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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching You're watching TVPN.
Speaker 2:Today is Wednesday, 05/28/2025. We are live from
Speaker 1:the TVPN Ultra Dome.
Speaker 2:But today is the trenches of technology. The domicile of DeFi,
Speaker 1:the mansion of meme coins, The capital of crypto.
Speaker 2:It's crypto day on TPPN. We started early. We're talking to people from all over the globe. We just talked to Balaji. We talked
Speaker 3:already been
Speaker 1:we've been podcasting for hours.
Speaker 2:Whole hours. We cut it down for you. We have our first three interviews. They're gonna play over the next hour, then we're gonna hop back on and do a whole bunch more live interviews. So stay tuned, but the but we're kicking it off with biology.
Speaker 3:Let's go.
Speaker 2:Let's go. Big news. We have Balaji in the studio. We're gonna bring him in, talk to him about for about forty five minutes, take his temperature on what's going on in crypto. I want the update on what he's up to and really just take us on the whirlwind tour.
Speaker 2:We're gonna get to the bottom of what happened, in 1971. We're gonna get the final answer.
Speaker 3:The final answer.
Speaker 2:Hotly debated. We're gonna figure it out
Speaker 3:right debate will
Speaker 4:be over.
Speaker 2:Let's bring Ambology. How are doing? Good to see you.
Speaker 5:Great to see you guys.
Speaker 2:Hey. Yeah. It's amazing having you on the show. Can you give us just the update on what is your day to day like? I'm familiar with some of the prehistory, but what are you working on?
Speaker 2:What are you most excited about right now?
Speaker 5:Sure. So I actually can I project here?
Speaker 3:Yeah, please.
Speaker 2:Is it possible? Yeah.
Speaker 6:You can
Speaker 2:share your screen.
Speaker 5:Alright. So about in q four, we just opened something I'm calling Network School. Yeah. Can you guys see the Yeah. The opening day shot Yeah.
Speaker 5:So, that was the kind of ribbon cutting. Cool. And this is something that combines a bunch of things I care about. Here's like the site is at ns.com. Great domain.
Speaker 7:No way. No
Speaker 2:way. A fantastic domain.
Speaker 5:Thank you. Thank you. I appreciate that. You guys are connoisseurs also.
Speaker 2:Have a four letter domain. You're kinda destroying us with the two letter Oh,
Speaker 1:he mocked us.
Speaker 5:I apologize. Well, well, I we will, you know, I I I still, to, you know, you're you're
Speaker 3:in the the Fordhamaz Club or something, I guess. I don't know. Yeah. The four characters club. Right?
Speaker 3:Yeah. Okay.
Speaker 2:Yeah. So so break it down to the point, saw a 100 fellowship. I also see Yes. A school. Typically, I have to pay for school.
Speaker 2:Are you paying me? How does this all work?
Speaker 5:Right. So this is essentially there's several things that are happening at the same time. Sure. Like, obviously, academia is basically over as we know it.
Speaker 8:Yep.
Speaker 5:It's about 10 different things hitting it at the same time. Mhmm. And it's, you know, lost trust and credibility and so on. Yeah. And, you know, what we've got here is we're doing global meritocracy.
Speaker 5:Anybody from anywhere, obviously, Americans are welcome, but anybody who's what I call Internet first is welcome. Right? So if you're, you know, pro Bitcoin, if you're pro crypto currency, smart contracts, and so on, you're pro AI, you're pro biotech, pro nuclear, and whatnot. And those kind of people exist all over the world. Yeah.
Speaker 5:Totally. And so we're bringing them here. And so global meritocracy, basically. And there's there's Vitalik, there's Brian Johnson. Can you see the video?
Speaker 2:Yeah. Got couple.
Speaker 5:So Yeah. This is it. Basically Fantastic. We're actually doing the startup society. So that's what that's what Norfolk School
Speaker 8:is.
Speaker 9:There's much
Speaker 5:more I can say about it, but that's that's the that's the idea.
Speaker 2:Okay. So, walk me through the actual experience of joining. Is this cohort based? A lot of these new education initiatives, very few of them have just jumped straight to, we're gonna replace a four year experience. And I don't know if that's because the four year experience is fundamentally broken.
Speaker 2:There's a lot of things that are potentially broken about higher ed. But what is your view on just the length of time that it takes to get whatever you need to out of academ academia or schooling generally?
Speaker 5:That's right. So well, very good question. It's a long long topic. But Sure. Just to to to level set, you know, I actually spent, you know, ten years at Stanford.
Speaker 5:I was a I was an undergraduate graduate. Got my MS in chemical engineering, BSMSPH electrical engineering. Taught computer science and stats there. I I'm a research scientist. I have 5,000 plus citations.
Speaker 5:I blah blah did genomics, taught, you know, computer science and so on at Stanford. So I know academia fairly well, and in fact, I thought for the first, you know, I don't know, ten years or so of my adult life that I was actually gonna be a professor. And then I, you know, started a genomics company and, you know, basically became, you know, got into tech. And my view is, there's many things I could say about the four year, you know, college education, but one issue is it's like front loading all the cost to the beginning, and then there's zero budgeted for maintenance over somebody's life. So it's as if you paid $200,000 for a car and then zero for oil or gas or, you know, wheel changes or so on for the rest of life.
Speaker 5:And so people get this expensive education and they forget all of it just a few years later. Yeah. I'm sure if you gave test retest, you know, stats and looked at what percentage they actually retained. We know all the stuff about space repetition. Yeah.
Speaker 5:We know forgetting curves and
Speaker 3:so on. So basically, the education is gone. And what you really want is something that's like continuous education over the course of your life Sure.
Speaker 5:Where, you know, then then, like, for example, VO comes out or some new API comes out. What you want is to be able to quickly load that into your brain, be productive, and to have some budget every year in a continuous sense as opposed to, you know, like a like a upfront Mhmm. Forget everything sense. That doesn't even get into the fact that, you know, unless you've been in the world of work, you don't actually appreciate how amazing it is to have just time to purely study. You have to learn everything on the job.
Speaker 5:It It also is something like front loading the vacation and getting all these kids at age 18 into like a lifetime of student loan debt. There's many many things wrong with it, but that era is ending. And then what's next? Like my view, you know, why why am I doing this in part because, you know how well, actually, we'll get right into it. You know how America started?
Speaker 2:Loosely? Boston Tea Party? Actually
Speaker 5:America was started by the tech and the bro forming the tech. Let me explain. Okay? So Amazing. Okay?
Speaker 5:Here's why. So, Massachusetts, Massachusetts was a tech
Speaker 10:and Virginia was a pro.
Speaker 3:Okay. There we go. There we go. Okay. For those
Speaker 5:who don't know, like Massachusetts, the Massachusetts Bay Colony, that's the Puritans, they founded Harvard in the sixteen hundreds when, you know, it was actually just a one room schoolhouse, basically, a one room one room place. Right? It was a very very small thing, very modest at the beginning. The Massachusetts Institute of Technology was founded about two hundred something years later, but basically, Massachusetts has always been the center of like higher learning, education, so on in The US. In Virginia, the cavaliers, you know, they were the they're the bro.
Speaker 5:They were muscular. They were on horseback, and, you know, they like to shoot things and so on. And actually, Virginia was, I mean, the most important state during the American Revolution. And a lot of the early American leaders came from Virginia. That was like the founder CEO archetype.
Speaker 5:Right? And both of these were actually different factions at at different times. One and lost in the English Civil War of like, you know, a hundred something years earlier. The round heads went to Massachusetts. That was like the left of of England, and the cavaliers were like the right, and they went to to Virginia.
Speaker 5:Anyway, so they basically when when the right and left were working together, that was the tech and the brow. Right? And that's what made America really great when they were working together. Now, course, not as Let's
Speaker 3:say you have a a husband and wife, and they have kids, and they have and one of one of the adults, you know, wants to participate in the network state, and the other parent is like, well, sorry, the kids are in preschool and tripping them. You know, that that feels like a large part of the people that you would want to recruit over time. I and I can imagine exactly what your kind of answers to that would be, but I'd love to hear it from you.
Speaker 5:Sure. So so first of all, you know, like my vision that we see is definitely family friendly. With that said, you know, who who moves and who moves what times. Right? So typically people move for education or employment, and they usually move in their twenties and so on and so forth.
Speaker 5:And once they're anchored in territory, they tend to only move if there's like a, you know, a job for both husband and wife, for example. Or if they're like refugees, like things get blown up like in Ukraine or Mhmm. Or in, you know, Middle East or what have you. Or if they're like refugees from, for example, blue states where the policy gets so bad that people just uproot and move and there's like muggings or, you know, something like that, syringes, etcetera. Like a lot of people left blue states for the last, you know, five years as you're aware because of that in part.
Speaker 5:And I know some people say things are getting better or whatever, but, like, you know, at least in some places, but I think in general that that exodus is still there. That's also actually how The US itself was populated at the beginning. There's two different forms, ways of founding start up societies, and they're complementary. The first is the Wild West frontier kind of thing, where you have single men coming out. But the second actually, the Puritans had quite a few married couples coming up, but because because they had an ideological or religious motivation.
Speaker 5:Then you also had waves of refugees from Europe. There's all kinds of crazy wars in Europe, like the revolutions of eighteen forty eight or, you know, famine in in Europe, like the Irish potato famine. And that also brings, you know, like like people out. Right? But so so the answer is, like, there's only so much you can do at the beginning.
Speaker 5:In a sense, you know how Dropbox started as an individual product and then it became a product for small teams and then for enterprise?
Speaker 3:Yeah. Mhmm. Yeah. Yeah. Yeah.
Speaker 5:Right. So in the same way, like, you first kind of have to build a product that works for like the individual remote worker, then maybe the couple where it's a two body problem, then like, you know, the early family, then the scaled up family, then like the whole community of people who are moving together, or the whole startup that's moving together. And so it's just like, think of it as kind of going from individual to SMB up up the ladder like that. So you definitely want families, and we actually have a lot of people who brought families. But the the product for families is itself a product.
Speaker 5:Just like Apple has a family plan, for example. Like, there's new permission structures and so on, account structures and stuff you need for families.
Speaker 3:I like how you explain this in product led SaaS terms.
Speaker 2:That's great.
Speaker 3:That's great.
Speaker 5:No. And I think it makes sense. I'm on the tech pros podcast. So I'm speaking
Speaker 3:Yeah. Yeah. No. And I and I totally buy that it's okay for these to be initially be frontiers and sort of kind of establish base camp effectively and then Totally. And bring more people in over time.
