WEBVTT Kind: captions Language: en 00:00:01.070 --> 00:00:13.650 align:start position:0% [Applause] 00:00:13.650 --> 00:00:13.660 align:start position:0% 00:00:13.660 --> 00:00:20.000 align:start position:0% [Music] 00:00:20.000 --> 00:00:20.010 align:start position:0% 00:00:20.010 --> 00:00:41.410 align:start position:0% [Music] 00:00:41.410 --> 00:00:41.420 align:start position:0% 00:00:41.420 --> 00:00:46.250 align:start position:0% okay<00:00:41.719> there's<00:00:41.960> no<00:00:42.050> penalty<00:00:42.410> post-op<00:00:42.739> but 00:00:46.250 --> 00:00:46.260 align:start position:0% 00:00:46.260 --> 00:00:48.900 align:start position:0% so<00:00:47.260> if<00:00:47.410> stable<00:00:47.800> points<00:00:48.100> are<00:00:48.190> a<00:00:48.219> centerpiece<00:00:48.520> of 00:00:48.900 --> 00:00:48.910 align:start position:0% so if stable points are a centerpiece of 00:00:48.910 --> 00:00:51.600 align:start position:0% so if stable points are a centerpiece of decentralized<00:00:49.629> projects<00:00:50.110> which<00:00:50.680> is<00:00:50.860> rapidly 00:00:51.600 --> 00:00:51.610 align:start position:0% decentralized projects which is rapidly 00:00:51.610 --> 00:00:54.060 align:start position:0% decentralized projects which is rapidly growing<00:00:51.879> and<00:00:52.120> increasingly<00:00:52.570> complex<00:00:52.930> in<00:00:53.770> just 00:00:54.060 --> 00:00:54.070 align:start position:0% growing and increasingly complex in just 00:00:54.070 --> 00:00:55.710 align:start position:0% growing and increasingly complex in just two<00:00:54.190> years<00:00:54.430> it's<00:00:54.640> grown<00:00:54.790> to<00:00:55.180> five<00:00:55.540> hundred 00:00:55.710 --> 00:00:55.720 align:start position:0% two years it's grown to five hundred 00:00:55.720 --> 00:00:58.350 align:start position:0% two years it's grown to five hundred million<00:00:56.110> dollars<00:00:56.230> in<00:00:56.680> assets<00:00:57.010> and<00:00:57.760> it's 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align:start position:0% different levels and in the financial world<00:01:05.979> complex<00:01:06.909> system<00:01:07.270> is<00:01:07.420> usually<00:01:07.720> come 00:01:07.890 --> 00:01:07.900 align:start position:0% world complex system is usually come 00:01:07.900 --> 00:01:10.170 align:start position:0% world complex system is usually come with<00:01:07.930> complex<00:01:08.500> roots<00:01:08.740> so<00:01:09.550> an<00:01:09.700> example<00:01:10.090> that 00:01:10.170 --> 00:01:10.180 align:start position:0% with complex roots so an example that 00:01:10.180 --> 00:01:11.969 align:start position:0% with complex roots so an example that everybody's<00:01:10.600> aware<00:01:10.810> of<00:01:10.869> is<00:01:11.229> the<00:01:11.470> 2008 00:01:11.969 --> 00:01:11.979 align:start position:0% everybody's aware of is the 2008 00:01:11.979 --> 00:01:13.889 align:start position:0% everybody's aware of is the 2008 financial<00:01:12.190> crisis<00:01:12.820> where<00:01:13.450> we<00:01:13.570> had<00:01:13.690> some 00:01:13.889 --> 00:01:13.899 align:start position:0% financial crisis where we had some 00:01:13.899 --> 00:01:15.990 align:start position:0% financial crisis where we had some contracts<00:01:14.470> that<00:01:14.710> were<00:01:15.190> intended<00:01:15.430> to<00:01:15.700> really 00:01:15.990 --> 00:01:16.000 align:start position:0% contracts that were intended to really 00:01:16.000 --> 00:01:18.270 align:start position:0% contracts that were intended to really stabilize<00:01:16.300> the<00:01:16.750> system<00:01:17.110> but<00:01:17.680> ended<00:01:18.009> on<00:01:18.130> that 00:01:18.270 --> 00:01:18.280 align:start position:0% stabilize the system but ended on that 00:01:18.280 --> 00:01:21.469 align:start position:0% stabilize the system but ended on that make<00:01:18.399> a<00:01:18.430> huge<00:01:18.729> destabilizing<00:01:19.509> force<00:01:20.460> but 00:01:21.469 --> 00:01:21.479 align:start position:0% make a huge destabilizing force but 00:01:21.479 --> 00:01:23.609 align:start position:0% make a huge destabilizing force but decentralized<00:01:22.479> finance<00:01:22.869> and<00:01:23.170> blockchain<00:01:23.590> is 00:01:23.609 --> 00:01:23.619 align:start position:0% decentralized finance and blockchain is 00:01:23.619 --> 00:01:26.070 align:start position:0% decentralized finance and blockchain is different<00:01:24.130> right<00:01:24.429> the<00:01:24.970> whole<00:01:25.090> idea<00:01:25.479> is<00:01:25.600> to<00:01:25.630> try 00:01:26.070 --> 00:01:26.080 align:start position:0% different right the whole idea is to try 00:01:26.080 --> 00:01:27.389 align:start position:0% different right the whole idea is to try to<00:01:26.259> correct<00:01:26.590> some<00:01:26.770> of<00:01:26.800> the<00:01:26.920> properties<00:01:27.250> from 00:01:27.389 --> 00:01:27.399 align:start position:0% to correct some of the properties from 00:01:27.399 --> 00:01:30.210 align:start position:0% to correct some of the properties from the<00:01:27.490> traditional<00:01:27.970> financial<00:01:28.300> system<00:01:29.039> well<00:01:30.039> it 00:01:30.210 --> 00:01:30.220 align:start position:0% the traditional financial system well it 00:01:30.220 --> 00:01:32.639 align:start position:0% the traditional financial system well it turns<00:01:30.399> out<00:01:30.610> that<00:01:30.910> defy<00:01:31.539> India<00:01:32.140> has<00:01:32.380> and 00:01:32.639 --> 00:01:32.649 align:start position:0% turns out that defy India has and 00:01:32.649 --> 00:01:35.010 align:start position:0% turns out that defy India has and complex<00:01:32.950> risks<00:01:33.369> so<00:01:33.970> here<00:01:34.210> is<00:01:34.300> a<00:01:34.330> noob<00:01:34.570> it's<00:01:34.840> one 00:01:35.010 --> 00:01:35.020 align:start position:0% complex risks so here is a noob it's one 00:01:35.020 --> 00:01:42.450 align:start position:0% complex risks so here is a noob it's one of<00:01:35.110> the<00:01:35.170> first<00:01:35.350> stable<00:01:35.770> points<00:01:40.229> in<00:01:41.229> USD<00:01:41.679> which 00:01:42.450 --> 00:01:42.460 align:start position:0% of the first stable points in USD which 00:01:42.460 --> 00:01:45.410 align:start position:0% of the first stable points in USD which has<00:01:42.670> a<00:01:43.000> major<00:01:43.270> competitive<00:01:44.170> Angeles<00:01:44.619> December 00:01:45.410 --> 00:01:45.420 align:start position:0% has a major competitive Angeles December 00:01:45.420 --> 00:01:48.270 align:start position:0% has a major competitive Angeles December hears<00:01:46.420> steam<00:01:46.750> dollars<00:01:47.140> which<00:01:47.710> has<00:01:47.860> struggled 00:01:48.270 --> 00:01:48.280 align:start position:0% hears steam dollars which has struggled 00:01:48.280 --> 00:01:50.270 align:start position:0% hears steam dollars which has struggled to<00:01:48.340> maintain<00:01:48.490> its<00:01:48.820> peg<00:01:49.030> over<00:01:49.240> the<00:01:49.420> last<00:01:49.569> year 00:01:50.270 --> 00:01:50.280 align:start position:0% to maintain its peg over the last year 00:01:50.280 --> 00:01:53.400 align:start position:0% to maintain its peg over the last year here's<00:01:51.280> BIP<00:01:51.640> et<00:01:52.000> Cie<00:01:52.239> a<00:01:52.479> synthetic<00:01:52.810> asset 00:01:53.400 --> 00:01:53.410 align:start position:0% here's BIP et Cie a synthetic asset 00:01:53.410 --> 00:01:55.350 align:start position:0% here's BIP et Cie a synthetic asset trying<00:01:53.739> to<00:01:53.800> track<00:01:54.009> Bitcoin<00:01:54.459> which<00:01:54.970> is<00:01:55.090> also 00:01:55.350 --> 00:01:55.360 align:start position:0% trying to track Bitcoin which is also 00:01:55.360 --> 00:01:59.040 align:start position:0% trying to track Bitcoin which is also collapsed<00:01:56.789> in<00:01:57.789> more<00:01:58.119> recent<00:01:58.330> news<00:01:58.599> this<00:01:58.989> past 00:01:59.040 --> 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suffered two oracle<00:02:04.989> attacks<00:02:05.819> the<00:02:06.819> problem<00:02:07.179> with<00:02:07.300> these 00:02:07.440 --> 00:02:07.450 align:start position:0% oracle attacks the problem with these 00:02:07.450 --> 00:02:09.570 align:start position:0% oracle attacks the problem with these systems<00:02:07.869> is<00:02:08.200> this<00:02:08.500> we<00:02:08.800> really<00:02:09.039> have<00:02:09.190> sort<00:02:09.520> of 00:02:09.570 --> 00:02:09.580 align:start position:0% systems is this we really have sort of 00:02:09.580 --> 00:02:11.100 align:start position:0% systems is this we really have sort of little<00:02:09.789> formal<00:02:10.149> understanding<00:02:10.209> of<00:02:10.840> how<00:02:10.959> they 00:02:11.100 --> 00:02:11.110 align:start position:0% little formal understanding of how they 00:02:11.110 --> 00:02:13.229 align:start position:0% little formal understanding of how they work<00:02:11.290> they<00:02:12.130> end<00:02:12.280> up<00:02:12.310> having<00:02:12.640> some<00:02:12.849> complex 00:02:13.229 --> 00:02:13.239 align:start position:0% work they end up having some complex 00:02:13.239 --> 00:02:15.570 align:start position:0% work they end up having some complex feedback<00:02:13.599> effects<00:02:14.080> there's<00:02:15.010> no<00:02:15.129> a<00:02:15.160> truly 00:02:15.570 --> 00:02:15.580 align:start position:0% feedback effects there's no a truly 00:02:15.580 --> 00:02:17.820 align:start position:0% feedback effects there's no a truly stable<00:02:15.970> asset<00:02:16.360> it's<00:02:16.660> efficiently<00:02:17.290> accessible 00:02:17.820 --> 00:02:17.830 align:start position:0% stable asset it's efficiently accessible 00:02:17.830 --> 00:02:18.900 align:start position:0% stable asset it's efficiently accessible within<00:02:18.069> these<00:02:18.190> systems 00:02:18.900 --> 00:02:18.910 align:start position:0% within these systems 00:02:18.910 --> 00:02:20.490 align:start position:0% within these systems sexual<00:02:19.330> early<00:02:19.660> trying<00:02:19.930> to<00:02:20.050> create<00:02:20.320> in<00:02:20.440> the 00:02:20.490 --> 00:02:20.500 align:start position:0% sexual early trying to create in the 00:02:20.500 --> 00:02:23.040 align:start position:0% sexual early trying to create in the first<00:02:20.710> place<00:02:20.920> with<00:02:21.130> steroids<00:02:21.700> and<00:02:22.050> involves 00:02:23.040 --> 00:02:23.050 align:start position:0% first place with steroids and involves 00:02:23.050 --> 00:02:24.570 align:start position:0% first place with steroids and involves complex<00:02:23.530> interaction<00:02:24.100> in<00:02:24.220> though<00:02:24.310> different 00:02:24.570 --> 00:02:24.580 align:start position:0% complex interaction in though different 00:02:24.580 --> 00:02:27.420 align:start position:0% complex interaction in though different agents<00:02:25.500> so<00:02:26.500> in<00:02:26.590> this<00:02:26.650> case<00:02:26.860> in<00:02:27.070> this<00:02:27.220> talk 00:02:27.420 --> 00:02:27.430 align:start position:0% agents so in this case in this talk 00:02:27.430 --> 00:02:29.010 align:start position:0% agents so in this case in this talk we're<00:02:28.330> gonna<00:02:28.390> go<00:02:28.600> through<00:02:28.780> a<00:02:28.810> little<00:02:28.990> bit 00:02:29.010 --> 00:02:29.020 align:start position:0% we're gonna go through a little bit 00:02:29.020 --> 00:02:30.960 align:start position:0% we're gonna go through a little bit about<00:02:29.260> understanding<00:02:29.800> stable<00:02:30.190> coins<00:02:30.430> sort<00:02:30.910> of 00:02:30.960 --> 00:02:30.970 align:start position:0% about understanding stable coins sort of 00:02:30.970 --> 00:02:32.220 align:start position:0% about understanding stable coins sort of motivating<00:02:31.390> how<00:02:31.510> they're<00:02:31.690> different<00:02:31.810> from 00:02:32.220 --> 00:02:32.230 align:start position:0% motivating how they're different from 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to<00:02:39.370> understand<00:02:39.730> these<00:02:40.110> systems<00:02:42.360> so<00:02:43.360> a 00:02:43.380 --> 00:02:43.390 align:start position:0% try to understand these systems so a 00:02:43.390 --> 00:02:46.220 align:start position:0% try to understand these systems so a stable<00:02:43.780> point<00:02:44.110> aims<00:02:44.350> to<00:02:44.650> be<00:02:44.740> a<00:02:44.770> protocol<00:02:45.250> that 00:02:46.220 --> 00:02:46.230 align:start position:0% stable point aims to be a protocol that 00:02:46.230 --> 00:02:48.900 align:start position:0% stable point aims to be a protocol that stabilizes<00:02:47.230> the<00:02:47.380> market<00:02:47.680> price<00:02:47.910> or 00:02:48.900 --> 00:02:48.910 align:start position:0% stabilizes the market price or 00:02:48.910 --> 00:02:51.120 align:start position:0% stabilizes the market price or purchasing<00:02:49.300> power<00:02:49.450> of<00:02:49.630> the<00:02:49.840> coin<00:02:50.050> to<00:02:50.890> become<00:02:51.100> a 00:02:51.120 --> 00:02:51.130 align:start position:0% purchasing power of the coin to become a 00:02:51.130 --> 00:02:53.820 align:start position:0% purchasing power of the coin to become a more<00:02:51.310> usable<00:02:51.550> and<00:02:52.350> adoptable<00:02:53.350> cryptocurrency 00:02:53.820 --> 00:02:53.830 align:start position:0% more usable and adoptable cryptocurrency 00:02:53.830 --> 00:02:55.800 align:start position:0% more usable and adoptable cryptocurrency and<00:02:54.760> there<00:02:54.940> are<00:02:55.000> two<00:02:55.120> main<00:02:55.270> types<00:02:55.300> of<00:02:55.630> state 00:02:55.800 --> 00:02:55.810 align:start position:0% and there are two main types of state 00:02:55.810 --> 00:02:58.440 align:start position:0% and there are two main types of state points<00:02:56.260> one<00:02:56.530> is<00:02:56.560> the<00:02:56.890> custodial<00:02:57.400> point<00:02:57.850> where 00:02:58.440 --> 00:02:58.450 align:start position:0% points one is the custodial point where 00:02:58.450 --> 00:03:01.050 align:start position:0% points one is the custodial point where some<00:02:58.840> custodian<00:02:59.740> holds<00:03:00.160> the<00:03:00.280> reserve<00:03:00.580> assets 00:03:01.050 --> 00:03:01.060 align:start position:0% some custodian holds the reserve assets 00:03:01.060 --> 00:03:02.550 align:start position:0% some custodian holds the reserve assets off<00:03:01.300> chain<00:03:01.630> this<00:03:01.960> is<00:03:02.020> something<00:03:02.350> with<00:03:02.470> each 00:03:02.550 --> 00:03:02.560 align:start position:0% off chain this is something with each 00:03:02.560 --> 00:03:04.740 align:start position:0% off chain this is something with each other<00:03:02.740> which<00:03:03.340> reintroduced<00:03:04.060> as<00:03:04.180> counterparty 00:03:04.740 --> 00:03:04.750 align:start position:0% other which reintroduced as counterparty 00:03:04.750 --> 00:03:06.450 align:start position:0% other which reintroduced as counterparty receive<00:03:04.990> back<00:03:05.170> into<00:03:05.470> cryptocurrencies<00:03:05.890> and 00:03:06.450 --> 00:03:06.460 align:start position:0% receive back into cryptocurrencies and 00:03:06.460 --> 00:03:09.330 align:start position:0% receive back into cryptocurrencies and then<00:03:07.090> there<00:03:07.270> are<00:03:07.360> now<00:03:07.510> just<00:03:07.540> oil<00:03:08.050> systems<00:03:08.500> in 00:03:09.330 --> 00:03:09.340 align:start position:0% then there are now just oil systems in 00:03:09.340 --> 00:03:10.890 align:start position:0% then there are now just oil systems in these<00:03:09.490> systems<00:03:09.670> which<00:03:10.330> is<00:03:10.600> what<00:03:10.780> we're 00:03:10.890 --> 00:03:10.900 align:start position:0% these systems which is what we're 00:03:10.900 --> 00:03:13.320 align:start position:0% these systems which is what we're selling<00:03:11.230> is<00:03:11.260> being<00:03:11.820> involve<00:03:12.820> on<00:03:13.090> chain 00:03:13.320 --> 00:03:13.330 align:start position:0% selling is being involve on chain 00:03:13.330 --> 00:03:15.630 align:start position:0% selling is being involve on chain mechanisms<00:03:13.960> to<00:03:14.170> try<00:03:14.320> to<00:03:14.380> target<00:03:14.590> stability<00:03:15.160> so 00:03:15.630 --> 00:03:15.640 align:start position:0% mechanisms to try to target stability so 00:03:15.640 --> 00:03:18.600 align:start position:0% mechanisms to try to target stability so example<00:03:16.060> here<00:03:16.210> this<00:03:16.330> maker<00:03:16.660> downs<00:03:16.930> dive<00:03:17.610> and 00:03:18.600 --> 00:03:18.610 align:start position:0% example here this maker downs dive and 00:03:18.610 --> 00:03:21.240 align:start