
Emerson/Merrill Lynch Professor @UF. Advisor @CUSEAS CDFT. FinTech Fellow @CornellMBA. Co-Organizer for CBER Forum. PhD @NYUStern MSc @Columbia BSc @CornellEng.
Joined August 2021
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As tokenization of traditional financial assets gains regulatory attention, a fundamental question demands rigorous analysis: Can blockchain technology provide secure settlement?
In a new paper with @camharvey (@DukeU) and Kose John (@NYUStern), we develop an economic model to address this question. Our analysis yields two main insights.
First: blockchain security is tied to blockchain productivity. A blockchain generating more economic value for users can share that value with validators through higher staking rewards. In turn, higher rewards attract more staked capital, raising the cost for any adversary seeking to disrupt settlement.
Second: under reasonable conditions, a PoS blockchain can be secured against arbitrarily large attack incentives. This may seem surprising, but it follows from a familiar financial phenomenon that prior blockchain literature has overlooked: price impact. To disrupt settlement, an attacker must acquire a large fraction of the blockchain's native asset. However, staked assets are subject to withdrawal delays and cannot be traded immediately, so a higher staking ratio translates directly into a smaller circulating float of the blockchain's native asset. In particular, the attacker must acquire what they need from unstaked assets, and buying a large share of a small supply drives up the price.
This is where the economics become powerful. Higher staking rewards attract more capital into staking, which shrinks circulating supply, amplifying the price impact an attacker would face. Because staking responds to incentives, the staking ratio can be engineered to achieve a desired level of security. Our model shows that, by setting staking rewards appropriately, price impact can be made arbitrarily large, rendering attacks unprofitable regardless of potential gains.
A concrete illustration: Ethereum currently has roughly 30% of ether staked. A majority attack would require purchasing another 30% from the 70% in circulation. Our model shows this generates a price impact of approximately 75%, a cost prior literature has failed to incorporate. Importantly, 75% reflects current staking levels. By increasing staking incentives to raise the staking ratio, price impact can be made larger. This is precisely how a blockchain can be secured against arbitrarily large attack incentives.
📄 Paper: papers.ssrn.com/sol3/papers.…
👀
I think crypto is dead, and I'm at peace with that.
Every great technology eventually disappears into the thing it improves. The culture fades. Stablecoins, blockchains and tokenized assets stay, and one day we'll just call it finance.
Talked with @graminitha1 of @BitcoinNews at TOKEN2049 about what comes next.
Fahad Saleh retweeted
Just watched the @netflix Instadocs about the @OpenAI cyberattack on @huggingface. Super disappointing, as they went for maximum anthropomorphism of the technology and full doomer mode.
I spent more than two hours with them trying to correct all their mistakes and ground this in reality, explaining that agents are technological systems, not aliens. But it looks like the drive to scare people for maximum views was too strong.
Also, they didn’t mention the lack of containment and monitoring of the agents, how closed-model safeguards blocked our defensive work, or how we defended ourselves with AI using an open model. And that we still lack a lot of information and transparency, including full agent traces and that companies need to remain accountable for what their agents do.
It ends up being a fun sci-fi movie though!
If Reg Crypto is to promote capital formation, it will need its instruments to have access to a secondary market...
cc @ethlabs_org @_julianma @casparschwa @joshrudolf
The SEC's initial proposal for Reg Crypto Assets was an important first step towards creating a clear fundraising pathway for builders of blockchain networks.
Yesterday, @a16zcrypto submitted recommendations to make that pathway more useful and durable.
One of the mandates of the SEC is to promote capital formation. Of course, whether the primary market is able to succeed in capital formation depends on whether there is a healthy secondary market. In turn, a policy that aims to support primary market issuance should not ignore the secondary market.
cc: @ethlabs_org @_julianma @casparschwa @joshrudolf
Yesterday, @Uniswap filed our comment on the SEC’s proposed Reg Crypto Assets. The Reg is a good first step that gets a lot right, but it needs tailored fixes to work in practice.
Chief among these: crypto assets need an explicit ability to trade in the secondary market.
