SEC under Biden because they prevented people from actually engaging at any commerce.

So people stopped. Under the Trump administration, that’s done a 180. The SEC has an entire working group. They’re asking for comments. The banking regulators are having all sorts of guidance being put out to change the behavior. There’s been an [00:04:00] executive order recently, but to me what’s also interesting is Congress has changed their view and in the long run, I think that’s more impactful because Donald Trump is a second term president.

There’s only so long he will be here. And if you’re a business person, you’re probably asking, okay, but if I’m thinking about long-term planning, I have to ask about what comes next. And so seeing genius become law, right? Where now stable coins are done, like Congress would have to go unpass that thing, which is basically something they don’t do.

We still have laws on the books from like a hundred years ago plus and two. Clarity passing with a significant margin in the house and coming over to the Senate. And even if it’s not gonna move in that exact form, the idea that Congress has understood, wait a minute, we’ve had all these big blowups in crypto with things like FTX offshore, we kicked all of the activity out of the United States.

Isn’t that a recipe for maximum chaos? And shouldn’t we do something constructive? To me, I think that’s the bigger sea change long term. But if you think about what Adam was just saying. [00:05:00] With banks, getting involved with asset managers, getting involved with payments, companies getting involved. I think something like Genius passing is actually the bigger shift in the long run because now they know this is here to stay and we’re gonna have to deal with it.

four years ago, bank of America could ignore stable quotes and what would happen to them? Probably nothing. Four years from now, if Bank of America has continued ignoring stable coins, they might have a pretty serious problem.

Luke: Yeah, why don’t we unpack the genius built.

Austin: Yeah, so I’ll start by saying everybody who thinks that they get to be super excited about this piece of legislation, please pump the brakes because actually it’s pretty boring, and I think that is a feature, not a bug.

So if you look in the United States at financial. Really in 2008 when all kinds of things broke, we’ve had a snowball rolling downhill from there. And one of the elements like embedded in that snowball has [00:06:00] been cash products reform. Because prior to oh eight you had people pitching things like.

Government money, market funds, bank savings products, prime money market funds, asset backed commercial papers, structured products based on MB, like just this giant spray of stuff. And some of it honestly turned out to be very safe. Like even in 2008, zero government money market funds broke the buck, but plenty of banks were failing as we know.

A prime money market fund broke the buck because of Lehman asset backed commercial paper completely melted down. And so there’s been this reform effort from the financial regulators, which by the way, if you want something good, US financial regulators have done money. Market reform is one of the best things they’ve done post oh eight, and they get no credit for that.

So. They basically said, listen, prime funds are risky. You need gates, you need floating nav. Like this is not a thing that just infinitely liquid every day, but government money, market funds, those seem to work fine. Now, in 2018, [00:07:00] this small financial regulator, by small, I mean by assets, probably the third largest in the world called the New York Department of Financial Services, was confronted with stable coins.

Do you know what they did? They stole the Fed’s homework. They said, wait a minute, money market reform worked fine. We’re gonna tell people, if you wanna do a stable coin, make it look like a government money market fund. And I will remind the audience that zero N-Y-D-F-S regulated stable coins have ever had PEG stability problems.

And that includes through FTX, through the collapse of Terraform Labs, through the regional banking crisis. All of them were fine. And so Genius looked at that, which looked at the original money market reform and yet again, stole their homework. And I would tell you, I think this is best practices in financial regulation, like don’t reinvent the wheel.

So here’s what Genius did to come all the way back to your question. Luke said, if you wanna run a government money market fund, here’s the deal. Bankruptcy. Like government money, market fund assets only then you can be a stable coin. And by the way, [00:08:00] by you we specifically mean US financial companies.

‘cause if you’re a large public company or foreign company and your business is not primarily financial, not you, so Amazon, you’re out, but like PayPal, JP Morgan, you guys are in,

Luke: what do you think that this bill will do

Austin: for the actual adoption of stable coins? This has been the signal that people needed in the United States, that one, you could bank these things.