position:0% example here this maker downs dive and this<00:03:18.910> is<00:03:19.060> like<00:03:19.240> the<00:03:19.420> systems<00:03:20.080> we<00:03:20.200> saw<00:03:20.410> in<00:03:21.130> the 00:03:21.240 --> 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a<00:03:35.330> simple<00:03:35.659> contract<00:03:35.989> for<00:03:36.260> difference 00:03:36.580 --> 00:03:36.590 align:start position:0% this is a simple contract for difference 00:03:36.590 --> 00:03:38.860 align:start position:0% this is a simple contract for difference so<00:03:37.190> here<00:03:37.430> we<00:03:37.730> have<00:03:37.849> a<00:03:37.909> contractor<00:03:38.480> preparing 00:03:38.860 --> 00:03:38.870 align:start position:0% so here we have a contractor preparing 00:03:38.870 --> 00:03:41.619 align:start position:0% so here we have a contractor preparing to<00:03:39.379> read<00:03:39.590> agents<00:03:40.040> a<00:03:40.159> stable<00:03:40.849> plan<00:03:41.000> holder<00:03:41.330> and 00:03:41.619 --> 00:03:41.629 align:start position:0% to read agents a stable plan holder and 00:03:41.629 --> 00:03:43.539 align:start position:0% to read agents a stable plan holder and speculators<00:03:42.140> let's<00:03:42.739> say<00:03:42.890> they<00:03:43.040> each<00:03:43.190> put<00:03:43.400> in 00:03:43.539 --> 00:03:43.549 align:start position:0% speculators let's say they each put in 00:03:43.549 --> 00:03:45.729 align:start position:0% speculators let's say they each put in want<00:03:44.030> to<00:03:44.090> use<00:03:44.180> their<00:03:44.360> current<00:03:44.599> worth<00:03:44.900> $100<00:03:45.530> for 00:03:45.729 --> 00:03:45.739 align:start position:0% want to use their current worth $100 for 00:03:45.739 --> 00:03:48.460 align:start position:0% want to use their current worth $100 for a<00:03:45.799> contract<00:03:46.510> so<00:03:47.510> now<00:03:47.659> there's<00:03:47.870> two<00:03:47.930> e's<00:03:48.200> over 00:03:48.460 --> 00:03:48.470 align:start position:0% a contract so now there's two e's over 00:03:48.470 --> 00:03:53.289 align:start position:0% a contract so now there's two e's over $200<00:03:50.500> as<00:03:51.500> time<00:03:51.709> goes<00:03:51.920> for<00:03:52.159> the<00:03:52.610> price<00:03:52.849> oracle 00:03:53.289 --> 00:03:53.299 align:start position:0% $200 as time goes for the price oracle 00:03:53.299 --> 00:03:55.030 align:start position:0% $200 as time goes for the price oracle updates<00:03:53.659> the<00:03:53.840> contract<00:03:54.290> with<00:03:54.560> the<00:03:54.709> new<00:03:54.829> price 00:03:55.030 --> 00:03:55.040 align:start position:0% updates the contract with the new price 00:03:55.040 --> 00:03:57.789 align:start position:0% updates the contract with the new price of<00:03:55.220> ether<00:03:55.489> but<00:03:55.970> six<00:03:56.209> eighty<00:03:56.420> dollars<00:03:56.870> and<00:03:57.170> then 00:03:57.789 --> 00:03:57.799 align:start position:0% of ether but six eighty dollars and then 00:03:57.799 --> 00:04:00.789 align:start position:0% of ether but six eighty dollars and then the<00:03:58.129> contract<00:03:58.549> service<00:03:58.989> returning<00:03:59.989> $100 00:04:00.789 --> 00:04:00.799 align:start position:0% the contract service returning $100 00:04:00.799 --> 00:04:02.530 align:start position:0% the contract service returning $100 worth<00:04:00.950> of<00:04:01.069> ether<00:04:01.370> now<00:04:01.579> one<00:04:01.970> point<00:04:02.150> you<00:04:02.299> Bobby 00:04:02.530 --> 00:04:02.540 align:start position:0% worth of ether now one point you Bobby 00:04:02.540 --> 00:04:04.360 align:start position:0% worth of ether now one point you Bobby be<00:04:02.690> there<00:04:02.900> to<00:04:02.989> the<00:04:03.109> stable<00:04:03.410> one<00:04:03.560> holder<00:04:03.890> either 00:04:04.360 --> 00:04:04.370 align:start position:0% be there to the stable one holder either 00:04:04.370 --> 00:04:06.400 align:start position:0% be there to the stable one holder either a<00:04:04.489> Mainer<00:04:04.730> to<00:04:04.910> the<00:04:05.000> speculator<00:04:05.480> but<00:04:06.140> of<00:04:06.230> course 00:04:06.400 --> 00:04:06.410 align:start position:0% a Mainer to the speculator but of course 00:04:06.410 --> 00:04:07.900 align:start position:0% a Mainer to the speculator but of course it's<00:04:06.590> interesting<00:04:06.920> a<00:04:07.160> price<00:04:07.430> point<00:04:07.609> which<00:04:07.790> is 00:04:07.900 --> 00:04:07.910 align:start position:0% it's interesting a price point which is 00:04:07.910 --> 00:04:10.030 align:start position:0% it's interesting a price point which is different<00:04:08.420> the<00:04:08.900> speculator<00:04:09.680> wanna<00:04:09.829> make<00:04:10.010> a 00:04:10.030 --> 00:04:10.040 align:start position:0% different the speculator wanna make a 00:04:10.040 --> 00:04:11.380 align:start position:0% different the speculator wanna make a property<00:04:10.489> and<00:04:10.790> that's<00:04:10.910> what<00:04:11.120> they're<00:04:11.239> really 00:04:11.380 --> 00:04:11.390 align:start position:0% property and that's what they're really 00:04:11.390 --> 00:04:13.059 align:start position:0% property and that's what they're really betting<00:04:11.690> on<00:04:11.930> that's<00:04:12.170> why<00:04:12.290> they<00:04:12.500> are<00:04:12.739> taking 00:04:13.059 --> 00:04:13.069 align:start position:0% betting on that's why they are taking 00:04:13.069 --> 00:04:15.849 align:start position:0% betting on that's why they are taking these<00:04:13.190> systems<00:04:13.930> so<00:04:14.930> this<00:04:15.019> is<00:04:15.200> similar<00:04:15.590> to<00:04:15.829> a 00:04:15.849 --> 00:04:15.859 align:start position:0% these systems so this is similar to a 00:04:15.859 --> 00:04:18.490 align:start position:0% these systems so this is similar to a forward<00:04:16.280> contract<00:04:16.660> importantly<00:04:17.660> except<00:04:18.079> the 00:04:18.490 --> 00:04:18.500 align:start position:0% forward contract importantly except the 00:04:18.500 --> 00:04:21.460 align:start position:0% forward contract importantly except the prices<00:04:18.919> really<00:04:19.280> like<00:04:19.519> fixed<00:04:19.850> in<00:04:20.269> terms<00:04:20.470> while 00:04:21.460 --> 00:04:21.470 align:start position:0% prices really like fixed in terms while 00:04:21.470 --> 00:04:23.830 align:start position:0% prices really like fixed in terms while the<00:04:21.560> payout<00:04:21.829> is<00:04:22.130> in<00:04:22.400> this<00:04:22.580> crystal<00:04:22.910> core<00:04:23.180> and 00:04:23.830 --> 00:04:23.840 align:start position:0% the payout is in this crystal core and 00:04:23.840 --> 00:04:25.980 align:start position:0% the payout is in this crystal core and you<00:04:23.930> can't<00:04:24.110> really<00:04:24.350> settle<00:04:24.560> in<00:04:24.680> u.s.<00:04:25.070> dollars 00:04:25.980 --> 00:04:25.990 align:start position:0% you can't really settle in u.s. dollars 00:04:25.990 --> 00:04:29.430 align:start position:0% you can't really settle in u.s. dollars blockchain<00:04:26.990> so<00:04:27.710> that's<00:04:28.130> one<00:04:28.580> limitation<00:04:28.880> and 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--> 00:04:37.900 align:start position:0% between Virginia<00:04:35.600> risky<00:04:35.960> assets<00:04:36.350> and<00:04:36.650> yet<00:04:37.100> and<00:04:37.789> in 00:04:37.900 --> 00:04:37.910 align:start position:0% Virginia risky assets and yet and in 00:04:37.910 --> 00:04:39.460 align:start position:0% Virginia risky assets and yet and in many<00:04:38.030> jurisdictions<00:04:38.240> it<00:04:38.780> may<00:04:38.870> not<00:04:39.080> be 00:04:39.460 --> 00:04:39.470 align:start position:0% many jurisdictions it may not be 00:04:39.470 --> 00:04:41.680 align:start position:0% many jurisdictions it may not be possible<00:04:39.650> and<00:04:39.979> so<00:04:40.639> if<00:04:40.880> you're<00:04:41.090> a<00:04:41.120> stable<00:04:41.479> part 00:04:41.680 --> 00:04:41.690 align:start position:0% possible and so if you're a stable part 00:04:41.690 --> 00:04:43.629 align:start position:0% possible and so if you're a stable part holder<00:04:42.020> and<00:04:42.320> there's<00:04:42.500> a<00:04:42.560> settlement<00:04:42.860> event<00:04:43.220> it 00:04:43.629 --> 00:04:43.639 align:start position:0% holder and there's a settlement event it 00:04:43.639 --> 00:04:45.400 align:start position:0% holder and there's a settlement event it may<00:04:43.820> actually<00:04:43.970> be<00:04:44.210> undesirable<00:04:45.080> for<00:04:45.259> you 00:04:45.400 --> 00:04:45.410 align:start position:0% may actually be undesirable for you 00:04:45.410 --> 00:04:47.290 align:start position:0% may actually be undesirable for you because<00:04:45.860> now<00:04:46.009> you're<00:04:46.280> holding<00:04:46.550> a<00:04:46.639> risky<00:04:46.940> asset 00:04:47.290 --> 00:04:47.300 align:start position:0% because now you're holding a risky asset 00:04:47.300 --> 00:04:50.260 align:start position:0% because now you're holding a risky asset and<00:04:47.720> to<00:04:48.199> maintain<00:04:49.070> a<00:04:49.310> stable<00:04:49.580> my<00:04:49.850> position 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what we're focusing<00:05:03.440> on<00:05:03.560> in<00:05:03.770> our<00:05:03.889> modeling<00:05:04.280> work<00:05:04.490> to<00:05:05.449> make 00:05:05.590 --> 00:05:05.600 align:start position:0% focusing on in our modeling work to make 00:05:05.600 --> 00:05:08.140 align:start position:0% focusing on in our modeling work to make it<00:05:05.630> make<00:05:05.990> stable<00:05:06.350> points<00:05:06.680> that<00:05:07.030> perform<00:05:08.030> in 00:05:08.140 --> 00:05:08.150 align:start position:0% it make stable points that perform in 00:05:08.150 --> 00:05:08.950 align:start position:0% it make stable points that perform in this<00:05:08.270> sort<00:05:08.479> of<00:05:08.539> way 00:05:08.950 --> 00:05:08.960 align:start position:0% this sort of way 00:05:08.960 --> 00:05:10.930 align:start position:0% this sort of way but<00:05:09.320> don't<00:05:09.560> have<00:05:09.770> sort<00:05:10.070> of<00:05:10.099> a<00:05:10.160> set<00:05:10.340> expiration 00:05:10.930 --> 00:05:10.940 align:start position:0% but don't have sort of a set expiration 00:05:10.940 --> 00:05:14.020 align:start position:0% but don't have sort of a set expiration date<00:05:11.229> so<00:05:12.229> in<00:05:12.349> these<00:05:12.500> systems<00:05:12.710> you<00:05:13.490> again<00:05:13.880> have 00:05:14.020 --> 00:05:14.030 align:start position:0% date so in these systems you again have 00:05:14.030 --> 00:05:16.089 align:start position:0% date so in these systems you again have a<00:05:14.060> speculator<00:05:14.599> let's<00:05:15.560> say<00:05:15.680> they<00:05:15.830> currently 00:05:16.089 --> 00:05:16.099 align:start position:0% a speculator let's say they currently 00:05:16.099 --> 00:05:18.100 align:start position:0% a speculator let's say they currently lock<00:05:16.460> one<00:05:17.000> Eve<00:05:17.150> for<00:05:17.419> the<00:05:17.570> hundred<00:05:17.810> dollars 00:05:18.100 --> 00:05:18.110 align:start position:0% lock one Eve for the hundred dollars 00:05:18.110 --> 00:05:20.830 align:start position:0% lock one Eve for the hundred dollars into<00:05:18.380> a<00:05:18.590> contract<00:05:19.099> and<00:05:19.370> they<00:05:20.210> create<00:05:20.539> fifty 00:05:20.830 --> 00:05:20.840 align:start position:0% into a contract and they create fifty 00:05:20.840 --> 00:05:23.200 align:start position:0% into a contract and they create fifty stable<00:05:21.169> coins<00:05:21.410> against<00:05:21.860> or<00:05:22.160> so<00:05:22.340> amounts<00:05:22.699> up<00:05:22.970> to 00:05:23.200 --> 00:05:23.210 align:start position:0% stable coins against or so amounts up to 00:05:23.210 --> 00:05:25.960 align:start position:0% stable coins against or so amounts up to some<00:05:23.389> other<00:05:23.630> collateral<00:05:24.020> effect<00:05:24.669> so<00:05:25.669> if<00:05:25.849> you 00:05:25.960 --> 00:05:25.970 align:start position:0% some other collateral effect so if you 00:05:25.970 --> 00:05:27.490 align:start position:0% some other collateral effect so if you think<00:05:26.180> in<00:05:26.360> terms<00:05:26.389> of<00:05:26.660> balance<00:05:26.840> sheets<00:05:27.229> this<00:05:27.440> is 00:05:27.490 --> 00:05:27.500 align:start position:0% think in terms of balance sheets this is 00:05:27.500 --> 00:05:29.110 align:start position:0% think in terms of balance sheets this is what<00:05:27.770> the<00:05:27.860> speculators<00:05:28.310> balance<00:05:28.699> sheet<00:05:28.880> looks 00:05:29.110 --> 00:05:29.120 align:start position:0% what the speculators balance sheet looks 00:05:29.120 --> 00:05:32.290 align:start position:0% what the speculators balance sheet looks like<00:05:29.590> and<00:05:30.590> then<00:05:31.190> they<00:05:31.490> can<00:05:31.639> take<00:05:31.789> those<00:05:31.940> fifty 00:05:32.290 --> 00:05:32.300 align:start position:0% like and then they can take those fifty 00:05:32.300 --> 00:05:35.230 align:start position:0% like and then they can take those fifty stable<00:05:32.660> coins<00:05:33.220> go<00:05:34.220> to<00:05:34.280> a<00:05:34.370> stable<00:05:34.580> plan<00:05:34.880> market 00:05:35.230 --> 00:05:35.240 align:start position:0% stable coins go to a stable plan market 00:05:35.240 --> 00:05:39.100 align:start position:0% stable coins go to a stable plan market and<00:05:35.449> trade<00:05:35.780> for<00:05:36.080> about<00:05:36.740> 0.5<00:05:37.660> and<00:05:38.660> I<00:05:38.720> say<00:05:38.840> about 00:05:39.100 --> 00:05:39.110 align:start position:0% and trade for about 0.5 and I say about 00:05:39.110 --> 00:05:40.659 align:start position:0% and trade for about 0.5 and I say about because<00:05:39.409> it<00:05:39.500> depends<00:05:39.830> on<00:05:39.919> what<00:05:40.130> the<00:05:40.250> market<00:05:40.580> is 00:05:40.659 --> 00:05:40.669 align:start position:0% because it depends on what the market is 00:05:40.669 --> 00:05:42.850 align:start position:0% because it depends on what the market is willing<00:05:40.789> to<00:05:40.940> bear<00:05:41.180> and<00:05:41.539> that<00:05:41.570> come<00:05:41.900> turns<00:05:42.740> out 00:05:42.850 --> 00:05:42.860 align:start position:0% willing to bear and that come turns out 00:05:42.860 --> 00:05:45.760 align:start position:0% willing to bear and that come turns out to<00:05:42.979> be<00:05:43.010> pretty<00:05:43.280> complex<00:05:43.760> to<00:05:44.000> understand<00:05:44.770> and 00:05:45.760 --> 00:05:45.770 align:start position:0% to be pretty complex to understand and 00:05:45.770 --> 00:05:47.589 align:start position:0% to be pretty complex to understand and this<00:05:46.070> table<00:05:46.280> by<00:05:46.520> market<00:05:46.880> works<00:05:47.150> through<00:05:47.389> some 00:05:47.589 --> 00:05:47.599 align:start position:0% this table by market works through some 00:05:47.599 --> 00:05:49.540 align:start position:0% this table by market works through some idea<00:05:47.930> of<00:05:48.199> arbitrage 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and<00:05:57.440> then<00:05:58.130> at<00:05:58.250> any<00:05:58.400> time<00:05:58.610> the 00:05:58.750 --> 00:05:58.760 align:start position:0% continues and then at any time the 00:05:58.760 --> 00:06:00.790 align:start position:0% continues and then at any time the speculator<00:05:59.240> can<00:05:59.479> repurchase<00:06:00.260> those<00:06:00.440> fifty 00:06:00.790 --> 00:06:00.800 align:start position:0% speculator can repurchase those fifty 00:06:00.800 --> 00:06:02.379 align:start position:0% speculator can repurchase those fifty stable<00:06:01.159> ones<00:06:01.370> to<00:06:01.580> unlock<00:06:01.880> their<00:06:02.120> collateral 00:06:02.379 --> 00:06:02.389 align:start position:0% stable ones to unlock their collateral 00:06:02.389 --> 00:06:03.879 align:start position:0% stable ones to unlock their collateral but<00:06:02.990> they're<00:06:03.169> essentially<00:06:03.409> getting<00:06:03.710> is<00:06:03.860> a 00:06:03.879 --> 00:06:03.889 align:start position:0% but they're essentially getting is a 00:06:03.889 --> 00:06:05.740 align:start position:0% but they're essentially getting is a leveraged<00:06:04.310> position<00:06:04.759> to<00:06:04.970> make<00:06:05.090> the<00:06:05.419> leverage 00:06:05.740 --> 00:06:05.750 align:start position:0% leveraged position to make the leverage 00:06:05.750 --> 00:06:07.180 align:start position:0% leveraged position to make the leverage bet<00:06:06.020> on<00:06:06.229> this<00:06:06.380> risky 