Varun

Bringing the world on-chain | Ex-Gelato | Ex-Polygon

[Varun @csvarun26396]

Lately, I've been wrestling with whether to stay or leave the decentralized tech space.

Choosing AI full-time is the obvious play for career security and better compensation.

But building on-chain brings a level of purpose that's hard to find anywhere else. I'm holding out a bit longer, hoping the ecosystem matures and finds the stability it needs.

I really hope the fruits of my labor help move things forward here.

[Varun @csvarun26396]

@lookonchain I hope its to bootstrap their startup

[Varun @csvarun26396]

The difference between how many people want to long/short SPCX and how many can do it is the addressable market for Defi

[Varun @csvarun26396]

@binji_x Hopefully we dont live to see that day. We can’t afford a talent exodus guys

[Varun @csvarun26396]

@binji_x https://t.co/zGclEwZs7U

[Varun @csvarun26396]

Clint eastwood retires today, aged 96

Meanwhile we have friends chasing FIRE (Financial Independence Retire Early)

The age old saying- An idle mind is a devils workshop

[Varun @csvarun26396]

@dorvonlevi traversing uncharted waters

[Varun @csvarun26396]

@devanshmehta Great run! Looking forward to seeing you go governance maxi again

[Varun @csvarun26396]

Atleast the EF did not falsely blame AI

[Ethereum Foundation @ethereumfndn]

Today, the EF is changing shape, concluding a months-long process of reorganization as part of the implementation of the Mandate and the Treasury Management Policy.

We come out of this process with the structure, activities, and people necessary for execution on the critical tasks ahead of us, but also with 54 fewer colleagues, roughly 20% of the EF, many of whom will be finding ways to contribute to Ethereum from outside the EF in the coming weeks.

Find a brief introduction to the new structure, and learn more about how we are supporting the people who are leaving in the full post below:

[trent.eth @trent_vanepps]

https://t.co/k2GESeuJuE

[Paul Frambot 🦋 @PaulFrambot]

One of the next frontiers for onchain lending will be privacy: the ability for institutions to allocate, earn, and manage positions without showing their strategy to the entire market.

Today we announce with @Zama the launch of the first confidential vault: confidential USDC can be deposited into Morpho Vaults, allowing institutions to earn yield on their stablecoins without exposing their positions.

[Varun @csvarun26396]

My thoughts on India's stance towards stablecoins.

First, where I agree.

Unbacked cryptocurrencies like Bitcoin/Ethereum are neither money nor financial assets in the traditional sense. No promise to pay, no issuer, no underlying cash flow. But I'd push back gently on the tulip mania framing — not to defend speculation, but to offer a more precise characterisation. Bitcoin and assets like it are better understood as digital commodities — censorship resistant, decentralised, live, unstoppable, no counterparty risk, etc and valued for such properties rather than any claim they represent. Commodities can be speculative and still be legitimate asset classes.

On the risks of stablecoins — I find the Deputy Governor's analysis largely persuasive. Currency substitution, erosion of monetary policy transmission, bank disintermediation, seigniorage leakage to foreign private issuers — these are serious concerns, particularly for an emerging market like India. If Indians migrate en masse to USDT or USDC, the RBI loses grip on money supply, Circle/Tether captures seigniorage that belongs to the Indian state, and the banking system loses its deposit base. The IMF-FSB synthesis paper is right that EMDEs face an amplified version of these vulnerabilities. I do not want to minimise any of this.

Where I'd like to participate in the debate is on two questions: whether the benefits have been fully considered, and whether the policy conclusion that follows from these risks is the right one.

On the benefits — UPI and stablecoins solve different problems.

The argument that UPI already delivers fast, cheap, reliable payments — and therefore stablecoins add little — is worth examining more closely. UPI and stablecoins do not really compete. They address different problems.
UPI is a closed domestic rail. It cannot settle a payment with someone in China, Argentina, or a freelancer in rural Kenya — not without a correspondent bank, currency conversion, and days of settlement friction. Stablecoins are composable, open, and global. Anyone with a smartphone and internet access can send and receive value instantly, peer-to-peer, across borders, without asking permission from any intermediary. That is a categorically different capability, not a marginal improvement on existing infrastructure.

On financial inclusion — the speech notes that stablecoins still require smartphones and internet, and therefore may not reach the most underserved. I'd offer a different perspective here. Financial inclusion through traditional channels requires enormous coordination — local government buy-in, physical infrastructure, trained staff, years of regulatory rollout. A smartphone and a data connection can hand someone access to the global financial system today, without waiting for that coordination to happen. That is not a limitation of stablecoins. That is arguably their most powerful feature.

On the bridge to the real economy — the Deputy Governor is right that today most stablecoin activity remains within crypto markets. But the direction of trend matters. Stripe, PayPal, and major AI and cloud infrastructure providers are already moving toward stablecoin-native payments. The rails are being laid now. Policy built on today's adoption levels risks being obsolete before it is implemented.

On the risks — the right response is regulation, not prohibition.
The dollarisation concern is the strongest part of the speech, and it deserves a direct answer. If Indians increasingly hold USDT or USDC, demand for the Rupee weakens. This is a real problem.

But I'd argue it points toward a specific solution rather than a blanket one. The way to address dollarisation through stablecoins is to ensure that when Indians use stablecoins, they use a Rupee-backed one.

Here is what a regulated framework could look like. RBI-licensed issuers — existing scheduled commercial banks or new fintech licensees under a dedicated stablecoin charter — holding 1:1 Rupee reserves in ring-fenced, RBI-approved instruments. Mandatory proof-of-reserves attestation by RBI-approved auditors, published on a regular basis. A legal obligation to redeem at par on demand.