‘cause now it’s gonna be very hard for a banking regulator to come to you and be like, Hey, this thing that Congress specifically passed legislation about, saying it was okay, you can’t bank that. That gets very difficult and it gives a bank that’s being pressured, like in choke point, the ability to fight back pretty effectively.

Two, it puts all the banks on notice. These things are here, so you need to figure out either how to bank them or how to compete with them or both, and that’s gonna be transformative. Three, all the payments companies can now be confident. We can integrate these things and they’re gonna work properly because.

Tether is a great business from a [00:09:00] profit and expansion perspective, and I think if you listen to Paolo, it’s very interesting what the story is, but nobody can say with certainty that Tether will continue to work because they just don’t disclose everything and we don’t know how the form factor works under the hood with a genius stable coin.

If I’m Visa, if I’m MasterCard, if I’m PayPal, if I’m JP Morgan, I can look at this and be like, we know that works. I know where the money is, I know how it’s structured. I can let everybody use this and it’s fine.

Luke: It already looks like we’re seeing some stable coin issuers kind of take more of a region by region approach.

Are there any red flags you guys are seeing, like from the investigation side or, or are things more clear with this past year in, in the changes that you’re seeing?

Adam: I would say this, generally speaking, our experience has been regardless of the particular industry. Whether it’s Web3 exchanges, stable coins, other kind of crypto financial service providers, or tradify getting in banks as the [00:10:00] example, many of them know that they need to get in.

And don’t know how to answer the, I think where your question is going. Don’t know how to answer the mail on risk. Right. And it’s not an easy, necessarily an easy question to answer. They know that they kind of need to like check the box with a forensics company. They need one of their forensics tools, but like beyond that.

What do we do to actually like answer the mail on the risks? We have treasury management and treasury risk, non checking wallets, risk that exists. I’ll give you just one story. One of the banks that we may work with as part of the deal, among the other things that they do, they provide liquidity. They’re nested financial institution to European banks.

They are taking it upon themselves, I think, rightfully so, to check transactions of the exchanges where they’re providing liquidity And these services, they tried to use their normal risk management tools. I, I don’t know which one it was, but you can imagine, you know, the world of those, it’s Fiserv, Jack Henry, those types [00:11:00] of places.

And because of the way just that the exchanges work with I believe because of. The way they were with omnibus accounts, nested accounts, and this is all off chain data that you merge with on chain data. Your normal risk tools actually can’t do anything. They flag an entire exchange. Instead of flagging an individual person, they’re basically back to step one in risk management for that particular client.

We’re trying to work through that and build something out, but I think the theme is that. Banks and, and other tify players that are moving into crypto are starting from square one. When it comes to risk, the risk itself is kind of the same pre post genius. I think the risk itself, the risks are the same.

The way that you do the analysis is more or less the same. Honestly, even like if you look at like the larger financial institution like a bank. The risks introduced by crypto are the same risks that they face elsewhere. It’s just faster and slightly different. But they’re starting from square one on like what data is needed to actually analyze for these risks?

How do [00:12:00] you mitigate those risks? Things like that. So it’s not introducing new risks, but it’s, it’s starting from square one on how you address it.

Luke: Interesting. I’m already seeing some kind of bad comparisons or people just not knowing the difference. But Austin, I keep seeing people talking about stable coins as the same thing as cbdc.

And then at the same time, oh yeah, that’s a

Adam: bad one.

Luke: Our friends in Europe are now talking about leaning towards cbdc, which, what’s your take on that?

Austin: Yeah. And let me start by saying we probably also need to explain the difference to a lot of bank risk people, which is part of why this space is so confused.

Like, to pile onto what Adam was saying, one of the things that I think a lot of the banks are now having an incredibly like. Terrifying realization about is that by being so incredibly adversarial to crypto over the past four years, they drove out any employee who knows anything about it. Hmm. Right.

Like I will jokingly remind people that at one point Citi had all of myself. The guy who’s the president of Coin [00:13:00] Funds, the current acting chair of the CFTC, the founder of hivemind, the two co-founders of Modus Capital, the founder of UICs, the guy who’s probably the best professor in this space up at Columbia.