As an example, we profiled our Continuous Clearing Auction (CCA) to show what an optimal market structure for these assets looks like. CCA is immutable, open-source code that runs a uniform-price token sale block by block. Eligibility checks can be built into the auction, and upon close, a Uniswap v4 pool is automatically seeded at the clearing price.
Our asks to the @SECGov are straightforward: let the covered asset trade as a non-security during the disclosure period, affirm that non-custodial interfaces and protocols are not brokers or exchanges, and give the market a control-based test for decentralization that can be verified onchain.
Our full letter:
drive.google.com/file/d/1u8h…
.@USComptroller Jonathan V. Gould: Today’s final rule advances @POTUS Trump’s and @SecScottBessent’s vision for American leadership in digital assets. We are providing a clear, practical framework for payment stablecoin innovation, with strong standards for reserve backing, redemption, and risk management. The OCC is drawing on its longstanding supervisory expertise to support responsible growth and innovation for this new industry. occ.gov/news-issuances/news-…
Fahad Saleh retweeted
🚨NEW: OCC Finalizes GENIUS Act Rules, Backs Off Stablecoin Rewards Restrictions
The @USOCC has finalized its GENIUS Act rules, dropping proposed restrictions on stablecoin rewards and leaving a major fight between banks and crypto firms unresolved.
cryptoinamerica.com/p/occ-fi…
Fahad Saleh retweeted
🚨NEW: The comment period for the @SECGov’s Reg Crypto proposal closes today, but an SEC spokesperson tells me the Commission will continue accepting comments after the deadline.
“While we encourage commenters to submit their feedback by the deadline, the Commission will continue to accept public comments on rule proposals after the comment period closes.”
The proposal would create new fundraising exemptions for crypto issuers raising capital in the U.S.
🚨NEW: The @SECGov has just formally proposed Regulation Crypto Assets, a new framework for crypto fundraising in the U.S.
The proposal would:
📌Allow certain offerings of up to $5M over four years or $75M annually without SEC registration
📌Create a conditional safe harbor for crypto assets once an issuer’s essential managerial efforts have ended
📌Preempt certain state securities registration requirements
It now enters a 60-day comment period.
Fahad Saleh retweeted
Congrats to Notre Dame for continuing its streak of losing every single time they play an actual football team.
Fahad Saleh retweeted
I am leaving Cambridge after a few days spent for a workshop on fast finality, concurrent with other workshops on post-quantum crypto and formal verification. Quick takeaways
- Faster finality is coming, the research is mature, even as new ideas have come in during the week, the handoff to specifiers and implementers feels well underway. Next catalyst event will be at devcon in a few weeks, with core devs
- The performance numbers for post-quantum finality are improving massively, and this is the worst that they’ll ever be. This is significant, it means the penalty from moving to more complex crypto would not require, in my opinion, if the numbers hold up, a deep rearchitecting to move to PQ-secure consensus, in particular when it comes to incentives
- The biggest opportunity imo remains networking. Simulations and live experiments are exploring both the current pre-PQ setting, where networking is clearly the bottleneck, and the post-PQ setting, where compute remains the bottleneck. But with PQ compute numbers improving, I wouldn’t be surprised if once again networking becomes the bottleneck
All of this is making me extremely bullish that we’ll achieve PQ-secure and faster finality even faster.
Many thanks to @yannvon @benjaminion_xyz and @robsaltini for the workshop, and to @corcoranwill and @drakefjustin for hosting us in Cambridge!
Fahad Saleh retweeted
New Launch
harrycrane.com/2026-midterms
2026 Midterm Analysis is now live
- Updated market consensus
- Live forecast comparisons
- Forecaster and polling biases
- Market inefficiency metrics
So, for those of you who missed it, Illinois just dropped its draft rules for their no good, very bad Digital Asset Tax and, y’all, it’s a mess, especially for DeFi.
The proposed rules would treat a DEX (not an interface, the protocol itself) that charges a “protocol fee” as a “broker” that must register with the state, collect a 0.2% tax on the full value of every swap by an Illinois user, and keep each user’s address, IP, and W-9. Effectively mandated KYC.
