Nowhere is this better illustrated than in the Philippines under the Spanish. Filipinos were instructed by the decree of November 21, 1849, to take on permanent Hispanic surnames. The author of the decree was Governor (and Lieutenant General) Narciso Claveria y Zaldua, a meticulous administrator as determined to rationalize names as he had been determined to rationalize existing law, provincial boundaries, and the calendar. He had observed, as his decree states, that Filipinos generally lacked individual surnames, which might “distinguish them by families,” and that their practice of adopting baptismal names drawn from a small group of saints names resulted in great “confusion.” The remedy was the catalogo, a compendium not only of personal names but also of nouns and adjectives drawn from flora, fauna, minerals, geography, and the arts and intended to be used by the authorities in assigning permanent, inherited surnames.
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“In view of the extreme usefulness and practicality of this measure, the time has come to issue a directive for the formation of a civil register [formerly a clerical function], which may not only fulfill and ensure the said objectives, but may also serve as a basis for the statistics of the country, guarantee the collection of taxes, the regular performance of personal services, and the receipt of payment for exemptions. It likewise provides exact information of the movement of the population, thus avoiding unauthorized migrations, hiding taxpayers, and other abuses.”
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The book is a bit of a slog, with its older and more technical bureaucrat-speak, but the concepts are fascinating.
Note: I tried my best to objectively capture what Do Kwon said / meant, but I do think he’s an unremorseful criminal who should be in jail. So clearly I am biased.
Guest: Do Kwon (DK) – Terra / Luna founder Host: Laura Shin – Unchained
Since last year, hasn’t been living in South Korea (SK)
Doesn’t understand how Red Notice works very well, has asked for clarification but hasn’t heard back
Disappointed that SK prosecutors are attempting to create new regulations through enforcement actions
DK hasn’t seen copy of the arrest warrant; Laura mentions the PDF is posted online, but DK says he hasn’t seen that PDF
“We are cooperating” with all the document requests (from SK govt)
Laura: Are you in Singapore now?
Doesn’t want to talk about his location for personal security – people broke into his apartment building in Seoul (both reporters and private citizens), personal threats
Laura: What about claims that Korean authorities froze $67M in his funds
“Too many things that are not true”
Went through proper procedures to pay residual taxes, hasn’t used KuCoin or OkEx “as far as I can remember”
“LFG only holds 313 bitcoin”
Hired onchain analysis company, will provide report shortly to give more clarity – should be “in next couple weeks”
Laura: Do you feel any remorse?
“Got carried away”, should have held to stricter standards In personal life “quite a bit of introvert”
Community pull for him to be more frank, transparent
Over time Twitter became his medium to do this “Largely for entertainment value”
“It is quite cringe” – worthwhile to keep up for record keeping and posterity
Laura: many people lost life savings, Taiwanese man who committed suicide, what do you want to say to them?
“My responsibility alone”
Hundreds of thousands if not millions who used Terra – “I own up to that responsibility fully”
“It’s not easy to live with”
In the process of people dealing with this grief, there were lots of accusations of fraud / theft — “important for them to have correct representation of what happened”
Crypto founder for last 5 years “Even to this day, I’m proud of work we did…values we tried to defend”
Laura: SBS News reported Do Kwon moved Singapore profits to Virgin Islands; family used proceeds to purchase apartment “I do own an apartment in Seoul”
Moved TFL corporate structure from Singapore to BVI, no funds were transferred
People who came on Korean shows that claimed to be Terra developers “were literally just interns”
Launched UST early 2021, at that time 20% was not extremely high yield, lots of 3-4 digit Defi yields
Internally, there were questions during launch that the yield wasn’t attractive enough!
