30 - Synthetix to Billions | Kain Warwick

welcome to thankless where we explore the frontier of internet money and internet finance this is how to get started how to get better and how to front run the opportunity this is ryan sean adams i'm here with david hoffman and we're here to help you become more bankless david what an epic interview with kane man it was great yeah i really think that these this d5 founders series that we're doing that we started with donnie with our last episode and and this episode with kane and then i really think that these

episodes are really going to be a fantastic snapshot of the the pre-bull market before before like all this explosion of innovation and development happens which you know i'm crossing my fingers does happen right and so what we're trying to do with these episodes is we are both trying to focus in on the founders of these specific protocols the actual individuals themselves you know stani kane sergey hue and and focus in on exactly what about them created these protocols but then

also simultaneously create like a canonical what is of a what is synthetics what is chain link episode at the same time and also create a snapshot for where these protocols are when the start of the bull market really got roaring right so that's what these episodes are about and that's what this episode with kane of synthetics is all about kanan himself is a really interesting figure and he's done a ton of podcasts right so but the reason why we wanted to get him specifically on is really get the background on kane

himself right because kane is a pretty interesting guy he's a he's a crypto anarchist and crypto anarchists are super interesting and so we we get into that conversation which i've never seen kane talk about before and so that was kind of my big big highlight of this episode is kind of seeing how kane thinks in the world and how that how he thinks and how that got related into the synthetics protocol ryan what did you take away from this episode yeah i think the the patterns and archetypes of these crypto native founders are basically

they're really setting the playbook for how other d5 protocols are going to be formed in the future right so you see you see these uh protocols like constantly learning from each other on you know how to how to build a community how to um you know create your incentives in our episode with stani last week he talked about how his avonomics the avonomics of the ave protocol basically inspired by a whole slew of other d5 protocols so what we're

really seeing is this entire ecosystem leveling up together and some of these protocols quite honestly they're experimenting they're flying by the seat of their pants but when something works when they iterate and something works then that ripples across the entire ecosystem and it becomes like a a pattern a best practice for d5 protocols moving forward so i think these episodes are key if you're looking for what those patterns are so you can identify the next synthetics you can identify the next ave you can identify

the next crypto native founder and front run the opportunity as we always say here this is also awesome because we got a chance to hear about synthetics and uh toward the end kane really spelled out what is happening next in three areas then he sort of added a fourth and uh i don't know left me very bullish on defy left me particularly bullish on eth which uh you know i'm usually trending in that direction anyway but also bullish on on what synthetics has planned so it's a great episode to

get up to speed on everything synthetics we we start with the the basics of what it is but then we get down to sort of the the the depth and the meat of what it um can be in the future and uh yeah fantastic listen so far we're two for two on both of these d5 founders leaving us with a particularly bullish sentiment at the end of their podcast uh the the flow through this podcast was pretty good uh so we like i said we start with talking about kane and his specific politics and personality how that

related to synthetics then we talk about uh you know the brutal bear market and growing community during that bear market and then we talk about rising the ranks of defy using the conviction and the strength of the community and really what was the recipe that synthetics created that ultimately created their success and then as we said we go into the road map for synthetics and future predictions uh the episode speaks with the self we don't need a long intro so i think ryan we're just gonna go ahead and get right into the podcast but first

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should have a domain name too so go to unstoppabledomains.com register a domain name for your ethereum address now unstoppabledomains.com all right let's get into the interview with kane bankless nation we are so excited to have kane warwick from synthetics on our show he describes himself as the formerly semi-benevolent dictator of the synthetics foundation but now he's

currently aspiring synthetics dao super delegate kane is really the founding father of d5 liquidity mining and all of the things that we're seeing going on in the space today kane it's great to have you we're super excited about this how are you doing sir uh yeah yeah thanks for having me guys uh i really appreciate it all right so first question as one of the founding fathers of all of this defy liquidity mining is has it gone too far do you have any regrets about starting this whole kind of trend