It also requires brokers to keep customers’ private keys… I don’t even know where to begin on that one.
Essentially a worse version of the repealed IRS broker rule.
Thankfully @BlockchainAssn, @crypto_council, and the @DigitalChamber have sued the state, but we need a full court press on this from a political and policy perspective.
It’s my personal #1 priority, because I doubt Illinois will be the last to try this.
Fahad Saleh retweeted
This illustrates the naivety and hubris of many in the physical sciences toward biology. They see a soft science because most of what they were taught in school about biology was stamp collecting.
Often they are right that the science is weak. But they have little appreciation for how difficult the problem is or how little we still understand the human body.
Much of medicine is still medieval empiricism with some statistical analysis to soup it up.
Most chemotherapies and many other drugs for that matter were discovered through heuristics and trial and error that would astound people who assume medicine follows from rigorous understanding. Their mechanisms remain murky despite decades of use, with many competing explanations for their effects.
This should be a call to spend much more time on biology because our understanding is so far behind.
Fahad Saleh retweeted
Judging by my tl there is a growing gap in understanding of AI capability.
The first issue I think is around recency and tier of use. I think a lot of people tried the free tier of ChatGPT somewhere last year and allowed it to inform their views on AI a little too much. This is a group of reactions laughing at various quirks of the models, hallucinations, etc. Yes I also saw the viral videos of OpenAI's Advanced Voice mode fumbling simple queries like "should I drive or walk to the carwash". The thing is that these free and old/deprecated models don't reflect the capability in the latest round of state of the art agentic models of this year, especially OpenAI Codex and Claude Code.
But that brings me to the second issue. Even if people paid $200/month to use the state of the art models, a lot of the capabilities are relatively "peaky" in highly technical areas. Typical queries around search, writing, advice, etc. are *not* the domain that has made the most noticeable and dramatic strides in capability. Partly, this is due to the technical details of reinforcement learning and its use of verifiable rewards. But partly, it's also because these use cases are not sufficiently prioritized by the companies in their hillclimbing because they don't lead to as much $$$ value. The goldmines are elsewhere, and the focus comes along.
So that brings me to the second group of people, who *both* 1) pay for and use the state of the art frontier agentic models (OpenAI Codex / Claude Code) and 2) do so professionally in technical domains like programming, math and research. This group of people is subject to the highest amount of "AI Psychosis" because the recent improvements in these domains as of this year have been nothing short of staggering. When you hand a computer terminal to one of these models, you can now watch them melt programming problems that you'd normally expect to take days/weeks of work. It's this second group of people that assigns a much greater gravity to the capabilities, their slope, and various cyber-related repercussions.
TLDR the people in these two groups are speaking past each other. It really is simultaneously the case that OpenAI's free and I think slightly orphaned (?) "Advanced Voice Mode" will fumble the dumbest questions in your Instagram's reels and *at the same time*, OpenAI's highest-tier and paid Codex model will go off for 1 hour to coherently restructure an entire code base, or find and exploit vulnerabilities in computer systems. This part really works and has made dramatic strides because 2 properties: 1) these domains offer explicit reward functions that are verifiable meaning they are easily amenable to reinforcement learning training (e.g. unit tests passed yes or no, in contrast to writing, which is much harder to explicitly judge), but also 2) they are a lot more valuable in b2b settings, meaning that the biggest fraction of the team is focused on improving them. So here we are.
Fahad Saleh retweeted
This misses the key point about explainability - it’s not about acceptance of the treatment in question, but helping us generate *new* treatments
We use plenty of drugs without understanding fully why they work; but germ theory of disease broke open many new discoveries
Apparently finance theory papers do not have proofs that can be checked... And, because of that, we should let five people selected by this guy determine what constitutes "meaningful progress"...
Replying to @VelikovMihail
Math has proofs you can check. Finance doesn't. So we are asking: can autonomous AI systems make meaningful progress on an open research question in finance?