Terra’s whitepaper doesn’t describe tokenomics – intentionally written in high level academic way – why decentralized algo important for industry
Didn’t initially consider need to have a stablecoin reserve
All-time high for UST/USD was $1.09
Would use SDT reserves to bring down UST price
Also made SDT stable coins available to ecosystem apps for initial / bootstrap liquidity
Initially used market operations to maintain peg – but gradually became “negligible % of overall volume”
UST became one of largest liquid stable coins, Luna was one of largest PoS networks
Eventual goal was UST would be backed by every large and promising crypto (eg, BTC)
Laura: there’s onchain evidence of cashing out $2.7B into USDT (via MIM), sent to Binance, Huobi, others
“Definitely did sell UST and Luna to fund operations” “$2.7B or anything to that effect…was not used to cash out or anything like that”
Laura: why continue to claim Chai brought millions of users to Terra, when that arrangement had ended
2020 – Daniel Shin (ex cofounder) left TFL to focus on Chai full-time, while Do left Chai which he also co-founded to focus on TFL “Consider myself the more active cofounder in building both of those companies”
In terms of Chai, limited visibility into its user data, “I should have been more consistent in how I fact checked numbers”, “definitely shortfalls on my part there”
Laura: Sam Kessler claims that Terra unilaterally re-awarded coins to an investor who lost private key (Translink capital) without discussion “Terra can’t unilaterally decide to do an upgrade”
“Validator driven process”
Laura: Basis Cash failed, why so confident about Terra still?
Saw TFL as accelerator to create lots of different apps – Pylon (yield), Anchor, Mirror
Initial Anchor team (5-6 people) spent a lot of time yield farming DeFi – Yam, Yearn – DK first got into DeFi through this
These early devs wanted to do implementation of Basis protocol and launch it anonymously
They assumed Rick & Morty pseudonyms – asked him to be “Rick” “Terra pre-dates Basis Cash”
“Currency failure of developing nation isn’t because monetary policy, it’s because underlying economy is weak”
“Don’t think there’s any underlying problem mechanism wise, it’s because no solid economy built on top” In terms of Basis Cash, “essentially all I did was join Telegram rooms and shitpost”
“I had no involvement in those things”
“It was an educational experience…why pseudonymous founders makes sense in crypto” “Basis Cash isn’t something he designed or operated…it’s something he encouraged”
Laura: Have you ever anonymously founded other projects?
“No”
Do’s description of de-pegging event
May 7, Singapore time – UST had de-pegged 2.5%, large trades against Curve LP, depleted pool
Didn’t think it was a serious problem
Over time the disparity got worse and worse
Patterns of large sells against UST
Sentiment was catching on, rumors, runaway situation
Deployed a few hundred $M to market maker, bought a bunch of UST – re-pegged briefly, “then the sells just got worse”
Luna falling, people dumping
War room of OGs, tried to raise fresh capital to buy more UST
Midnight fundraising round – got leaked – even more shorts piled up Once Luna market cap fell below certain level, the rescue fundraise became untenable
Laura: 5 months later, why no accounting or trading logs of those market makers / peg defense?
“Bound to some confidentiality” “Lot of transactions… finally in closing phases [on this report to be released]”
“I haven’t personally taken any tokens from TFL from May 2020”
Laura: Monthly unlock tokens (3M+, up to $300M USD value per month) were going to employees / operating expenses?
“Contract obligations and things to that effect”
Laura: After South Korea passport invalidated, what will you do? “I’m not using it anyway”
“I don’t feel comfortable talking about location”
Laura: When will USDT / USDC disbursements occur?
“Until litigation resolved, not able to distribute tokens”
“Don’t have a lot of clarity on how long process will take” “Not a refund…more of a goodwill effort” [to re-distribute the 313 BTC they’re still holding]
Laura: How do you feel about direction your life has taken? “Never about money or fame or success…I like making toys, simply tinkering with things”
“I enjoy building furniture…sometimes cook” “What happened with Terra wasn’t a scam, it was a massive market failure”
“Believe in need for decentralized stable coins more than anyone else”
“I’m 31 and I would still love to contribute”
“I get to do a lot more engineering”
Laura: Anything you’d do differently?
“Maybe building onchain BTC reserves earlier, more significant” “Being less aggressive less joking on Twitter”
“Next attempts at decentralized money will look a lot different”
“Without [decentralized money], what are we even doing here?”
“Deeply regretful of how things panned out with UST” but developers need to keep building
Laura: Anything else?
“Working on lots of different things…highly experimental”
“Not working on Luna Classic at all”
Here are more highlights from the article that Tyler references (emphasis mine):
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But now, when governments take control of private credit creation through the banking system by guaranteeing loans, central banks are pushed out of their role. There’s another way of looking at today’s loud, hawkish rhetoric by central banks: Teddy Roosevelt once said that, in terms of foreign policy, one should speak softly and carry a big stick. What does it tell you when central banks speak loudly? Perhaps that they’re not carrying a big stick anymore.
