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Is this DeFi’s worst or most valuable man?

coinnewsdaily by coinnewsdaily
Juli 11, 2021
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Is this DeFi’s worst or most valuable man?
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conservative commentator

Even Chris Blec’s staunchest supporters acknowledge that he can be as blunt as a sledgehammer when he uses Twitter to demand transparency from DeFi projects.

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The founder of DeFi Watch incites outrage throughout the industry, whether he’s criticizing Polygon for entrusting billions to two developers with administrative access or Rari Capital for being run by teenagers.

He is precisely the type of provocateur who brings up the kinds of difficult questions that those in positions of power would prefer to avoid.

This is not possible in cryptography, which is why he adores it.

“In a decentralized community, I feel like I’ve sort of found my groove a little bit, mostly because I can’t be turned off,” he laughs. “That’s why I’m drawn to crypto. Because I do think the day will come when, you know, when banks censor people if they violate norms, or if they don’t comply with social standards. And I’ll be first in line for that.”

“I promise you, if DeFi projects had a way today to censor people based on their political beliefs, there would be at least one doing it.”

If you take a swing at the king…

Indeed, a recent Uniswap proposal sought $50 million in order to bribe the 45-year-old to completely abandon DeFi.

It began with a Twitter thread in which industry luminaries such as Scott Lewis, co-founder of DeFi Pulse, Taylor Monahan of MyCrypto, and ChainLinkGod accused him of being right-wing, being completely wrong, and acting in bad faith.

Popular opinion: Chris Blec sucks.

He’s right but he has a shit poor way of showcasing his opinion.

I’m tired of the constant complaints.

You’d think maybe he would shut up and found something.

— ✨ ᕙ༼ຈل͜ຈ༽ᕗ ✨ ? ? ? ? ? ? ? ? ? ? ? ? (@androolloyd) May 29, 2021

The proposal didn’t pass a consensus check. “It failed miserably,” Blec says. “I was actually rooting for it. If they paid me $50 million, I would leave. I will say that.”

As a Bitcoiner with a diverse professional background that includes work with the Ultimate Fighting Championship, conservative commentator Glenn Beck, and Mad Money’s Jim Cramer, his combative approach contrasts sharply with the soft-spoken Ethereum developers who are responsible for the majority of DeFi projects.
Hayden Adams, the inventor of the Uniswap, for example, appears to hold him in contempt.

“He has been kind of open about his disdain for me in general,” Blec says. “I don’t think he likes the way that I express myself. I think he really comes from that background of tech utopia a little bit. You know, having these really controlled environments and safe spaces. And I’m the opposite. So, it’s a little bit like oil and vinegar.”

In spite of the negative feedback he has received, he has not let it deter him in the slightest.

According to Blec, bringing DeFi projects to the public’s attention for their flaws is the only way to ensure that user funds are protected and that the sector remains out of the hands of financial institutions.

“I think there’s valuable contributions I’m making that I want to keep making, but there’s a lot of people that don’t want me to make them.”

Governance theater

Adams is unlikely to be won over by Blec’s most recent campaign, which was a resounding failure.
He’s been the most outspoken opponent of a recently passed Uniswap proposal to establish a $1 million UNI fund to support lobbying efforts for improved DeFi laws and regulations, which was recently passed.

He opposes “disgusting D.C. lobbying” on the basis of principle, and he believes the fund, proposed by the Harvard Law Blockchain and Fintech Initiative, demonstrates that Uniswap’s governance is not decentralized: 18 percent of tokens are controlled by early VC investors, and a further 21.2 percent of votes are in the hands of the team.

Andreessen Horowitz, also known as A16z, is a venture capital firm that controls enough tokens on its own to surpass the 40-million UNI threshold required to pass a proposal.
However, while it has delegated its votes to a variety of university blockchain associations at Harvard, the University of California at Berkley, and Stanford University, in addition to projects such as Gauntlet, Blec believes it is the one who instigated the lobbying fund proposal to benefit its DeFi investments.

“If Andreessen Horowitz wants to take $40 million out of the Treasury to fund this committee because it’s going to help their corporate interests, then that should be known. That shouldn’t be a secret, you know, so that’s what I really try to pursue with this stuff.”

Voting on $UNI „DeFi Education Fund“ is over.

