On The Brink with Castle Island

Kyle Davies, co-founder of Three Arrows Capital, joins the show. In this episode we discuss: Kyle's perspectives on layer one blockchain protocols and how smart contract platforms are evolving The decentralized finance (DeFi) landscape, and where Kyle sees the biggest opportunities The blurring of the lines between centralized and decentralized finance platforms Learn more about Three Arrows Capital: https://www.threearrowscap.com/ Follow Kyle on Twitter @kyled116

Aditya Palepu and Frédéric Fortier, the cofounders of DerivaDEX, join the show to talk about DEXes and prospects for their future development, and to introduce their own project. In this episode: How Adi and Fred chose to build a Dex Why traders tend to love Dexes despite their shortcomings Dexes versus noncustodial exchanges Adi and Fred's Dex taxonomy and where they fit into that How Derivadex plans to decentralize the operation of their orderbook Are today's AMM-style Dexes sufficient? How the Derivadex team is thinking about the shape of the liquidity mining distribution curve How the distribution curve actually affects which users end up owning a piece of the DAO Why Derivadex struck a more pragmatic approach than certain other Dexes – and how they're going after CeFi users Why the team opted for USDT as the default collateral type The lessons Derivadex took from the MakerDAO exploit Their approach to capitalizing an insurance fund For more, see this introduction to DerivaDEX.

Nic and Matt cover news and deals of the week. In this episode: FTX acquires Blockfolio for $150m DCG announces a $100m investment in Foundry, a mining subsidiary Fidelity files with the SEC for a Bitcoin fund – and what this means for other asset managers Why large asset managers have not built products around Bitcoin just yet The INX situation explained Why security tokens might actually make sense The Boston Fed is evaluating 30 different blockchains for their digital dollar project Do exchanges owe depositors their forked coins? How will NYDFS react to the Wyoming SPDI? The Fed signals a more inflationary environment Can you use whisky as a SoV?

Zachary Kelman, managing partner at Kelman Law PLLC, joins the show to shed light on the FATF – it's origins and its current mandate – the travel rule, and what the industry can expect from these developments. Covered in this episode: Zach's prior career in bank compliance and how he decided to focus on Bitcoin How Zach noticed the blurring of lines between stopping crime and politics for bank AML Why overseas payments in the correspondent bank system are expensive What the Travel Rule actually means Why Zach thinks Bitcoin compares favorably with the default correspondent banking system Why banks freeze out certain sectors even without a specific ban or prohibition How Coins.ph moved the needle for financial inclusion in the Philippines The history of the FATF and its original mandate and intent Why the FATF's recommendation could possibly bifurcate the bitcoin market How the end of the Cold War might have influenced the creation of the FATF What Fukuyama's End of History has to do with financial crimes enforcement Will the decline of the US-led international order mean organizations like the FATF will have a reduced ability to police global finance Zach's thesis that western Europe might end up being a haven for the crypto industry How the FATF recommendations actually get enforced at the local level How the FATF black and graylists change bank behavior Why NYDFS has so much control over global finance How bank behavior in the US is often more norm based than couched in law Why a rise of nationalism could advantage Bitcoin

Dick Bove, senior research analyst at Odeon Capital Group joins the show. In this episode we discuss: Dick's 52 year career as a research analyst and his path to covering the banking sector The 2008 financial crisis, the measures that were taken, and how this has impacted the banking industry The future of dollar dominance and the rise of China on the geopolitical stage The role of cryptocurrency and the state of awareness in the institutional world Dick's favorite books and his perspective on the research industry To learn more about Odeon Capital and to access Dick's research visit www.odeoncap.com

Nic and Matt cover deals and the news of the week. In this episode: Hawaii announces the Digital Currency Innovation Lab Wyoming's Senate nominee Cynthia Lummis is a Bitcoiner Why Bitcoin values are American values How Bitcoin is mutualistic with the US dollar Evidence that Tether is used for capital outflows from China Kraken creates Kraken Financial to pursue the SPDI in Wyoming Warren Buffett buys gold Our explanation of a new breed of ponzis Where DeFi is and is not compelling to us

Zac Prince, CEO and Founder of crypto lender BlockFi, joins the show once again to talk their recent growth and milestones. Today, BlockFi announced a $50m Series C round of financing, capitalizing on their recent growth. We dive into the fundraise, BlockFi's eye-popping growth, and what is driving interest in the crypto lending space today. In this episode: Blockfi announces a $50m Series C fundraising round What it was like raising a Series C during covid BlockFi's insane traction and what is driving that growth Zac's big picture vision for the company as a global bank The growth that BlockFi has seen in stablecoins on the platform and the role they play What is really behind the high yields that BlockFi is able to offer The risk profile of lending BTC with BlockFi Zac's taxonomy of stablecoins BlockFi's plan for Tether – and why Zac decided to support it Zac's view of current institutional participation in the lending market How Zac thinks about DeFi and the rise of decentralized lending – and whether it competes with BlockFi What positions BlockFi is hiring for and who they would like to apply