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I’m not talking about a command economy or about Marxism, but about an economy where the government plays a significant role in the allocation of capital. The French would call this system «dirigiste». This is nothing new, as it was the system that prevailed from 1939 to 1979. We have just forgotten how it works, because most economists are trained in free market economics, not in history.
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I think we’ll see consumer price inflation settling into a range between 4 and 6%. Without the energy shock, we would probably be there now. Why 4 to 6%? Because it has to be a level that the government can get away with. Financial repression means stealing money from savers and old people slowly.
Elon’s “what did you get done this week” as a clear filter for who agrees / disagrees with you
“It’s time to build”
What helped him start Oculus
1. Started dissembling and assembling smartphones – funded a lot of his early R&D
2. PC gamer – after 8 monitor setup, he asked “what’s next from here?”
3. Mod retro – modding game systems like N64, adding screens, batteries, etc
Oculus was a community of people learning hardware + software – very collaborative, helping and sharing work
Bunch of teenagers Early employees were moderators / participants on Mod Retro
Oculus was not just a headset – it was the engaged community and SDK that made it easy to build VR software
At 19yo, realized Oculus was not just cheaper but also better than VR headsets available in the market
Predistortion was a novel mainstream idea at that point
Met John Carmack – he was studying VR because he was posting on a different forum, and Palmer helped him “John is one of top 10 most productive people in tech”
Absolutely brilliant; doesn’t care if he upsets you; tells you exactly what he thinks and will always do things the way he thinks is right; deeply understands hardware + software (not just assembly but also deep into each piece of hardware and how it operates)
Not only made Quake and Doom but started a rocket company well before Elon
Also would hot-rod cars and was world-class at this
AR vs VR is a spectrum
Eg, VR world but when you bring your own hands in
Eg, AR but you edit out elements of background
It’s all the same – “allow person to see or experience anything they can imagine”
Aarthi: Why start Anduril?
Anduril is more successful than Oculus on any measurable metric – but everyone knows Oculus because it was consumer tech
Couldn’t retire – ego wouldn’t let him – it was partly spite (“they’re gonna regret it, and they’re gonna look like idiots”) – regarding Facebook firing him
All the criticisms – “there wasn’t a place for him”, “the company has grown past him” – a lot of passive aggressive takes, really dismissive of him
Settled on national security (Anduril) because it was the most important problem he could work on
Existing tech cos couldn’t work with US government because they were beholden to China, foreign governments and suppliers
Before Oculus, worked at army-funded VR research lab (military VR projects)
Saw how far behind DoD was on technology, made industry friends
Became concerned when he was in Silicon Valley and culturally everyone there thought working on defense was bad
Growing up, his favorite media characters were weapons manufacturers – big fan of Yu Gi Oh, Iron Man
“Did I have a choice in any of this?”
Wanted to punch above his weight, certain it would be / become important
Clear that Russia will invade Ukraine, China will invade Taiwan
We’re going to build tools to defend western democracy – and one day, everyone else will understand it
Most tech workers are pro military – but often not willing to say it
But very vocal minority who are anti-military – and executives use them to advance agendas
Google’s project Maven – working with military in small capacity – lots of protest, 1000s of Googlers signed petition against it – but that’s only 1% of Google’s workforce!
Most defense cos (the primes) work on cost-plus basis – doesn’t incentivize the best work
Before Anduril, only 2 unicorns who worked with military – Palantir and SpaceX – while there were 4 mattress unicorns, 100 gaming unicorns
Tech founders are turned off by this, hard to get scale, can’t recruit best people
Smart investors don’t invest in them either
When started Anduril, had more people on PR and government relations than engineering – you need it for defense
Core of early Anduril were ex-Oculus, ex-Palantir
ON RUSSIA – UKRAINE
Conflict headed in a bad direction – Anduril’s been involved since 2nd week of conflict
Met Zelensky shortly after he was elected – at that time US didn’t want to sell military tech to Ukraine because it was afraid of provoking Russia
Ukraine has re-built extraordinarily quickly – Kiev does not feel like a war zone
Russia has full control over media in their own nation – probably their most powerful weapon
Lots of Russian soldiers believed in invading they were actually helping liberate pro-Russian Ukrainians – thought it’d be over in a few days
See parallels with China – Taiwan
Russia able to convince their citizens of a crazy lie, what about China?