Speaker 2:Yeah. On on on the Bitcoin thing, I I I imagine that Bitcoin could be kind of the gold standard for many network states if they opt in. The interesting story that I've been toying with with Bitcoin is that the narratives have shifted. Bitcoin promised a few things. It didn't deliver entirely on all of those.
Speaker 2:It wasn't entirely anonymous. It wasn't entirely used for transactions, but it's become a fantastic store of value, and that's kind of where it landed. Do you think that that that that that's the correct story of Bitcoin? And do you think that crypto projects, is there a pattern of this, like, shoot for the moon, you'll land amongst the stars. It's okay to kind of build towards, like, a three pronged amorphous future because if one of them hits, you could still wind up with with a fantastic power law outcome.
Speaker 5:Oh, yeah. I mean, like,
Speaker 3:I think I think it's the
Speaker 5:only way of doing things.
Speaker 3:Mhmm.
Speaker 5:In the sense of it's kind of like people who there there's some people there's one guy who remained unnamed who, like, critiques, like, Elon's self driving schedule. He's like, he promised it an x date, and it only arrived like like a year later. He sucks so much. And and I'm like, you know, like, I think Elon is saying like Tesla or, you know, SpaceX, they turn impossible into late.
Speaker 3:Yeah.
Speaker 11:Yeah. That's good one.
Speaker 5:Yeah. You'll take that every single day, obviously. In my view, obviously. Right? The I wanna answer to to your point.
Speaker 5:So the way I the way I think about Bitcoin Mhmm. Is maybe the obvious way, but it's digital gold. Right? That is to say, it is infrequently moved on chain. It stores large amounts of value, and it actually serves some of the purpose of gold reserves where, like, you sort of want to show on chain that you have it.
Speaker 5:It's almost like meant to be public in some ways. Right? And then the various kinds of features that people have wanted to add over time to Bitcoin. The problem is that, like, gold should be as immutable as possible, and mutability is in conflict with I mean, programmability is a good value, and immutable is a good value, but those are like, you know, fire and water, they don't mix. Right?
Speaker 5:There's there's, you know, you want a drink of water and sometimes you want a hot fire to keep you warm, but you don't want them in the same thing, then you get nothing. Right? Yep. So immutability, Bitcoin's immutability, its stability, and its predictability, think of it as locked. Right?
Speaker 5:Mhmm. And then what happened was privacy went to, like, Zcash and zero knowledge, you know, Tornado Cash, which is now legal again and and so on. Mhmm. And and zero knowledge is booming. Zero knowledge is one of the big things that people are underpricing, I think.
Speaker 5:Cool. Biotech arguably another and so on. Then number two is programmability with smart contracts. That went to Ethereum and Solana and whatnot. Number three, transactions, you know, as digital cash, that went to stable coins, USDC, USDT.
Speaker 5:And then other kinds of things like storing data on chain and, you know, like like using it as an oracle, that went to other stuff, like Chainlink and and other kinds of things. And then, you know, basically other other functions like on chain data is NFT, it's just like on chain code of smart contracts. That that went to NFTs. Mhmm. So all of these things that were initially contemplated did happen.
Speaker 5:Yeah. It just happened on other chains that could tolerate the risk because, you know, you have success and failures then. Yeah. And Bitcoin couldn't tolerate that risk. Bitcoin is locked.
Speaker 2:Yeah. Yeah. Well, with the zero knowledge stuff, I I haven't been tracking it as closely most recently. Are you waiting for engineering challenges to be hurdled? Are you waiting for, just more code to be written?
Speaker 2:I understand that it's incredibly complex code, some of the hardest
Speaker 5:is hard code.
Speaker 2:Programming software, or is it more on the customer adoption side? We're ready for on ramps of kind of the masses, but it's just gonna take time for people to build the the bridges to actually make these new ZK products, just lovable and, like, you
Speaker 5:know Well, first, just to explain what zero knowledge is. Zero knowledge arguably is, and Vitalx also made this analogy, ZK arguably is to crypto with the transformers to AI. In the sense of it takes a bunch of things that were previously special case stuff
Speaker 6:Mhmm.
Speaker 5:And it puts it into kind of a common framework where you can like, lots of special case subroutines can now be general case to to very to oversimplify. And what that means is you can develop ZK protocols that for example, you know, ZKYC, where they just prove what is necessary for a government to be satisfied that this is a real human being and nothing else. Right? Yep. And that's necessary because look at these, you know, these KYC attacks on, like, you know, Raj, Ypsilant, and other kinds of people.
Speaker 5:Right? Like, the modern form of KYC is where governments force companies to store giant honey pots full of sensitive in information. And then the governments themselves are often hacked like the opium hack and so on so forth. So Yeah. That's one aspect of where ZK can come in and be the solution.
Speaker 6:Mhmm.
Speaker 5:Another thing is that ZK is actually used as a compression technology. So for example, ZK roll ups, not just a privacy technology. Mhmm. And so this stuff is actually already there and it's being deployed and it's working through ZK chains and so on. It's it's one of those things where, is it consumer visible?
Speaker 5:Maybe not. But I think I think it's just a really important technology.
Speaker 2:It might never need to be consumer visible is what you're saying.
Speaker 6:I mean,
Speaker 5:that's right. But but what it does basically mean is there can be sort of magical things where you can prove what you need to prove without giving up anything else.
Speaker 3:Yeah. Right? You can prove you are I mean, that's the a
Speaker 2:lot of KYC stuff works right now. Scan my ID. Most people don't know that there is a machine learning algorithm with computer vision in there that's reading the ID and checking it with a database. People just know, hey, I scanned my ID and I got KYC'd. It could be a lot easier and it could be more resistant to hacks and leaks.
Speaker 2:Right?
Speaker 5:What you want what you want is something like SingPass or Estonia's Digital ID where it's like an app on your phone and that's your ID card. And then that can do a zero knowledge handshake with something else. Right?
Speaker 3:Yeah. As opposed
Speaker 5:to like a piece of paper, like physical card,
Speaker 7:you know?
Speaker 2:Are you feeling about stablecoins
Speaker 7:these days?
Speaker 10:Go ahead.
Speaker 2:How are you feeling about stablecoins these days? I feel like there's an immense amount of energy and excitement, but it's but they always feel a little bit misaligned with the folks who are like, let's get off the dollar. Let's you know, you you know, we don't we we wanted to move away from that system and we're kind of maybe rebuilding it. How are you feeling about stablecoins? Are you optimistic?
Speaker 2:Is there do they play an important role in your vision of the future?
Speaker 5:Yes. Though, I think well, so let me actually show you guys something. Ready? Here is a fun video.
Speaker 3:K. Can
Speaker 5:you see the screen there?
Speaker 2:The stablecoin video is dropping right now. Let's see. Oh, Coinbase and Circle announced launch of USDC, digital dollar. Yes.
Speaker 5:10/23/2018. And so guess who's there?
Speaker 2:Were you behind this? That's amazing. Lore. This is great.
Speaker 3:There he is.
Speaker 2:I remember this video. Yeah. I remember thinking like, oh, I don't really understand this, but now I do.
Speaker 3:You were So amazing. Yeah. This is a long way of saying you were early and right.
Speaker 2:You were super long stablecoins, But I've heard it's hard to make money. Like
Speaker 5:super long me just show you just to underline. Here is the market cap of USDC, which is now at $60,000,000,000.
Speaker 2:Yeah. Wow.
Speaker 3:And on
Speaker 5:October 3, let's see if I can get the cursor. Bang. What's it? Let's say October third of twenty eighteen. Can you see that?
Speaker 2:0. I can't see that. But Okay. I I can see the broad But congratulations for being early. You're always early.
Speaker 5:Where are
Speaker 2:we going in the future with stablecoins? How important are they gonna be? Because it still feels like there's a little bit of tug of war with like, we're staying on the dollar. We're not really moving
Speaker 3:to these few new future global financial institutions Yeah. Seeing that we're in a friendlier regulatory environment, seeing the product market fit of stablecoins now wanting a piece of the action.
Speaker 2:Like, when when the Wall Street Journal reports like the dollar fell in value, the stablecoins also fell in value. Right? And so it solves some problems, but not all of them. So what what what's your take on So,
Speaker 5:well, the term stablecoin obviously is historical because it was stable relative to Bitcoin. Sure. I think you could sort of separate that out into two things, like a fiat coin and a flat coin.
Speaker 2:Totally.
Speaker 5:Like a fiat coin is something that's an on chain mirror of fiat off chain.
Speaker 6:Yep.
Speaker 5:And a flat coin would be something
Speaker 3:that actually pertained its purchasing power over time.
Speaker 5:Yep. And that's much harder to do because you'd have to maintain its stability against bread and PlayStations and whatever. And if there's an actual shortage of those things, then price might increase for no reason than than, you know, other than actual physical shortage. So but keeping the historical name, stablecoins are so first, why are they useful? Well, at a minimum, they're better international wire transfers.
Speaker 5:Yeah. That alone justifies their market cap.
Speaker 2:Totally.
Speaker 5:That's like tens of billions of dollars in market cap because they just save you from $25 and more importantly, you know, banks are only open like nine to five weekdays. Right? So like from forty hours a week uptime to a hundred sixty eight hours a week, which is twenty four seven uptime, that's worth a lot. Imagine if websites were only up forty hours a week. Right?
Speaker 6:Yeah.
Speaker 5:So just that alone, the ubiquity internationalization, then you add the programmability and so on. When people say, oh, why just put a dollar on chain? That's why. Right? That's why they're they're valuable.
Speaker 5:Right? And our the space is partitioned in an interesting way, and I think many other things will partition this way into, like, a US and a global. Right? Like, the USDC coin or the USDC asset is, like, US regulated, and then USDT is, like, intentionally non US regulated. Right?
Speaker 5:So, like, there's, like, Coinbase and there's, like, global exchanges and so on. So I think that'll be a common partitioning of of of many kinds of markets. And so so that's that's justification for why I'm bullish. But now onto your specific questions, I think that one of the things once you've got something on chain, it can just be easily swapped. Right?
Speaker 5:And so now that USDC is there, you're gonna have probably every other fiat currency up there and what have you because it becomes so mainstream and whatnot. But when that happens, you get an interesting thing which is similar to launch of Google News in the mid two thousands. As you may recall, all these newspapers put their newspapers online in the late nineties and early two thousands. Yep. Then when Google News launched, it suddenly showed that the Des Moines Herald and the San Francisco Chronicle and NYT, WAPO, you know, Miami Miami Tribune, whatever, were all basically printing the same stuff.
Speaker 5:Were some custom stuff that they had in their own markets, but most of it was just reprinting the AP. The newswire. Right? Yeah. Newswire.