kane what have you done yeah i know you know it's actually it's so funny uh i woke up this morning and the first message that i i saw was uh from a guy on discord and he was like do you ever think like what have i done here [Laughter] that was literally the first message that i saw and i was like what's gone wrong i was like what's happening i like immediately when like looked at like sushi and saw the migration happen so um you know i think uh i think at times you know it has gotten a little uh a

little crazy um but you know i've always been a big advocate for you know experimentation and and so i think that this idea of like distilling some of these incentives and really kind of testing the edges of them is you know not necessarily the worst thing so you like the experimentation is what you're saying yeah yeah i think it's i think it's good i think it's a net positive in the end so kane you've gone on a bajillion podcasts and so there there's plenty of podcasts that are just like all right what's synthetics but of all the podcasts i've heard with you

kane i've yet to hear one that talks about your personal politics or your personal attitudes about life and from what i've listened to i've gotten the gist that you're kind of a crypto anarchist uh if is that right and can you elaborate on that yeah so so you know i definitely uh have like a an anarchist uh bent right and and you know it comes from uh i guess like this you know anti-authoritarian uh viewpoint of you know power structures need to be justified and you know anything uh you know any

power structure any sort of hierarchy or or you know authority that can't uh be legitimized you know should be torn down um and you know i think that that's kind of the the sort of core of my uh my world view from a political standpoint so anti-authoritarian then like has it always been that way kane or was this sort of an awakening at some point in your life no i think it's always it's always been that way um you know uh probably you know coming from uh my upbringing i guess right like

um you know i uh my dad was a professional tennis player so he was um you know pretty intense person um is a pretty intense person and you know definitely uh our our family was uh was you know i've got three younger brothers so there's you know four four boys competing all the time so i you know we always had this uh this you know really intense highly competitive environment in my uh house and so i think you know at some point uh

kind of challenging that and and sort of questioning you know authority just became ingrained in me when did and when did you get into crypto and would you say that all those same values came before crypto or kind of after crypto and crypto helped instantiate them definitely before you know i i was kind of you know someone that would read uh things like chomsky and and you know a bunch of different uh sort of political uh viewpoints you know in my kind of uh late teens and early twenties

um and you know just really had a strong uh kind of view that the status quo was was not quite adequate and you know that there are a lot of issues in in the status quo in terms of you know how uh how governance worked etc and so i think that when i when i first saw uh bitcoin you know to be honest i i didn't really get it i read uh the slashdot thread that i think a lot of people read um you know in like 2011. um and you know coming from uh a payments

background and a retail background um you know it just it didn't quite sync with me it was probably a couple years later before i i really um you know saw the value from like a political perspective rather than just as a payment mechanism being a crypto anarchist of sorts what is your hope for how crypto platforms crypto protocols how they help organize people like what is the futuristic sci-fi version of crypto that you see in your head well you know this is this is part of

the reason why i've been uh so bullish on tokens for for such a long time right you know even through through the bear market where you know tokens were seen as um you know this uh this terrible kind of black mark right on on you know people who had done icos and that sort of thing and the reason behind that is that i believe that you know they're such a powerful coordination mechanism and that you know if you set up a system of rules that is is very clear um and you're open and anyone can participate that you know

having a token that kind of uh unites uh that rule set is is a really powerful way of driving behavior and so you know the idea that you can create these coordination games and you know provide services without needing some sort of like top-down you know hierarchy or you know structure i think is is really exciting and we're starting to see that you know and and obviously the first uh kind of wave of this is very financial in nature um but i think there is the possibility to extend it you know further than that and really you know

kind of open it up and and have these sort of self-governing uh you know systems that don't require essential authority to to mediate them how is this reflected in this synthetics protocol right because all crypto protocols have values baked into them to some degree so how would you say that these values have been worked into synthetics i i think it kind of comes from our community um you know where i've been a participant in the community from day one you know even when there