00:06:07.180 --> 00:06:07.190 align:start position:0% bet on this risky 00:06:07.190 --> 00:06:09.190 align:start position:0% bet on this risky and<00:06:07.430> at<00:06:07.910> some<00:06:08.180> time<00:06:08.360> at<00:06:08.540> some<00:06:08.570> wife<00:06:08.870> they<00:06:09.050> may 00:06:09.190 --> 00:06:09.200 align:start position:0% and at some time at some wife they may 00:06:09.200 --> 00:06:11.170 align:start position:0% and at some time at some wife they may want<00:06:09.380> to<00:06:09.440> exit<00:06:09.770> that<00:06:09.920> lecherous<00:06:10.130> position<00:06:10.730> and 00:06:11.170 --> 00:06:11.180 align:start position:0% want to exit that lecherous position and 00:06:11.180 --> 00:06:13.150 align:start position:0% want to exit that lecherous position and then<00:06:12.080> the<00:06:12.170> other<00:06:12.320> side<00:06:12.590> of<00:06:12.770> the<00:06:12.890> statement 00:06:13.150 --> 00:06:13.160 align:start position:0% then the other side of the statement 00:06:13.160 --> 00:06:14.920 align:start position:0% then the other side of the statement market<00:06:13.730> is<00:06:13.820> taken<00:06:14.120> by<00:06:14.270> these<00:06:14.330> staple<00:06:14.780> gun 00:06:14.920 --> 00:06:14.930 align:start position:0% market is taken by these staple gun 00:06:14.930 --> 00:06:17.290 align:start position:0% market is taken by these staple gun holders<00:06:15.290> who<00:06:15.950> buy<00:06:16.370> the<00:06:16.430> stable<00:06:16.880> coins<00:06:17.120> that 00:06:17.290 --> 00:06:17.300 align:start position:0% holders who buy the stable coins that 00:06:17.300 --> 00:06:19.420 align:start position:0% holders who buy the stable coins that want<00:06:17.510> to<00:06:17.630> maintain<00:06:17.780> a<00:06:18.050> stable<00:06:18.680> position<00:06:18.950> for 00:06:19.420 --> 00:06:19.430 align:start position:0% want to maintain a stable position for 00:06:19.430 --> 00:06:22.870 align:start position:0% want to maintain a stable position for some<00:06:19.580> sort<00:06:21.310> or<00:06:22.310> potentially<00:06:22.730> in<00:06:22.790> the<00:06:22.850> future 00:06:22.870 --> 00:06:22.880 align:start position:0% some sort or potentially in the future 00:06:22.880 --> 00:06:24.720 align:start position:0% some sort or potentially in the future for<00:06:23.270> purchasing<00:06:23.720> reasons 00:06:24.720 --> 00:06:24.730 align:start position:0% for purchasing reasons 00:06:24.730 --> 00:06:28.660 align:start position:0% for purchasing reasons so<00:06:25.730> now<00:06:25.910> as<00:06:26.300> time<00:06:26.660> involves<00:06:27.230> a<00:06:27.770> price<00:06:28.220> Oracle 00:06:28.660 --> 00:06:28.670 align:start position:0% so now as time involves a price Oracle 00:06:28.670 --> 00:06:30.970 align:start position:0% so now as time involves a price Oracle again<00:06:29.120> updates<00:06:29.600> its<00:06:29.840> contract<00:06:30.320> to<00:06:30.650> tell<00:06:30.830> what 00:06:30.970 --> 00:06:30.980 align:start position:0% again updates its contract to tell what 00:06:30.980 --> 00:06:33.160 align:start position:0% again updates its contract to tell what the<00:06:31.070> true<00:06:31.190> price<00:06:31.400> of<00:06:31.430> Defense<00:06:31.970> and<00:06:32.810> get<00:06:33.020> the 00:06:33.160 --> 00:06:33.170 align:start position:0% the true price of Defense and get the 00:06:33.170 --> 00:06:35.170 align:start position:0% the true price of Defense and get the collateral<00:06:33.590> value<00:06:33.920> decreases<00:06:34.310> below<00:06:34.730> some 00:06:35.170 --> 00:06:35.180 align:start position:0% collateral value decreases below some 00:06:35.180 --> 00:06:37.630 align:start position:0% collateral value decreases below some threshold<00:06:35.660> then<00:06:36.350> the<00:06:36.680> speculator<00:06:37.340> can<00:06:37.550> be 00:06:37.630 --> 00:06:37.640 align:start position:0% threshold then the speculator can be 00:06:37.640 --> 00:06:39.130 align:start position:0% threshold then the speculator can be partially<00:06:38.060> liquid<00:06:38.360> in<00:06:38.450> him<00:06:38.600> to<00:06:38.720> try<00:06:38.900> bring 00:06:39.130 --> 00:06:39.140 align:start position:0% partially liquid in him to try bring 00:06:39.140 --> 00:06:42.370 align:start position:0% partially liquid in him to try bring them<00:06:39.320> back<00:06:39.470> within<00:06:40.010> that<00:06:40.280> threshold<00:06:41.140> and<00:06:42.140> so 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around the price Oracle which if you can 00:06:48.380 --> 00:06:49.960 align:start position:0% around the price Oracle which if you can manipulate<00:06:48.530> it<00:06:48.950> you<00:06:49.070> can<00:06:49.220> connect<00:06:49.460> the<00:06:49.580> entire 00:06:49.960 --> 00:06:49.970 align:start position:0% manipulate it you can connect the entire 00:06:49.970 --> 00:06:52.270 align:start position:0% manipulate it you can connect the entire system<00:06:50.480> and<00:06:51.110> the<00:06:51.230> other<00:06:51.350> is<00:06:51.530> around<00:06:51.830> the 00:06:52.270 --> 00:06:52.280 align:start position:0% system and the other is around the 00:06:52.280 --> 00:06:54.190 align:start position:0% system and the other is around the stable<00:06:52.670> point<00:06:52.790> market<00:06:53.180> which<00:06:53.780> if<00:06:54.020> it 00:06:54.190 --> 00:06:54.200 align:start position:0% stable point market which if it 00:06:54.200 --> 00:06:56.520 align:start position:0% stable point market which if it collapses<00:06:54.710> it<00:06:54.860> also<00:06:55.010> breaks<00:06:55.220> down<00:06:55.370> the<00:06:55.550> system 00:06:56.520 --> 00:06:56.530 align:start position:0% collapses it also breaks down the system 00:06:56.530 --> 00:06:59.620 align:start position:0% collapses it also breaks down the system and<00:06:57.530> then<00:06:58.070> at<00:06:58.250> any<00:06:58.370> point<00:06:58.700> there<00:06:59.360> could<00:06:59.570> be 00:06:59.620 --> 00:06:59.630 align:start position:0% and then at any point there could be 00:06:59.630 --> 00:07:01.630 align:start position:0% and then at any point there could be some<00:07:00.260> I<00:07:00.380> did<00:07:00.560> like<00:07:00.740> this<00:07:00.890> global<00:07:01.310> settlement 00:07:01.630 --> 00:07:01.640 align:start position:0% some I did like this global settlement 00:07:01.640 --> 00:07:03.850 align:start position:0% some I did like this global settlement where<00:07:02.450> this<00:07:02.930> is<00:07:03.110> getting<00:07:03.350> back<00:07:03.470> to<00:07:03.650> what<00:07:03.740> would 00:07:03.850 --> 00:07:03.860 align:start position:0% where this is getting back to what would 00:07:03.860 --> 00:07:05.260 align:start position:0% where this is getting back to what would happen<00:07:04.010> in<00:07:04.280> the<00:07:04.370> original<00:07:04.670> contract<00:07:05.030> for 00:07:05.260 --> 00:07:05.270 align:start position:0% happen in the original contract for 00:07:05.270 --> 00:07:07.270 align:start position:0% happen in the original contract for difference<00:07:05.600> the<00:07:06.140> contract<00:07:06.740> has<00:07:06.860> settled<00:07:07.160> the 00:07:07.270 --> 00:07:07.280 align:start position:0% difference the contract has settled the 00:07:07.280 --> 00:07:09.040 align:start position:0% difference the contract has settled the stable<00:07:07.670> and<00:07:07.850> holders<00:07:08.180> in<00:07:08.390> exchange<00:07:08.810> they're 00:07:09.040 --> 00:07:09.050 align:start position:0% stable and holders in exchange they're 00:07:09.050 --> 00:07:10.810 align:start position:0% stable and holders in exchange they're stable<00:07:09.380> points<00:07:09.710> for<00:07:09.920> either<00:07:10.280> at<00:07:10.550> the<00:07:10.640> last 00:07:10.810 --> 00:07:10.820 align:start position:0% stable points for either at the last 00:07:10.820 --> 00:07:12.760 align:start position:0% stable points for either at the last oracle<00:07:11.210> price<00:07:11.420> and<00:07:11.720> the<00:07:12.020> remainder<00:07:12.290> it<00:07:12.590> goes 00:07:12.760 --> 00:07:12.770 align:start position:0% oracle price and the remainder it goes 00:07:12.770 --> 00:07:14.830 align:start position:0% oracle price and the remainder it goes to<00:07:13.010> speculators<00:07:13.550> but<00:07:14.000> this<00:07:14.120> is<00:07:14.240> meant<00:07:14.420> as<00:07:14.600> sort 00:07:14.830 --> 00:07:14.840 align:start position:0% to speculators but this is meant as sort 00:07:14.840 --> 00:07:17.170 align:start position:0% to speculators but this is meant as sort of<00:07:14.870> a<00:07:14.960> last<00:07:15.140> resort<00:07:15.530> sort<00:07:15.860> of<00:07:15.950> thing<00:07:16.130> and<00:07:16.880> not 00:07:17.170 --> 00:07:17.180 align:start position:0% of a last resort sort of thing and not 00:07:17.180 --> 00:07:20.800 align:start position:0% of a last resort sort of thing and not intended<00:07:17.450> to<00:07:18.290> really<00:07:18.440> take<00:07:18.650> effect<00:07:19.750> so<00:07:20.750> an 00:07:20.800 --> 00:07:20.810 align:start position:0% intended to really take effect so an 00:07:20.810 --> 00:07:22.510 align:start position:0% intended to really take effect so an important<00:07:21.170> question<00:07:21.320> in<00:07:21.740> these<00:07:21.860> models<00:07:22.280> is 00:07:22.510 --> 00:07:22.520 align:start position:0% important question in these models is 00:07:22.520 --> 00:07:24.750 align:start position:0% important question in these models is can<00:07:23.419> we<00:07:23.510> use<00:07:23.660> the<00:07:23.810> existing<00:07:24.050> literature 00:07:24.750 --> 00:07:24.760 align:start position:0% can we use the existing literature 00:07:24.760 --> 00:07:27.130 align:start position:0% can we use the existing literature currency<00:07:25.760> peg<00:07:25.940> models<00:07:26.330> to<00:07:26.540> try<00:07:26.630> to<00:07:26.690> understand 00:07:27.130 --> 00:07:27.140 align:start position:0% currency peg models to try to understand 00:07:27.140 --> 00:07:29.550 align:start position:0% currency peg models to try to understand fees<00:07:27.320> and<00:07:27.700> unfortunately<00:07:28.700> the<00:07:28.940> answer<00:07:29.060> is<00:07:29.240> no 00:07:29.550 --> 00:07:29.560 align:start position:0% fees and unfortunately the answer is no 00:07:29.560 --> 00:07:32.530 align:start position:0% fees and unfortunately the answer is no so<00:07:30.560> in<00:07:30.740> traditional<00:07:31.640> currency<00:07:31.970> peg<00:07:32.150> models 00:07:32.530 --> 00:07:32.540 align:start position:0% so in traditional currency peg models 00:07:32.540 --> 00:07:34.420 align:start position:0% so in traditional currency peg models we're<00:07:33.140> really<00:07:33.290> looking<00:07:33.470> at<00:07:33.710> a<00:07:33.770> game<00:07:34.010> played 00:07:34.420 --> 00:07:34.430 align:start position:0% we're really looking at a game played 00:07:34.430 --> 00:07:35.110 align:start position:0% we're really looking at a game played between 00:07:35.110 --> 00:07:35.120 align:start position:0% between 00:07:35.120 --> 00:07:37.210 align:start position:0% between holder's<00:07:35.600> and<00:07:35.810> there's<00:07:36.380> a<00:07:36.470> government<00:07:36.770> issuer 00:07:37.210 --> 00:07:37.220 align:start position:0% holder's and there's a government issuer 00:07:37.220 --> 00:07:39.310 align:start position:0% holder's and there's a government issuer which<00:07:37.610> is<00:07:37.729> not<00:07:37.850> really<00:07:38.090> a<00:07:38.120> player<00:07:38.360> they're 00:07:39.310 --> 00:07:39.320 align:start position:0% which is not really a player they're 00:07:39.320 --> 00:07:41.590 align:start position:0% which is not really a player they're sort<00:07:39.560> of<00:07:39.590> mechanically<00:07:40.130> committed<00:07:40.520> to<00:07:40.729> to 00:07:41.590 --> 00:07:41.600 align:start position:0% sort of mechanically committed to to 00:07:41.600 --> 00:07:43.120 align:start position:0% sort of mechanically committed to to maintaining<00:07:41.990> stability<00:07:42.199> for<00:07:42.650> its<00:07:42.740> own<00:07:42.860> city 00:07:43.120 --> 00:07:43.130 align:start position:0% maintaining stability for its own city 00:07:43.130 --> 00:07:45.850 align:start position:0% maintaining stability for its own city but<00:07:44.090> now<00:07:44.240> in<00:07:44.630> the<00:07:44.870> stable<00:07:45.260> point<00:07:45.410> systems 00:07:45.850 --> 00:07:45.860 align:start position:0% but now in the stable point systems 00:07:45.860 --> 00:07:48.159 align:start position:0% but now in the stable point systems we're<00:07:46.460> really<00:07:46.699> replacing<00:07:47.389> the<00:07:47.720> government 00:07:48.159 --> 00:07:48.169 align:start position:0% we're really replacing the government 00:07:48.169 --> 00:07:50.530 align:start position:0% we're really replacing the government issuer<00:07:48.440> with<00:07:49.340> decentralized<00:07:50.060> speculators 00:07:50.530 --> 00:07:50.540 align:start position:0% issuer with decentralized speculators 00:07:50.540 --> 00:07:53.050 align:start position:0% issuer with decentralized speculators who<00:07:51.139> are<00:07:51.199> now<00:07:51.350> players<00:07:51.710> linking<00:07:52.190> so<00:07:52.910> they 00:07:53.050 --> 00:07:53.060 align:start position:0% who are now players linking so they 00:07:53.060 --> 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committed to maintaining<00:07:59.750> any<00:08:00.229> idea<00:08:00.560> all<00:08:00.740> right 00:08:00.909 --> 00:08:00.919 align:start position:0% maintaining any idea all right 00:08:00.919 --> 00:08:02.860 align:start position:0% maintaining any idea all right and<00:08:01.550> the<00:08:01.820> best<00:08:01.970> part<00:08:02.120> you<00:08:02.240> hope<00:08:02.389> for<00:08:02.660> is<00:08:02.840> that 00:08:02.860 --> 00:08:02.870 align:start position:0% and the best part you hope for is that 00:08:02.870 --> 00:08:05.620 align:start position:0% and the best part you hope for is that protocols<00:08:03.710> will<00:08:04.160> assigned<00:08:04.550> and<00:08:04.880> the<00:08:05.330> peg<00:08:05.510> is 00:08:05.620 --> 00:08:05.630 align:start position:0% protocols will assigned and the peg is 00:08:05.630 --> 00:08:08.320 align:start position:0% protocols will assigned and the peg is maintained<00:08:06.080> through<00:08:06.560> incentives<00:08:07.150> with<00:08:08.150> some 00:08:08.320 --> 00:08:08.330 align:start position:0% maintained through incentives with some 00:08:08.330 --> 00:08:12.640 align:start position:0% maintained through incentives with some high<00:08:08.449> probability<00:08:10.900> so<00:08:11.900> this<00:08:12.020> motivates<00:08:12.229> the 00:08:12.640 --> 00:08:12.650 align:start position:0% high probability so this motivates the 00:08:12.650 --> 00:08:14.650 align:start position:0% high probability so this motivates the model<00:08:12.949> of<00:08:13.039> this<00:08:13.220> that<00:08:13.639> we're<00:08:13.820> building<00:08:13.970> which 00:08:14.650 --> 00:08:14.660 align:start position:0% model of this that we're building which 00:08:14.660 --> 00:08:16.960 align:start position:0% model of this that we're building which it's<00:08:15.530> we're<00:08:15.919> building<00:08:16.160> of<00:08:16.220> a<00:08:16.280> model<00:08:16.580> of<00:08:16.669> the 00:08:16.960 --> 00:08:16.970 align:start position:0% it's we're building of a model of the 00:08:16.970 --> 00:08:19.629 align:start position:0% it's we're building of a model of the ascetic<00:08:17.630> we<00:08:17.780> put<00:08:18.740> forward<00:08:19.070> in<00:08:19.250> the<00:08:19.370> previous 00:08:19.629 --> 00:08:19.639 align:start position:0% ascetic we put forward in the previous 00:08:19.639 --> 00:08:21.640 align:start position:0% ascetic we put forward in the previous slides<00:08:20.090> and<00:08:20.360> that<00:08:20.419> behind<00:08:21.110> those<00:08:21.289> pictures 00:08:21.640 --> 00:08:21.650 align:start position:0% slides and that behind those pictures 00:08:21.650 --> 00:08:24.820 align:start position:0% slides and that behind those pictures and<00:08:21.919> so<00:08:22.789> we<00:08:22.910> have<00:08:23.060> two<00:08:23.240> agents<00:08:23.470> these<00:08:24.470> stable 00:08:24.820 --> 00:08:24.830 align:start position:0% and so we have two agents these stable 00:08:24.830 --> 00:08:26.890 align:start position:0% and so we have two agents these stable point<00:08:25.039> holders<00:08:25.370> were<00:08:25.610> seeking<00:08:25.880> stability<00:08:26.449> and 00:08:26.890 --> 00:08:26.900 align:start position:0% point holders were seeking stability and 00:08:26.900 --> 00:08:29.610 