The person who’s the head of institutional at Avalanche, the, the list goes on, but all of those were city employees and they lost. Every single one of them. Wow. And the story has been similar elsewhere. And so the brain drain out of banks saw this is incredible. There are close to zero risk officers at any major bank who know anything about crypto.

Wow. And like if you’re listening to this and you’re senior management at a bank and you’re listening to your own people on crypto, you are making a terrible mistake because anybody who knew what to say to you is gone. And so what that means is we end up. With discussions that are just completely deranged about things like cbdc, because the difference is simple.

A true central bank digital currency is money issued by a central bank. It’s like a dollar bill, [00:14:00] but virtual and. That’s kind of the end of the definition is canonical. And then from there, there’s this sort of parade of things that fall out that range all the way from like, call it the cyberpunk slash cipher punk ideal of like these cryptographic digital dollars that can never be traced, that exist on like cred sticks all the way to.

Fully programmable money that like, if we think you’re too fat, we can ban you from buying junk food with that kind of uses and everything in the middle. But I’m gonna roll people back to ask an even more important personal question, how many people think they get great customer service from the government?

Because the problem with being an issuer of electronic money is at some point grandma’s gonna lose her keys and you’ve gotta help her. Hmm. Right? And like this is why historically this has been outsourced to the bags. ‘cause the first. And best way to get your government overthrown is to with people’s money.

Mm-hmm. And I think governments are gonna find out, actually it’s the [00:15:00] customer service part that’s gonna be really bad. So what’s a stable coin? It is yet again, just another form of the exact monetary system we already have. When you need money, you go to JP Morgan Chase, you go to Bank of America, you go to Wells Fargo, you might go to PayPal.

You’re not going literally to the Federal Reserve down on Maiden Lane and. Being like, I demand customer service. They’ve completely outsourced that. And so stable coins are just this again, and whether it’s in the form of a bank deposit or a money market fund, and like again, for anybody who thinks this is crazy, I’ll remind everybody you can get a debit card from Fidelity where you can pay for things with a government money market fund right now, like in your Fidelity account, we already do this.

So it’s just an extension of the current system.

Luke: I’ve been really interested to get your take on this, Adam, and it might be that you’re not hearing anything recently. There have been, and just in the past week, but also in the past year, we’re seeing things like age verification on websites where people are having to upload IDs, you know, like in Texas and [00:16:00] in Florida.

Then even more recently in the uk we’re starting to see a lot of new, like, quote unquote safety acts coming into play. Does this impact Inca? Are you guys getting more types of requests outside of finance in some of these new areas? I would imagine that with what you guys do, there might be some benefit to tapping, you know, intel kind of services in, in trying to keep people safe.

What’s your take on just these, these new laws that are coming into play?

Adam: Oh yeah, dude. All sorts of random requests coming in. All sorts of stuff. I’ll tell you one funny story and then a story about a, a potentially new client that I just talked to. Yeah, so the, the whole, I think at like a high level, like.

Image verification with IDs. It’s a terrible solution, but the best one that we have right now in terms of doing things at scale. And a great example of that is, what was the name of that app where it was like women rating the dudes that they dated and it was only. T, was it T or something like that? Ts Yes.

T [00:17:00] up. That dataset got leaked. We grabbed everything Uhhuh. ‘cause it is going to have an implication on KYC. That data is going to be used by scammers, by money launderers to get KYC varied verified accounts. Everywhere.

Luke: Mm. Everywhere.

Adam: It was like tens of thousands of, of images of women with their driver’s licenses, IDs, what they, you know, it’s just like their addresses, like everything, which is pretty wild and so easily forg once you have that picture.

We have that data set now, we’re not necessarily sure exactly what we’re gonna do with it yet, but we’re going to integrate it into a product at some point. We’re getting all sorts of random requests. A big one that I think is close to what you’re asking is what’s going on with North Koreans getting hired in the tech sector.

Luke: Yeah. Yeah.

