Why Kalshi's Timeline Fight Put Its ETH Perp Volume Under a Microscope: Uneasy Money

Kain Warwick (0:00)

And I think there is a sense of, you get lulled into a sense of security, right? Where you have a sandbox, you've been testing agents, it's been fine, they haven't broken out. If you put 03mini in a sandbox, that guy's not going anywhere, right? It's like a baby, right? You have a baby and you put it on the ground and it can't go anywhere for the first seven months, right?

And then after like a month.

Taylor Monahan (0:23)

And then it's like.

Kain Warwick (0:24)

And then they can. And then they can start moving. And you gotta be aware that eventually they're going to start moving. Also, if your job is to make them move quickly, you would think like at some point, you're like, some point this thing's going to be smart enough that it's going to escape its bounds. We should probably be watching for that moment. And instead they're like, just like, ah, it's a baby. They don't move. It's fine. Don't worry about it. Hey everyone, I'm Dream Wark and welcome to Uneasy Money because what happens on Chained never stays on Chained. Before we begin, here is a word from the sponsors that make this show possible.

Laura Shin (0:56)

This episode is brought to you by 1inch Aqua, the shared liquidity layer from 1inch. Back multiple liquidity positions with one wallet balance and keep your tokens in your wallet until a swap fills. See how it works at 1inch.com/aqua. Before we get started, I want to ask you for something. We're making a bunch of decisions right now about Unchained. What we make next, when we go live, what we should be doing more of, and I'd rather hear from you before we make them than after. So we put together a survey. It takes just a few minutes. It's anonymous. And there's a box where you can tell me what we could be doing better. I read all the responses. The link is in the show notes or you can snap the QR code on screen or go to unchainedcrypto.com/survey.

Thanks.

Taylor Monahan (1:43)

All right.

Kain Warwick (1:44)

I'm here with my co-host, Taylor Monahan, Security Expert. And we have a very special new special co-host. Double special. Double special.

Taylor Monahan (1:56)

Yeah.

Kain Warwick (1:57)

We love when you're a guest, but now you're stuck with us. So welcome as a regular host to the show. We're very excited to have you.

Yeah. Thanks for having me. Let's get into it. Let's get into it. We got lots of stuff to talk about, lots of AI stuff. So, but we'll get through the crypto stuff quickly.

Taylor Monahan (2:20)

Will we? Will we really?

Kain Warwick (2:21)

We want. We want.

Taylor Monahan (2:23)

All right.

Kain Warwick (2:23)

So, Kalshi got themselves into a timeline warfare, which was just in it.

This felt so inevitable to me that this is going to happen because they're so not crypto, and they hired genuinely some weird crypto people. The people that you would hire if you had no idea about crypto, and you're like, that's a guy on the timeline, like he's the guy, I'll just go and hire him. He knows crypto.

Taylor Monahan (2:58)

Yeah, he has ICO in his name. He's been here forever. He really knows what's going on.

Kain Warwick (3:03)

I'm sure he knows. I'm sure he seems like a good guy.

So, they hired a bunch of people, and some of them, I say this every time, but I'm a polymarket seed investor. So, my bag bias is very heavy here, but the Kalshi guys are kind of rats. Let's be honest. Everything that they do is kind of rat mode. From trying to fucking call the FBI, just all kinds of weird shit that they've been involved in, like just every possible sketchy thing that you could come up with as like a game plan, they seem to come up with. And so, yeah, of course, like they're fucking going to get themselves into some pitch battle. The interesting thing is, I think that for like most of the last, I don't know, let's call it like 18 months while they've been like main characters, fighting it out with Polly Market.

And prediction markets have been like, you know, huge, huge this cycle. They haven't really gotten into fights on the timeline because they're not really crypto people, so they're not really on the timeline. But then they deputize these crypto people to be on the timeline, and they managed to get themselves into a fight with some cracked autist guy, who's like, I'll tear you apart and teach you a lesson. And so that's what's happened. And so this guy, Benny, got into a fight with ICO Beast, and ICO Beast was like, I don't know, said something to him, and he's like, all right, I'm going to go and like, analyze all the data that's all public and like, just went to town on them. And so the allegation is like wash trading, that it's all fake volume on their perp markets, that there's some fake volume on the prediction markets, et cetera, et cetera. So there's a bunch of things, and they've looked at the data, and like, the numbers don't sound amazing, right? So like the ETH perp had $3 million of open interest, and half a billion in 24-hour volume, which like, I don't know, man, anything's possible. It could be someone really is not confident in their ETH position, and keeps, you know, FOMOing in and out over and over. I mean, the one interesting thing is like, you know, I think the only possible way, right? And I think this has also kind of come out, and people have talked about this. The only possible way that this makes any sense is if it's incentivized, right? Like, not everything. I think it's worth calling out. Not everything has to be wash trading, right?