align:start position:0% point holders were seeking stability and provides<00:08:27.289> row<00:08:27.500> at<00:08:27.770> the<00:08:27.830> demand<00:08:28.250> side<00:08:28.460> of 00:08:29.610 --> 00:08:29.620 align:start position:0% provides row at the demand side of 00:08:29.620 --> 00:08:33.279 align:start position:0% provides row at the demand side of elasticity<00:08:30.620> and<00:08:31.120> speculators<00:08:32.120> who<00:08:32.810> choose 00:08:33.279 --> 00:08:33.289 align:start position:0% elasticity and speculators who choose 00:08:33.289 --> 00:08:35.110 align:start position:0% elasticity and speculators who choose leverage<00:08:33.950> bets<00:08:34.190> that<00:08:34.400> are<00:08:34.460> vacuuming<00:08:34.880> the 00:08:35.110 --> 00:08:35.120 align:start position:0% leverage bets that are vacuuming the 00:08:35.120 --> 00:08:37.990 align:start position:0% leverage bets that are vacuuming the silver<00:08:35.479> and<00:08:36.169> there's<00:08:36.380> madison's<00:08:37.070> ether<00:08:37.789> which 00:08:37.990 --> 00:08:38.000 align:start position:0% silver and there's madison's ether which 00:08:38.000 --> 00:08:41.290 align:start position:0% silver and there's madison's ether which is<00:08:38.150> risky<00:08:38.630> an<00:08:39.560> exogenous<00:08:39.830> price<00:08:40.339> and<00:08:40.849> stable 00:08:41.290 --> 00:08:41.300 align:start position:0% is risky an exogenous price and stable 00:08:41.300 --> 00:08:43.630 align:start position:0% is risky an exogenous price and stable one<00:08:41.539> which<00:08:42.050> has<00:08:42.320> our<00:08:42.560> doggedness<00:08:43.159> price<00:08:43.459> that 00:08:43.630 --> 00:08:43.640 align:start position:0% one which has our doggedness price that 00:08:43.640 --> 00:08:45.340 align:start position:0% one which has our doggedness price that we're<00:08:43.729> trying<00:08:43.880> to<00:08:44.000> understand<00:08:44.510> which<00:08:45.020> is<00:08:45.110> over 00:08:45.340 --> 00:08:45.350 align:start position:0% we're trying to understand which is over 00:08:45.350 --> 00:08:47.760 align:start position:0% we're trying to understand which is over collateralized<00:08:45.950> in<00:08:46.430> in<00:08:46.760> the 00:08:47.760 --> 00:08:47.770 align:start position:0% collateralized in in the 00:08:47.770 --> 00:08:50.100 align:start position:0% collateralized in in the and<00:08:48.400> then<00:08:48.940> there's<00:08:49.150> a<00:08:49.210> stable<00:08:49.570> point<00:08:49.690> market 00:08:50.100 --> 00:08:50.110 align:start position:0% and then there's a stable point market 00:08:50.110 --> 00:08:52.860 align:start position:0% and then there's a stable point market which<00:08:50.950> clears<00:08:51.250> by<00:08:51.520> setting<00:08:51.880> the<00:08:51.970> demand<00:08:52.300> with 00:08:52.860 --> 00:08:52.870 align:start position:0% which clears by setting the demand with 00:08:52.870 --> 00:08:55.170 align:start position:0% which clears by setting the demand with the<00:08:52.900> supply<00:08:53.320> in<00:08:53.710> the<00:08:53.890> target<00:08:54.220> terms<00:08:54.430> in<00:08:55.030> this 00:08:55.170 --> 00:08:55.180 align:start position:0% the supply in the target terms in this 00:08:55.180 --> 00:08:57.420 align:start position:0% the supply in the target terms in this case<00:08:55.390> a<00:08:55.630> simple<00:08:55.780> list<00:08:56.110> of<00:08:56.410> dollars<00:08:56.770> and<00:08:57.220> this 00:08:57.420 --> 00:08:57.430 align:start position:0% case a simple list of dollars and this 00:08:57.430 --> 00:08:59.730 align:start position:0% case a simple list of dollars and this is<00:08:57.580> similar<00:08:57.760> in<00:08:58.390> concept<00:08:58.450> of<00:08:59.110> how<00:08:59.200> clear<00:08:59.500> is 00:08:59.730 --> 00:08:59.740 align:start position:0% is similar in concept of how clear is 00:08:59.740 --> 00:09:03.540 align:start position:0% is similar in concept of how clear is not<00:08:59.950> yes<00:09:00.310> well<00:09:01.470> and<00:09:02.470> so<00:09:02.770> in<00:09:02.860> our<00:09:02.980> paper<00:09:03.160> we're 00:09:03.540 --> 00:09:03.550 align:start position:0% not yes well and so in our paper we're 00:09:03.550 --> 00:09:05.960 align:start position:0% not yes well and so in our paper we're focusing<00:09:03.940> on<00:09:04.060> understanding<00:09:04.630> how 00:09:05.960 --> 00:09:05.970 align:start position:0% focusing on understanding how 00:09:05.970 --> 00:09:10.070 align:start position:0% focusing on understanding how speculators<00:09:06.970> make<00:09:07.210> to<00:09:07.330> see<00:09:08.280> so<00:09:09.280> in<00:09:09.640> our<00:09:09.760> model 00:09:10.070 --> 00:09:10.080 align:start position:0% speculators make to see so in our model 00:09:10.080 --> 00:09:13.380 align:start position:0% speculators make to see so in our model the<00:09:11.080> speculators<00:09:11.530> decide<00:09:12.010> how<00:09:12.550> to<00:09:12.610> change<00:09:12.940> the 00:09:13.380 --> 00:09:13.390 align:start position:0% the speculators decide how to change the 00:09:13.390 --> 00:09:15.930 align:start position:0% the speculators decide how to change the stable<00:09:13.720> point<00:09:13.870> supply<00:09:14.260> to<00:09:15.130> maximize<00:09:15.610> their 00:09:15.930 --> 00:09:15.940 align:start position:0% stable point supply to maximize their 00:09:15.940 --> 00:09:18.570 align:start position:0% stable point supply to maximize their next<00:09:16.480> period<00:09:16.750> expected<00:09:17.200> returns<00:09:17.500> subject<00:09:18.310> to 00:09:18.570 --> 00:09:18.580 align:start position:0% next period expected returns subject to 00:09:18.580 --> 00:09:22.110 align:start position:0% next period expected returns subject to some<00:09:18.760> constraints<00:09:19.290> so<00:09:20.290> this<00:09:20.620> is<00:09:20.820> some<00:09:21.820> idea 00:09:22.110 --> 00:09:22.120 align:start position:0% some constraints so this is some idea 00:09:22.120 --> 00:09:24.060 align:start position:0% some constraints so this is some idea idea<00:09:22.540> of<00:09:22.810> honest<00:09:23.170> behavior<00:09:23.590> in<00:09:23.710> these<00:09:23.830> systems 00:09:24.060 --> 00:09:24.070 align:start position:0% idea of honest behavior in these systems 00:09:24.070 --> 00:09:26.280 align:start position:0% idea of honest behavior in these systems of<00:09:24.430> these<00:09:24.580> speculators<00:09:25.090> because<00:09:25.810> assistant 00:09:26.280 --> 00:09:26.290 align:start position:0% of these speculators because assistant 00:09:26.290 --> 00:09:27.960 align:start position:0% of these speculators because assistant designers<00:09:26.740> really<00:09:27.370> intend<00:09:27.670> what<00:09:27.760> are<00:09:27.880> the 00:09:27.960 --> 00:09:27.970 align:start position:0% designers really intend what are the 00:09:27.970 --> 00:09:29.940 align:start position:0% designers really intend what are the systems<00:09:28.360> to<00:09:28.450> be<00:09:28.540> maintained<00:09:28.990> this<00:09:29.560> idea<00:09:29.890> of 00:09:29.940 --> 00:09:29.950 align:start position:0% systems to be maintained this idea of 00:09:29.950 --> 00:09:31.860 align:start position:0% systems to be maintained this idea of arbitrage<00:09:30.400> if<00:09:30.910> the<00:09:31.060> price<00:09:31.270> of<00:09:31.300> the<00:09:31.540> stable 00:09:31.860 --> 00:09:31.870 align:start position:0% arbitrage if the price of the stable 00:09:31.870 --> 00:09:33.390 align:start position:0% arbitrage if the price of the stable point<00:09:32.050> is<00:09:32.140> trading<00:09:32.440> too<00:09:32.590> high<00:09:32.770> or<00:09:33.010> too<00:09:33.040> low 00:09:33.390 --> 00:09:33.400 align:start position:0% point is trading too high or too low 00:09:33.400 --> 00:09:36.240 align:start position:0% point is trading too high or too low then<00:09:33.970> there's<00:09:34.360> some<00:09:34.600> idea<00:09:34.990> of<00:09:35.290> incentives<00:09:35.980> for 00:09:36.240 --> 00:09:36.250 align:start position:0% then there's some idea of incentives for 00:09:36.250 --> 00:09:37.920 align:start position:0% then there's some idea of incentives for these<00:09:36.400> stable<00:09:37.270> point<00:09:37.450> issuers<00:09:37.810> and 00:09:37.920 --> 00:09:37.930 align:start position:0% these stable point issuers and 00:09:37.930 --> 00:09:40.170 align:start position:0% these stable point issuers and speculators<00:09:38.620> to<00:09:38.950> change<00:09:39.430> the<00:09:39.580> supply<00:09:39.820> to 00:09:40.170 --> 00:09:40.180 align:start position:0% speculators to change the supply to 00:09:40.180 --> 00:09:41.870 align:start position:0% speculators to change the supply to bring<00:09:40.330> them<00:09:40.480> back<00:09:40.810> in<00:09:40.990> line<00:09:41.110> with<00:09:41.350> the<00:09:41.470> target 00:09:41.870 --> 00:09:41.880 align:start position:0% bring them back in line with the target 00:09:41.880 --> 00:09:44.220 align:start position:0% bring them back in line with the target but<00:09:42.880> as<00:09:43.060> we<00:09:43.270> mentioned<00:09:43.570> earlier<00:09:43.660> the<00:09:43.990> stock 00:09:44.220 --> 00:09:44.230 align:start position:0% but as we mentioned earlier the stock 00:09:44.230 --> 00:09:45.960 align:start position:0% but as we mentioned earlier the stock should<00:09:44.380> really<00:09:44.680> to<00:09:44.860> arbitrage<00:09:45.310> that<00:09:45.340> depends 00:09:45.960 --> 00:09:45.970 align:start position:0% should really to arbitrage that depends 00:09:45.970 --> 00:09:48.150 align:start position:0% should really to arbitrage that depends on<00:09:46.060> some<00:09:46.240> assumptions<00:09:46.510> the<00:09:47.230> systems<00:09:47.650> continue 00:09:48.150 --> 00:09:48.160 align:start position:0% on some assumptions the systems continue 00:09:48.160 --> 00:09:50.910 align:start position:0% on some assumptions the systems continue performance<00:09:48.780> so<00:09:49.780> these<00:09:49.900> speculators<00:09:50.380> are 00:09:50.910 --> 00:09:50.920 align:start position:0% performance so these speculators are 00:09:50.920 --> 00:09:53.490 align:start position:0% performance so these speculators are then<00:09:51.180> that<00:09:52.180> they're<00:09:52.450> subject<00:09:52.840> first<00:09:53.200> to<00:09:53.470> a 00:09:53.490 --> 00:09:53.500 align:start position:0% then that they're subject first to a 00:09:53.500 --> 00:09:55.410 align:start position:0% then that they're subject first to a liquidation<00:09:53.920> constraint<00:09:54.490> and<00:09:55.150> this<00:09:55.330> is 00:09:55.410 --> 00:09:55.420 align:start position:0% liquidation constraint and this is 00:09:55.420 --> 00:09:57.330 align:start position:0% liquidation constraint and this is inherent<00:09:55.810> to<00:09:55.840> the<00:09:55.960> protocol<00:09:56.440> it<00:09:56.740> says<00:09:57.070> how 00:09:57.330 --> 00:09:57.340 align:start position:0% inherent to the protocol it says how 00:09:57.340 --> 00:09:59.160 align:start position:0% inherent to the protocol it says how over<00:09:57.850> collateralized<00:09:58.420> their<00:09:58.600> positions<00:09:59.020> have 00:09:59.160 --> 00:09:59.170 align:start position:0% over collateralized their positions have 00:09:59.170 --> 00:10:01.290 align:start position:0% over collateralized their positions have to<00:09:59.320> be<00:09:59.440> and<00:09:59.950> then<00:10:00.490> in<00:10:00.640> our<00:10:00.730> model<00:10:00.790> they're<00:10:01.180> also 00:10:01.290 --> 00:10:01.300 align:start position:0% to be and then in our model they're also 00:10:01.300 --> 00:10:03.570 align:start position:0% to be and then in our model they're also subject<00:10:01.780> to<00:10:01.870> a<00:10:01.990> risk<00:10:02.320> constraint<00:10:02.770> which<00:10:03.310> is 00:10:03.570 --> 00:10:03.580 align:start position:0% subject to a risk constraint which is 00:10:03.580 --> 00:10:05.460 align:start position:0% subject to a risk constraint which is self<00:10:04.000> imposed<00:10:04.270> by<00:10:04.540> the<00:10:04.600> speculator<00:10:05.140> it's 00:10:05.460 --> 00:10:05.470 align:start position:0% self imposed by the speculator it's 00:10:05.470 --> 00:10:07.980 align:start position:0% self imposed by the speculator it's sense<00:10:06.010> how<00:10:06.460> much<00:10:06.640> to<00:10:06.820> the<00:10:06.880> speculator<00:10:07.360> want<00:10:07.810> to 00:10:07.980 --> 00:10:07.990 align:start position:0% sense how much to the speculator want to 00:10:07.990 --> 00:10:10.980 align:start position:0% sense how much to the speculator want to avoid<00:10:08.230> liquidation<00:10:09.270> so<00:10:10.270> some<00:10:10.420> examples<00:10:10.870> of 00:10:10.980 --> 00:10:10.990 align:start position:0% avoid liquidation so some examples of 00:10:10.990 --> 00:10:12.420 align:start position:0% avoid liquidation so some examples of how<00:10:11.200> to<00:10:11.260> formulate<00:10:11.530> this<00:10:11.830> might<00:10:12.040> be 00:10:12.420 --> 00:10:12.430 align:start position:0% how to formulate this might be 00:10:12.430 --> 00:10:14.700 align:start position:0% how to formulate this might be risk<00:10:13.089> constraint<00:10:13.570> which<00:10:14.140> is<00:10:14.170> consistent<00:10:14.680> with 00:10:14.700 --> 00:10:14.710 align:start position:0% risk constraint which is consistent with 00:10:14.710 --> 00:10:16.769 align:start position:0% risk constraint which is consistent with idea<00:10:15.100> like<00:10:15.220> a<00:10:15.339> margin<00:10:15.670> of<00:10:15.760> safety<00:10:15.910> you<00:10:16.540> want<00:10:16.630> to 00:10:16.769 --> 00:10:16.779 align:start position:0% idea like a margin of safety you want to 00:10:16.779 --> 00:10:18.360 align:start position:0% idea like a margin of safety you want to avoid<00:10:16.960> liquidations<00:10:17.649> with<00:10:17.980> some<00:10:18.160> probability 00:10:18.360 --> 00:10:18.370 align:start position:0% avoid liquidations with some probability 00:10:18.370 --> 00:10:20.910 align:start position:0% avoid liquidations with some probability but<00:10:19.270> importantly<00:10:19.750> we<00:10:20.170> can<00:10:20.320> consider<00:10:20.620> a<00:10:20.710> number 00:10:20.910 --> 00:10:20.920 align:start position:0% but importantly we can consider a number 00:10:20.920 --> 00:10:24.900 align:start position:0% but importantly we can consider a number of<00:10:21.070> other<00:10:21.250> formulations<00:10:21.910> in<00:10:22.060> our<00:10:22.149> law<00:10:23.700> so<00:10:24.700> from 00:10:24.900 --> 00:10:24.910 align:start position:0% of other formulations in our law so from 00:10:24.910 --> 00:10:27.990 align:start position:0% of other formulations in our law so from our<00:10:25.060> model<00:10:25.270> were<00:10:25.660> able<00:10:25.990> to<00:10:26.399> back<00:10:27.399> out<00:10:27.610> some 00:10:27.990 --> 00:10:28.000 align:start position:0% our model were able to back out some 00:10:28.000 --> 00:10:29.880 align:start position:0% our model were able to back out some analytic<00:10:28.690> laws<00:10:28.839> also<00:10:29.080> help<00:10:29.380> us<00:10:29.529> understand 00:10:29.880 --> 00:10:29.890 align:start position:0% analytic laws also help us understand 00:10:29.890 --> 00:10:32.460 align:start position:0% analytic laws also help us understand these<00:10:30.010> systems<00:10:30.430> so<00:10:31.089> the<00:10:31.660> first<00:10:31.899> is<00:10:32.260> that 00:10:32.460 --> 00:10:32.470 align:start position:0% these systems so the first is that 00:10:32.470 --> 00:10:34.380 align:start position:0% these systems so the first is that there's<00:10:32.950> a<00:10:33.010> bound<00:10:33.279> to<00:10:33.760> the<00:10:33.880> speculators 00:10:34.380 --> 00:10:34.390 align:start position:0% there's a bound to the speculators 00:10:34.390 --> 00:10:36.630 align:start position:0% there's a bound to the speculators ability<00:10:34.810> to<00:10:34.990> maintain<00:10:35.140> the<00:10:35.470> market<00:10:35.830> it<00:10:36.399> looks 00:10:36.630 --> 00:10:36.640 align:start position:0% ability to maintain the market it looks 00:10:36.640 --> 00:10:41.310 align:start position:0% ability to maintain the market it looks something<00:10:37.180> like<00:10:39.120> it's<00:10:40.120> not<00:10:40.270> really<00:10:40.660> important 00:10:41.310 --> 00:10:41.320 align:start position:0% something like it's not really important 00:10:41.320 --> 00:10:44.579 align:start position:0% something like it's not really important to<00:10:41.500> rest<00:10:41.649> on<00:10:42.450> the<00:10:43.450> second<00:10:43.810> result<00:10:44.050> is<00:10:44.440> that 00:10:44.579 --> 00:10:44.589 align:start position:0% to