Speaker 5:And you could see this on Google News, it's like a 73 other outlets printed the story.
Speaker 2:And it's all the same story every time. Yeah.
Speaker 5:Yeah. And that's because those newspapers, they had trucks and they had, you know, used to say, never argue with a man who buys ink by the barrel. Now, never listen to a man who still buys ink by the barrel. LOL. Right?
Speaker 10:Because, you
Speaker 3:know, they're
Speaker 2:I love it.
Speaker 5:You know? Are you buying any ink? You know? I mean, I actually like pen pencil and paper to write, but not to print. Right?
Speaker 5:That's really not news
Speaker 3:Early days. We went through a lot it. Early days.
Speaker 2:Never fight with a podcaster who livestreams for twenty hours a week. Like that. Exactly.
Speaker 4:It'll just
Speaker 5:beat you on
Speaker 2:exactly. The modern version.
Speaker 5:That's right. So so point point being though that Yeah. They had these geographical monopolies that suddenly they put their stuff online and there was a delayed reaction, and suddenly they realized, wait a second, every newspaper is in competition with every other newspaper. And so, of course, all the local ones, Saudi brand, basically stalled, died, and only the national ones survived, and they became much more ideological. And the new partitioning of information space was on the base of ideology, not geography.
Speaker 5:So you've got the, you know, Jim Bros, and you've got, like, people who are interested in, I don't know, various political causes, you've got crypto causes, you've got things sectioned by vertical rather than geographic horizontal, ideology rather than geography. Okay. So the same thing is gonna happen with assets. And the reason is, first, you've got these fiat currencies that are put on chain.
Speaker 2:Mhmm.
Speaker 5:And then we're we're we're nearing something which I call the DeFi matrix. Mhmm. The DeFi matrix starts with observation that fiat fiat can be swapped like Forex, but fiat crypto can also be swapped like USD BTC, and crypto crypto can be swapped like BTC ETH. And of course, crypto can be swapped for NFTs and all kinds of this crazy mandatory of digital assets that are now out there. So you visualize this giant square of every asset that can be traded for every other asset.
Speaker 5:And there's amazing numbers of crazy financial machinery out there now that will basically do the complexity of finding buy and seller pairs, you know, like Uniswap and market makers and so on behind the scenes for this swap. What that means is that whatever asset you have, you have less need to get into a fiat currency. You could just hold that asset, and then when you want to, you just liquidate it for whatever other asset you want at some fee.
Speaker 3:Mhmm.
Speaker 5:Okay? What I mean by that is, what what do people call it? What's a what's a hybrid way of saying when you sell your company? You get a
Speaker 2:Liquidity event. Liquidity.
Speaker 5:Yeah. Liquidity event. That's right. That's that's another term of talking about cash. Cash is liquidity.
Speaker 5:Cash is universal barter. Yeah. Cash can be traded for anything.
Speaker 3:Yep.
Speaker 5:But now anything can be traded for anything.
Speaker 3:Mhmm.
Speaker 5:Which means there's less need for cash. Right? Yep. And so all these countries will wake up one day and they'll find, wait a second, just like the newspapers, we had a geographical monopoly on our fiat currencies, but now we don't and we're competing in this global marketplace of all these other cryptocurrencies as well as really big fiat currencies. Right?
Speaker 5:And then they're gonna have to compete just like, you know, the information environment you compete on ideology rather than geography. Mhmm. Then the in the transaction environment, have to compete on features, not places. Right? Mhmm.
Speaker 5:So for example, privacy coins or smart contract coins and so on so forth. You you compete on the vertical as opposed to the horizontal of France coin, which is a franc, and Japan coin, which is JPY. Right?
Speaker 10:Yeah.
Speaker 5:And it's a funny way of putting it, but that's that's like what they are. Right?
Speaker 12:Yeah. Yeah.
Speaker 5:Yeah. So I'm not saying there isn't any utility to geography, but especially given that so many of these things, what have people done? All these countries have gone cashless. Right?
Speaker 2:Yeah.
Speaker 5:Yeah. Cash, physical cash, was actually something that tethered people to geographical area because you needed to actually hold it, and it was issued there and redeemed there and so on and so forth. Once you go digital, you don't have to use cash anymore. And many people have, for example, crypto cards where they can hold in one currency and spend in another, and it just Apple Pay or whatever just works, you know, that people don't know. Right?
Speaker 5:So stablecoins are an intermediate form that facilitates this transition from the, you know, fiat world to the pure crypto world, kinda like putting newspapers online was an intermediate form. And just like there's a whole battle in the twenty tens where newspapers at one point felt threatened, oh my god. I mean, not at one point. They still feel threatened, but they fought this whole battle of the bulge counter attack on social media, tried to take away your voice, my voice, everybody's voice, but they lost. You know what x you know you know what I call when Elon took over x?
Speaker 5:You know what I call it?
Speaker 3:What do you call it?
Speaker 5:X Day. It's like D Day. Right? Yeah. All the good guys amassed $44,000,000,000 for like the Normandy landing.
Speaker 5:Boom. Right? Like this, you know, because all it was still technically illegal. They were like, if you want your own company, why not build one or whatever to get free speech back. Remember those kinds of lines of argument prior to, right, Transform two?
Speaker 5:And then Elon basically gathered the forces and every tech guy, like some Marvel movie, you know, put in a mil, a bill, 5 mil, whatever they could afford, pass the hat around. I mean, $4,000,000,000 in
Speaker 2:cash is
Speaker 5:like a non go ahead.
Speaker 2:No. No. It's just funny passing the hat around and Morgan Stanley puts in 13,000,000,000 in debt. It's kind of classic.
Speaker 5:Yeah. So every every center right, centrist, center left in some cases Yeah. Yeah. Person who right? Totally.
Speaker 5:Piled it because Elon obviously was the man, but so many people backed him. Right? And this was something where, like, you know, Thor landing with a hammer, boom, like this. Right? Poof.
Speaker 3:All of these communists just fly back against, you know, the walls. All these folks just defeated like this. And x day. Right? Now Yeah.
Speaker 5:What that actually also meant was a Tower of Babel kind of moment, because Twitter no longer exists. There's x, there's Truth Social, and Gab, and whatever, all on the right. And there's there's Blue Sky and Mastodon and Threads and TikTok on the left. And there's the crypto networks like Nostr and Lens and Farcaster and so on. Right?
Speaker 5:So you have a Taro Baila moment where Twitter has been shattered.
Speaker 2:Anyway, this has been fantastic, Balaji. Thank you so much for stopping.
Speaker 3:You're welcome to come on and screen share with us anytime.
Speaker 2:Yeah, this is great.
Speaker 5:Awesome. Great.
Speaker 6:I can
Speaker 5:be your Kramer special
Speaker 3:guest. And thank you for kicking off.
Speaker 2:Yeah, I
Speaker 3:love We have, I think, 10 plus other, you know, exciting crypto entrepreneurs.
Speaker 2:Should be a big day once we welcome. How are you?
Speaker 3:There he is. What's going on?
Speaker 9:Hey. How's it going, guys? A pleasure to to be here. Welcome to
Speaker 3:the temple of technology.
Speaker 2:Can you kick us off with a quick introduction on yourself and the company
Speaker 3:for this And then and your and your PFP too.
Speaker 2:Well, yeah, what is
Speaker 3:Gotta get the backstory there.
Speaker 9:Absolutely. I think not too many people are pretty familiar with the PFP. But to start with myself, I'm Al An. I'm one
Speaker 3:of the cofounders of PumpFun.
Speaker 2:Cool.
Speaker 3:PumpFun is a is a launch pad where anyone can create their own coin, and it's based on
Speaker 9:the Solana blockchain. And my my PFP is Remilio. It is
Speaker 3:a is a an NFT based on Ethereum. Very cool. A little crossover. Yeah. Is not
Speaker 2:of theory. Not not pure Solana Max.
Speaker 3:Why don't we start with we have a primarily sort of traditional tech audience. Why don't we start with the origin story of Pump? I know you have had a crazy time even even fundraising, went through a couple pivots to get to the launch pad that is today. So I I think it'd be great to to hear the backstory.
Speaker 9:Yeah. Absolutely. So my background, I mean, I've been in crypto for a while. Before we built PumpFund, myself and my two cofounders were building a bunch of different ideas in in crypto consumer crypto, you know, in NFTs and social fi and a bunch of different random corners of the space. Nothing really stuck.
Speaker 9:I mean, I think we built for around a year or so before we got any semblance of traction. Ultimately, we weren't really building for ourselves, and I think once people started trading meme coins on Solana is when we first saw that there is a problem or a few problems that we can solve that would actually be addressing some of our issues because we were, you know, trading on the side. We've always been trading meme coins and NFTs and all that different stuff on chain. And we noticed that, there's a whole bunch of different problems that we we could solve by by building a lot a LaunchPad where anyone could, create their own coin, standardizing the way people launch these things in a in a more secure and safe manner, as well as, in a way that is more user friendly for people. So anyone can get involved, and you don't need to be highly technical to launch your own asset.
Speaker 9:So PumpFun, I would say, was the first product that really allowed for mass tokenization, and it's something that we, that we're gonna continue doing.
Speaker 3:So I wanna give a little bit of backstory. I'm I'm sure you can't, you know, talk about numbers. But Pump is one of the fastest growing companies in history. Yeah. That's why we're, you know, one of the reasons we were interested in having you on the show.
Speaker 3:I believe, I I we'll have to make some type of chart at some point. But I believe we'll probably be one of the fastest companies ever to a billion dollars in revenue. Yep. How quickly when you guys started the Launchpad did you feel like you were, did you kind of realize that you were onto something? Was it kind of immediate PMF, or did you even have to iterate from that initial launch of the Launchpad?
Speaker 9:Yeah. When we first came up with the idea, we were pretty confident that it was going to work, especially compared to some of other stuff that we were building. On our launch day, we got quite a bit of buzz around it. I mean, the MVP that we shipped was so incredibly shitty that everyone came, and then they they had to leave because it just wasn't working. But, again, that initial buzz and the feedback that we got get you know, make us made us realize that we were onto something for sure.
Speaker 9:It was only a matter of iteration. It was a matter of finding distribution because, ultimately, what we offer is a marketplace. It's a launch pad where you're connecting people that are creating these assets and people that are potentially interested in buying and selling them and trading them. So it was a matter of distribution. It was a matter of iteration and may and and polishing the products.
Speaker 9:It took us around two months after launch to actually get it off the ground. There's a lot of, you know make it work, but eventually, it it played out. And, obviously, you know, we were confident that it was gonna work, but we had no idea that it could blow up and then actually generate so much revenue and become this great business.