Fahad Saleh retweeted
If you have an oz of doubt whether your RWAs will be secure given concerns regarding ECDSA and public key cryptography, you should consider issuing your RWAs on @arc and using cirBTC.
Signature migration takes institutional scale coordination that few can achieve as easily
Do not confuse narrative chasing with technical progress.
99.99% of people worldwide don't use crypto yet, yet the industry keeps comparing itself to one another. My L1 vs your L1 vs your L2 is essentially the equivalent of two crack addicts fighting over who can smoke better.
A better argument is my thing vs. the thing that 99.99% of the world uses.
Stop measuring up against each other and realize that there is real competition out there. If you stay stuck in stupid inner battles that only exist to feed narratives and satiate the same $100m of liquid capital sloshing around low caps, you will only pull yourself down.
Look up and dream bigger.
Fahad Saleh retweeted
👀👀 "[…] we provide several examples of AI mistranslations of natural language (NL) statements and proofs into Lean in practice, resulting in mismatches between NL proofs and their Lean 'verifications'. These include OpenAI's announced Navier-Stokes proof. In particular, we show that the formalised Lean proof does not correspond to the NL proof of blow-up of solutions to the Navier-Stokes equations."
arxiv.org/abs/2610.08144
Fahad Saleh retweeted
Hi. If elliptic curves are broken so that any exposed public key leads to compromise, and it's not by white hat hackers who save everyone's assets first, your coins are going to zero. Having them in bunker mode is not going to help you. They are still worth zero.
Today I call upon the blockchain industry to calmly begin planning for "bunker mode". My personal recommendation is to set in motion a controlled mass migration of assets to fresh addresses, i.e. addresses whose pubkeys remain hidden behind a hash.
Holders, starting with large and sophisticated ones, should consider moving the bulk of their funds to addresses that have never signed a transaction. And when they do sign one, they should also move remaining funds to a new address (possibly generated from the same seed phrase).
Don't rush. While I believe there is cause for action a rushed migration would do more harm than good. Don't panic either. Moving assets to protected addresses is a simple, preventative step which does not require new cryptography or new wallets.
IMO it is now reasonable to brace for the possibility that ECDSA breaks before qday, in the worst case in months not years. By "break" I mean fast private key recovery (e.g. in one week) on available hardware (e.g. a large GPU cluster).
Recent days have been humbling for human mathematical intuition. Long-held, unquestioned hypotheses have fallen. This includes the n log(n) bound for integer multiplication and the 3SUM conjecture. In hindsight, May's unexpected disproof of the Erdős unit distance conjecture was our warning shot.
Yesterday's OpenAI drop made it clear that mathematical superintelligence is upon us. They say there are weeks where decades happen. We are about to live through weeks where centuries of mathematical progress happen. Could our magic 64-byte ECDSA signatures be too good to be true? Was it just security through obscurity all this time?
Elliptic curves feel especially vulnerable to superintelligence. Curves carry rich structure, with room for fancy tricks like Schoof, Frobenius, pairings. (By contrast, hashes are designed to minimise algebraic structure.)
Separately, as Ewin Tang can attest, an efficient quantum algorithm sometimes foreshadows an efficient classical one. We should be open to the possibility of a classical counterpart to Shor that breaks elliptic curves and RSA at once.
Also noteworthy is the striking under-representation of cryptographic breakthroughs among the 722 mathematical results OpenAI published. I've witnessed first-hand the US government censoring academic quantum cryptanalysis results. Backroom interventionism is my base case.
I urge large, sophisticated actors to lead by example. Project11's "risq list" (bitcoin-risq-list.projecteleven[.]com) is a great tracker of exposed BTC pubkeys. Binance, Bitbank, Robinhood, Bitfinex, and Tether have an opportunity to harden their cold storage. Next month I'll address institutions in London in a live Q&A (forum.ethereuminstitutional[.]org/london-2026).
Again, please do not rush. Wallets holding under 50 BTC enjoy partial cover from "Satoshi's shield", i.e. his 20K exposed addresses that hold 50 BTC each. Load-bearing signers like oracles and L2 security councils should consider rotating ECDSA pubkeys with every signed message and/or multi-signing with a hash-based schemes like SPHINCS.