1m UNI will be transferred to the custody of the new committee.

Vote was decided by proxies of VCs (i.e. @a16z) and @Uniswap team members.

This #DeFiWatch request for transparency was received but ignored.https://t.co/7if3lAaYdt

— Chris Blec (@ChrisBlec) June 29, 2021

Of course, there is no conclusive evidence that A16z was behind this proposal or that the organization’s delegates were instructed on how to vote.
However, it’s worth noting that Harvard, Berkley, Stanford, Gauntlet, and former Andreessen Horowitz partner Jesse Walden received a combined total of 40.5 million votes, according to the final vote total.
Additional votes totaling 10.5 million came from other university-affiliated organizations, although it has not been confirmed whether or not they were delegated votes from the A16z.

While there was plenty of support for the „Education Fund“ from other sources — including community members and Consensys — Blec is raising legitimate governance concerns:

“The reason I’m so adamant about it is because it’s setting a trend, and others are watching, and I want people to see, it’s not as easy as they want it to be because you’re gonna have fat guys in Florida like me, breathing down your neck, looking for transparency. You can’t hide all this stuff and not expect people to ask questions.”

Blec’s journey

Born in New Jersey in 1975, Blec was mad keen on radio growing up. “I loved to listen to the radio and call into the radio stations and stuff in the ‘80s,” he says, explaining one of his first jobs was as a DJ for Smooth FM in New York in the 1990s. He built the station’s website on the side using his rudimentary knowledge of HTML.

He left New York after 9/11 “for obvious reasons” and helped build Total Nonstop Action Impact Wrestling in Nashville from 2003 onward. That led to “a really cool job” in Las Vegas looking after marketing for the Ultimate Fighting Championship.

I joke that he must have learned his pugnacious approach to Twitter from five years working alongside wrestlers and martial artists. Surprisingly he agrees. “It’s actually true because part of it was that I worked for a fight promoter there that was pretty intense. And then before that, I worked with professional wrestlers. And, you know, working in radio was also kind of like a cage fight every day.” He adds:

“After that, I stayed in television. I worked with Glenn Beck, who’s like a conservative talk show host, and I helped them run their digital television network. It was called TheBlaze. And so, he’s a pretty big personality. And then I also worked for a short time with Jim Cramer.”

On the money

Blec first bought Bitcoin in 2015 for a long trip through South East Asia with his wife, as it seemed like a convenient payment method while traveling, but it wasn’t until early 2017 that he fell down the rabbit hole. He explains he was doing an online course on the history of money — “because I’m a nerd” — when he had an epiphany about why Bitcoin was such a leap forward.

“I remember that precise moment I was in my living room: I jumped up and I was like, ‘I need to find that Bitcoin stuff. I need to learn about that.’ Because I just connected it to everything I’d ever believed in as far as liberty and politics and stuff. And I just raced to try to learn everything I could after that.”

He quit his job on The Street to work as a consultant in crypto full time, and during the ICO boom, he was involved in a project that tried and failed to launch a gold-linked token, which gave him his first peek behind the curtain.

“I learned about all the mistakes you can make in the space as far as security, and I swear, I kind of had this moment with that where I realized that smart contracts are not entirely unchangeable and that there are parts of them that can be modified. It started to open my mind.”

He started posting crypto education videos on YouTube in 2018 and launched a specialist DeFi channel the following year with explanations of how to use protocols like Maker and Compound.

“I really think I brought thousands of people to DeFi through the videos,” he says. “But I mean, now YouTube is pulling off videos just for saying one little thing…”

Blec’s referring to reports that YouTube censored a video featuring mRNA technology inventor Dr. Robert Malone and others for expressing concerns over the COVID-19 vaccine. In protest, Blec recently pulled all of his video content from the platform.

“That was the one that I just cracked and I was like, ‘if we’re supposed to be building a censorship-resistant technology here in crypto, how am I supporting a business that just completely is opposed to any sort of rational dialogue?’ So, I pulled it off and I’m looking for another home for it.”

Blec is also deeply unhappy with mask mandates and lockdowns, skeptical about vaccines, and moved from “oppressive” New Jersey to Miami Beach this year to take advantage of its more relaxed approach.