Speaker 12:How do
Speaker 9:you actually make money? Yeah. So two different two main oh, well, it's it's it's all really the same model. Yeah. It's a small fee on each trade.
Speaker 9:So whenever a coin launches, the platform takes a 1% trading fee, and each time the coin is traded, once it graduates I mean, a graduation is basically when a coin gets to a certain market cap, it grows in size and so on. Once it graduates, there's, it's the same fee, basically, but just a smaller one that Sure. That the platform charges.
Speaker 3:And is that, like, it's a really
Speaker 2:small piece of this? Disintermediated or you don't get out competed by other platforms? Like, are you thinking about that? And and because I I feel like there's this narrative in crypto where, like, somebody builds something amazing, has a great business, and then there's, an open source fork of it or something like that. Is that is that a risk that you're thinking of and, like, planning against?
Speaker 9:I mean, of course, you know, when you build something successful, I think in any industry, you're gonna expect some copycats. I mean, something that we've been expecting is something that we saw historically. We saw it a year ago. We saw it six months ago, and we're continuing to see Yep. I mean, obviously, we continue to monitor the markets and and kinda see what user feedback is on on different approaches and models.
Speaker 9:But, ultimately, we have our own solutions. We speak to to our own users, and, you know, we we we kind of stay in our own lane in that regard.
Speaker 3:Yeah. Talk about the branding. It's extremely chaotic. It feels extremely Internet native. Yeah.
Speaker 3:And but but I'm curious what your kind of, like, framework to making decisions around everything kind of design brand.
Speaker 9:Yeah. Absolutely. I mean, I think when we first started, we pump actually wasn't the the name that we came up for this product specifically. It it existed for, like, a few different products that we launched because we honestly thought it was, like, all the products we were building were for for people in the trenches, so to speak, so people that were trading on chain and so on. And we felt like that whole ethos, that whole branding just kind of aligned with, I guess, with what with the culture, like, of of people trading on chain and and and really this deeply Internet native crowd that we were addressing.
Speaker 9:I think it definitely contributes to how we think about it today. We the way we think about it is we don't necessarily want to, I guess we wanna pay respects to to kinda where we came from, and we wanna grow our community rather than removing and and making our brand, like I mean, there's a big difference between making your brand more accessible or your product more accessible and kind of moving away from the brand that you've built. Right? So I think a big part of why Pump has succeeded is that it has really built a community of people that are, you know, that are trading and hopping on every single day and and so on. And a part of that is being in touch with them and and continuing to to to to to interact.
Speaker 9:And that also reflects in the design. Like, if we changed everything all of a sudden and it was extremely, I guess, you know, looked like your average product in AI or something like that, then I think there'd be a lot of eyebrows that would be raised by by our user base.
Speaker 2:Yeah. Can you talk to us about VC? I mean,
Speaker 6:have you
Speaker 2:raised any I'm sure
Speaker 3:people I know. I know. Are
Speaker 2:growing fast. They're beating down your
Speaker 3:story is is you raised from Six Man. Right? Is that correct? Dudas' fund?
Speaker 9:That's correct. I can't give too many details on Sure. The whole, I guess, life cycle.
Speaker 3:Yeah. But I but I I have a question that that I Go that would be fun to answer. What's the craziest thing a VC has ever done to try to win allocation Here we go. Pump? Because I know you guys Anonymously.
Speaker 3:Revenue has just rocketed to such an extreme people are You guys, you know, for every dollar of venture capital, I'm sure you've generated, you know Yeah. At this point an an obscene amount of of profit. But but do you have any funny stories there?
Speaker 9:I'm not sure if there's anything in particular there, but definitely, there are so many stories where not just for VCs, but, like, you know, I guess, in the space and stuff as well, where we DM them multiple times and got received introductions and didn't get any responses only for the exact opposite to take place once once the platform has gained traction. And, yeah, this has happened many times.
Speaker 2:Wow. Can you talk to us about the live streaming product that you guys have? I mean, we're we're live streamers ourselves, and so super interested in what's
Speaker 3:going on. Recently brought it back and made a number of changes to it. So I'm curious, you know, how it how it's evolving.
Speaker 9:Yeah. Absolutely. So the livestreaming feature is pretty simple. When you launch your own coin, you can also launch a livestream alongside it to, you know, engage with your community, talk to them, do a whole bunch of different things. Obviously, I think a lot of your viewers are gonna be familiar with the previous livestream product that we had, which kind of you know?
Speaker 9:I mean, it it gained a lot of mindshare late last year and and ultimately needed to to shut that down for a variety of reasons.
Speaker 3:Yeah.
Speaker 9:But we we decided to bring it back with, you know, much, much better moderation as well as, I guess, an improved product overall. And and what the reason why we think that our livestreaming product can genuinely change the whole creator landscape and and actually compete with some of the biggest livestreaming platforms out there is that it completely flips the incentives, that creators are currently facing. As a creator I mean, I'm I'm already seeing this, with with relatively few users compared to the biggest platforms. As a creator, when you're starting out, it's pump fun livestreaming is easiest place in the world to get your first fifty to a hundred viewers. Why is that?
Speaker 9:The reason is because users are directly incentivized to find people early. Because, you know, if they find your livestream early, they see that you're you're interesting, you're entertaining, you're funny, etcetera, and they, you know, they buy into your coin. If you get if your your coin gets more attention, then that presumably can, can yield, you know, can yield profits. Obviously, not not financial advice, etcetera, etcetera.
Speaker 2:But Yeah.
Speaker 9:That's oftentimes what ends up happening. And because of that incentive structure, it makes it so much easier for for, for, you know, creators to get traction. And that's the the biggest problem that creators usually face when they start out. That's the first thing. The second thing is that, you know, with a few recent changes that that we've made, creators don't necessarily even have to sell their tokens to to make money.
Speaker 9:They can monetize instantly with no middleman through creator revenue sharing. So whenever someone makes a trade, a small percentage of that goes directly to the creator. So they monetize immediately. We there's no approvals that that they have to go through. They don't need to reach any milestones.
Speaker 9:They interact directly with their audience, and they don't necessarily need to appeal to any advertisers and so on. As long as they their content, is within you know, respects the terms of service of the site, they're going to be able to monetize.
Speaker 3:Talk about why you chose Solana early on and why you're continuing to double down there and if you're looking at opportunities on on other chains at all.
Speaker 9:Yeah. So we love Solana. I mean, we I mentioned Ethereum early on with my with my PFP. So that's, I guess, kind of where we where our background is. We built on Ethereum for many years in the in that ecosystem.
Speaker 9:Eventually, you know, because we were building products and we're getting, I guess, like, increasingly desperate to get users, we saw that, especially for this for for for meme coins, people are starting to trade them on other on other blockchains, specifically Solana. Now it's gaining a lot of traction back then. So we we start you know, wanted to get to where where where all the users were. Right? Because that would maximize our our chances of succeeding.
Speaker 9:So we went to Solana. Obviously, after we we gained success, we got a ton of inbound from other blockchains and and so on, and people were asking to get their, you know, favorite blockchain added. But, you know, ultimately, our goal is to bring tokenization to the masses. Our goal is to kind of expand this this universe and and and really break into the mainstream. And I I don't necessarily I don't necessarily believe that going into any other chain would, you know, would contribute to that.
Speaker 9:Solana as infrastructure has improved so significantly over the past year year, year and a half since pump PumpFund has been live that we're very confident that, you know, once, I guess, that critical mass is reached, the infrastructure will be able to to support, you know, to support the the activity on on the platform. And and more than just that, there's so many ecosystem applications that utilizes pumps in you know, marketplace infrastructure and so on that actually contribute to the you know, not not just to to the bottom line, but contributes to the overall bot you know, user experience. Like, people can use whatever interfaces they like to get the, you know, the best experience possible. So all in all, couldn't be happier being on Solana, we're not considering leaving anytime soon.
Speaker 3:Very cool. Fantastic. Thank you for jumping on. I know you don't do a lot of interviews, do a lot of media in general. So I appreciate you coming and telling the story.
Speaker 3:It will, I I I legitimately think there will there will eventually be a Harvard, you know, business school case study on Yeah.
Speaker 2:That'll be very fascinating.
Speaker 3:You're building because it's completely unprecedented, the growth. I think we're we'll probably just start to see this year people realizing how big a business, you know, pump has become in in such an incredibly short period of time. So thank you for jumping on and and sharing, and we'll we'll talk to you soon.
Speaker 9:Absolutely. Appreciate it, guys.
Speaker 3:Cheers.
Speaker 6:And
Speaker 2:that Harvard Business case study will be tokenized on chain. I'm sure it will have a meme I'm
Speaker 3:sure it will. I'm sure we'll get It'll have it on top
Speaker 2:case study. Maybe
Speaker 3:A meme coin for every paragraph.
Speaker 2:Flash should just be livestreamed on pump fund.
Speaker 3:They could fractionalize the case study. Every every word, you can just get a word. Yeah. Well, that's Anyway, it's it's interesting that the Yeah. That I think Meme Coins were working on Ethereum.
Speaker 3:Yeah. But the the gas fees on
Speaker 2:Ethereum were
Speaker 3:so $20
Speaker 2:or something.
Speaker 3:You know, you couldn't Yeah. Make a trade for a hundred dollars Yeah. Because, you know, somebody would be like, I might are they gonna pay Yeah. $50 in gas to make a
Speaker 2:trade
Speaker 2:like
Speaker 3:Like
Speaker 2:speed, you increase the speed, you drop the price, like you always just see more activity. And so, yeah, fascinating. That $1,000,000,000 revenue number, is that something that you can just inspect on the blockchain if you just add up
Speaker 3:a think lot it is. Is that possible Yeah, it's visible. Had seen a post as of maybe last week that they had passed $750,000,000 in Wow. When did they actually launch?
Speaker 2:It seems like it was like a year ago.
Speaker 3:Is it like roughly a year ago?
Speaker 2:Wow. Impressive.
Speaker 3:So a one year to $750,000,000 in my real Only credit. And it's not marketplace.
Speaker 6:Yeah. Yeah. Yeah.
Speaker 3:It's like that's like their Yeah.
Speaker 2:Yeah. That's not GMV. That's actually their their take
Speaker 3:on Net revenue.
Speaker 2:Revenue. Anyway, next up, we have Katie Hahn from Hahn Ventures in the studio. Welcome to the show. Katie, thanks so much for hopping on. We're excited to talk to her.
Speaker 3:Welcome. Welcome.
Speaker 13:Hey. Hey, guys. Good morning.