rest on the second result is that 00:10:44.589 --> 00:10:47.190 align:start position:0% to rest on the second result is that speculators<00:10:45.459> case<00:10:45.760> limits<00:10:46.209> on<00:10:46.660> how<00:10:46.899> quickly 00:10:47.190 --> 00:10:47.200 align:start position:0% speculators case limits on how quickly 00:10:47.200 --> 00:10:49.050 align:start position:0% speculators case limits on how quickly they<00:10:47.500> can<00:10:47.649> reduce<00:10:47.860> coverage<00:10:48.130> even<00:10:48.850> if<00:10:48.940> they're 00:10:49.050 --> 00:10:49.060 align:start position:0% they can reduce coverage even if they're 00:10:49.060 --> 00:10:50.790 align:start position:0% they can reduce coverage even if they're bringing<00:10:49.330> in<00:10:49.450> capital<00:10:49.930> for<00:10:50.200> outside<00:10:50.589> of<00:10:50.680> the 00:10:50.790 --> 00:10:50.800 align:start position:0% bringing in capital for outside of the 00:10:50.800 --> 00:10:52.680 align:start position:0% bringing in capital for outside of the system<00:10:51.130> and<00:10:51.580> this<00:10:52.029> leads<00:10:52.240> to<00:10:52.360> what<00:10:52.570> we<00:10:52.600> call 00:10:52.680 --> 00:10:52.690 align:start position:0% system and this leads to what we call 00:10:52.690 --> 00:10:55.800 align:start position:0% system and this leads to what we call deleveraging<00:10:53.589> spirals<00:10:54.459> where<00:10:55.209> a<00:10:55.240> speculator 00:10:55.800 --> 00:10:55.810 align:start position:0% deleveraging spirals where a speculator 00:10:55.810 --> 00:10:57.810 align:start position:0% deleveraging spirals where a speculator can<00:10:56.020> end<00:10:56.200> up<00:10:56.350> having<00:10:56.800> to<00:10:57.010> research<00:10:57.279> a<00:10:57.399> stable 00:10:57.810 --> 00:10:57.820 align:start position:0% can end up having to research a stable 00:10:57.820 --> 00:11:00.300 align:start position:0% can end up having to research a stable point<00:10:57.970> at<00:10:58.570> an<00:10:58.990> increasing<00:10:59.470> price<00:10:59.709> as 00:11:00.300 --> 00:11:00.310 align:start position:0% point at an increasing price as 00:11:00.310 --> 00:11:02.610 align:start position:0% point at an increasing price as liquidity<00:11:00.670> dries<00:11:01.060> up<00:11:01.330> in<00:11:01.450> the<00:11:01.510> market<00:11:01.810> so 00:11:02.610 --> 00:11:02.620 align:start position:0% liquidity dries up in the market so 00:11:02.620 --> 00:11:04.440 align:start position:0% liquidity dries up in the market so let's<00:11:02.950> look<00:11:03.190> through<00:11:03.459> intuitively<00:11:04.060> how<00:11:04.270> this 00:11:04.440 --> 00:11:04.450 align:start position:0% let's look through intuitively how this 00:11:04.450 --> 00:11:07.230 align:start position:0% let's look through intuitively how this sort<00:11:05.170> of<00:11:05.230> works<00:11:05.440> so<00:11:06.190> here<00:11:06.430> we're<00:11:06.880> looking<00:11:06.910> at 00:11:07.230 --> 00:11:07.240 align:start position:0% sort of works so here we're looking at 00:11:07.240 --> 00:11:09.030 align:start position:0% sort of works so here we're looking at to<00:11:07.480> measure<00:11:07.690> the<00:11:07.959> price<00:11:08.230> of<00:11:08.440> the<00:11:08.529> stable<00:11:08.860> point 00:11:09.030 --> 00:11:09.040 align:start position:0% to measure the price of the stable point 00:11:09.040 --> 00:11:11.460 align:start position:0% to measure the price of the stable point so<00:11:09.760> measures<00:11:10.120> of<00:11:10.330> demand<00:11:10.720> and<00:11:10.899> supply<00:11:10.959> in<00:11:11.260> the 00:11:11.460 --> 00:11:11.470 align:start position:0% so measures of demand and supply in the 00:11:11.470 --> 00:11:13.530 align:start position:0% so measures of demand and supply in the stable<00:11:11.770> point<00:11:11.920> market<00:11:12.339> and<00:11:12.850> on<00:11:13.000> the<00:11:13.029> far<00:11:13.300> side 00:11:13.530 --> 00:11:13.540 align:start position:0% stable point market and on the far side 00:11:13.540 --> 00:11:16.230 align:start position:0% stable point market and on the far side the<00:11:14.200> collateral<00:11:14.649> in<00:11:14.709> the<00:11:14.800> system<00:11:15.130> and<00:11:15.580> so<00:11:15.940> now 00:11:16.230 --> 00:11:16.240 align:start position:0% the collateral in the system and so now 00:11:16.240 --> 00:11:18.900 align:start position:0% the collateral in the system and so now if<00:11:16.570> there's<00:11:16.779> a<00:11:16.870> liquidation<00:11:17.790> collateral<00:11:18.790> is 00:11:18.900 --> 00:11:18.910 align:start position:0% if there's a liquidation collateral is 00:11:18.910 --> 00:11:21.480 align:start position:0% if there's a liquidation collateral is used<00:11:19.180> to<00:11:19.510> reduce<00:11:19.660> the<00:11:20.020> supply<00:11:20.170> by<00:11:21.130> buying<00:11:21.370> back 00:11:21.480 --> 00:11:21.490 align:start position:0% used to reduce the supply by buying back 00:11:21.490 --> 00:11:24.060 align:start position:0% used to reduce the supply by buying back stable<00:11:22.029> coins<00:11:22.240> which<00:11:23.200> leads<00:11:23.440> to<00:11:23.560> an<00:11:23.620> imbalance 00:11:24.060 --> 00:11:24.070 align:start position:0% stable coins which leads to an imbalance 00:11:24.070 --> 00:11:27.420 align:start position:0% stable coins which leads to an imbalance between<00:11:24.160> supply<00:11:24.550> and<00:11:24.910> demand<00:11:25.360> and<00:11:25.800> to<00:11:26.800> make<00:11:27.279> up 00:11:27.420 --> 00:11:27.430 align:start position:0% between supply and demand and to make up 00:11:27.430 --> 00:11:29.460 align:start position:0% between supply and demand and to make up for<00:11:27.610> that<00:11:27.640> that<00:11:27.940> leads<00:11:28.150> to<00:11:28.390> increase<00:11:29.020> in<00:11:29.050> price 00:11:29.460 --> 00:11:29.470 align:start position:0% for that that leads to increase in price 00:11:29.470 --> 00:11:32.340 align:start position:0% for that that leads to increase in price of<00:11:29.500> a<00:11:29.740> stable<00:11:30.070> coin<00:11:30.310> and<00:11:30.580> a<00:11:31.270> decrease<00:11:31.660> in<00:11:31.690> the 00:11:32.340 --> 00:11:32.350 align:start position:0% of a stable coin and a decrease in the 00:11:32.350 --> 00:11:33.060 align:start position:0% of a stable coin and a decrease in the demand 00:11:33.060 --> 00:11:33.070 align:start position:0% demand 00:11:33.070 --> 00:11:35.040 align:start position:0% demand thanks<00:11:33.250> back<00:11:33.430> your<00:11:33.610> wine<00:11:33.790> but<00:11:34.600> now<00:11:34.720> if<00:11:34.900> we're 00:11:35.040 --> 00:11:35.050 align:start position:0% thanks back your wine but now if we're 00:11:35.050 --> 00:11:37.320 align:start position:0% thanks back your wine but now if we're looking<00:11:35.140> at<00:11:35.440> starting<00:11:36.430> at<00:11:36.640> this<00:11:36.820> state<00:11:37.090> if 00:11:37.320 --> 00:11:37.330 align:start position:0% looking at starting at this state if 00:11:37.330 --> 00:11:39.170 align:start position:0% looking at starting at this state if there's<00:11:37.570> another<00:11:37.810> wave<00:11:38.080> of<00:11:38.110> liquidations 00:11:39.170 --> 00:11:39.180 align:start position:0% there's another wave of liquidations 00:11:39.180 --> 00:11:41.910 align:start position:0% there's another wave of liquidations because<00:11:40.180> the<00:11:40.330> price<00:11:40.510> is<00:11:40.660> higher<00:11:40.840> there's<00:11:41.770> less 00:11:41.910 --> 00:11:41.920 align:start position:0% because the price is higher there's less 00:11:41.920 --> 00:11:43.590 align:start position:0% because the price is higher there's less liquidity<00:11:42.100> in<00:11:42.430> the<00:11:42.460> market<00:11:42.850> the<00:11:43.330> more 00:11:43.590 --> 00:11:43.600 align:start position:0% liquidity in the market the more 00:11:43.600 --> 00:11:45.300 align:start position:0% liquidity in the market the more collateral<00:11:43.900> needs<00:11:44.260> to<00:11:44.380> be<00:11:44.500> used<00:11:44.740> to<00:11:44.920> buy<00:11:45.070> back 00:11:45.300 --> 00:11:45.310 align:start position:0% collateral needs to be used to buy back 00:11:45.310 --> 00:11:47.970 align:start position:0% collateral needs to be used to buy back the<00:11:45.760> same<00:11:45.940> amount<00:11:46.210> of<00:11:46.270> supply<00:11:46.600> to<00:11:47.140> its 00:11:47.970 --> 00:11:47.980 align:start position:0% the same amount of supply to its 00:11:47.980 --> 00:11:50.670 align:start position:0% the same amount of supply to its epicenter<00:11:48.490> facts<00:11:48.820> and<00:11:49.210> so<00:11:49.660> you<00:11:50.140> have<00:11:50.320> sort<00:11:50.560> of 00:11:50.670 --> 00:11:50.680 align:start position:0% epicenter facts and so you have sort of 00:11:50.680 --> 00:11:52.760 align:start position:0% epicenter facts and so you have sort of a<00:11:50.950> potential<00:11:51.430> apple<00:11:51.640> amplification<00:11:52.420> effect 00:11:52.760 --> 00:11:52.770 align:start position:0% a potential apple amplification effect 00:11:52.770 --> 00:11:55.650 align:start position:0% a potential apple amplification effect to<00:11:53.770> how<00:11:53.980> much<00:11:54.130> collateral<00:11:54.400> and<00:11:55.030> how<00:11:55.390> quickly 00:11:55.650 --> 00:11:55.660 align:start position:0% to how much collateral and how quickly 00:11:55.660 --> 00:11:59.940 align:start position:0% to how much collateral and how quickly it's<00:11:56.200> used<00:11:57.660> our<00:11:58.660> third<00:11:58.930> analytical<00:11:59.440> result<00:11:59.770> it 00:11:59.940 --> 00:11:59.950 align:start position:0% it's used our third analytical result it 00:11:59.950 --> 00:12:01.950 align:start position:0% it's used our third analytical result it describes<00:12:00.370> when<00:12:01.030> these<00:12:01.180> systems<00:12:01.600> are<00:12:01.750> stable 00:12:01.950 --> 00:12:01.960 align:start position:0% describes when these systems are stable 00:12:01.960 --> 00:12:05.730 align:start position:0% describes when these systems are stable versus<00:12:02.590> unstable<00:12:03.930> if<00:12:04.930> we<00:12:05.080> had<00:12:05.200> a<00:12:05.230> couple<00:12:05.470> more 00:12:05.730 --> 00:12:05.740 align:start position:0% versus unstable if we had a couple more 00:12:05.740 --> 00:12:07.920 align:start position:0% versus unstable if we had a couple more assumptions<00:12:06.460> we<00:12:06.640> contracted<00:12:06.970> we<00:12:07.270> show<00:12:07.480> that 00:12:07.920 --> 00:12:07.930 align:start position:0% assumptions we contracted we show that 00:12:07.930 --> 00:12:10.530 align:start position:0% assumptions we contracted we show that if<00:12:08.890> the<00:12:09.040> leverage<00:12:09.520> constraints<00:12:10.150> for<00:12:10.390> these 00:12:10.530 --> 00:12:10.540 align:start position:0% if the leverage constraints for these 00:12:10.540 --> 00:12:13.800 align:start position:0% if the leverage constraints for these speculators<00:12:11.050> is<00:12:11.320> never<00:12:11.920> acted<00:12:12.490> then<00:12:13.420> the 00:12:13.800 --> 00:12:13.810 align:start position:0% speculators is never acted then the 00:12:13.810 --> 00:12:16.080 align:start position:0% speculators is never acted then the system<00:12:14.140> converges<00:12:14.620> to<00:12:14.830> a<00:12:14.860> steady-state<00:12:15.370> where 00:12:16.080 --> 00:12:16.090 align:start position:0% system converges to a steady-state where 00:12:16.090 --> 00:12:18.030 align:start position:0% system converges to a steady-state where we<00:12:16.180> have<00:12:16.330> a<00:12:16.360> stable<00:12:16.750> price<00:12:17.080> and<00:12:17.470> zero<00:12:17.740> variance 00:12:18.030 --> 00:12:18.040 align:start position:0% we have a stable price and zero variance 00:12:18.040 --> 00:12:21.180 align:start position:0% we have a stable price and zero variance and<00:12:18.810> important<00:12:19.810> observation<00:12:20.350> here<00:12:20.590> is<00:12:20.830> that 00:12:21.180 --> 00:12:21.190 align:start position:0% and important observation here is that 00:12:21.190 --> 00:12:23.370 align:start position:0% and important observation here is that this<00:12:21.790> steady<00:12:22.240> state<00:12:22.480> may<00:12:22.750> not<00:12:22.930> have<00:12:23.080> a<00:12:23.110> price 00:12:23.370 --> 00:12:23.380 align:start position:0% this steady state may not have a price 00:12:23.380 --> 00:12:26.100 align:start position:0% this steady state may not have a price of<00:12:23.410> $1<00:12:24.100> maybe<00:12:24.490> below<00:12:24.730> put<00:12:25.570> there<00:12:25.750> potentially 00:12:26.100 --> 00:12:26.110 align:start position:0% of $1 maybe below put there potentially 00:12:26.110 --> 00:12:28.950 align:start position:0% of $1 maybe below put there potentially be<00:12:26.230> above<00:12:26.470> and<00:12:27.090> then<00:12:28.090> sort<00:12:28.420> of<00:12:28.450> outside<00:12:28.930> of 00:12:28.950 --> 00:12:28.960 align:start position:0% be above and then sort of outside of 00:12:28.960 --> 00:12:30.630 align:start position:0% be above and then sort of outside of this<00:12:29.230> stable<00:12:29.680> or<00:12:29.770> each<00:12:29.860> other<00:12:30.070> when<00:12:30.430> this 00:12:30.630 --> 00:12:30.640 align:start position:0% this stable or each other when this 00:12:30.640 --> 00:12:34.410 align:start position:0% this stable or each other when this constraint<00:12:31.230> activated<00:12:32.230> then<00:12:33.270> we<00:12:34.270> conjecture 00:12:34.410 --> 00:12:34.420 align:start position:0% constraint activated then we conjecture 00:12:34.420 --> 00:12:36.570 align:start position:0% constraint activated then we conjecture the<00:12:34.810> volatility<00:12:35.350> is<00:12:35.470> bounded<00:12:35.920> above<00:12:36.100> zero 00:12:36.570 --> 00:12:36.580 align:start position:0% the volatility is bounded above zero 00:12:36.580 --> 00:12:38.910 align:start position:0% the volatility is bounded above zero with<00:12:37.000> high<00:12:37.120> probability<00:12:37.330> and<00:12:38.080> the<00:12:38.620> reason 00:12:38.910 --> 00:12:38.920 align:start position:0% with high probability and the reason 00:12:38.920 --> 00:12:40.410 align:start position:0% with high probability and the reason here<00:12:39.130> is<00:12:39.220> that<00:12:39.430> sort<00:12:39.700> of<00:12:39.760> when<00:12:39.940> you're<00:12:40.060> outside 00:12:40.410 --> 00:12:40.420 align:start position:0% here is that sort of when you're outside 00:12:40.420 --> 00:12:42.720 align:start position:0% here is that sort of when you're outside of<00:12:40.570> this<00:12:40.660> this<00:12:41.470> region<00:12:41.830> you're<00:12:42.340> more<00:12:42.490> likely 00:12:42.720 --> 00:12:42.730 align:start position:0% of this this region you're more likely 00:12:42.730 --> 00:12:44.220 align:start position:0% of this this region you're more likely to<00:12:42.910> remain<00:12:43.210> outside<00:12:43.600> because<00:12:44.020> of<00:12:44.050> this 00:12:44.220 --> 00:12:44.230 align:start position:0% to remain outside because of this 00:12:44.230 --> 00:12:46.560 align:start position:0% to remain outside because of this feedback<00:12:44.650> effect<00:12:45.010> which<00:12:45.490> leads<00:12:45.760> to<00:12:45.910> something 00:12:46.560 --> 00:12:46.570 align:start position:0% feedback effect which leads to something 00:12:46.570 --> 00:12:47.970 align:start position:0% feedback effect which leads to something like<00:12:46.780> a<00:12:46.810> kink<00:12:47.110> and<00:12:47.320> the<00:12:47.470> probability 00:12:47.970 --> 00:12:47.980 align:start position:0% like a kink and the probability 00:12:47.980 --> 00:12:51.810 align:start position:0% like a kink and the probability distribution<00:12:48.580> at<00:12:48.850> this<00:12:49.060> about<00:12:49.270> G<00:12:49.830> and<00:12:50.830> so<00:12:51.730> we 00:12:51.810 --> 00:12:51.820 align:start position:0% distribution at this about G and so we 00:12:51.820 --> 00:12:53.190 align:start position:0% distribution at this about G and so we can<00:12:51.940> actually<00:12:52.210> see<00:12:52.360> some<00:12:52.600> of<00:12:52.630> these<00:12:52.780> effects 00:12:53.190 --> 00:12:53.200 align:start position:0% can actually see some of these effects 00:12:53.200 --> 00:12:56.400 align:start position:0% can actually see some of these effects in<00:12:53.350> real<00:12:53.800> data<00:12:54.810> this<00:12:55.810> is<00:12:55.960> just<00:12:56.110> a<00:12:56.200> preliminary 00:12:56.400 --> 00:12:56.410 align:start position:0% in real data this is just a preliminary 00:12:56.410 --> 00:13:00.270 align:start position:0% in real