Adam: Right. There are some companies that are doing like really good work here. I, I just spoke to some of the folks at Chainlink that are doing good work for themselves, right. To make sure that they don’t do anything there and, and we’re getting asked more and more to verify. New hires, current hires on where they live, who they are, things like that.

We have a whole process now to look through that, [00:18:00] which does not include, by the way, Austin’s suggestion was that every single person that you interview has to tear up a picture of Kim Jong on live on, live on it should weed out everybody very quickly.

Austin: Awesome. But yeah, just, just make him call him a stupid fat guy with no fashion sense. Weed out. The majority of North Koreans right there

Adam: we’re getting those requests. I mean, most of them are still listening the context of crypto or finance. But now beyond like what we would traditionally do, you know, like it’s risk intelligence, but like with a twist.

And then obviously there’s like huge national security applications to that too. Even with stable coins, right? I mean like, you know, as far as stable coins are a national security prerogative. The fact that we might have, you know, north Korean hackers with admin access to GitHub repos is a great thing.

Right? That’s a big one. And I think, obviously as we go, part of what we’re trying to do is, is address broader KYC issues. How do we, how do we find bad [00:19:00] guys beyond just looking at their IDs? We’re trying.

Luke: We’re starting to see kind of an emergence of new compliance experiments or models like with what world coin’s doing and privacy pools and things that are starting to use more ZK methodology and and, and implementations, or even just alternative KYC approaches.

What’s the state of the state on that? Is it looking promising but early or is it problematic?

Adam: Promising but early is my answer. Yeah, I mean there’s a lot going on both like on the on chain side with, you know, identification, which is promising, but like, you know, hasn’t necessarily been used at scale, like real scale yet you’ve got efforts like ours where we’re just trying to amass enough osint that we can try to say who a person really knows shit is whether they’re a good guy or a bad guy.

And even for us, I mean like, you know, the, the tools that we’re building are. Promising but early, even though it’s not on chain work. And I think where we currently are is a problem and actually [00:20:00] affects people. People in other parts of the world that don’t necessarily have identification at all or really shitty identification or the current facial recognition models have trouble identifying one person from another DE Banks, those people.

It’s like, it’s literally part of the reason why those people are not banked with current products. So like this is a real issue that needs to be solved. It’s a big ass problem in exchanges Know it too. You know what I mean? Like when I talk to like the founders at, at the different exchanges, the amount of money, it’s super expensive.

The amount of money that they have to spend on KYC and then. The crappy job that those tools do limits how many people they’re able to get in certain parts of the world. And that’s something that crypto is trying. Big C crypto is like the big project is trying to solve, right? Like we’re trying to bank people globally, but then we have these hurdles like KYC that is a solvable problem with on chain and off chain solutions, but it’s still early.

Austin: What do you say, Austin? So I think one thing [00:21:00] that is actively unhelpful in solving this problem is what I previously said, which is a lot of the people who need to solve this problem do not have the talent that they need to solve this problem, which is contributing to the issue, right? I think over the next five-ish years, you know, with the emergence of AI and deep fakes and you know, increasing numbers of hacks, getting the kind of data that Adam’s got his hands on from the T app.

You’re gonna live in a world where the current bank compliance regime just breaks down completely. Like if what you’re doing is what you do currently, you’re just gonna constantly get defrauded and that is what it is, and you’re gonna facilitate all kinds of bad activity and. The days of, I have a 60-year-old compliance person who still struggles with email, but boy does this guy have intuition about local lending is probably over because that’s just not the nature of the business that you’re trying to do anymore, right?

We see this all the time. Anytime you wanna look at. Oh, there was a big ledger issue and people lost a [00:22:00] bunch of data, or, oh, some bank was being used as a conduit for money laundering. Domestically, internationally is a whole different story, but like domestically, it’s always small banks that are under resourced on this stuff, right?

Like, it’s never like literally JP Morgan, but it’ll be something like, you know, evolve in the synapse fiasco or something like that. That’s like, oh, they were totally compromised. And it’s like, well, yeah, this is 21 dudes in Arkansas and we’re expecting. Them to build a world class compliance program to deal with like the North Koreans.