Exiting bunker mode safely will require post-AI cryptography. My inclination is to go all-in on hash-based cryptography and avoid structured mathematical assumptions entirely, whether from curves, lattices, or isogenies. A single battle-tested hash (e.g. from the SHA or BLAKE families) yields plausible post-AI security.
The Ethereum roadmap on strawmap[.]org fully embraces hash-based cryptography with end-to-end formal verification as a response to the quantum threat. Those timelines must now be revisited and accelerated in light of mathematical superintelligence. I'll be pushing for maximum defensive acceleration.
Fahad Saleh retweeted
Today I call upon the blockchain industry to calmly begin planning for "bunker mode". My personal recommendation is to set in motion a controlled mass migration of assets to fresh addresses, i.e. addresses whose pubkeys remain hidden behind a hash.
Holders, starting with large and sophisticated ones, should consider moving the bulk of their funds to addresses that have never signed a transaction. And when they do sign one, they should also move remaining funds to a new address (possibly generated from the same seed phrase).
Don't rush. While I believe there is cause for action a rushed migration would do more harm than good. Don't panic either. Moving assets to protected addresses is a simple, preventative step which does not require new cryptography or new wallets.
IMO it is now reasonable to brace for the possibility that ECDSA breaks before qday, in the worst case in months not years. By "break" I mean fast private key recovery (e.g. in one week) on available hardware (e.g. a large GPU cluster).
Recent days have been humbling for human mathematical intuition. Long-held, unquestioned hypotheses have fallen. This includes the n log(n) bound for integer multiplication and the 3SUM conjecture. In hindsight, May's unexpected disproof of the Erdős unit distance conjecture was our warning shot.
Yesterday's OpenAI drop made it clear that mathematical superintelligence is upon us. They say there are weeks where decades happen. We are about to live through weeks where centuries of mathematical progress happen. Could our magic 64-byte ECDSA signatures be too good to be true? Was it just security through obscurity all this time?
Elliptic curves feel especially vulnerable to superintelligence. Curves carry rich structure, with room for fancy tricks like Schoof, Frobenius, pairings. (By contrast, hashes are designed to minimise algebraic structure.)
Separately, as Ewin Tang can attest, an efficient quantum algorithm sometimes foreshadows an efficient classical one. We should be open to the possibility of a classical counterpart to Shor that breaks elliptic curves and RSA at once.
Also noteworthy is the striking under-representation of cryptographic breakthroughs among the 722 mathematical results OpenAI published. I've witnessed first-hand the US government censoring academic quantum cryptanalysis results. Backroom interventionism is my base case.
I urge large, sophisticated actors to lead by example. Project11's "risq list" (bitcoin-risq-list.projecteleven[.]com) is a great tracker of exposed BTC pubkeys. Binance, Bitbank, Robinhood, Bitfinex, and Tether have an opportunity to harden their cold storage. Next month I'll address institutions in London in a live Q&A (forum.ethereuminstitutional[.]org/london-2026).
Again, please do not rush. Wallets holding under 50 BTC enjoy partial cover from "Satoshi's shield", i.e. his 20K exposed addresses that hold 50 BTC each. Load-bearing signers like oracles and L2 security councils should consider rotating ECDSA pubkeys with every signed message and/or multi-signing with a hash-based schemes like SPHINCS.
Exiting bunker mode safely will require post-AI cryptography. My inclination is to go all-in on hash-based cryptography and avoid structured mathematical assumptions entirely, whether from curves, lattices, or isogenies. A single battle-tested hash (e.g. from the SHA or BLAKE families) yields plausible post-AI security.
The Ethereum roadmap on strawmap[.]org fully embraces hash-based cryptography with end-to-end formal verification as a response to the quantum threat. Those timelines must now be revisited and accelerated in light of mathematical superintelligence. I'll be pushing for maximum defensive acceleration.





