data this is just a preliminary analysis<00:12:57.130> of<00:12:57.250> this<00:12:57.780> here<00:12:58.780> on<00:12:59.650> this<00:12:59.800> side<00:13:00.010> here 00:13:00.270 --> 00:13:00.280 align:start position:0% analysis of this here on this side here 00:13:00.280 --> 00:13:01.780 align:start position:0% analysis of this here on this side here we're<00:13:00.730> seeing 00:13:01.780 --> 00:13:01.790 align:start position:0% we're seeing 00:13:01.790 --> 00:13:03.789 align:start position:0% we're seeing and<00:13:01.970> either<00:13:02.239> decline<00:13:02.689> in<00:13:02.989> December<00:13:03.679> of<00:13:03.769> last 00:13:03.789 --> 00:13:03.799 align:start position:0% and either decline in December of last 00:13:03.799 --> 00:13:07.509 align:start position:0% and either decline in December of last year<00:13:04.689> leading<00:13:05.689> to<00:13:05.839> a<00:13:06.049> large<00:13:06.499> reduction<00:13:07.069> of<00:13:07.189> the 00:13:07.509 --> 00:13:07.519 align:start position:0% year leading to a large reduction of the 00:13:07.519 --> 00:13:09.369 align:start position:0% year leading to a large reduction of the supply<00:13:07.819> of<00:13:07.850> dye<00:13:08.149> and<00:13:08.419> an<00:13:08.959> accompanying 00:13:09.369 --> 00:13:09.379 align:start position:0% supply of dye and an accompanying 00:13:09.379 --> 00:13:10.809 align:start position:0% supply of dye and an accompanying increases<00:13:09.980> in<00:13:10.069> the<00:13:10.160> price<00:13:10.279> of<00:13:10.399> dumping 00:13:10.809 --> 00:13:10.819 align:start position:0% increases in the price of dumping 00:13:10.819 --> 00:13:12.819 align:start position:0% increases in the price of dumping consistent<00:13:11.600> with<00:13:11.839> potentially<00:13:12.499> an<00:13:12.589> early 00:13:12.819 --> 00:13:12.829 align:start position:0% consistent with potentially an early 00:13:12.829 --> 00:13:15.159 align:start position:0% consistent with potentially an early stage<00:13:13.040> of<00:13:13.189> a<00:13:13.309> deliverance<00:13:13.699> by<00:13:14.059> troll<00:13:14.299> and<00:13:14.989> so 00:13:15.159 --> 00:13:15.169 align:start position:0% stage of a deliverance by troll and so 00:13:15.169 --> 00:13:17.019 align:start position:0% stage of a deliverance by troll and so if<00:13:15.290> that<00:13:15.589> continued<00:13:16.220> for<00:13:16.279> a<00:13:16.459> while<00:13:16.609> we<00:13:16.850> might 00:13:17.019 --> 00:13:17.029 align:start position:0% if that continued for a while we might 00:13:17.029 --> 00:13:19.539 align:start position:0% if that continued for a while we might see<00:13:17.209> more<00:13:17.239> extreme<00:13:17.779> effects<00:13:18.079> after<00:13:18.410> that<00:13:18.589> and 00:13:19.539 --> 00:13:19.549 align:start position:0% see more extreme effects after that and 00:13:19.549 --> 00:13:21.819 align:start position:0% see more extreme effects after that and then<00:13:19.669> on<00:13:19.759> the<00:13:19.879> far<00:13:20.059> side<00:13:20.299> here<00:13:20.540> in<00:13:21.410> sort<00:13:21.769> of 00:13:21.819 --> 00:13:21.829 align:start position:0% then on the far side here in sort of 00:13:21.829 --> 00:13:24.609 align:start position:0% then on the far side here in sort of more<00:13:21.949> normal<00:13:22.160> times<00:13:22.549> for<00:13:22.879> diet<00:13:23.350> you<00:13:24.350> can<00:13:24.470> see 00:13:24.609 --> 00:13:24.619 align:start position:0% more normal times for diet you can see 00:13:24.619 --> 00:13:26.710 align:start position:0% more normal times for diet you can see that<00:13:24.829> the<00:13:24.980> price<00:13:25.369> the<00:13:26.059> certain<00:13:26.449> normal 00:13:26.710 --> 00:13:26.720 align:start position:0% that the price the certain normal 00:13:26.720 --> 00:13:29.409 align:start position:0% that the price the certain normal trading<00:13:26.989> price<00:13:27.199> of<00:13:27.350> diet<00:13:27.529> can<00:13:27.829> be<00:13:27.859> below<00:13:28.549> the 00:13:29.409 --> 00:13:29.419 align:start position:0% trading price of diet can be below the 00:13:29.419 --> 00:13:31.590 align:start position:0% trading price of diet can be below the $1<00:13:29.779> target<00:13:30.230> but<00:13:30.619> to<00:13:30.709> serve<00:13:30.859> in<00:13:31.009> line<00:13:31.189> with<00:13:31.429> our 00:13:31.590 --> 00:13:31.600 align:start position:0% $1 target but to serve in line with our 00:13:31.600 --> 00:13:34.539 align:start position:0% $1 target but to serve in line with our stable<00:13:32.600> original<00:13:32.959> results<00:13:33.319> and<00:13:33.589> sort<00:13:34.489> of 00:13:34.539 --> 00:13:34.549 align:start position:0% stable original results and sort of 00:13:34.549 --> 00:13:36.069 align:start position:0% stable original results and sort of effects<00:13:34.850> from<00:13:34.970> liquidations<00:13:35.600> can<00:13:35.869> cause 00:13:36.069 --> 00:13:36.079 align:start position:0% effects from liquidations can cause 00:13:36.079 --> 00:13:39.340 align:start position:0% effects from liquidations can cause spike<00:13:36.649> spike<00:13:37.639> increases<00:13:38.239> to<00:13:38.540> the<00:13:38.779> trading 00:13:39.340 --> 00:13:39.350 align:start position:0% spike spike increases to the trading 00:13:39.350 --> 00:13:43.509 align:start position:0% spike spike increases to the trading process<00:13:39.470> of<00:13:39.919> technical<00:13:41.619> our<00:13:42.619> system<00:13:43.100> lets<00:13:43.309> us 00:13:43.509 --> 00:13:43.519 align:start position:0% process of technical our system lets us 00:13:43.519 --> 00:13:45.639 align:start position:0% process of technical our system lets us our<00:13:44.269> model<00:13:44.540> also<00:13:44.779> lets<00:13:44.959> us<00:13:45.139> do<00:13:45.410> some 00:13:45.639 --> 00:13:45.649 align:start position:0% our model also lets us do some 00:13:45.649 --> 00:13:48.129 align:start position:0% our model also lets us do some simulations<00:13:46.309> so<00:13:46.759> in<00:13:46.850> these<00:13:46.939> simulations<00:13:47.569> we 00:13:48.129 --> 00:13:48.139 align:start position:0% simulations so in these simulations we 00:13:48.139 --> 00:13:49.629 align:start position:0% simulations so in these simulations we can<00:13:48.350> see<00:13:48.859> these<00:13:49.040> stable<00:13:49.429> and<00:13:49.549> unstable 00:13:49.629 --> 00:13:49.639 align:start position:0% can see these stable and unstable 00:13:49.639 --> 00:13:52.539 align:start position:0% can see these stable and unstable regions<00:13:50.329> as<00:13:50.480> well<00:13:50.509> we<00:13:51.199> can<00:13:51.350> also<00:13:51.379> look<00:13:51.739> at<00:13:51.919> the 00:13:52.539 --> 00:13:52.549 align:start position:0% regions as well we can also look at the 00:13:52.549 --> 00:13:54.220 align:start position:0% regions as well we can also look at the effects<00:13:53.269> of<00:13:53.389> different<00:13:53.540> speculator 00:13:54.220 --> 00:13:54.230 align:start position:0% effects of different speculator 00:13:54.230 --> 00:13:56.590 align:start position:0% effects of different speculator behaviour<00:13:55.179> volatility<00:13:56.179> and<00:13:56.359> sort<00:13:56.569> of 00:13:56.590 --> 00:13:56.600 align:start position:0% behaviour volatility and sort of 00:13:56.600 --> 00:13:59.049 align:start position:0% behaviour volatility and sort of survival<00:13:57.049> rates<00:13:57.259> of<00:13:57.410> the<00:13:57.499> system<00:13:57.859> I'll<00:13:58.819> leave 00:13:59.049 --> 00:13:59.059 align:start position:0% survival rates of the system I'll leave 00:13:59.059 --> 00:14:00.879 align:start position:0% survival rates of the system I'll leave that<00:13:59.089> to<00:13:59.449> sort<00:13:59.749> of<00:13:59.839> more<00:14:00.319> details<00:14:00.679> in<00:14:00.829> the 00:14:00.879 --> 00:14:00.889 align:start position:0% that to sort of more details in the 00:14:00.889 --> 00:14:04.299 align:start position:0% that to sort of more details in the paper<00:14:01.100> to<00:14:01.369> watch<00:14:01.549> check<00:14:01.730> it<00:14:01.850> out<00:14:03.309> another 00:14:04.299 --> 00:14:04.309 align:start position:0% paper to watch check it out another 00:14:04.309 --> 00:14:05.710 align:start position:0% paper to watch check it out another important<00:14:04.759> thing<00:14:04.790> from<00:14:05.029> our<00:14:05.179> results<00:14:05.600> is<00:14:05.689> that 00:14:05.710 --> 00:14:05.720 align:start position:0% important thing from our results is that 00:14:05.720 --> 00:14:08.679 align:start position:0% important thing from our results is that they<00:14:05.929> can<00:14:06.049> lead<00:14:06.230> to<00:14:06.410> new<00:14:06.589> attack<00:14:07.069> examples<00:14:07.689> so 00:14:08.679 --> 00:14:08.689 align:start position:0% they can lead to new attack examples so 00:14:08.689 --> 00:14:10.539 align:start position:0% they can lead to new attack examples so first<00:14:09.230> an<00:14:09.919> important<00:14:10.309> thing<00:14:10.369> is<00:14:10.519> that 00:14:10.539 --> 00:14:10.549 align:start position:0% first an important thing is that 00:14:10.549 --> 00:14:12.639 align:start position:0% first an important thing is that attacking<00:14:10.999> a<00:14:11.059> stable<00:14:11.389> one<00:14:11.600> is<00:14:12.109> a<00:14:12.169> different 00:14:12.639 --> 00:14:12.649 align:start position:0% attacking a stable one is a different 00:14:12.649 --> 00:14:17.199 align:start position:0% attacking a stable one is a different idea<00:14:12.889> from<00:14:13.160> a<00:14:13.220> traditional<00:14:15.699> the<00:14:16.699> focus<00:14:16.999> here 00:14:17.199 --> 00:14:17.209 align:start position:0% idea from a traditional the focus here 00:14:17.209 --> 00:14:18.879 align:start position:0% idea from a traditional the focus here is<00:14:17.299> not<00:14:17.329> on<00:14:17.539> breaking<00:14:18.230> the<00:14:18.259> willingness<00:14:18.679> of 00:14:18.879 --> 00:14:18.889 align:start position:0% is not on breaking the willingness of 00:14:18.889 --> 00:14:21.819 align:start position:0% is not on breaking the willingness of the<00:14:19.039> central<00:14:19.369> bank<00:14:19.579> to<00:14:20.059> maintain<00:14:21.049> a<00:14:21.079> peg<00:14:21.350> its 00:14:21.819 --> 00:14:21.829 align:start position:0% the central bank to maintain a peg its 00:14:21.829 --> 00:14:24.939 align:start position:0% the central bank to maintain a peg its instead<00:14:22.249> involving<00:14:22.879> manipulating<00:14:23.949> the 00:14:24.939 --> 00:14:24.949 align:start position:0% instead involving manipulating the 00:14:24.949 --> 00:14:26.470 align:start position:0% instead involving manipulating the interaction<00:14:25.429> of<00:14:25.519> a<00:14:25.579> number<00:14:25.819> of<00:14:25.910> speculators 00:14:26.470 --> 00:14:26.480 align:start position:0% interaction of a number of speculators 00:14:26.480 --> 00:14:29.109 align:start position:0% interaction of a number of speculators and<00:14:27.339> there<00:14:28.339> are<00:14:28.429> three<00:14:28.669> sort<00:14:28.850> of<00:14:28.879> attack 00:14:29.109 --> 00:14:29.119 align:start position:0% and there are three sort of attack 00:14:29.119 --> 00:14:30.789 align:start position:0% and there are three sort of attack primitives<00:14:29.600> that<00:14:29.689> allow<00:14:29.959> these<00:14:30.169> attacks<00:14:30.499> to 00:14:30.789 --> 00:14:30.799 align:start position:0% primitives that allow these attacks to 00:14:30.799 --> 00:14:32.859 align:start position:0% primitives that allow these attacks to happen<00:14:31.129> first<00:14:31.519> is<00:14:31.730> that<00:14:31.910> these<00:14:32.269> delivering 00:14:32.859 --> 00:14:32.869 align:start position:0% happen first is that these delivering 00:14:32.869 --> 00:14:35.559 align:start position:0% happen first is that these delivering spirals<00:14:33.379> can<00:14:34.309> lead<00:14:34.489> to<00:14:34.669> your<00:14:34.789> arbitrage<00:14:35.299> like 00:14:35.559 --> 00:14:35.569 align:start position:0% spirals can lead to your arbitrage like 00:14:35.569 --> 00:14:37.040 align:start position:0% spirals can lead to your arbitrage like trance<00:14:35.899> around 00:14:37.040 --> 00:14:37.050 align:start position:0% trance around 00:14:37.050 --> 00:14:40.199 align:start position:0% trance around these<00:14:38.050> to<00:14:38.290> be<00:14:38.440> supplemented<00:14:39.310> with<00:14:39.339> the<00:14:39.760> fact 00:14:40.199 --> 00:14:40.209 align:start position:0% these to be supplemented with the fact 00:14:40.209 --> 00:14:42.480 align:start position:0% these to be supplemented with the fact that<00:14:40.269> real<00:14:40.510> implementation<00:14:40.839> is<00:14:41.260> stable<00:14:41.560> at 00:14:42.480 --> 00:14:42.490 align:start position:0% that real implementation is stable at 00:14:42.490 --> 00:14:44.400 align:start position:0% that real implementation is stable at arbitrage<00:14:43.089> to<00:14:43.390> try<00:14:43.510> too<00:14:43.570> hard<00:14:43.660> automate<00:14:44.260> these 00:14:44.400 --> 00:14:44.410 align:start position:0% arbitrage to try too hard automate these 00:14:44.410 --> 00:14:47.430 align:start position:0% arbitrage to try too hard automate these regulations<00:14:45.010> and<00:14:45.880> then<00:14:46.000> third<00:14:46.209> miners<00:14:46.779> have 00:14:47.430 --> 00:14:47.440 align:start position:0% regulations and then third miners have 00:14:47.440 --> 00:14:49.560 align:start position:0% regulations and then third miners have ability<00:14:47.860> to<00:14:47.890> censor<00:14:48.339> reorder<00:14:48.910> transactions 00:14:49.560 --> 00:14:49.570 align:start position:0% ability to censor reorder transactions 00:14:49.570 --> 00:14:53.400 align:start position:0% ability to censor reorder transactions to<00:14:50.350> extract<00:14:50.649> problems<00:14:51.810> so<00:14:52.810> the<00:14:52.959> first<00:14:53.140> attack 00:14:53.400 --> 00:14:53.410 align:start position:0% to extract problems so the first attack 00:14:53.410 --> 00:14:55.680 align:start position:0% to extract problems so the first attack we<00:14:53.529> consider<00:14:53.890> if<00:14:54.850> there's<00:14:55.060> either<00:14:55.360> decline 00:14:55.680 --> 00:14:55.690 align:start position:0% we consider if there's either decline 00:14:55.690 --> 00:14:58.170 align:start position:0% we consider if there's either decline attacker<00:14:56.380> and<00:14:56.829> manipulate<00:14:57.279> the<00:14:57.399> market<00:14:57.730> to 00:14:58.170 --> 00:14:58.180 align:start position:0% attacker and manipulate the market to 00:14:58.180 --> 00:15:00.269 align:start position:0% attacker and manipulate the market to trigger<00:14:58.510> and<00:14:59.010> profit<00:15:00.010> from<00:15:00.100> these 00:15:00.269 --> 00:15:00.279 align:start position:0% trigger and profit from these 00:15:00.279 --> 00:15:02.310 align:start position:0% trigger and profit from these liquidations<00:15:00.910> so<00:15:01.570> this<00:15:01.690> is<00:15:01.810> similar<00:15:02.110> to<00:15:02.290> a 00:15:02.310 --> 00:15:02.320 align:start position:0% liquidations so this is similar to a 00:15:02.320 --> 00:15:04.019 align:start position:0% liquidations so this is similar to a short<00:15:02.589> squeeze<00:15:02.860> like<00:15:03.130> attack<00:15:03.459> on<00:15:03.670> existing 00:15:04.019 --> 00:15:04.029 align:start position:0% short squeeze like attack on existing 00:15:04.029 --> 00:15:06.690 align:start position:0% short squeeze like attack on existing speculators<00:15:04.660> it<00:15:05.589> can<00:15:05.800> be<00:15:05.890> supplemented<00:15:06.070> also 00:15:06.690 --> 00:15:06.700 align:start position:0% speculators it can be supplemented also 00:15:06.700 --> 00:15:08.449 align:start position:0% speculators it can be supplemented also with<00:15:06.820> a<00:15:06.850> bribe<00:15:07.120> to<00:15:07.390> miners<00:15:07.750> to<00:15:07.959> try<00:15:08.079> to<00:15:08.140> freeze 00:15:08.449 --> 00:15:08.459 align:start position:0% with a bribe to miners to try to freeze 00:15:08.459 --> 00:15:11.699 align:start position:0% with a bribe to miners to try to freeze collateral<00:15:09.459> chopped<00:15:09.640> up<00:15:09.850> transactions<00:15:10.810> and 00:15:11.699 --> 00:15:11.709 align:start position:0% collateral chopped up transactions and 00:15:11.709 --> 00:15:13.470 align:start position:0% collateral chopped up transactions and it<00:15:11.860> sort<00:15:12.040> of<00:15:12.070> works<00:15:12.250> like<00:15:12.399> this<00:15:12.579> so<00:15:13.300> the 00:15:13.470 --> 00:15:13.480 align:start position:0% it sort of works like this so the 00:15:13.480 --> 00:15:15.600 align:start