Like, what are we doing here? Right? Like it’s no shock they failed. And that’s not an insult. Like I wouldn’t have succeeded either in those circumstances. And so I think what Adam is revealing here is there is a deeper need for talented technological transformation in this entire industry. And crypto and trad fire are sort of colliding.

That point. Let’s be totally honest. Crypto has been better at some areas, and Tradify has been better at some areas, but neither of them independently are getting a passing grade. [00:23:00]

Luke: I mean, it just seems like in the current landscape with AI, that it’s just rife for false positives with everything, and it seems like.

The traditional compliance approach is just dead. Like, how, how else do you do? You’re gonna have to have more layers to, to do it, right? Like Adam, is that kind of, I mean, that’s kind of what Inca does, right?

Adam: That’s it. That is ultimately,

Luke: not to shamelessly plug you, but I’ll take it. How else are you gonna do it?

The, the AI is not great enough to be able to do this with, you know, any confidence yet Everybody hyping it. Would love to claim that it is, it just seems like there’s not enough tube in the toothpaste.

Adam: With the amount of SpongeBob that I watch on YouTube, I’m definitely gonna be classified as a child.

I’m not gonna be able to watch anything anymore.

Luke: Fair. Fair enough. Fair enough. How seriously are institutions taking some of these new ZK implementations? They mostly don’t

Austin: know how to use them yet. Right. which is not to say they’re not taking them seriously, but rather they kind of don’t know what to do with it.

Right. Like I’ll, I’ll jokingly say [00:24:00] with many financial institutions, this would be like us in the current day being teleported back to like 1500 and trying to explain things like the internet. To people and they’ll just be like, what is this magic? Right? I mean, think about it. In the modern world, with all the capabilities we had, if we appeared to the ancient Greeks, we’d literally be Gods, right?

Like we’re flying through the air, right? And sending messages instantaneously globally. Amazing. But like. It’s kind of that for them trying to like use ZK proofs, like again, chase can’t get me two-factor authentication with anything other than an SMS, and we think these people are gonna use ZK proofs.

Right, right,

Adam: right.

Luke: That seems

Adam: fair. One caveat to that, it doesn’t mean that they’re unwilling to try or that they’re unwilling to hire help. To explore that as an option, right? It’s just like at most of these financial institutions, they just don’t have the technological capacity in-house to do so, but, and [00:25:00] then they’ll think very practically about like how this affects their business, how they can actually incorporate these things, and that’s why this is such a boon for Luke, the industry that you were talking about, right?

You’ve got all these different tool sets coming onto the market. That are going to see like significant growth, because ultimately they’re gonna have to do those things if they, if they want to grow and don’t want to face the current hurdles that they have. So they’re open to it. They, yeah. They just don’t have the capacity in house to do it.

That’s all. They’ll spend money on it though.

Luke: What’s the the number one priority in, in your problem set that you all are working on at Inca right now?

Adam: First, you know, we’ve been talking a lot about stable coins. It is absolutely out there. It’s top three for sure. We’re seeing growth. We’re landing a bunch of stablecoin clients.

We’re looking at new ways to help them manage that risk. Again, all outside of what the forensics companies do, right? We’re looking at secondary markets. We’re looking at off chain risk. We’re helping stable coins manage their treasuries for like treasury type risk, but that is one of our top priorities, I would say.

The other one is [00:26:00] exploring ways to help take down the bad guys that. Are non-traditional. So in the traditional model, even for Inca, the traditional model is we provide intelligence to law enforcement and then law enforcement goes and does the finish. Right? And the kind of special operator find, fix, finish model, right?

They do the finish. Inca is taking more and more. Taking that over in new ways. So we’re starting to do things like instead of, I mean, we still obviously have law enforcement clients and provide ’em intelligence, but now we’re filing lawsuits ourselves. So we’re filing civil lawsuits ourselves. We’re freezing assets ourselves.