were only maybe 10 of us that actually cared about the you know the project right um and and so you know my my view has always been engage with the community as a community member um you know and even though i do occupy a privileged position as the founder i've really tried to you know not exercise that power and not you know not leverage it um and you know just to to try and uh you know advocate for whatever position i'm advocating um you know on its merits right rather

than you know relying on some kind of authority and so i think that the people who uh participate in our community and who've been kind of attracted to that have a very similar viewpoint right like they believe that you know the the kind of argument should be one on on its own merits and that anyone can participate and that's another reason why i think you know we haven't gone down the uh the sort of on-chain uh governance path right we've we've kind of stuck with this idea of um you know rough consensus and and letting

debate kind of you know live in the community and to decide things so okay and something else i i actually just learned today is you wrote a novel right i did i did uh somewhat um stupidly um it's never a bad decision to write a book in so yeah you know it was it it was one of those things where like um i i read a lot right um you know i read

a lot i read a lot of uh non-fiction and a lot of science fiction and you know fantasy and stuff and uh i was reading um a nick bostrom uh book about ai and there was this example this uh super intelligence super intelligence yeah yeah super intelligent so um and you know he gets to the point about like the the paper clip generating you know optimizer right that like is is optimizing for um you know uh generating as many paper clips as as possible um

and i've i you know was reading it at night fell asleep and and kind of you know was really stuck with me and then the next morning uh i kind of had this idea for like a short story that kind of extended that uh that you know thought experiment and so i started writing it and you know throughout the rest of the day like i you know put down like i don't know 8 000 words or something like that like it just it was kind of like flowing out and so then i was like well maybe this is a bit bigger than a short story and i've never written anything longer than a short story before and that was a huge mistake because the amount of uh pain

and suffering that you go through in the editing process i just was not uh prepared for it so it ended up taking me like almost 18 months to finish it because i went through like you know five different uh revisions and really changed a bunch of stuff so i'm a bit of a perfectionist which is which is why uh start starting to write a novel was maybe not the best uh best plan given that it was a side project well good for you for sticking with it but like so i i've read that book too uh super intelligence i think um elon musk was talking about it for a while and just it

kind of tuned me into it and i gotta say that book uh somewhat haunted me right because your part of the thesis uh is that basically ai is inevitable and quite possibly an evil ai is the out uh is the end outcome of all of this and you know nick's kind of caution to us is we should be preparing for that now in fact i think he he works as an ethicist uh to like come up with um protocols to uh reign in the the future ai that's

coming i i almost wonder so um peter thiel i think has has kind of painted this contrast where he talks about ai being almost an authoritarian type of technology versus uh crypto blockchain being a a more classically liberal type of technology an anti-authoritarian uh technology and i'm wondering if that kind of fed into your interest in that book super intelligence and uh the novel itself this this whole kind of anti-authoritarian

like i guess path that you've been on your entire life it seems did that feed into it well you know so uh i definitely had the naive uh view of uh of ai right up to that point and you know i i definitely spent a lot of time you know reading about um you know general uh artificial intelligence and you know for for years right like tons of uh books you know um and i think reading uh bostrom's book it was haunting it was it was really

scary like he really painted a picture uh of you know this alternative uh approach and you know i think i i'm fairly optimistic about the potential for technological progress but that definitely was an eye-opening uh uh kind of experience reading and what i remember in reading it was how fast it could happen like in a blink of an eye right so it gets to human iq you know 100 iq 120 iq right and then a week later it could be well beyond human's capability to even reign it in yeah exactly and and that was part of you

know writing the the novel i think originally the short story was like just a way for me to kind of uh you know take this very sort of troubling alternative viewpoint that i hadn't really uh you know considered previously and process it you know as a way of kind of processing it and obviously it took on a life of its own and took a lot longer than i would have liked but you know i think it was it was very helpful for me to kind of incorporate that into my world view but i do think it's a little bit you know like uh