position:0% it sort of works like this so the attacker<00:15:13.720> would<00:15:14.019> buy<00:15:14.200> stable<00:15:14.740> points<00:15:15.100> early 00:15:15.600 --> 00:15:15.610 align:start position:0% attacker would buy stable points early 00:15:15.610 --> 00:15:17.819 align:start position:0% attacker would buy stable points early sort<00:15:16.480> of<00:15:16.570> try<00:15:16.779> out<00:15:16.810> put<00:15:17.200> it<00:15:17.290> in<00:15:17.380> the<00:15:17.500> market 00:15:17.819 --> 00:15:17.829 align:start position:0% sort of try out put it in the market 00:15:17.829 --> 00:15:19.980 align:start position:0% sort of try out put it in the market during<00:15:18.220> the<00:15:18.430> ether<00:15:18.640> decline<00:15:18.990> liquidations 00:15:19.980 --> 00:15:19.990 align:start position:0% during the ether decline liquidations 00:15:19.990 --> 00:15:21.990 align:start position:0% during the ether decline liquidations are<00:15:20.140> triggered<00:15:20.500> and<00:15:20.920> then<00:15:21.100> the<00:15:21.310> attacker<00:15:21.610> can 00:15:21.990 --> 00:15:22.000 align:start position:0% are triggered and then the attacker can 00:15:22.000 --> 00:15:23.790 align:start position:0% are triggered and then the attacker can potentially<00:15:22.390> earn<00:15:22.540> a<00:15:22.660> spread<00:15:22.959> by<00:15:23.350> selling<00:15:23.680> at 00:15:23.790 --> 00:15:23.800 align:start position:0% potentially earn a spread by selling at 00:15:23.800 --> 00:15:25.680 align:start position:0% potentially earn a spread by selling at the<00:15:23.860> post<00:15:24.070> of<00:15:24.160> liquidation<00:15:24.490> prices<00:15:25.000> and<00:15:25.420> also 00:15:25.680 --> 00:15:25.690 align:start position:0% the post of liquidation prices and also 00:15:25.690 --> 00:15:26.940 align:start position:0% the post of liquidation prices and also potentially<00:15:26.230> the<00:15:26.260> mentor<00:15:26.620> as<00:15:26.740> a<00:15:26.769> new 00:15:26.940 --> 00:15:26.950 align:start position:0% potentially the mentor as a new 00:15:26.950 --> 00:15:29.579 align:start position:0% potentially the mentor as a new speculator<00:15:27.490> attacks<00:15:28.089> by<00:15:28.390> prices<00:15:28.839> which<00:15:29.470> is 00:15:29.579 --> 00:15:29.589 align:start position:0% speculator attacks by prices which is 00:15:29.589 --> 00:15:31.110 align:start position:0% speculator attacks by prices which is good<00:15:29.769> for<00:15:30.010> speculator<00:15:30.730> position 00:15:31.110 --> 00:15:31.120 align:start position:0% good for speculator position 00:15:31.120 --> 00:15:34.530 align:start position:0% good for speculator position intentionally<00:15:31.709> and<00:15:32.940> start<00:15:33.940> looking<00:15:34.269> at<00:15:34.360> this 00:15:34.530 --> 00:15:34.540 align:start position:0% intentionally and start looking at this 00:15:34.540 --> 00:15:36.569 align:start position:0% intentionally and start looking at this in<00:15:34.600> our<00:15:34.779> model<00:15:35.140> through<00:15:35.290> some<00:15:35.410> examples<00:15:35.890> could 00:15:36.569 --> 00:15:36.579 align:start position:0% in our model through some examples could 00:15:36.579 --> 00:15:39.900 align:start position:0% in our model through some examples could potentially<00:15:37.240> be<00:15:37.360> very<00:15:37.690> profitable<00:15:38.910> the 00:15:39.900 --> 00:15:39.910 align:start position:0% potentially be very profitable the 00:15:39.910 --> 00:15:42.870 align:start position:0% potentially be very profitable the second<00:15:40.209> attack<00:15:40.480> is<00:15:40.980> after<00:15:41.980> their<00:15:42.250> spiritual 00:15:42.870 --> 00:15:42.880 align:start position:0% second attack is after their spiritual 00:15:42.880 --> 00:15:46.139 align:start position:0% second attack is after their spiritual attacker<00:15:43.839> trying<00:15:44.470> to<00:15:44.589> re-argue<00:15:44.920> blotching<00:15:45.610> to 00:15:46.139 --> 00:15:46.149 align:start position:0% attacker trying to re-argue blotching to 00:15:46.149 --> 00:15:47.610 align:start position:0% attacker trying to re-argue blotching to trigger<00:15:46.480> and<00:15:46.690> profit<00:15:47.019> from<00:15:47.199> spiraling 00:15:47.610 --> 00:15:47.620 align:start position:0% trigger and profit from spiraling 00:15:47.620 --> 00:15:49.800 align:start position:0% trigger and profit from spiraling liquidations<00:15:48.399> and<00:15:49.089> so<00:15:49.180> the<00:15:49.300> idea<00:15:49.570> here<00:15:49.779> is 00:15:49.800 --> 00:15:49.810 align:start position:0% liquidations and so the idea here is 00:15:49.810 --> 00:15:51.269 align:start position:0% liquidations and so the idea here is that<00:15:50.019> a<00:15:50.079> change<00:15:50.440> in<00:15:50.680> the<00:15:50.709> transaction 00:15:51.269 --> 00:15:51.279 align:start position:0% that a change in the transaction 00:15:51.279 --> 00:15:53.880 align:start position:0% that a change in the transaction ordering<00:15:51.670> can<00:15:52.209> cause<00:15:52.540> more<00:15:52.990> liquidation<00:15:53.529> and 00:15:53.880 --> 00:15:53.890 align:start position:0% ordering can cause more liquidation and 00:15:53.890 --> 00:15:55.710 align:start position:0% ordering can cause more liquidation and extractable<00:15:54.610> value<00:15:54.940> for<00:15:55.149> the<00:15:55.209> speculator 00:15:55.710 --> 00:15:55.720 align:start position:0% extractable value for the speculator 00:15:55.720 --> 00:15:58.079 align:start position:0% extractable value for the speculator which<00:15:56.380> leads<00:15:56.620> to<00:15:56.740> the<00:15:57.100> fact<00:15:57.310> that<00:15:57.370> perverse 00:15:58.079 --> 00:15:58.089 align:start position:0% which leads to the fact that perverse 00:15:58.089 --> 00:16:00.420 align:start position:0% which leads to the fact that perverse incentives<00:15:58.660> for<00:15:58.959> these<00:15:59.220> attacks 00:16:00.420 --> 00:16:00.430 align:start position:0% incentives for these attacks 00:16:00.430 --> 00:16:02.910 align:start position:0% incentives for these attacks for<00:16:01.060> miners<00:16:01.390> is<00:16:01.660> if<00:16:02.110> those<00:16:02.320> rewards<00:16:02.529> are 00:16:02.910 --> 00:16:02.920 align:start position:0% for miners is if those rewards are 00:16:02.920 --> 00:16:04.530 align:start position:0% for miners is if those rewards are greater<00:16:03.220> than<00:16:03.250> the<00:16:03.430> mining<00:16:03.699> rewards<00:16:04.120> then 00:16:04.530 --> 00:16:04.540 align:start position:0% greater than the mining rewards then 00:16:04.540 --> 00:16:05.940 align:start position:0% greater than the mining rewards then there's<00:16:05.079> an<00:16:05.350> incentive<00:16:05.740> for<00:16:05.769> the 00:16:05.940 --> 00:16:05.950 align:start position:0% there's an incentive for the 00:16:05.950 --> 00:16:08.670 align:start position:0% there's an incentive for the to<00:16:06.460> do<00:16:06.550> this<00:16:06.700> technically<00:16:07.240> so<00:16:08.170> what<00:16:08.500> is<00:16:08.590> this 00:16:08.670 --> 00:16:08.680 align:start position:0% to do this technically so what is this 00:16:08.680 --> 00:16:10.920 align:start position:0% to do this technically so what is this kind<00:16:08.890> of<00:16:08.950> look<00:16:09.070> so<00:16:09.640> in<00:16:10.000> the<00:16:10.450> current<00:16:10.630> state<00:16:10.900> of 00:16:10.920 --> 00:16:10.930 align:start position:0% kind of look so in the current state of 00:16:10.930 --> 00:16:12.840 align:start position:0% kind of look so in the current state of the<00:16:11.230> system<00:16:11.380> we<00:16:11.680> might<00:16:11.830> have<00:16:12.010> a<00:16:12.280> timeline<00:16:12.790> of 00:16:12.840 --> 00:16:12.850 align:start position:0% the system we might have a timeline of 00:16:12.850 --> 00:16:15.150 align:start position:0% the system we might have a timeline of the<00:16:13.240> transaction<00:16:13.780> history<00:16:13.900> and<00:16:14.560> say<00:16:14.890> this<00:16:15.010> is 00:16:15.150 --> 00:16:15.160 align:start position:0% the transaction history and say this is 00:16:15.160 --> 00:16:16.950 align:start position:0% the transaction history and say this is the<00:16:15.340> Oracle<00:16:15.580> price<00:16:15.880> view<00:16:16.150> and<00:16:16.780> now<00:16:16.900> the 00:16:16.950 --> 00:16:16.960 align:start position:0% the Oracle price view and now the 00:16:16.960 --> 00:16:18.900 align:start position:0% the Oracle price view and now the attacker<00:16:17.290> are<00:16:17.740> and<00:16:18.490> then<00:16:18.640> there<00:16:18.850> are 00:16:18.900 --> 00:16:18.910 align:start position:0% attacker are and then there are 00:16:18.910 --> 00:16:20.070 align:start position:0% attacker are and then there are liquidations<00:16:19.420> in<00:16:19.600> the<00:16:19.660> current<00:16:19.900> timeline 00:16:20.070 --> 00:16:20.080 align:start position:0% liquidations in the current timeline 00:16:20.080 --> 00:16:22.820 align:start position:0% liquidations in the current timeline here<00:16:20.500> and<00:16:21.280> now<00:16:21.550> the<00:16:21.610> attacker<00:16:21.940> wants<00:16:22.240> to 00:16:22.820 --> 00:16:22.830 align:start position:0% here and now the attacker wants to 00:16:22.830 --> 00:16:25.190 align:start position:0% here and now the attacker wants to branch<00:16:23.830> the<00:16:24.040> watch<00:16:24.220> chain<00:16:24.460> here<00:16:24.760> and 00:16:25.190 --> 00:16:25.200 align:start position:0% branch the watch chain here and 00:16:25.200 --> 00:16:27.270 align:start position:0% branch the watch chain here and importantly<00:16:26.200> they<00:16:26.380> can<00:16:26.410> inherit<00:16:26.890> the<00:16:27.100> price 00:16:27.270 --> 00:16:27.280 align:start position:0% importantly they can inherit the price 00:16:27.280 --> 00:16:29.280 align:start position:0% importantly they can inherit the price because<00:16:28.150> those<00:16:28.420> transactions<00:16:29.050> that<00:16:29.230> are 00:16:29.280 --> 00:16:29.290 align:start position:0% because those transactions that are 00:16:29.290 --> 00:16:31.260 align:start position:0% because those transactions that are designed<00:16:29.740> they<00:16:30.580> can<00:16:30.730> inherit<00:16:30.910> the 00:16:31.260 --> 00:16:31.270 align:start position:0% designed they can inherit the 00:16:31.270 --> 00:16:33.330 align:start position:0% designed they can inherit the liquidations<00:16:31.810> as<00:16:32.020> well<00:16:32.200> and<00:16:33.010> place 00:16:33.330 --> 00:16:33.340 align:start position:0% liquidations as well and place 00:16:33.340 --> 00:16:34.770 align:start position:0% liquidations as well and place themselves<00:16:33.580> in<00:16:33.940> the<00:16:34.060> position<00:16:34.420> to<00:16:34.450> perform 00:16:34.770 --> 00:16:34.780 align:start position:0% themselves in the position to perform 00:16:34.780 --> 00:16:37.440 align:start position:0% themselves in the position to perform those<00:16:34.930> and<00:16:35.200> benefit<00:16:35.500> from<00:16:35.620> those<00:16:35.830> and<00:16:36.490> in<00:16:37.240> fact 00:16:37.440 --> 00:16:37.450 align:start position:0% those and benefit from those and in fact 00:16:37.450 --> 00:16:39.840 align:start position:0% those and benefit from those and in fact they<00:16:37.660> can<00:16:37.720> reorder<00:16:38.620> and<00:16:38.950> censor<00:16:39.250> transactions 00:16:39.840 --> 00:16:39.850 align:start position:0% they can reorder and censor transactions 00:16:39.850 --> 00:16:41.760 align:start position:0% they can reorder and censor transactions to<00:16:40.090> trigger<00:16:40.330> even<00:16:40.630> more<00:16:40.780> liquidations<00:16:41.350> and 00:16:41.760 --> 00:16:41.770 align:start position:0% to trigger even more liquidations and 00:16:41.770 --> 00:16:42.990 align:start position:0% to trigger even more liquidations and put<00:16:41.980> themselves<00:16:42.130> in<00:16:42.460> the<00:16:42.490> position<00:16:42.640> of<00:16:42.910> the 00:16:42.990 --> 00:16:43.000 align:start position:0% put themselves in the position of the 00:16:43.000 --> 00:16:49.100 align:start position:0% put themselves in the position of the proper<00:16:43.210> doses 00:16:49.100 --> 00:16:49.110 align:start position:0% 00:16:49.110 --> 00:16:52.380 align:start position:0% [Music] 00:16:52.380 --> 00:16:52.390 align:start position:0% 00:16:52.390 --> 00:16:54.420 align:start position:0% so<00:16:52.840> they're<00:16:53.260> there<00:16:53.860> also<00:16:54.010> some<00:16:54.310> design 00:16:54.420 --> 00:16:54.430 align:start position:0% so they're there also some design 00:16:54.430 --> 00:16:57.660 align:start position:0% so they're there also some design insights<00:16:54.940> that<00:16:55.120> come<00:16:55.270> forth<00:16:56.340> from<00:16:57.340> our<00:16:57.520> work 00:16:57.660 --> 00:16:57.670 align:start position:0% insights that come forth from our work 00:16:57.670 --> 00:17:00.990 align:start position:0% insights that come forth from our work so<00:16:58.360> one<00:16:58.690> idea<00:16:58.960> is<00:16:59.260> that<00:16:59.290> if<00:16:59.860> we're<00:17:00.550> trying<00:17:00.640> to 00:17:00.990 --> 00:17:01.000 align:start position:0% so one idea is that if we're trying to 00:17:01.000 --> 00:17:02.790 align:start position:0% so one idea is that if we're trying to figure<00:17:01.270> out<00:17:01.450> how<00:17:01.540> to<00:17:01.600> design<00:17:01.840> these<00:17:02.050> the<00:17:02.470> focus 00:17:02.790 --> 00:17:02.800 align:start position:0% figure out how to design these the focus 00:17:02.800 --> 00:17:04.740 align:start position:0% figure out how to design these the focus should<00:17:03.010> be<00:17:03.040> on<00:17:03.160> the<00:17:03.490> widening<00:17:04.120> a<00:17:04.360> stable 00:17:04.740 --> 00:17:04.750 align:start position:0% should be on the widening a stable 00:17:04.750 --> 00:17:06.870 align:start position:0% should be on the widening a stable region<00:17:04.960> and<00:17:05.380> limiting<00:17:06.130> the<00:17:06.220> severity<00:17:06.520> of<00:17:06.670> the 00:17:06.870 --> 00:17:06.880 align:start position:0% region and limiting the severity of the 00:17:06.880 --> 00:17:08.940 align:start position:0% region and limiting the severity of the unstable<00:17:07.240> region<00:17:07.690> and<00:17:08.530> there<00:17:08.740> are<00:17:08.800> some 00:17:08.940 --> 00:17:08.950 align:start position:0% unstable region and there are some 00:17:08.950 --> 00:17:10.410 align:start position:0% unstable region and there are some specific<00:17:09.040> certain<00:17:09.670> considerations 00:17:10.410 --> 00:17:10.420 align:start position:0% specific certain considerations 00:17:10.420 --> 00:17:13.050 align:start position:0% specific certain considerations I<00:17:10.570> prefer<00:17:11.380> diet<00:17:11.620> particularly<00:17:12.040> so<00:17:12.850> there<00:17:12.970> are 00:17:13.050 --> 00:17:13.060 align:start position:0% I prefer diet particularly so there are 00:17:13.060 --> 00:17:15.720 align:start position:0% I prefer diet particularly so there are fees<00:17:13.330> in<00:17:13.570> the<00:17:13.660> die<00:17:13.780> system<00:17:14.320> which<00:17:15.220> can 00:17:15.720 --> 00:17:15.730 align:start position:0% fees in the die system which can 00:17:15.730 --> 00:17:17.370 align:start position:0% fees in the die system which can actually<00:17:16.120> have<00:17:16.390> the<00:17:16.540> effect<00:17:16.570> of<00:17:16.840> amplifying 00:17:17.370 --> 00:17:17.380 align:start position:0% actually have the effect of amplifying 00:17:17.380 --> 00:17:20.490 align:start position:0% actually have the effect of amplifying these<00:17:17.620> deleveraging<00:17:17.980> spirals<00:17:18.990> but<00:17:19.990> there's 00:17:20.490 --> 00:17:20.500 align:start position:0% these deleveraging spirals but there's 00:17:20.500 --> 00:17:21.990 align:start position:0% these deleveraging spirals but there's potentially<00:17:20.920> ways<00:17:21.070> that<00:17:21.430> this<00:17:21.640> could<00:17:21.850> be 00:17:21.990 --> 00:17:22.000 align:start position:0% potentially ways that this could be 00:17:22.000 --> 00:17:23.670 align:start position:0% potentially ways that this could be reformatted<00:17:22.810> in<00:17:23.080> a<00:17:23.170> counter<00:17:23.410> cyclical 00:17:23.670 --> 00:17:23.680 align:start position:0% reformatted in a counter cyclical 00:17:23.680 --> 00:17:25.770 align:start position:0% reformatted in a counter cyclical cyclical<00:17:24.640> way<00:17:24.820> so<00:17:25.060> that's<00:17:25.180> work<00:17:25.390> that's<00:17:25.420> more 00:17:25.770 --> 00:17:25.780 align:start position:0% cyclical way