We’re giving money back to victims ourselves. And in the civil court system, at least in the US it’s, it’s actually fairly flexible on what you can do. And the reason we’re doing this is because. Quite frankly, I think law enforcement moves too slow and doesn’t have, and continuing the theme doesn’t have the technological capacity that they need to, to do this at scale and speed.

But we [00:27:00] do, and we can, we can do it so long as we can take advantage of the court system, which again goes back to the broader point on whether it’s stable points or the growth of crypto generally. I think it’s super important for the industry to have some accountability when bad guys do bad things, we’re just taking over.

Issuance of the accountability ourselves a little bit. So I, I think that’s super important for the industry and it’s one of the, one of Incas top priorities to kind of grow that line of work for what we’re doing. That’s

Austin: awesome. How about you, Austin? So I think the number one on my list is trying to get people on both sides to be realistic about what it’s going to take to bring RWAs on chain if we wanna grow this space.

Because I think there. Are some deep misconceptions on the tradify side about, Hey, we’re gonna be able to control everything in walled gardens the way we always do, right? And on the crypto side, some deep misconceptions about, Hey, we’re gonna be able to retain all our cipher punk ideals and everything’s gonna [00:28:00] be permissionless.

Right? And both of those are completely wrong. And like the example I used to talk about this is I ask people like, well, if we tokenize grandma’s house and it. Gets hacked and the North Koreans end up with it. Do you think they legally own grandma’s house now? And interestingly, there are a subset of like permissionless Bitcoin maxes who will go.

Yep. And number one, let me tell you, boy, will the US military have things to say about that. I don’t think they’re gonna let the North Koreans just move in. And this comes to a key point about RWAs, which is. Real assets are not decentralized. They exist in the real world. They’re either securities that attach to a real corporation with real people in those cases, or they’re like literal physical assets.

So this whole. Sort of idea of decentralization stops making sense. When I ask people things like, well, how do you decentralize your physical house? Right? that’s not a thing, So one [00:29:00] that, two, these things have to be responsive to real world concerns, right? Again, if the North Koreans hack the NFT and then the North Koreans try to sell it, somebody tries to move in.

A court is gonna be like. No. Mm-hmm. Right. And now you have a problem of the ledger that you have electronically does not reflect the reality of what’s going on in the world. So now your ledger is useless. And so, okay, we need permissioned ledgers in some form, but this is where I’m pointing out the lack of sophistication on both sides is like I was literally arguing with.

You know Toley, who’s one of the founders of Solana about this recently on Twitter, and he was like, well, I mean there’s controls for the assets. And I’m like, what if they are the ones who got hacked?

Luke: Hmm.

Austin: Right, right, right. What is your procedure for like completely replacing a token that got hacked? And if anybody tells me, oh, you just dropped a new token, let me tell you, as the guy running BUSD, wow, does that all of defi, right?

Because suddenly we have all these LP pools that now one token is [00:30:00] repudiated and instantly wor, like the level of coordination for that to work across an ecosystem is non-trivial. Maybe possible, but nothing is built that way right now. The other option is you need validator level controls where people at the network level will be like, ah, I don’t think so.

And just revert everything. And there are very few chains that have put serious thought into that, right? Like. To give Adam some credit here. Inca was involved in the C dus hack. They helped Miston Labs partially control an incident like that. There are things that have been thought about, like avalanche subnets or like stellar’s permission validator structure that may be totally solvent.

But these are things that many of the crypto natives are uncomfortable with because they want decentralization. So. I think there’s still a lot of work that needs to be done on both sides to come to reality on that. Right now they’re kind of believing in their ideological biases, but reality has a way of intervening in that over the long run that the truth,

Luke: it’s where real world things [00:31:00] meet up with the magic internet beings, right.

I really appreciate you guys making the time today. I’d love to have you guys back in the future to uh, opine on the latest happenings. Sounds good. Yeah. Happy to be back at some point. Right on. Thanks guys.

Adam: Yeah, thanks so much for your time, Luke.

Luke: Awesome. Thanks for listening to the Brave Technologist Podcast.

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