Kyle Powers is the cofounder and CEO of LibertyPay, a Boston business that powers remittances to Brazil and Mexico – settling on Bitcoin, rather than traditional financial rails. LibertyPay has settled nine figures worth of value in its history – and most users never know their transactions are settling via Bitcoin. In this episode: How LibertyX began with the cofounders standing beside a Bitcoin ATM in South Station in 2014 The origins of LibertyPay and how the cofounders realized that Bitcoin-based remittances were a viable product How LibertyPay determined the most viable channels for their Bitcoin remittance product Why Brazil is a goldilocks zone for Bitcoin-powered remittances In which domains Bitcoin-based remittances outmatch the traditional system Why LibertyPay uses Bitcoin as their bridge currency and not another asset Why obtaining banking in 2014 was such a challenge Whether there was a coordinated attempt to unbank crypto companies in 2014-15 Whether Kyle is optimistic about the future of digital cash Whether XRP will ever grow into its promise as a touted bridge currency Why Kyle views Bitcoin's base layer as more of SWIFT analogue rather than a payments network Why owning Bitcoin gives you exposure to all of its descendants, in the case of a dispute Why Bitcoiners should be excited about stablecoins

Coin Metrics network data product lead Lucas Nuzzi joins the show to help explain how to audit the supply of Ethereum – and other, even more challenging blockchains. Also covered in this episode: Does the Winklevoss gold asteroid mining talking point have any merit? Are the Winklevii being ironic or sincere The Boston Fed is hiring crypto engineers Why DeFi tokens remind us of PoW launches from 2014 Why we need a new taxonomy for autonomous fair launched DeFi tokens Why DeFi might not herald a resurgence of the ICO phenomenon Microstrategy surprises to the upside Facebook focuses on payments ETH supplygate explained

James Lovejoy, recent MEng MIT grad and former graduate researcher at the MIT Digital Currency Initiative, joins the show to talk about his masters thesis and associated project focusing on detecting double-spends in proof of work cryptocurrencies. Previously, little data was collected in a systematic way to detect double-spends and reorganizations across many cryptocurrencies. James' project sheds light on previously unknown security properties of PoW. In this episode: How James came to work on Vertcoin Why James thinks ASIC resistance is valuable James' blockchain monitoring project and why it matters Why reorgs are challenging to detect Why investigating the economic damage of reorgs is difficult How James noticed a 51% attack in progress on Vertcoin and intervened to save Bittrex money – and how this can be replicated Why understanding Nicehash is critical to detecting and dealing with 51% attacks James' critiques of dominant theoretical models of PoW security How James found reorgs and counterattacks happening on BTG in real time Why exchange processes like KYC might actually help protect blockchains from reorgs How permissionless trading and leverage makes certain blockchains more vulnerable to attacks Rules of thumb for confirmation requirements for exchanges The issue with calling coins "Nicehash-able" – and why it's likely a lowball How exchanges can proactively mitigate the risk of 51% attacks and what they should be targeting How BTG developers finally defeated deep reorgs Whether James is confident in the long-term prospects of PoW Whether James still believes in GPU mining Content referenced in this episode James Lovejoy, An Empirical Analysis of Chain Reorganizations and Double-Spend Attacks on Proof-of-Work Cryptocurrencies Raphael Auer, Beyond the doomsday economics of "proof-of work" in cryptocurrencies Eric Budish, The Economic Limits of Bitcoin and the Blockchain Hasu, Prestwich, and Curtis, A model for Bitcoin's security and the declining block subsidy Carlsten, Kalodner, Narayanan, Weinberg, On the Instability of Bitcoin Without the Block Reward Moroz, Aronoff, Narula, Parkes, Double-Spend Counterattacks: Threat of Retaliation in Proof-of-Work Systems Judmayer et al, Pay-To-Win: Cheap, Crowdfundable, Cross-chain Incentive Manipulation Attacks on Cryptocurrencies Liao and Katz, Incentivizing Blockchain Forks via Whale Transactions James Lovejoy and David Vorick, ASICs and cryptocurrencies: benefits and drawbacks [debate] Nic Carter, It's the settlement assurances, stupid [blog] Elaine Ou, Cryptocurrency Deals can Always be Erased, for a Price [article]