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Welcome back to the breakdown.

It is Tuesday, February 18th, and today we are going to talk about defy, and in particular,

this set of attacks or exploitations or whatever you want to call them that have been

defining the conversation in not just defFi, but crypto as a whole for

the last two or three days. I think that in many ways, Defy has come to be the perhaps second

greatest focus across this industry after perhaps Bitcoin and just the role of Bitcoin

in the world at large. Defy has surged in attention. It has obviously

come to define the Ethereum community. And with recent milestones like a billion dollars being

locked in defy, it is starting to get notice from people who are outside the crypto community

and who are in the mainstream financial world. And that's why these attacks,

these exploitations, which really in some ways represent the first sustained affront to the

defy system that isn't just theoretical, but is clear and in practice, are so important, right?

This is, I think, a pivotal moment in the history and evolution of the

DFI space, and which should have ramifications for how the space evolves. First, we're going to

talk about what actually happened, and then second, we're going to look at the way that

different parts of the community are responding to it. All right, so there are two attacks we're going to be talking about today.

And actually, before we dive into them, let's talk about the nomenclature that we're using for a second.

Because in various reporting, in tweets and whatever, these attacks have been called variously hacks, they've been called exploits,

they've been called smart people seeing an arbitrage opportunity,

and that's what makes this interesting, because both of these actions weren't traditional hacks

...