Speaker 2:Good morning. How are you?
Speaker 13:Wherever you may be. I think you're at the conference.
Speaker 2:No. We are not. We're in Los Angeles. We're in Hollywood, the future of media.
Speaker 13:Yeah. Good morning.
Speaker 3:We're bringing media back to Hollywood.
Speaker 2:But thanks so much for joining. Would you mind kicking us off with, like, just a little bit of an introduction and how how are you spending your day to day these days?
Speaker 13:Oh my gosh. A little bit of an introduction. Well, my name is Katie Hahn. I founded Hahn Ventures, which is we're investing in blockchain technology through an early stage fund and a later stage fund. Mhmm.
Speaker 13:And we're about three and a half years old as a company and as a fund. Do you
Speaker 3:do liquids or all How decades has the last three and a half years been? Oh my god.
Speaker 13:You know what, I've actually been in this space over a decade.
Speaker 2:Yeah. Wow.
Speaker 13:Over a decade. So how how many years has that felt like? Yeah. But the last three years have been wild. But I'm really excited.
Speaker 13:As about how I'm spending my days, I'm really excited about this particular moment in crypto Sure. Because we have a lot of the fundamentals coming together. And I I said, I've been in this space a long time, and we've had different fundamentals working at different points. Mhmm. But it finally feels like all these fundamentals are working all at once.
Speaker 13:And
Speaker 3:Break down break down those fundamentals. I imagine it's regulatory, it's community, it's collective Scale of the actual
Speaker 2:exchange maturity of code. Do you think about What are you thinking
Speaker 6:about?
Speaker 13:Here, you guys do it. I can question you. Break up. No. So the first thing is institutions, like you said.
Speaker 13:Okay. Institutions. The institutional story has been around before in crypto and different cycles. And we had some early adopters for institutions. Right?
Speaker 13:We had Fidelity. If you think about folks like Abby Johnson, she's been in the space for as long as I have, maybe even longer. We had folks like Meta. I mean, was on Zuck's original DM project board. Yeah.
Speaker 13:He saw stablecoins coming years ago. So we had Meta leaned in as an institution kind of early. And then we had other institutions, folks like BlackRock. I think Larry Fink is actually a great exhibit a for someone who really changed their mind on crypto.
Speaker 3:Totally.
Speaker 13:You know, Larry was against crypto. Not against, but he was certainly not a fan of blockchain technology. And a few years ago, he he said he had really changed his mind. And now you have BlackRock running a tokenized money market fund That's yes. Called Fiddle.
Speaker 13:So that's some of the earlier institutional adopters. But now we have some of the later institutional adopters, folks like JPMorgan, Charles Schwab, and others. And you'll see other announcements coming out soon from other institutions. So the institutional story is one fundamental, but I wanna talk about three others.
Speaker 12:Mhmm. Please.
Speaker 13:You you mentioned one, regulatory. But before I get to regulatory, because it's not the most exciting, is the technological progress. You know, we've had different kinds of levels of technological progress over the cycles, that that make up the crypto industry. You know, cycles, we always talk about the bear and the bull cycles, and really kind of the last bear market when folks were really declaring the space dead, as they do, by the way, every single cycle.
Speaker 3:Yeah. Really felt I remember when Ethereum was touching $800 after the FTX crisis, and I was like, I don't know where the bottom is here. This feels like the most toxic asset. Oh my god.
Speaker 7:And that was like, I I basically A
Speaker 13:great time to start a fund. Right?
Speaker 3:Yeah. Well, yeah. Yeah.
Speaker 14:That's what
Speaker 13:I was I had just started our fund.
Speaker 3:No. And and in high and in hindsight and in hindsight, was like, the moment that I thought this It was over? It was completely over was like a perfect bottom tick.
Speaker 6:Perfect bottom.
Speaker 13:Guys, another time, another story for another day. Remind me to tell you my Solana buying story in New Year's. And when I thought it couldn't go any lower, it even went lower. Well, we got in we got in when it was pretty pretty darn low. And and to a lot of assets, you asked if we do liquids.
Speaker 13:Absolutely, we do. We believe hugely in tokens. We believe hugely in equity. But let me get back to the fundamentals first because this is where we're spending our day, thinking about stuff like the technological progress. If you think about post FTX, that era you're talking about
Speaker 3:Yeah.
Speaker 13:ETH is at or thereabouts, you know, Solana got down to, like, what, $9? Bitcoin's hitting, like, what, $17.16, $18,000 levels. People were declaring the space dead pundits. Sorry. I know you're not pundits.
Speaker 13:But everyone was saying, god, idea. You started a crypto fund. Here we were, 10 of us. Like, no. This is a great time in the space.
Speaker 13:And I think one of the things we saw is there's a market story to crypto and there's a technology story to crypto. And what we saw on the technical progress and by the way, Fred Wilson and I authored a blog post probably about a week after FTX saying, hey, the technical story here has not changed, folks. And instead, it's it's only changing for the better. We had things like the Ethereum merge, the largest software upgrade in history. You know, Toly, the founder of Solana recently said that we're no longer talking about block space for one of the first times in this industry.
Speaker 13:Stuff is scalable. Stuff is cheaper instead of, paying, you know, multiple dollars for a stablecoin transfer. Or an NFT transaction, it's sub 1¢. And that's due in large part to the builders that were building through these bear cycles, including the last painful bear cycle. So that's the second fundamental.
Speaker 13:And I think the third fundamental, as I think about it, is product market fit. You know, you talk about things like product market fit, Bitcoin. Hello. Product market fit exhibit a. Debated Paul Krugman in was it 2018 or 2017?
Speaker 13:And he told me Bitcoin has zero use. I debated him and I said it will find product market fit. At that time, I think Bitcoin was trading around three, four, five thousand dollars. Yeah. And lo and behold, fast forward these years later, I think it's clear it has found product market fit Yeah.
Speaker 13:As a digital store of value. But also we have things like stable coins have found clear product market fit. And I hope we can talk about stables. We'll dive deeper later in in today's session because stable coins are the story of the day that Yeah. Folks in the mainstream are now talking about.
Speaker 13:So we have product market fit and others Other product market fit kind of I I say we're on the precipice of. We can talk about that. But then you mentioned the fourth fundamental, which is regulatory.
Speaker 6:Mhmm.
Speaker 13:And I think the thing I heard for the last decade from builders, by the way, from enterprises, from institutions, from LPs when I was at my prior fund is regulators aren't gonna allow this, though. Right? Like, this this is all gonna get shut down.
Speaker 3:What was your answer then? Was it, like, break your the the obvious rebuttal is regulators are gonna make code illegal. Like, it's pretty hard to to ban code. Right? Anybody can kind of create it and put it out on the Internet.
Speaker 3:I'm sure you were always confident that it wouldn't be made illegal, but at the same time, the sort of US regulatory regime was making it pretty difficult to exist Yeah. As a crypto founder in The US, which had the same, you know, sort of effect in some ways.
Speaker 13:Yeah. You know, fun fact, since there's the conference going on today, I don't know if you if you guys are aware of this. I was asked probably around 2012, '20 '13 to help shut down Bitcoin for the US government when I was a federal prosecutor. Wow. So it's just crazy to think about.
Speaker 13:I mean
Speaker 3:Hey, Katie. Little project.
Speaker 15:I don't know
Speaker 3:if you have time this weekend to
Speaker 8:look into it.
Speaker 2:Can you
Speaker 3:shut down
Speaker 13:Open the case, Fanu Lanu. First name unknown, last name unknown.
Speaker 16:Wow. Wow.
Speaker 13:You know, somewhere in the Tenderloin, San Francisco 450 Golden Gate said file of Fanu Lanu. But look, I realized early on that this was a really powerful technology. And regulators, by the way and we've been saying this for the last decade. Regulators should love this technology. I mean Yeah.
Speaker 13:For its kind of permanence. Right? All of the things that make a blockchain great for a lot of things. Also, by the way, make it look. As I always said, when I was a criminal, hoped that criminals would use this instead of cash or wires, which I don't know how many banks anyone has ever subpoenaed.
Speaker 13:I've subpoenaed a
Speaker 14:lot of them.
Speaker 13:Good luck getting compliance with a subpoena. But at the same time, I really do worry about the erosion of financial privacy and not just now that I'm in the crypto industry ten years later. I talked about this when I was a prosecutor and the kind of reach of the Bank Secrecy Act. And we can go really deep on that. I think Yeah.
Speaker 13:There are parts now under the third party doctrine that if went back to the Supreme Court today, I think you might have a a very different result than the last bit time the Bank Secrecy Act was challenged was in the nineteen seventies. Mhmm. And of course, the velocity of payments has just skyrocketed since then. And now, unlike in 1970 where I couldn't glean too much information about you from your maybe couple payments or people writing out checks back in those days, Now, if you think about if I have all access to all of your payment information, I could probably like predict where you're gonna go every day just about. Right?
Speaker 13:I mean, it's a really great almost in that way, and this is not crypto, this is just all financial data. Right? Every time you use your Apple Pay, you're using a credit card, you're using stable coins. I mean, this is something that we should talk about at another time.
Speaker 3:Talk about talk about your kind of early stage investment framework philosophy. What are you I imagine there's investments that you get the opportunity to make that you believe will be successful, but maybe aren't the best use of your capital if you have this sort of broader vision of of where the the asset class can and and the technology can go. But I'm curious how you think about opportunities and and even kind of your moral framework Mhmm. For investments.
Speaker 13:I've never heard it described as a moral framework, but that's an interesting framing. I mean, think first of all, we start with the founders. Like any other venture investor, it's all about the founders and the market opportunity. Right? And if you think about founders that I've previously kind of known in my gut, this is an amazing founder, an exceptional person who's going to build an amazing business.
Speaker 13:I mean, the first instance of that, as far as I was concerned coming into crypto was Brian Armstrong Yeah. And Coinbase. Right? And I think one of the things that makes Brian so remarkable is he had a huge business going just spot trading Bitcoin and then Ethereum and adding all of these other assets, but he was never content to just rest on those laurels as an exchange. It was always about diversifying the business and the the Web three economy.
Speaker 13:And he was thinking about things like stablecoins many years ago. Obviously, USDC was a partnership between Coinbase and
Speaker 3:Yeah. We had 2018. Balaji on earlier, and he showed a video of the launch Yeah. The web the the web's page for the launch video, and he's, like, in the first five seconds.
Speaker 2:In that video.
Speaker 13:I remember that. I remember that. Did he have a bowl of cereal with cream or something in that dating? I remember those days with Balaji well. That's great.