Not independent free thinking people
Putin very likely to use a tactical nuke
-US believes nukes are strategic weapons – huge bombs to take out large cities – dis-assembled all our tactical nukes
-Tactical nukes are smaller, more limited, used to win a battle, not a war
-Russia has tactical nukes, part of their military doctrine, way to even the odds with NATO
-thinks Putin will use it to blow up an airfield, or take out a heavily built up military area
Europe headed to winter – really need Russian gas
Anti-nuclear people – “what a disaster”
People unwilling to sacrifice like they did during WW2
Putin sees our resolve isn’t that strong
“There’s no easy button”
If Putin is killed, the one who replaces him probably isn’t better
CHINA – TAIWAN
Some of Taiwan’s weapons purchases are buying wrong things – trying to build large submarines that can’t fight in Strait; buying non-stealth jets that are easy to shoot down
Some Taiwanese politicians want to appear strong, but won’t actually deter Chinese aggression
Taiwanese billionaire committed to buying $100s of millions in small weaponized drones, other asymmetric weapons – “that’s worth noting”
Theory for how the conflict plays out
-China won’t do massive large scale invasion and raise the flag a week later
–Will launch trade blockade to block all harbors
-Have a narrative to justify to local Chinese – enforce customs, immigration, tax law
–Expel every merchant ship that comes to Taiwan
-This makes it less likely that Taiwan’s allies will start shooting war
-How many are willing to see US fire the first shot in a “trade dispute”?
-Will be devastating to US economy
US carrier group used to be unbeatable – but in war games, they’re increasingly vulnerable – China won’t fire 5 hypersonic missiles they’ll fire 300
In China the best companies are required by law to work with military
Only thing that could stop China would be economic collapse
People don’t build in China because it’s cheap – that’s old school thinking
Chinese are very competent, very smart, unmatched supply chain, government that gets stuff done even at expense of human rights
Apple only shifting out of China to extent that Chinese government allows it – eg 10% to Germany or 5% to Japan, “China would lose its minds”
During Oculus, critics weren’t upset at what he actually did – more upset at what media reported that he did
Biggest mistake was Facebook PR convinced him to not fight the criticism
Online editor of his college newspaper – understands how media works He encourages entrepreneurs to confront haters, be aggressive – make yourself too prickly a target to lie about
If they lie about you, you’re going to punch back
“King of direct communication” – Trump
VR wasn’t popular when he started Oculus – was a joke technology when he first tried to raise money
After Oculus, looked at several other areas other than Anduril
1. petroleum food products to solve obesity epidemic
2. private prison reform – only charge governments after prisoners served sentence and remained out of prison for 5 years
See a lot of founders that think they’re better than they are – important to accurately assess your strengths
Job of executive is to make themselves obsolete
If you really love tech, do not start a tech company – start it if you want to work on nonstop bullshit – HR, fundraising, interpersonal employee issues, working with gov’t regulators
I think this paper is a great illustration of AI’s power, not to eliminate our jobs, but to augment and enrich them:
Although the danger of AI to radiologists is overblown, the new medical computer vision industry will profoundly change how radiologists practice, most likely in a direction that pleases radiologists. And AI has the potential to democratize radiology by enabling nonradiologists in underserved areas to tap into subspecialty expertise, perhaps on their mobile devices
And:
“Will AI replace radiologists?” is the wrong question. The right answer is: Radiologists who use AI will replace radiologists who don’t.
And another example in a completely different industry:
Bank tellers are often cited as the canonical example of a job replaced by technology. But reliable studies of the industry show no such effect. In 1985, the United States had 60 000 automated teller machines (ATMs) and 485 000 bank tellers. In 2002, there were 352 000 ATMs and 527 000 bank tellers. The U.S. Bureau of Labor Statistics counted 600 500 bank tellers in 2008 and projects that this number grew to 638 000 in 2018 (24). Instead, bank tellers’ responsibilities advanced from the drudgery of withdrawals and deposits at the bank window to more interesting and sophisticated transactions.