i don't know um you know the heat death of the universe or something like that it's like a thing that you know is true but you kind of have to just you know continue operating yeah yeah exactly like if we sat around all day like worried about like you know this idea of like an agi uh emerging you know in 10 seconds uh being over uh you know maybe maybe that's too pessimistic right maybe we should be trying harder to prevent it but i kind of feel like it's either inevitable or it's not and you know the hope is that we have some benevolent uh

agi rather than you know something that is malicious and i i do think at least for me right so uh ai could grow very powerful we're already seeing it today in centralized companies like google and um you know baidu and all of these uh all these companies but um crypto is almost like a little bit of the antidote to that right it's it restores some balance in the universe it restores some self-sovereignty for the individual and we're starting with money systems but um there could be other systems so

i find personally like after reading you know some of nick's work and other things it's just like that's that's kind of the the side i want to be on um at least right now is is like more the decentralization side of things that's helping to restore a little bit of the balance of um you know what centralized ai could it could eventually become but um yeah anyway yeah i agree and you know i think i think there's like the the risk is really in the opacity right and this is where you know crypto uh is

so powerful right like when the rule system that you're operating under is opaque and and you can't you know understand what the implications are you know it's impossible to kind of see the the rules um that's where you know power can really aggregate and become abusive i think when everyone's operating um you know on the same rule set and the rules are very clear uh at least you have that you know advantage where you understand how everyone else is playing um so i think that that is something that i see in crypto's you know a very powerful driver for um you know maybe uh the

potential for more fair outcomes uh you know in in these systems so kane you wrote this novel out of just pure inspiration and and motivation which you know is is something in of itself like a high effort activity right and then ever in doing some research for this podcast i went to the synthetics slash haven blog which started in september of 2017 and you've been just pumping out blog posts after blog post ever since then right and then and then not to mention

just being the leader for this crazy awesome d5 protocol where does this motivation come from like where do you get the energy and meaning behind what you are doing so that when you wake up in the morning you're ready to go and and build something like what what motivates you to what yeah what motivates you one of my favorite uh books to to stay on the the book thread is the hard thing about hard things um by ben horowitz and and i think you know he talks about the

idea that like hard things are the reward in themselves right just doing something that's really challenging and i think that you know there's there's definitely certain people who have uh you know a mindset i think i fall into this category of you know it's just fun to do difficult things um for you know it's its own reward and so you know uh i think i'm i'm a little bit uh crazy like that where you know i i have this kind of perfectionistic streak and and feel um you know really driven to be challenged and you know if i'm if

i'm not challenged then i get bored really quickly and and so you know waking up at the moment and just being uh you know kind of inundated with like the the d5 fire hose it's you know it's definitely confronting and i think everyone's feeling that um but you know there is an aspect of like trying to kind of synthesize it all and you pull it all together into some coherent uh view you know is really fun at the same time right so you know you got to be having some fun but you know it's definitely

it's definitely challenging i've been doing startups for a long time and you know there there are days where you kind of wake up and you're like it's been 20 years of startup life and you know you feel a little bit burnt out but i think it's it's fun enough to kind of keep going um you know at the moment and so what's the goal like when you are when you do decide to wake up and and decide that you know no longer is startup life fit for you and instead walking in the mountains is now fit for you like what what do you have hoped to

achieve like what are you trying to change the world to to be like or or what's your trying to what's the mark that you're trying to leave upon the world you know i think uh i have a very strong uh sort of streak of like trying to achieve fairness and and trying to achieve uh equitable outcomes um you know i feel very strongly about that i think that you know arbitrary and this comes back again like anti-authoritarian you know viewpoints right like the the idea that someone can exercise arbitrary power over someone else i find to be

really abhorrent and so you know to build a system or you know to contribute to systems being built uh where that you know is uh is limited and the ability for people to to abuse power is limited i think you know even if it's not necessarily you know synthetics being a world-changing thing just contributing to you know crypto and d5 i think is is something that you know keeps me motivated and you know i'm hopeful that uh we can kind of continue experimenting and you know add to