Speaker 13:You know, with with the USDC launch happening. And I think, again, he I remember being in the Coinbase office, by the way, the day the day that Bitcoin first hit $10,000 for the first Imagine, by the way, if we were having this conversation Yeah. You know, now we would be like, oh my god, $10,000 market correction. Well, just a few short years ago, that was like cause for celebration. People couldn't believe it was $10,000.
Speaker 13:I was in the office, the euphoria was kind of everywhere except Brian had his eyes on what's happening next. We're not gonna get comfortable with this. We're building an open global financial system for the world. Where are we taking our revenue lines next? And he's been thinking about that day the s one, you know, day the direct listing happened in April of twenty twenty one at Coinbase.
Speaker 13:So Yeah. I was so excited to be a director of that company for almost eight years and see that company through a remarkable series of events and I still am so excited watching from the sidelines about what they're doing. So I think the first thing we look for is we look for an amazing exceptional founder. Yeah. And and that could you know, Brian's a great example.
Speaker 13:Right? So we're just trying to find the next the next Brian's. But also the market opportunities and the space, as I said, the asset class is so broad. So it really we're talking about what are we talking about? We're about prediction markets.
Speaker 13:One thing that's an area we're very excited about, but we kind of think about it as where will this evolve. Not the current state of innovation, but more of the end state of innovation or the midpoint state of innovation. And Yep.
Speaker 14:In the
Speaker 13:case of prediction markets, I'll tell you one of the things we think about is, think about like Netflix. Netflix did, was very centralized. It curated content. And then all of a sudden, YouTube came along and then unleashed even more content globally at scale, I mean, exceptionally so. So for prediction markets, when are we gonna get that user generated equivalent or the YouTube moment?
Speaker 13:I think that's really interesting. And I think what makes crypto special in that story is the programmability that people around the world twenty four seven. You know, the inner Internet operates twenty four seven and anyone with a smartphone can access that. So we think that's exciting. Yeah.
Speaker 13:So we're looking for, you know, we're looking for exceptional founders.
Speaker 2:Sounds like an easy job. Just find 10 more Brian Armstrongs.
Speaker 6:I know.
Speaker 2:You're great.
Speaker 13:So 10 more.
Speaker 6:Sounds like an easy job.
Speaker 3:I believe it. I believe in you.
Speaker 2:I believe yeah. Thank you, guys. Think you can do it.
Speaker 3:Thank you for doing the work to surface the Brians
Speaker 2:Yeah.
Speaker 3:Of the world.
Speaker 2:Yeah. We're talking to him later today. We're very excited.
Speaker 13:Oh, great. Well, I'll tune in for that also. I think, though you mentioned Morrill. I think one of the things we
Speaker 3:By just I like No, think I know you The context there is like certain VCs will have a you know, traditional VCs will have a vice clause, right? Where they say, we don't do defense. We don't do recreational cannabis. We don't do this. I could imagine crypto funds bifurcating to some degree where some of them say, we're gonna do these types of deals, and we're not gonna do those types of deals.
Speaker 3:But maybe that's
Speaker 13:That happens already. Right? Like, saw this during the last run up, the last bull run-in twenty twenty one. We had many folks, traditional VCs, many of whom are friends of mine, decided they were gonna get into crypto, but they weren't gonna touch tokens. They were only going to do equity businesses.
Speaker 13:And although we love crypto equity businesses, they missed out on a lot of tremendous opportunities. Like Yeah. Imagine if you had said, we're not touching Solana. I mean, Solana is
Speaker 2:for example.
Speaker 13:A huge market opportunity. Yep. Ethereum, huge market opportunity. I mean, Bitcoin, huge market opportunity. Right?
Speaker 13:These are just some blue chips I'm naming. Of course, there are plenty of others.
Speaker 6:Yeah.
Speaker 13:We said, we are crypto maxis. We're not, you know, we're not gonna be religious zealots about any particular token, but nor are we gonna write off entire segments. Rather, we're gonna focus on the founder, the bona fides of the project, the metrics of the project, and we really wanna know here and by the way, do they have a plan for regulatory compliance realizing that times were uncertain in those moments? But do they have a plan for it? Or is there a plan to launch a token and then we we say leave The US
Speaker 3:That's gotta be the most that's gotta be the most nervous meeting a founder has in in in their round is pitching you on their regulatory plan. Because like a lot of other VCs are like, yeah, great. He's got a regulatory plan. You're like, well, here's like the 10 reasons why that is not gonna work.
Speaker 6:Screw up.
Speaker 13:Yeah. You know what? I think that actually we like to think that we can be helpful in that way even with clarity. I was talking to probably one of the most legendary biotech investors in the world a couple months ago and he told a group of our founders, he said, you know, I'm in a regulated space. We've got plenty of regulatory clarity and believe me, we still need to kind of navigate.
Speaker 13:Like, this doesn't it doesn't just go away just because we have legislation passed which we think is really important and clarity. You still gotta comply with it. And and we always said I always said, look, you gotta have, like, kind of a plan for it. You don't have to have it all figured out when you're raising a seed round, when you're raising your series a. Coinbase was great in this regard, but look, they did not they've obviously made a lot progress as a company on that front across the different iterations of their company, like one would expect, like is reasonable.
Speaker 13:So my touchstone is what's reasonable. And you gotta build a business too. Right? And and I think we realize that and we're pragmatic partners and we like to work with founders. Tell me a founder who says, I have no idea what to do here.
Speaker 13:I don't wanna break the law. I don't know what the law is. But like, we'd love your help. We'd love your thought partnership and we love those kind of founders.
Speaker 2:It's amazing. Well, thank you so much
Speaker 3:for stopping by. This was a fantastic conversation. Come back on again soon.
Speaker 13:Guys. Thank you for having me.
Speaker 2:We'd love to go way deeper. I'm sure we're learning a lot today. This
Speaker 13:is good.
Speaker 14:Sounds good. Cheers.
Speaker 13:Thanks for
Speaker 6:coming on.
Speaker 2:Up next, we have Chris Dixon from Andreessen Horowitz. But first, let me tell you about Ramp. Time is money. Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place.
Speaker 2:Go to Ramp.com to get started. Ramp. And very excited to talk to Chris. Obviously, extremely storied investor, top of the Midas list, early Coinbase investor, continual Coinbase investor. We got Brian Armstrong coming on later to tell his side, the founder journey of Coinbase.
Speaker 2:But Chris has been all over the place in crypto for a decade, fifteen years, twenty years. I think he invested in Bitcoin back in He was early. 1994.
Speaker 3:And right. Yeah. A lot of the people that we're having on today were early in right.
Speaker 2:Yep. Yep. Yep. Good thing to Chris, welcome to the show. How are you doing?
Speaker 8:I'm great, John. Good to see you. Good to see you. An early, Soylent investor.
Speaker 12:Yes. Yes.
Speaker 8:Jordy, good to see you guys. Congratulations on all the success with the show.
Speaker 2:Thank you. Thank you. Yeah. It's been a lot of fun. Where should we start?
Speaker 2:Can you give us a temperature on the crypto markets? It's been, up and down.
Speaker 3:Let them take a victory
Speaker 2:lap. Victory lap. Let
Speaker 6:them take
Speaker 12:victory lap. Like mean, I know the job's not finished. But
Speaker 2:They they they always twist you twist your arm into doing podcasts when the market's down
Speaker 3:and saying, oh, you gotta hold
Speaker 2:you accountable. And then where is Kara Swisher calling you when the market's up?
Speaker 3:That's a
Speaker 8:good point. That's a good point. By the way, can you guys hear me Okay?
Speaker 2:Yeah, yeah, sound Okay,
Speaker 8:great. Yeah, good. I mean, it's yeah, it's been a long journey, as you guys pointed out. I think that we had a lot of challenges the last four years, regulatory challenges with the last administration. And that looks like it's trending much better now with the new administration.
Speaker 8:It's sort of more pro tech. And I think we have a lot of momentum in Congress. And that's a big deal because that created a lot of headwinds. So that's great. And then also, like, the kind of core infrastructure, and we can don't if you guys want talk more about it, but like, you know, the so for example, one of the things happening right now are stablecoins are really taking off.
Speaker 8:So like last month, was something like 2,000,000,000,000 in stablecoin volume
Speaker 7:Yeah. Which is
Speaker 8:more than trillion with a T, which is more than Visa. And so quite a lot of volume. That a lot of that's due to the fact that so Solana, Ethereum, and and so forth has gotten really good. Yeah. So you can now send an arbitrary amount of money anywhere in the world for under 1p and one second.
Speaker 8:But that took years and years of work, investment, you know, founders, technical folks doing a lot of work. So that's great. And so there's a lot of good things. I think that, you know, there's there's a lot of challenges too, but but, but overall, it's been, it's been fun.
Speaker 2:Do you think that the narrative around stablecoins is still going to morph into micropayments for the Internet. Ben Thompson was talking about this with MCP. It's not in the standard, but you can easily imagine that getting worked into the second version of the standard. At the same time, obviously, just global remittances has always been a huge category. It is the one category that I used stablecoins for years ago.
Speaker 2:And it felt very real in that moment even while people were were saying, oh, this is useless. It's it felt like, okay. This is the value. But I'm interested in, like, kind of the next application of stablecoins and then the one after that.
Speaker 8:Yeah. Great. So I think just maybe briefly to the way to think about stablecoins is today, we don't really have a global payment system or global financial system. We have, you know, 95 countries. Each one has many different banking systems.
Speaker 8:When you send money to another country, like I say, you wire money. Like, actually, we've had this experience at the firm where we wire investment. Yeah. And it ends up going through, like, a bunch of humans and paperwork. It's really just a mishmash of systems.
Speaker 8:And so the way to think about stablecoins is similar to how for those who are old enough to remember, text messaging was like this at one like in the two thousands. You would send a text message and it would say, don't have a plan to send to Canada. You got to sign up. And it was all these different systems. Then WhatsApp and FaceTime came along and they built this sort of what they call over the top global network.
Speaker 8:So think of stablecoins and blockchains as an over the top network. It's from day one global, low fee, credibly neutral, programmable payment system that just sort of works everywhere. That's kind of the simple way to think of it. And so as you mentioned, you know, one of the obvious benefits is just cross border, and that's where a lot of the uses are right now. And so for example, like, SpaceX has a program where they move you know, they'll sell a Starlink in, I think, it's like some south of, like, Brazil or something, and then they'll immediately, you know, use stable coins for so called treasury management.
