What Brings Capital Back to DeFi? | Roundup
Episode publishedPodcast: Bell CurveBell Curve
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Hey, everyone. Quick disclaimer before we get into today's episode. Nothing said on Bell Curve is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely our opinions, not financial advice. Our guests and I may hold positions in the companies, funds, or projects discussed. Alright, gents. Welcome back to another episode of Bell Curve. You got me, Miles, Zave. Fellas, what's up?
Good to be back.
Good to be back. Good to see you. Another fun week in DeFi.
It's been a month for DeFi. 500,000,000. Some 500,000,000 mostly between Drift and Kelp, but it's not great. Not great. You know what this reminds me of is do you guys remember? It it just feels very reminiscent of the post FTX c five blowup. And, I mean, that took down a bunch of, like, the CeFi lenders, BlockFi and Celsius, which that that never really got rebuilt. But I will say this is a bull bear case for DeFi episode, but to lead with my opinion here, I remember at that time everyone was like, I would never hold my assets in a CeFi account. Why would you ever do that? And DeFi was having
Yeah. It's like, it's obviously like the losses are not even close and the reputation is damages not to the industry is not even close as FTX. But during all those other like, you know, centralized exchange rugging, like it's always like, look at DeFi humming along perfectly. Everything worked exactly as it should have. That was like always this weird victory lap that like, DeFi people would take. And unfortunately, now it's really like it technically is working, but it's also like very, very, very broken. And so in some ways, this is like, kind of worse than FTX was for the industry in terms
Let's just go through to kick things off a quick overview of what actually happened over the last month. So there've been two big exploits. One was for about $285,000,000 on Drift and then roughly the same amount for Kelp DAO. Although on the Kelp DAO side of things, this has largely been focused around Abe because RSEETH, which is the liquid restaked, you know, KELPDAO instrument, that was listed as a collateral on Abe core. So that's caused a whole bunch of knock on effects. But, you know, I think the the summary here is that North Korea is actually playing a really big part of the story. So
can talk about that.
Yeah. I'd maybe just add one thing. I think someone resurfaced a tweet from Kyle Simani this week about him saying that, you know, security doesn't matter. Like, all all that matters is speed. I think for a while, the last few years, the industry has optimized for scalability and speed and whereas in the early days of blockchain, we really optimized the security. And I think that pendulum is swinging back. Now we know that we can have fast chains. I think we now need to work out how we have secure chains, including smart contracts, And that, of course, is under the same umbrella as DeFi. So, y
I don't have a ton to add. I mean, the contagion effects are, like, very clear here. We're, like, gonna spend most of the episode talking about Aave, but this is very much so like a layer zero and Kelp dial, like, configuration of layer zeros setup problem. And yeah, I guess maybe like one speculative question. Don't know if you guys have any thoughts. Like, there's a kind of a question of why these are accelerating. Is it because, AI has given Lazarus like way more capabilities and like the ability to find these things? Or there's another interesting theory which could be like they know mytho
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