this you know body of knowledge about how you coordinate uh behavior and you know achieve things like that without uh necessarily um you know looking for some specific outcome right you know um i don't i don't think it really matters uh what the outcome is as long as you know we're kind of building up this uh this you know uh new kind of technology and new way of coordinating people so we're in the middle of our d5

founders series here on bankless and we started with uh stani from ave last week we're now here with kane from synthetics and one of the questions that we're asking everyone came from our episode with vance spencer of framework uh which was also kind of like the vc start to this whole thing and one of the concepts that he talked about was when he is looking for you know d5 founders and then also d5 protocols to like invest in or put their skin in the game into they they said they frequently asked the question for protocols that are looking to hand

over governance over the protocol to the community the question is are you really about that life because that's a different lifestyle that's a different choice than running a c-corp with you know a board of directors and and publicly owned company right it's a different it's a different goal and so so kane why are you about that life like what what about you is particularly suited to building this community owned and operated protocol i've always i've always you know in all the startups that i've run uh you know some of my friends and and people that

are close to me have always kind of pointed out that you know one of the the common threads with all of them is that there you know tends to be a community that kind of uh coalesces around them um that gets really passionate about it and really cares about it and i think you know part of that is the this kind of process of engagement right of you know genuinely uh engaging with people and wanting them to contribute and i think a lot of people pay lip service to that process right but really they do want to retain power and they want to retain uh some sense of

control um but you know i i genuinely do want to engage and and kind of hand over control uh as much as as possible you know to uh this this protocol like it's it's you want to be this the super delegate instead of the benevolent dictator right that's what it says 100 exactly exactly and you know even though we don't have super delegates yet you know when we do um you know my my genuine hope is that people uh you know think that i'm a viable candidate for

that role and you know we might end up in a situation where we have you know seven uh people that are super delegates that are you know sort of responsible for um you know helping to kind of direct the the next um you know phase of the the project um and you know obviously i want to be a part of that right but i also want to to have earned it rather than you know be kind of grandfathered in because i you know happened to be you want to get it you want to be a voice in the protocol not the voice in the synthetics protocol

in time over time absolutely and you know this is already happening right like people do not listen if you go in and like honestly if you go in and look at discord right like i'm constantly advocating for things from there like no not we're just not doing that we don't we don't think you're right on this so it's so you're already getting overruled then on things oh all the time are there times where are there times where you're like oh you know the community is right about that and i was actually wrong and it led to a better decision and i guess you know the

opposite do you feel like sometimes the community's made bad decisions you know i think in the in the early days everyone was very passionate everyone felt you know very uh very strongly about you know the direction that things should be be going in but it was also very cohesive right like we all were really bored into what we were trying to do and so you know we would have debates and disagreements but you know generally was about like how do we achieve something and i think what's kind of shifted as the community has grown is it's less of debates about how do we

achieve something but you know sometimes even like what are we trying to achieve um which i think is an important thing but you know even uh you know recently uh probably i think the biggest one and i've talked about this before is the monetary policy change right you know when we change the uh the inflation schedule um there was a community member delta tiger who you know was advocating for it and i said no this is a bad idea like we don't want to go down that path we want to you know have like a you know coherent uh monastery policy and he advocated for it you know pushed it

through and you know it was definitely a good change like that was a really positive this was basically the decision right i i guess i introduced as kind of you know father of uh founding father of d5 liquidity mining right but um the original design for synthetics was like more like bitcoin right where it would be some kind of fixed cap and there wouldn't be a change to issuance policy it was very kind of regimented right that was the prevailing thought at the time so you're saying like this whole shift to liquidity mining wasn't even

your idea it came from the community it that's true so so you know um i basically said uh you know i had this idea um when i think this is going back to like 2018 right so um i think it was around devcon so like you know maybe october whatever of 2018 and we were clearly not getting traction right like we weren't getting people to uh to you know uh stake we you know we're having trouble with engagement and uh i started talking