Speaker 8:This is one of the kind of growing use cases that that folks like Stripe will talk about. Remittances, you're sending money back home, you know, from from The US to, you know, whatever some developing country countries where the currency is volatile and they want access to dollars or euros. And then as you mentioned, John, the the idea that actually, I encourage those who are interested to to go listen to the Colossians. They were an all in podcast a few weeks ago talking about this. What they're actually say say they're really excited about is less the low fees and more the programmability as you just described.
Speaker 8:And so you can do so this is like one obvious thing is, you know, invoice fraud. So people will send, you know, these these faxes type things. It's a really old fashioned where they'll say, like, here's my wiring instruction. And if you guys if you've done this, you'll say, like, please make sure you call first. But, of course, calling doesn't work in an age of AI because it could be a fake voice.
Speaker 8:And so, you know, what what Stripe was excited about is that because blockchains are programmable, they can have a full kind of reputation system on top. So they know, like, this is a valid place to send money to for your invoicing system. Right? So you can program it. As you mentioned, micro payments.
Speaker 8:Right? Now that you can send money for 1p, that unlocks a whole bunch of use cases. So machine to machine payments every time you're doing an AI API request. So as you mentioned, MCP. Right?
Speaker 8:So like watch MCP, I would expect would have down the road a payment standard. Right? And AI agents, you imagine a world which I think we're headed to pretty soon in a couple of years, we have all these different AI agents running around. I'm hey. I'm advertising.
Speaker 8:I can program. I can I can write your essay for you? I can do your homework, whatever. And they're all sort of advertising their services. And then you sort of imagine other agents coming along and negotiating and pennies getting transferred back and forth in this big kind of economic of collection on top.
Speaker 8:So the web moves from these sign up forms to agents sending money automatically. And we think that would be powered by, most naturally powered by, a global know, low fee programmable How? System like blockchains.
Speaker 2:Yeah. Yeah.
Speaker 3:How has I'm super curious to understand how your guys' lobbying efforts have evolved over the past six to twelve months. We went from, you know, a sort of co a a large coalition of people trying to basically, you know, block crypto from getting real adoption and traction in The US to suddenly ETFs being approved and things like that. And I imagine that's kind of changed your guys' strategy on the hill. So I'm interested to hear how that's evolved.
Speaker 8:Yeah. So that's a so I've I've been doing, you know, we sort of I I saw Mark Mark Andreessen on on you guys. I think it was a week or two ago. I watched that, and, he was talking about a little bit. Mark and I have been very involved in this and and by necessity, originally, like, or five years ago.
Speaker 8:And then and then over time, realized just how important it is to engage. They say in in Washington, they like to say, if you are not at the table, you're on the menu. Yeah. So so you you don't wanna be on the menu. So Yeah.
Speaker 8:So, you know, I've been going sort of, like, once a month and Mark has two and and just and really just kinda trying to explain our our perspective because we feel like the the interest of startup like, so start most startups don't have the resources to go to DC. Right? And, of course, big tech companies do, and big banks do, and all sorts of other big entities do. And so we our our kind of logic was that we're one of the few entity, you know, kind of organizations that has enough scale to have a government affairs team who represents the interest of interest of startups. And so we go and we say, look, we represent small companies, and here's what they're interested in.
Speaker 8:So for example, they they wanna have clear guardrails and rules around blockchains. They wanna have, they wanna have open source AI. That's another really important issue to us. Mhmm. Clear rules on, like, AI and copyright.
Speaker 8:There's a series of things. You know, having a single federal framework and not a 50 state laws on a lot of these things and so forth. And so we go and we advocate for that. We've taken a bipartisan approach from the beginning. We think that's very important.
Speaker 8:Mean, look, just one is to get we think the way you really build industries is legislation. If you back to the internet, that was built really on the 'ninety six Telecom Act. Had things like Section two thirty, which you may know is now a contentious issue. I like to say Section two thirty had been administrative guidance instead of legislation. It would have been a political football every four years.
Speaker 8:It was built into legislation, and so you could section two thirty is what enabled marketplaces, social networks, and so forth to build reliably on the Internet. So we've always felt that both for AI and for crypto, want legislation that provides clear rules, paths for innovation, and and, and really eliminates or mitigates or eliminates, you know, all all the kind of bad use cases and bad actors. And so that's always been our approach. I've been bipartisan. That's the legislation you need bipartisan, first of all.
Speaker 8:And secondly, look, the Democratic Party has like, most people will sort of think, you know, Republicans are pro crypto, Democrats are anti. That's not really true. Like, we just had a last week, a senate sort of it was a procedural vote on the stablecoin bill, I believe there were 17 Democrats who voted for it, you know, which is significant. And I think, you know, our view has been we want to kind of, you know, shift the Democratic Party back to the values of Obama and Bill Clinton when they were pro tech and not sort of the kind of blue sky thing move Democrat thing that happened the
Speaker 2:last Yeah. Yeah. I mean, the interesting thing about the lobbying is that I looked at the, I looked at the donation dollars that were coming from crypto aligned people and crypto funds, and it was split almost exactly fifty fifty. Like, the entire crypto community really did go super bipartisan with the spend. And, obviously, the Republicans won, so it feels like a Republican issue, like, right now.
Speaker 2:But I it doesn't feel like it's gonna remain that way. On the issue of government, I'm interested to know, maybe stablecoins are a good example, but just general crypto adoption. How do you bucket? How do you think about the adoption across government, b two b, or just direct to consumer? Because when I think about stablecoins, for example, there's people that want to pay people individually, but there's so many ways that you can just tuck stablecoins under some business.
Speaker 2:Like with the AI thing, if you get Anthropic, OpenAI, Google, Microsoft using stablecoins in an agentic application, the user might never know that I'm paying a fraction of a cent to access a Wall Street Journal article. It just happens, and I'm not even aware. So what are the key drivers for the different, the different constituencies and then the different applications, and how do they fit together?
Speaker 8:No. That's a great question. And I like, I have a broader kind of framework I'd like to talk about. Yeah. Which is sort of I I sort of like to distinguish technologies between what I call inside out and outside in.
Speaker 8:And so inside out are things that sort of start with established institutions, AI to some extent is like that. You know, the iPhone was like this. It came out of Apple, a very established institution. AI came out of, you know, Stanford and so forth. Whereas crypto very much, you know, Bitcoin started at the fringes.
Speaker 8:Right? And some sort of like open source software and there's, you know, other kind of tech movements that started at fringes, and it sort of worked its way in. Right? So stablecoin started for the main use case was settling, you know, crypto trades, you know, seven years ago or And then over time, you started to see more and more payment providers in Argentina, for example. And that sort of more moving to the center.
Speaker 8:Now Stripe, I think if Stripe is very much probably the smartest a lot of people think the smartest, one of the, if not the smartest fintech company is all in on it. Know, they did a billion dollar acquisition bridge to get you know, to ramp up their efforts. I think the main the gaining factor, like I speak to a lot of like like, what I would love to see is a world where you have banks and, you know, asset management firms and every payment provider, as you described, John, like, the scenes, it's the substrate. It's the infrastructure. Right?
Speaker 8:It's like HDP or SMTP. It's just this thing that exists. A lot of them say we just want that final regulatory clarity piece because they want that assurance. They're look, they're risk averse. We just had four years of kind of lawfare against the industry.
Speaker 8:So that's why I think that's really like honestly, like, I probably spend more than half my time on that now. Like, that that's just kind of the key. There's two and just to say there's two big kind of bills that we're advocating for. There's stablecoins. There's one called market structure that's just coming forward in the house now, which is also to kind of clarify more broadly on tokens.
Speaker 8:But I think that's the main thing right now. Think and I but to your point, exactly, I don't think most people ultimately will will think of even the word stablecoin. I think it'll be like digital dollars, you know, that could like for the average person.
Speaker 2:Yeah, the industry term like ERP. People Yeah, interface with that. They don't know. And like actually, but we'll
Speaker 8:see like we have a fintech group at the firm that's not crypto. Don't know you know the folks like I think you've interviewed Anish and Yeah. All those folks. And they, you know, they like crypto, but they're not like crypto. They'll tell me now, like, it's become pretty standard in the stable in the fintech stack that people will use
Speaker 3:stablecoin Yeah. Let's
Speaker 8:Yeah. You're Sorry. One you're like a three person startup, and like, boom, you push a button, and you got 190 countries. That's very different than the old days. Sorry.
Speaker 8:Yeah.
Speaker 3:I wanna get your point of view on the competitive forces and dynamics right now because we have startups which there's entire subcategories. You have hyper decentralized, you know, crypto companies. You have sort of hybrid companies like maybe Bridge that are kind of sitting in between fintech and and crypto rails. And then you now have big institutional players that are coming in. Maybe they brought ETFs to market to start and then now they're thinking about, you know, stablecoin applications as well.
Speaker 3:How do you look at the market and and what kind of advice do you give to portfolio companies that are trying to figure out who they are, whether that's fully decentralized or some type of hybrid or or or so on?
Speaker 8:Yeah. Yeah. I think that that's a great question. I think that I mean, the the the, you know, the the point is not for, like, decentralization and kind of this new architecture of blockchains for its own sake. The point is they have specific benefits.
Speaker 8:So, like, why why would one build on a blockchain like Ethereum or Solana as opposed to a traditional, you know, on AWS, like a traditional architecture? And the answer is by build know, when you build an the way I like to describe it most simply is blockchains allow you to build digital services that remove the intermediaries. So you remove so for example, stablecoins, you have no intermediaries that are taking fees. You don't have the banks and the payment providers and the payment networks, right, to take the all the different layers of fees. So that's an important benefit as you're building these you know, you could build social networks without fees.
Speaker 8:You can build games without fees. You can build AI systems without fees. Right? Without fees, it's, like, very low, like, sub, like, couple basis points. I actually have it for those I wrote a book, Read, Write, Own, and I have a chapter on take rates where I go through this in detail.
Speaker 8:But it's essentially you're going from, like, 30% in the App Store, you know, a % in Facebook, and 50% on YouTube to, like, five basis points or something. Right? So or, you know, two and a half percent for payments and so forth. So so so the first question is why would you wanna build on them? The other one we mentioned before is programmability.
Speaker 8:You know, you can do all sorts of cool stuff on top. And so I think it it to your question, I think it depends. Like, ultimately, think of startups as you wanna work backwards. You wanna say, what do you wanna do for the world? What kind of service do wanna provide?
Speaker 8:And then you work backwards and you say, how do you wanna build that? Right? In some cases, that means you wanna build something on a blockchain, like a pure service, like a protocol, we call it, with a token and so forth. In other cases, you wanna build more traditional software that maybe, like, for example, like you mentioned that that bridges between a a bank and an asset manager and a and a blockchain system. Right?
