Bits + Bips: Why the Drift Hack Is an ‘Embarrassment for the Industry’

The podcast episode centers on the intersection of cryptocurrency, macroeconomics, and national security, particularly focusing on the Drift Protocol hack attributed to North Korea and Iran's use of crypto to circumvent sanctions. The discussion covers the sophistication of nation-state attacks on DeFi protocols, the tension between on-chain speed and legal norms in freezing illicit funds, and the potential liability of stablecoin issuers. The hosts also explore the need for improved security standards and multiple interdiction points to combat state-sponsored cyberattacks. Additionally, they analyze the tokenomics of various crypto projects, debating the fat protocol thesis and the value accrual to layer-1 blockchains versus applications. The episode concludes with a discussion of Franklin Templeton's acquisition of 250 Digital and its implications for institutional adoption of crypto.