so that's work that's more 00:17:25.780 --> 00:17:28.580 align:start position:0% cyclical way so that's work that's more a<00:17:26.170> good<00:17:26.770> key<00:17:26.950> mechanism<00:17:27.490> could<00:17:27.640> also<00:17:27.760> reduce 00:17:28.580 --> 00:17:28.590 align:start position:0% a good key mechanism could also reduce 00:17:28.590 --> 00:17:30.870 align:start position:0% a good key mechanism could also reduce speculator<00:17:29.590> earth<00:17:29.860> behavior<00:17:30.370> and<00:17:30.580> also 00:17:30.870 --> 00:17:30.880 align:start position:0% speculator earth behavior and also 00:17:30.880 --> 00:17:34.470 align:start position:0% speculator earth behavior and also reduce<00:17:31.180> the<00:17:31.600> effect<00:17:32.140> of<00:17:32.430> spirals<00:17:33.430> and<00:17:34.180> also 00:17:34.470 --> 00:17:34.480 align:start position:0% reduce the effect of spirals and also 00:17:34.480 --> 00:17:36.720 align:start position:0% reduce the effect of spirals and also there<00:17:34.630> are<00:17:34.690> potential<00:17:35.110> better<00:17:35.710> uses<00:17:36.160> for<00:17:36.190> a 00:17:36.720 --> 00:17:36.730 align:start position:0% there are potential better uses for a 00:17:36.730 --> 00:17:40.200 align:start position:0% there are potential better uses for a last<00:17:37.270> resort<00:17:37.630> idea<00:17:38.260> of<00:17:38.410> mk9<00:17:39.340> insurance<00:17:39.820> to<00:17:40.060> try 00:17:40.200 --> 00:17:40.210 align:start position:0% last resort idea of mk9 insurance to try 00:17:40.210 --> 00:17:42.060 align:start position:0% last resort idea of mk9 insurance to try to<00:17:40.270> do<00:17:40.390> quality<00:17:40.540> to<00:17:40.930> leverage<00:17:41.260> expertise<00:17:41.830> I 00:17:42.060 --> 00:17:42.070 align:start position:0% to do quality to leverage expertise I 00:17:42.070 --> 00:17:43.700 align:start position:0% to do quality to leverage expertise I talked<00:17:42.520> about<00:17:42.580> that<00:17:42.820> a<00:17:42.880> little<00:17:42.970> bit<00:17:43.150> more<00:17:43.300> okay 00:17:43.700 --> 00:17:43.710 align:start position:0% talked about that a little bit more okay 00:17:43.710 --> 00:17:46.590 align:start position:0% talked about that a little bit more okay a<00:17:44.710> key<00:17:45.130> factor<00:17:45.610> in<00:17:45.640> how<00:17:46.000> severe<00:17:46.450> these 00:17:46.590 --> 00:17:46.600 align:start position:0% a key factor in how severe these 00:17:46.600 --> 00:17:49.440 align:start position:0% a key factor in how severe these deleveraging<00:17:46.930> spirals<00:17:47.560> can<00:17:47.740> be<00:17:47.890> is<00:17:48.450> how 00:17:49.440 --> 00:17:49.450 align:start position:0% deleveraging spirals can be is how 00:17:49.450 --> 00:17:51.600 align:start position:0% deleveraging spirals can be is how exchangeable<00:17:50.200> was<00:17:50.350> the<00:17:50.500> stable<00:17:50.860> point<00:17:51.070> to<00:17:51.460> use 00:17:51.600 --> 00:17:51.610 align:start position:0% exchangeable was the stable point to use 00:17:51.610 --> 00:17:53.760 align:start position:0% exchangeable was the stable point to use alternatives<00:17:52.600> on<00:17:52.690> the<00:17:52.780> sighting<00:17:53.050> system<00:17:53.380> so 00:17:53.760 --> 00:17:53.770 align:start position:0% alternatives on the sighting system so 00:17:53.770 --> 00:17:56.870 align:start position:0% alternatives on the sighting system so things<00:17:53.980> like<00:17:54.160> stable<00:17:54.430> fiat<00:17:55.180> currencies<00:17:55.690> or 00:17:56.870 --> 00:17:56.880 align:start position:0% things like stable fiat currencies or 00:17:56.880 --> 00:17:59.630 align:start position:0% things like stable fiat currencies or stable<00:17:57.880> Fiat<00:17:58.150> back<00:17:58.390> to<00:17:58.600> crypto<00:17:58.930> currencies 00:17:59.630 --> 00:17:59.640 align:start position:0% stable Fiat back to crypto currencies 00:17:59.640 --> 00:18:02.670 align:start position:0% stable Fiat back to crypto currencies and<00:18:00.640> the<00:18:01.150> highest<00:18:01.570> exchange<00:18:01.930> ability<00:18:02.290> is<00:18:02.410> to 00:18:02.670 --> 00:18:02.680 align:start position:0% and the highest exchange ability is to 00:18:02.680 --> 00:18:04.980 align:start position:0% and the highest exchange ability is to lower<00:18:03.100> the<00:18:03.220> feedback<00:18:03.640> effects<00:18:04.150> but<00:18:04.870> it 00:18:04.980 --> 00:18:04.990 align:start position:0% lower the feedback effects but it 00:18:04.990 --> 00:18:06.540 align:start position:0% lower the feedback effects but it introduces<00:18:05.470> an<00:18:05.770> idea<00:18:05.980> of<00:18:06.070> shut<00:18:06.250> numbers 00:18:06.540 --> 00:18:06.550 align:start position:0% introduces an idea of shut numbers 00:18:06.550 --> 00:18:08.610 align:start position:0% introduces an idea of shut numbers because<00:18:06.880> we're<00:18:07.030> really<00:18:07.150> relying<00:18:07.420> on<00:18:07.900> these 00:18:08.610 --> 00:18:08.620 align:start position:0% because we're really relying on these 00:18:08.620 --> 00:18:10.560 align:start position:0% because we're really relying on these flows<00:18:09.280> outside<00:18:09.550> the<00:18:09.820> system<00:18:10.030> to<00:18:10.330> help<00:18:10.420> to 00:18:10.560 --> 00:18:10.570 align:start position:0% flows outside the system to help to 00:18:10.570 --> 00:18:12.510 align:start position:0% flows outside the system to help to stabilize<00:18:10.780> the<00:18:11.140> system<00:18:11.320> and<00:18:11.860> in<00:18:11.980> many 00:18:12.510 --> 00:18:12.520 align:start position:0% stabilize the system and in many 00:18:12.520 --> 00:18:14.070 align:start position:0% stabilize the system and in many jurisdictions<00:18:12.730> this 00:18:14.070 --> 00:18:14.080 align:start position:0% jurisdictions this 00:18:14.080 --> 00:18:18.480 align:start position:0% jurisdictions this being<00:18:14.500> optional<00:18:16.080> so<00:18:17.080> there's<00:18:17.350> a<00:18:17.620> couple<00:18:17.890> sort 00:18:18.480 --> 00:18:18.490 align:start position:0% being optional so there's a couple sort 00:18:18.490 --> 00:18:20.490 align:start position:0% being optional so there's a couple sort of<00:18:18.550> open<00:18:18.850> questions<00:18:18.940> that<00:18:19.840> I'm<00:18:20.050> continuing<00:18:20.470> to 00:18:20.490 --> 00:18:20.500 align:start position:0% of open questions that I'm continuing to 00:18:20.500 --> 00:18:22.230 align:start position:0% of open questions that I'm continuing to look<00:18:20.680> at<00:18:20.830> along<00:18:21.040> these<00:18:21.160> lines<00:18:21.460> the<00:18:21.760> first<00:18:21.970> is 00:18:22.230 --> 00:18:22.240 align:start position:0% look at along these lines the first is 00:18:22.240 --> 00:18:25.140 align:start position:0% look at along these lines the first is expanding<00:18:23.080> the<00:18:23.170> strategy<00:18:23.590> space<00:18:23.860> of<00:18:24.760> the 00:18:25.140 --> 00:18:25.150 align:start position:0% expanding the strategy space of the 00:18:25.150 --> 00:18:26.310 align:start position:0% expanding the strategy space of the speculator<00:18:25.690> is<00:18:25.780> an<00:18:25.900> attack<00:18:26.110> there's 00:18:26.310 --> 00:18:26.320 align:start position:0% speculator is an attack there's 00:18:26.320 --> 00:18:28.200 align:start position:0% speculator is an attack there's understanding<00:18:27.040> what<00:18:27.310> else<00:18:27.460> it<00:18:27.940> could<00:18:28.060> be 00:18:28.200 --> 00:18:28.210 align:start position:0% understanding what else it could be 00:18:28.210 --> 00:18:30.330 align:start position:0% understanding what else it could be possible<00:18:28.630> in<00:18:28.780> this<00:18:28.900> space<00:18:29.140> and<00:18:29.530> understanding 00:18:30.330 --> 00:18:30.340 align:start position:0% possible in this space and understanding 00:18:30.340 --> 00:18:32.160 align:start position:0% possible in this space and understanding governance<00:18:31.090> now<00:18:31.210> our<00:18:31.360> fluorisis<00:18:31.840> how<00:18:31.960> that 00:18:32.160 --> 00:18:32.170 align:start position:0% governance now our fluorisis how that 00:18:32.170 --> 00:18:34.350 align:start position:0% governance now our fluorisis how that relates<00:18:32.470> to<00:18:32.620> the<00:18:33.100> interests<00:18:33.550> as<00:18:33.670> well<00:18:33.790> and 00:18:34.350 --> 00:18:34.360 align:start position:0% relates to the interests as well and 00:18:34.360 --> 00:18:36.620 align:start position:0% relates to the interests as well and then<00:18:34.690> connecting<00:18:35.140> back<00:18:35.320> to<00:18:35.350> the<00:18:35.560> first<00:18:35.830> slide 00:18:36.620 --> 00:18:36.630 align:start position:0% then connecting back to the first slide 00:18:36.630 --> 00:18:38.580 align:start position:0% then connecting back to the first slide understanding<00:18:37.630> sort<00:18:37.750> of<00:18:37.870> composability<00:18:38.350> of 00:18:38.580 --> 00:18:38.590 align:start position:0% understanding sort of composability of 00:18:38.590 --> 00:18:39.810 align:start position:0% understanding sort of composability of the<00:18:38.680> risks<00:18:38.920> between<00:18:39.070> all<00:18:39.370> these<00:18:39.580> protocols 00:18:39.810 --> 00:18:39.820 align:start position:0% the risks between all these protocols 00:18:39.820 --> 00:18:42.060 align:start position:0% the risks between all these protocols but<00:18:40.480> you<00:18:40.570> can<00:18:40.720> have<00:18:40.840> layers<00:18:41.080> upon<00:18:41.470> layers<00:18:41.500> of 00:18:42.060 --> 00:18:42.070 align:start position:0% but you can have layers upon layers of 00:18:42.070 --> 00:18:44.340 align:start position:0% but you can have layers upon layers of de<00:18:42.490> letters<00:18:42.790> that<00:18:43.300> could<00:18:43.600> potentially<00:18:44.110> occur 00:18:44.340 --> 00:18:44.350 align:start position:0% de letters that could potentially occur 00:18:44.350 --> 00:18:47.070 align:start position:0% de letters that could potentially occur and<00:18:44.770> then<00:18:45.520> eventually<00:18:45.790> we<00:18:46.330> want<00:18:46.510> to<00:18:46.570> learn<00:18:46.690> how 00:18:47.070 --> 00:18:47.080 align:start position:0% and then eventually we want to learn how 00:18:47.080 --> 00:18:50.660 align:start position:0% and then eventually we want to learn how to<00:18:47.110> design<00:18:47.950> more<00:18:48.460> crash<00:18:48.760> resistant<00:18:49.270> systems 00:18:50.660 --> 00:18:50.670 align:start position:0% to design more crash resistant systems 00:18:50.670 --> 00:18:53.460 align:start position:0% to design more crash resistant systems so<00:18:51.670> that<00:18:51.820> wraps<00:18:52.150> up<00:18:52.360> the<00:18:52.420> talk<00:18:52.690> here 00:18:53.460 --> 00:18:53.470 align:start position:0% so that wraps up the talk here 00:18:53.470 --> 00:18:55.320 align:start position:0% so that wraps up the talk here so<00:18:54.070> key<00:18:54.250> takeaways<00:18:54.700> you<00:18:54.820> can<00:18:54.940> take<00:18:55.060> away 00:18:55.320 --> 00:18:55.330 align:start position:0% so key takeaways you can take away 00:18:55.330 --> 00:18:57.540 align:start position:0% so key takeaways you can take away either<00:18:55.570> a<00:18:55.960> stable<00:18:56.500> kind<00:18:56.620> of<00:18:56.860> lateral<00:18:57.130> yeah 00:18:57.540 --> 00:18:57.550 align:start position:0% either a stable kind of lateral yeah 00:18:57.550 --> 00:18:59.160 align:start position:0% either a stable kind of lateral yeah potentially<00:18:58.060> be<00:18:58.150> consumed<00:18:58.540> a<00:18:58.570> lot<00:18:58.750> faster 00:18:59.160 --> 00:18:59.170 align:start position:0% potentially be consumed a lot faster 00:18:59.170 --> 00:19:00.840 align:start position:0% potentially be consumed a lot faster because<00:18:59.470> of<00:18:59.710> his<00:19:00.010> deleveraging<00:19:00.340> sort<00:19:00.790> of 00:19:00.840 --> 00:19:00.850 align:start position:0% because of his deleveraging sort of 00:19:00.850 --> 00:19:03.030 align:start position:0% because of his deleveraging sort of effects<00:19:01.240> and<00:19:01.480> this<00:19:02.380> can<00:19:02.560> lead<00:19:02.740> to<00:19:02.770> you 00:19:03.030 --> 00:19:03.040 align:start position:0% effects and this can lead to you 00:19:03.040 --> 00:19:04.470 align:start position:0% effects and this can lead to you arbitrage<00:19:03.610> like<00:19:03.850> trades<00:19:04.180> around 00:19:04.470 --> 00:19:04.480 align:start position:0% arbitrage like trades around 00:19:04.480 --> 00:19:06.960 align:start position:0% arbitrage like trades around liquidations<00:19:05.200> and<00:19:05.680> new<00:19:06.160> attack<00:19:06.430> incentives 00:19:06.960 --> 00:19:06.970 align:start position:0% liquidations and new attack incentives 00:19:06.970 --> 00:19:09.720 align:start position:0% liquidations and new attack incentives to<00:19:07.120> consider<00:19:08.160> so<00:19:09.160> there<00:19:09.280> are<00:19:09.340> a<00:19:09.370> couple<00:19:09.520> more 00:19:09.720 --> 00:19:09.730 align:start position:0% to consider so there are a couple more 00:19:09.730 --> 00:19:11.250 align:start position:0% to consider so there are a couple more resources<00:19:10.270> here<00:19:10.450> as<00:19:10.540> we<00:19:10.630> want<00:19:10.810> to<00:19:10.840> learn<00:19:10.990> more 00:19:11.250 --> 00:19:11.260 align:start position:0% resources here as we want to learn more 00:19:11.260 --> 00:19:14.280 align:start position:0% resources here as we want to learn more and<00:19:12.250> you<00:19:12.370> can<00:19:12.550> follow<00:19:12.730> me<00:19:13.000> to<00:19:13.300> see<00:19:13.840> some<00:19:14.110> of<00:19:14.200> the 00:19:14.280 --> 00:19:14.290 align:start position:0% and you can follow me to see some of the 00:19:14.290 --> 00:19:34.070 align:start position:0% and you can follow me to see some of the subsequent<00:19:14.590> work<00:19:14.860> that<00:19:15.040> i'm<00:19:15.130> working<00:19:15.250> out 00:19:34.070 --> 00:19:34.080 align:start position:0% 00:19:34.080 --> 00:19:40.019 align:start position:0% [Music] 00:19:40.019 --> 00:19:40.029 align:start position:0% [Music] 00:19:40.029 --> 00:19:44.320 align:start position:0% [Music] yeah<00:19:42.370> yeah<00:19:43.370> that<00:19:43.549> was<00:19:43.640> acting<00:19:44.029> to 00:19:44.320 --> 00:19:44.330 align:start position:0% yeah yeah that was acting to 00:19:44.330 --> 00:19:46.450 align:start position:0% yeah yeah that was acting to understanding<00:19:45.260> how<00:19:45.470> the<00:19:45.529> demand<00:19:45.950> side<00:19:46.220> works 00:19:46.450 --> 00:19:46.460 align:start position:0% understanding how the demand side works 00:19:46.460 --> 00:19:51.789 align:start position:0% understanding how the demand side works yeah<00:19:47.150> more<00:19:47.510> of<00:19:47.570> artistic<00:19:47.779> oh<00:19:48.049> no<00:19:50.650> that's<00:19:51.650> not 00:19:51.789 --> 00:19:51.799 align:start position:0% yeah more of artistic oh no that's not 00:19:51.799 --> 00:19:57.070 align:start position:0% yeah more of artistic oh no that's not quite<00:19:52.159> right<00:19:53.440> like<00:19:54.440> that<00:19:55.360> motivated<00:19:56.360> team<00:19:56.480> the 00:19:57.070 --> 00:19:57.080 align:start position:0% quite right like that motivated team the 00:19:57.080 --> 00:20:02.110 align:start position:0% quite right like that motivated team the external<00:19:57.620> Lord<00:19:58.450> as<00:19:59.450> the<00:19:59.600> system<00:20:00.789> you<00:20:01.789> go<00:20:01.909> back 00:20:02.110 --> 00:20:02.120 align:start position:0% external Lord as the system you go back 00:20:02.120 --> 00:20:04.180 align:start position:0% external Lord as the system you go back like<00:20:02.510> four<00:20:02.809> best<00:20:03.049> nights<00:20:03.289> okay 00:20:04.180 --> 00:20:04.190 align:start position:0% like four best nights okay 00:20:04.190 --> 00:20:06.090 align:start position:0% like four best nights okay actually<00:20:04.850> I<00:20:04.909> think<00:20:05.000> we<00:20:05.149> have<00:20:05.240> to<00:20:05.390> wrap<00:20:05.539> up<00:20:05.750> but 00:20:06.090 --> 00:20:06.100 align:start position:0% actually I think we have to wrap up but 00:20:06.100 --> 00:20:15.550 align:start position:0% actually I think we have to wrap up but come<00:20:07.100> talk<00:20:07.399> to<00:20:07.429> me<00:20:07.669> right<00:20:07.880> now 00:20:15.550 --> 00:20:15.560 align:start position:0% 00:20:15.560 --> 00:20:23.779 align:start position:0% [Applause] 00:20:23.779 --> 00:20:23.789 align:start position:0% 00:20:23.789 --> 00:20:25.850 align:start position:0% you