The Chopping Block: Zcash +400%, Tempo’s $500M Shock, EF Pay Firestorm & AWS/Base Meltdown feat. Mert - Ep. 929
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Companies
99
Key Quotes
3
Topics
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Insights
🎯 Summary
Podcast Episode Summary: The Chopping Block: Zcash +400%, Tempo’s $500M Shock, EF Pay Firestorm & AWS/Base Meltdown feat. Mert - Ep. 929
This 60-minute episode of The Chopping Block features hosts Seed, Tom, and special guest Mert (Helius) dissecting several major controversies and market movements in the crypto space, focusing heavily on the Zcash price surge and the internal turmoil within the Ethereum ecosystem sparked by the Tempo fundraising and subsequent talent departures.
1. Focus Area
The discussion centers on Cryptocurrency Market Dynamics, Ecosystem Politics, and Talent Retention. Key areas include the recent price action of Zcash (ZEC), the massive funding round for the L1 blockchain Tempo, and the internal governance and compensation issues within the Ethereum Foundation (EF).
2. Key Technical Insights
- Zcash Privacy Mechanics: The Zcash price surge highlighted a widespread lack of understanding among newer crypto participants regarding fundamental privacy features like shielded transactions and anonymity sets, underscoring the industry’s general knowledge gap on privacy tech.
- Tempo’s Architecture (Implied): While not deeply technical, the discussion touches on the debate over whether payment-focused chains (like Tempo, which is incubated by Stripe) can succeed as Layer 1s, with Mert suggesting they might be better suited as Layer 2 solutions.
- ZK Proofs in Bitcoin: The conversation references Satoshi Nakamoto’s early acknowledgment of the desire for ZK proofs in Bitcoin, contrasting it with Zcash’s successful implementation, which is a key technical differentiator.
3. Market/Investment Angle
- Zcash Narrative Shift: The 400% ZEC price rally is seen as a shift in narrative, moving from long-term stagnation to being viewed as the “best trade in crypto,” driven by renewed interest in privacy and influencer momentum (Mert, Naval).
- Tempo Valuation: The $500M Tempo raise at a $5B valuation is considered strong given the backing (Stripe, Paradigm), though one host suggested its immediate trading valuation could be closer to $15B based on current market comparables, implying it might be slightly overpriced at launch.
- Investment Philosophy Conflict: The Zcash debate highlights a clash between the “cypherpunk ethos” (privacy, sovereignty) often associated with early Bitcoin, and the current TradFi-aligned narrative of Bitcoin (ETFs, BlackRock).
4. Notable Companies/People
- Zcash (ZEC): The subject of a massive recent price pump, leading to friction with OG Bitcoin maximalists.
- Tempo: The blockchain incubated by Stripe and Paradigm, which raised $500M at a $5B valuation, drawing criticism for potentially “sucking value” from the Ethereum ecosystem.
- Ethereum Foundation (EF): Central to the controversy regarding underpayment and political centralization.
- Dankrad: Key Ethereum Foundation researcher who announced his move to Tempo full-time, causing significant backlash in the ETH community.
- Peter Szilagyi: Former head of Geth development, who leaked a memo detailing severe underpayment ($600k over six years) and political centralization within the EF leadership structure.
- Mert (Helius): Defended the Zcash movement and strongly criticized the EF’s compensation structure, calling it a “colossal failure of leadership.”
5. Regulatory/Policy Discussion
The discussion indirectly touches on regulatory risk, noting that developers working on privacy code like Zcash’s face potential legal jeopardy (“you can go to jail for writing privacy code”), which Mert argues makes Zcash a low-EV (negative expected value) project for bad actors looking to orchestrate simple pumps.
6. Future Implications
The conversation suggests a fracturing within the crypto community regarding core values:
- Talent Exodus: The EF’s failure to compensate top talent adequately (as evidenced by Szilagyi’s memo) will continue to drive key developers toward well-funded, corporate-backed L1s like Tempo, potentially leading to an “Ethereum talent drain.”
- Ecosystem Competition: The Zcash rally signals that privacy narratives still hold significant sway, challenging the current focus of Bitcoin influencers on TradFi integration.
- Culture vs. Compensation: The industry is moving toward a reality where developers must choose between the “nonprofit land” ethos of organizations like the EF and the lucrative opportunities offered by for-profit chains.
7. Target Audience
This episode is highly valuable for Crypto Investors, Ecosystem Builders, Blockchain Developers, and Venture Capitalists who need an insider perspective on ecosystem politics, talent dynamics, and significant market movements outside of the immediate Bitcoin/Ethereum narratives.
🏢 Companies Mentioned
Wildcat
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Institution/Finance
PayPal USD
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Institution/Stablecoin
USet
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Institution/Stablecoin
AWS (Amazon Web Services)
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Institution
Linux Foundation
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Organization
Ronin Chain
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Layer 1 blockchain projects
Hashgraph
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Layer 1 blockchain projects
Michael Saylor
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N/A (Investor)
RSA (Ryan Adams)
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N/A (Media/Influencer)
Handsome
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N/A (Influencer)
Naval
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N/A (Influencer/Investor)
AWS West
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unknown
The AWS
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unknown
Bill Gates
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unknown
South America
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unknown
💬 Key Insights
"It turns out all these interconnected things are failing together."
"There was a massive AWS outage today... Coinbase had massive downtime, and then we also saw Base, the Layer 2, go down, which of course, unsurprising, given that it's a centralized sequencer."
"This money from USDC literally goes to Base. Why is this happening? And so, I was like, 'Why are we directly funding somebody who's trying to compete with us?' This seems a little weird to me."
"For a bear chain, when the party's over, it's over, and everyone goes home. Whereas for Bitcoin and for Ethereum, even when nobody else cares and the lights go out and the price is doing terrible and it's at $1,800, there's still the monks chanting, and you go into the sanctuary, and they're still there, and the flame is alive."
"Ethereum as a product has been pretty shit over the last few years, right? Just objectively speaking, it's not the fastest blockchain, not the best UX... And nevertheless, it's managed to hold onto its position. Why is that? I think a big part of it is this special valence that Ethereum has because of the purity and the high priesthood and the smells and bells, so to speak."
"The immune response from the Ethereum community was overwhelming [to Dankrad/Justin Drake taking advisory with EigenLayer]. And if that was Mert or somebody else, nobody would have given a shit. 'Oh yeah, whatever. Of course Mert can get paid. He's in the private sector.' But the idea that somebody who's, it's like the equivalent of a government, someone in government taking a kickback or something."
📊 Topics
#artificialintelligence
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#investment
5
#startup
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🧠 Key Takeaways
still be publishing open source and trying to make public goods, even if these large corporates
just abolish the specialness that people feel about the EF, that the EF should just be like any other organization competing for talent and it should have the same rules as it does anywhere else
know, and how are you thinking about it now, a month or so down the road, now that you've socialized this idea within Solana? I think so
probably start thinking about this," because the thing that annoyed me, by the way, it wasn't like I was trying to be constructive, it was purely out of spite, where I was like, "This money from USDC literally goes to Base