This structure satisfies the Deputy Governor's own framework for what money should be. Issued under RBI license — fiat. Pegged 1:1 to the Rupee — single. Legally mandated redemption guarantee — promise to pay. The concerns, addressed within his own terms.

The US is working through exactly this with the GENIUS Act — mandating reserves, audits, and federal oversight for stablecoin issuers. India need not invent this from scratch. It can adapt a framework that is already being stress-tested.

On the recommended path — a respectful disagreement on CBDCs.
The speech proposes CBDCs as the superior alternative, and I understand the appeal — they satisfy all the attributes of money while keeping innovation within the regulated system. But I have two concerns.
First, CBDCs carry surveillance risks that privately issued digital money does not. A government-issued digital currency with full transaction visibility may undermine the financial privacy that citizens reasonably expect, and that physical cash currently provides. The Deputy Governor himself acknowledges the need for tiered anonymity — which suggests this tension is real.

Second, and more practically — CBDCs are slow to build and will arrive late. Bilateral CBDC corridors require prolonged diplomatic negotiation and are hostage to the state of international relations. UPI interlinking, while genuinely valuable, is structurally limited to jurisdictions where bilateral agreements exist. It cannot scale to the long tail — a developer in Greenland paying for an Indian SaaS product, a migrant worker sending money home from an unbanked region, or an AI agent autonomously settling a cross-border microtransaction.

The Deputy Governor asked: can we afford to experiment with the foundations of monetary stability?

It is a fair and important question. My perspective is that the greater risk may be inaction — ceding the infrastructure of global digital money to Dollar-denominated private issuers, while waiting for a sovereign alternative that may not arrive at scale in time.

India has the regulatory sophistication, the banking infrastructure, and the policy precedent — payment banks, UPI, the account aggregator framework — to design a world-class stablecoin regime. The opportunity is to channel that innovation toward a Rupee-backed instrument, fully regulated, fully reserved, and fully accountable.

[ReserveBankOfIndia @RBI]

Stablecoins - Do They Have a Role in the Financial System

Keynote Address delivered by Shri T. Rabi Sankar, Deputy Governor, Reserve Bank of India at the Mint Annual BFSI Conclave 2025 on December 12, 2025 in Mumbai
https://t.co/F3BqazKJEI
Video Credit: Mint

[Varun @csvarun26396]

Not cool. Just when you thought there was going to progress in regulations

[miles jennings @milesjennings]

This is one of the most anti-crypto laws in the U.S.

It taxes the exchange, transfer, or storage of digital assets—you buy BTC, you pay a tax; you hold your BTC on Coinbase, you pay a tax; and so on.

There is effectively no comparable state financial transaction tax on stocks, bonds, or derivatives anywhere in the country. That means crypto is being singled out in violation of several federal laws.

Further, the approach makes little sense—you aren’t taxed if you exchange a stock, bond, or derivative in paper form, but you are taxed if they happen to be recorded on a blockchain? That’s like taxing email.

So, rather than embracing innovation and the cost efficiencies blockchains can deliver for ordinary people in Illinois, the state is poised to punish its entrepreneurs and citizens that want to use crypto.

This is a shame—it was only just recently that Illinois embraced a constructive approach to blockchain technology through the adoption of the effectively-scoped Digital Assets and Consumer Protection Act. This new tax is a complete 180.

When states adopt discriminatory, asset-specific taxes that drive builders and users elsewhere, we all lose.

[Varun @csvarun26396]

Payment infrastructure that I came across while topping up my AI usage credits

- Coinbase Payments on Openrouter
- Coingate on NordVPN
- A combination of Privy and Stripe on Hermes

Magic internet money for magic internet services. The thesis is quietly playing out.

[Varun @csvarun26396]

OpenRouter will own the customer

[OpenRouter @OpenRouter]

Introducing the Fusion API, the smartest compound model in the market.

Fusion achieves Fable-level intelligence at half the price.

How it works 👇

[Varun @csvarun26396]

Switched from gemini-3.5-flash to deepseek-v4-flash for my Hermes agent. Costs went down by 80% .

When the world catches up, then China would have done to software what it already did to hardware - Dramatically reduce costs while improving quality.

Even Silicon Valley would then be standing on thin ice.

[The Kobeissi Letter @KobeissiLetter]

BREAKING: OpenAI has confidentially filled for an IPO.

We are about to witness the most incredible IPO run in history.

[Varun @csvarun26396]

@brian_armstrong Hot Take - China based LLMs(Deepseek, Tencent) are more cost-efficient than the ones from US (OpenAI, Anthropic)

If China does to US's R&D what they did to US manufacturing.

We have an interesting software economy on our hands.

[Varun @csvarun26396]

@coingecko https://t.co/d52sDsAG0k

[Varun @csvarun26396]

BD fam, times are changing. Hope you're levelling up!

[Varun @csvarun26396]

@binji_x An actually working and more efficient version of the Cosmos ecosystem and its governance setup

[Varun @csvarun26396]

For me, it's not stablecoins, perp DEXs, or prediction markets. It's about how thousands of actors coordinated to build and maintain a global public good

That is the mother of all innovation. We’re still just looking at the cherry on the tip of the iceberg - The 1% of the 1% of what's possible

[Elon Musk @elonmusk]

@McMurchie @alexmd2 @Techmeme @CatherineShu At this point, I want ETH even if it is a scam