Here’s an updated version of my personal bible which is a collection of excerpts and highlights and quotes from my favorite writings.
Recently I added two sources, one is Wences Casares’s bitcoin PDF (original post), some snippets:
If Bitcoin succeeds it may be a global non-political standard of value and settlement. The world already has a global non-political standard of length in the meter, and a global non-political standard of weight in the kilo. Could you imagine a world in which we changed the length of the meter or the weight of the kilo regularly according to political considerations? Yet that is what we are doing with our standard of value.
To illustrate the power of these qualities, consider that today the only standard of value and settlement that the United States of America can be certain that The People’s Republic of China (PRC) will not discriminate access to, censor transactions from or dilute the value of is the Bitcoin Blockchain.
I’m not half done with Rafa Nadal’s 2011 memoir (Amazon link) which is AMAZING, felt compelled to begin adding it to my bible already. Some snippets:
To illustrate the power of these qualities, consider that today the only standard of value and settlement that the United States of America can be certain that The People’s Republic of China (PRC) will not discriminate access to, censor transactions from or dilute the value of is the Bitcoin Blockchain.
Nadal’s mother, Ana María Parera, does not disagree. “He’s on top in the tennis world but, deep down, he is a super-sensitive human being full of fears and insecurities that people who don’t know him would scarcely imagine,” she says. “He doesn’t like the dark, for example, and he prefers to sleep with the light, or the TV, on. He is not comfortable with thunder and lightning either. When he was a child he’d hide under a cushion when that happened and, even now, when there’s a storm and you need to go outside to fetch something, he won’t let you. And then there are his eating habits, his loathing of cheese and tomato, and of ham, the national dish of Spain. I’m not as mad about ham myself as most people seem to be, but cheese? It is a bit peculiar.”
After all he’s accomplished since then — can’t wait for an update.
Good interview with author Edward Chancellor on the macro environment and interest rates. I just started reading his book “The Price of Time” which explores the history of interest rates. Interest rates are like water – we just assume it’s there and it works – but when it’s manipulated, it can poison the global economy, which is what we’re seeing now.
Interest is the price of time. Time is valuable, or as Ben Franklin would say, time is money. And if you don’t place a proper price on time, then the world will turn upside down.
By aggressively pursuing an inflation target of 2% and constantly living in horror of even the mildest form of deflation, they not only gave us the ultra-low interest rates with their unintended consequences in terms of the Everything Bubble. They also facilitated a misallocation of capital of epic proportions, they created an over-financialization of the economy and a rise in indebtedness. Putting all this together, they created and abetted an environment of low productivity growth.
Going forward, we’ll have more inflation in the stop-go fashion that I described, we’ll have rising interest rates and a lot more volatility in financial markets
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Chancellor also mentions Bill White who I’ve shared previously.
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”