“Florida is crazy right now. They’re setting records with real estate. And everybody’s just trying to come here because there’s the least amount of rules here.”

The fact Miami mayor Francis Suarez is a Bitcoiner is an added bonus. “The tech scene is growing so quickly, and I know a lot of people moved here last year. It’s just kind of an exciting place to be right now,” he says.

Bitcoiner in the ETH house

Blec approaches DeFi with the mindset of a Bitcoiner, rather than an Etherean, and has a laser-like focus on decentralization. DeFi Watch emerged as a result of Blec learning that Compound and other projects had an “admin key” providing devs with “God Mode” style control over funds and contracts.

“That was the first time that I really had the realization that with DeFi, things weren’t always as it seemed,” he says of the gulf between the rhetoric and the reality.

“It suddenly struck me, like, ‘Okay, wait a minute — they’ve kept some sort of centralized control? Who is it that holds this control? Why are they holding the control? How are they using it?’ And I just started asking all these questions.”

He started digging into other projects to see if they had similar issues (many did) and put the results in a popular spreadsheet that got so many views he started up the DeFi Watch site to house all the information he’d collected.

Eventually, it became impossible to keep up with all the new projects launching, so he now focuses on representative examples, with the self-taught Blec roaming GitHub looking for telltale signs there’s centralized control putting user funds at risk.

He says his goal is to educate DeFi users to be constantly skeptical so that they are “thinking about these issues all the time.” The endless array of exploits of DeFi protocols attest to the fact that sloppy security and poorly designed smart contracts are rampant. Blec says the June 20 Visor Finance exploit, in which $500,000 was lost, is yet another admin key fiasco.

“They had their private key accidentally saved in their GitHub repo. I mean, to me, that’s like the ultimate. And as soon as you see that kind of negligence or ineptness from a developer, they can be the nicest guys in the world. But if they’re that bad, you have to just run.”

Administering the key

Projects often use admin keys, while the protocol is still being built in order to quickly fix security issues or stop exploits, with the goal of getting rid of it once the project is stable and ready for full decentralization. In order to mitigate the risks, many projects have adopted a multisig admin key, which requires a certain number of people to independently approve its use for a particular action.

This is not without its flaws either. Blec has been hammering away at Ethereum layer-two scaling solution Polygon for using a multisig to secure $8.32 billion in total value locked. When he began asking questions, they were using a two-of-three multisig, meaning that just two people could have colluded to make off with the funds, or had the access stolen from them.

“There was billions of dollars flying around on this blockchain that basically was relying on three developers not to lose their Ledger Nano S devices. When you think about it that way, it’s kind of crazy.”

While it’s since been changed to a five-of-eight multisig, that still has issues, according to Blec, who argues that Polygon users need to trust that the signers have just one copy of their key and that the multisig was set up securely. Equally worrying, is the fact that the project is based in India, which has been toying with a crypto ban. Having five people able to make unilateral changes means regulators have an identifiable target.

“What happens if a regulator comes along and says you have to use this key to comply with these regulations, or you have to turn off this network right now until you can figure out how to comply?”

@ChrisBlec The Defi Cop pic.twitter.com/UY4rUN04aV

— Hexologist ⬣ Ask Me About PulseChain Airdrop (@Hexologist31) July 6, 2021

Kids in the kitchen

For Blec, the only thing worse than having an admin key in the hands of developers is having an admin key in the hands of teenagers. Blec famously called out Rari Capital’s team of teenage devs, including a 15-year-old named Jet in March. The eldest was just 20. While his criticism was controversial at the time, the protocol itself was exploited a month or so later for $11 million.

“I did feel a little bad when they got hacked after I was criticizing them,” he says. “I sent that kid a message right away because I just felt bad for him. I just didn’t want him to take it to heart even though it was a loss, and they did screw up.” Blec says that he’s sensitive to “any situation where I feel like somebody could become depressed.”

“I’ve had family members that have committed suicide and stuff, and it affected me pretty deep. And, you know, I’ve always been sensitive to that kind of stuff as far as, you know, depression and things.”

But he says asking tough questions is too important to stop just to avoid hurting people’s feelings.

“There’s millions and sometimes billions of dollars at stake. So, it’s trying to balance the feelings of a developer who’s got himself in way too deep with the finances of thousands of people who have their money staked.”

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