Speaker 8:So I think it ultimately, we think of it through that lens as kind of now, as an investor, I I skew towards things. I like things with, for example, network effects because it's just they they can be very I've in my career, I've found that network effects can be very powerful. Right?
Speaker 3:You Yeah.
Speaker 8:Invest in something, it grows. It kind of has a natural kind of defensibility and kind of gets better as more people use it. So there's different lenses you can look at. The last thing I would say is to your listeners, I know you have a broad audience. I think that the crypto space right now, the real shortage we have is startup talent, in that there's a lot of obvious good ideas where there just aren't many people pursuing it.
Speaker 8:Yeah. So I think it's actually the opposite problem than most, like, than you might have in AI right now, where I imagine AI, it's an amazing technology and and deservingly people are excited as they should be excited about it. But you probably for every idea have, I don't know, 50 good startups pursuing it. In crypto, I I think we're under competed. Like, we have under too too little competition, honestly.
Speaker 8:Like
Speaker 6:Yeah. So I
Speaker 8:would just say to your listeners, if you're a smart person thinking about doing a startup, I think there's a lot of white space right now.
Speaker 2:Mean you're in AI, pivot to crypto. We heard first.
Speaker 8:Yeah. We do both. We love AI. It is
Speaker 2:because my my
Speaker 3:reason How how are are you I'm sure you're perpetually gonna be unsatisfied with the technological progress because you understand the full potential. Right? Where where are you at right now? You know, we had Balaji on earlier. He's you know, was was very bullish on ZK proofs and and what's coming down the pipeline there.
Speaker 2:Prediction markets.
Speaker 3:And there's obviously yeah. Prediction markets feel like It was cool.
Speaker 2:During the election, it was like, wow. This is a completely no one was talking about this during the Bitcoin white paper. And yet crypto has created something that everyone gets value out of in one way or another.
Speaker 4:Yeah.
Speaker 8:Yeah. I think I well, I think we are still you know, I think of these these technology things always go in s curves. We're clearly still at the sort you know, somewhere in the bottom of the s curve. Like, think there's just a lot more growth. And just like user base, there's something on the order there's tens most of these applications I'm describing have, you know, up to 50 at the highest end, probably 50,000,000 users, which is 1% of the Internet.
Speaker 8:So Mhmm. It it's still very early in, Poly market is doing incredibly well, but I assume it's still in that sub 1% of the Internet. It's not and the Internet has 5,000,000,000 people now. So we have a long way to go. I think a lot of the core infrastructure is now, as of a year and a half ago, good enough.
Speaker 8:Think a lot of these technologies have that characteristic where you have kind of whether like neural networks only got good enough, I don't know, whatever circa, let's call it, something in the February because of the Moore's Law on GPUs. Right? And so iPhones, once you had capacitive screens and so many whatever processors and so forth, I think blockchains I think we no longer have infrastructure as an excuse anymore. Like, now it's about building applications, about getting regulatory clarity. And I think we're pretty far along there.
Speaker 8:I think we have a long way to go fully exploring kind of the idea maze and all the different cool things you can do. And and, you know, and then bringing it to billions of people is the goal.
Speaker 3:How have you been advising crypto emerging managers? My my one of my favorite I'm I'm gonna kinda butcher the stat. But apparently, like, the, the sort of median crypto fund massively outperformed like the median venture fund for most of the last decade. And so I thought that that was this beautiful narrative violation because you know, people, traditional venture would love to poke fun at crypto VCs, yet they were sort of like systemically outperforming Yep. Yep.
Speaker 3:Yep. The other party. But but what what kind of general guidance are you giving to somebody that maybe was an active trader and wants to get more into the actual, you know, kind of venture side of the game?
Speaker 8:I I I've been so, you know, I've I've invest so I've been investing in in venture funds and crypto funds for a long time. I've just after I sold my first company. In fact, Mark Mark Andreessen and I have done it together for a long time and have been doing crypto funds since, gosh, by ten years and just consistently. And I'm still very bullish. And to your point, I think that's probably correct, like, on the on the, you know, the data.
Speaker 8:Like, they've just they've done and I think it's just it's just traditional finance in the sense of you have to, you know, nonconsensus right. Right? Like, as much as we hear about crypto, it's still very nonconsensus. A lot of a lot a lot of venture funds simply maybe they'll have a little bit of Bitcoin, but they'll otherwise, they'll rule it out if there's tokens and things. Mhmm.
Speaker 8:You talk to fund the funds. They a lot of them will say we have a no crypto rule, you know, sovereign wealth funds, so all the kind of giant pools of capital that fund the venture world. So it's still kind of this considered this kind of weird sideshow. You know, like, obviously, the past doesn't predict the future and so forth, we don't know how things will play out, but it's still very nonconsensus, I think, from a from a financial investing point of view, the broader crypto world. So I I look.
Speaker 8:I believe that's where the opportunities are in in in venture investing. Obviously, you have to also be right.
Speaker 7:And so
Speaker 8:and time will tell. But it's I think it's still much more not it's surprisingly nonconsensus in the investing world, I I think, to to this day despite the performance.
Speaker 2:Can you explain a little bit of the dynamic of how Venture fits into the life cycle of a new crypto company these days? Because Yeah. There's liquidity available from retail in some cases. There's some companies that are going to be profitable very early because of their, you know, insane product Yeah.
Speaker 3:We had a lawn from from PumpOn earlier, and that's classic example
Speaker 2:of companies that profitable.
Speaker 3:Able to be very efficient. And I think we've seen, on the other side, you have companies like Hyperliquid that got out and and have a token very early. So I'm curious, yeah, how how you think of the capital life cycle.
Speaker 8:Yeah. Yeah. So we I mean, let's see if I can answer that. So, one reason we started a separate crypto fund originally, I guess, 02/2018, was so that we could before that, I was doing crypto investing. Yeah.
Speaker 8:But I would always get these questions from the LPs and, like, what is this? Is it equity? Is it tokens? And so create a separate crypto fund with the basic idea where we have maximum flexibility. And and we went to the LPs and we said, look, this is gonna be different and here's the idea and here's the and a lot of them opted out.
Speaker 8:Some of them opted in, but we were very clear upfront what it was. And so what we what we think of it is we can do everything from we can buy buy bitcoin or something just directly Yep. Which we do. People see our funds and they assume it's all ventures, not like we do a lot of, you know, just buying, like, tokens that we think have have upside. We also do a lot of we can do equity investments like a coin base, which is a classic equity investment.
Speaker 8:We have a bunch of those that, you know, the goal would be to someday IPO. They could be cash flow heavy ones that that do dividends like the ones you're describing, Jordy. Like, maybe some of those or maybe I don't know what their plans are pumped up. Or maybe the IPO, maybe they dividend, maybe they just buy backs. Right?
Speaker 8:If you have cash flows, you have a lot of options. Yeah. And then the third one, which is actually, you know, one of our core ones is you'll you'll do an equity a project will start as a as an equity investment, but then over time, we'll launch a token. And the equity investors get sort of pro rata rights to those tokens. And that actually that's kind of that was sort of the new thing Yeah.
Speaker 8:That we really wanted to lean into back in when we started the crypto fund. That was a new idea that, know, we helped kind of pioneer that, I think.
Speaker 3:And that was like the warrant structure?
Speaker 8:Yeah. Well, it's basically yeah. It's very similar. It's a term sheet with two extra things. It has essentially token rights.
Speaker 8:Yeah. And it can be a warrant, there's different ways to structure it. And what's nice about that is that one of the reasons startups work so well is that they're max like, when when they work is that the investors and the founders are fully aligned. So before that structure existed, I don't know how deep you guys wanna go on this. There were these things called sass and like Yeah.
Speaker 8:These kinds of things where you do token purchases. And the problem is it created all these weird incentives where the founder would try to create a token just to do something. What we what we believe very strongly is alignment between the investors and the founders. And so there's sort of this this equity structure with token rights or token warrants is one where if they decide to they can stay an equity company and they can do, you know, just do traditional kind of go for profits and things, or they can create a token or they can create two tokens or whatever is best for that service they're trying to create. And in in in in whatever way that they eventually decide to you know, whatever business model they pursue, they the investor will participate kind of pro rata alongside the founders.
Speaker 2:What happens to the c corp in that scenario where they launch a token, the token grows, and the community is and, like, the the the asset is now controlled by the token and the c corp still exists? Are there roles for foundations and nonprofits and Yeah. And and different transitions that could happen?
Speaker 8:Yeah. It's a great question. A lot of times, they'll become, they'll just become, like, kind of one software provider in the network. Oh, Like Makes sense. You know, they're so so for example, you know, think of the Ethereum Foundation.
Speaker 8:I don't if you guys know the relationship between Ethereum Foundation and Ethereum. Ethereum is a network. Yeah. Ethereum Foundation, you know, they help make a little bit of software. They give some research guidance, but they don't control the network.
Speaker 8:They don't you know? It's just like kind of in the same way this is sort of a foundation that has some kind of a bully pulpit. Sometimes they can have a separate business model. Know? So, like, Uniswap is a is a decentralized protocol that we're Yeah.
Speaker 8:Investors in. It's sort of a a let's think of it as a decentralized New York Stock Exchange or something that's doing very well, multiple trillions and trillions in volume traded. And they separately so they spun off this protocol, and then they separately have a website that they operate, which is what the company does. And the website is now believe it's sub 5% of the volume on the protocol, But it's still 5%. Right?
Speaker 8:So they're just one front end to it. And so that I think that's probably one of maybe one of the best examples of what you're asking, John.
Speaker 2:That makes a ton of sense. Jordy?
Speaker 3:Where what are you expecting to see out of the kind of real world asset category over the next couple years? It feels like it's this year, at least to me, it's felt like we're days or weeks away from some pretty high profile assets coming on chain. I'm curious how you think about the category broadly.
Speaker 8:Yeah. Yeah. I mean, I think of stablecoins as sort of the initial real world asset. Right? So you have dollars in the bank account.
Speaker 8:And then the next and then and then the great thing about that, the kind of adoption there and hopefully all the regulatory clarity we're getting is that will be a natural stepping stone to, you you have Robinhood talking about stocks. You have BlackRock talking about, you know, treasury bills. Wouldn't I think it would be nice if anyone in the world I think it'd good for The US and I think it'd be good for the world if anyone in the world could buy, you know, 4.5% treasury, you know, interest treasury bill. Right?
Speaker 3:Yeah. Totally.
Speaker 8:And have it secure and easy and permissionless and low fee. I think it's, you know, it's good for our, you know, The US, the popularity of the dollar, and I think it's, you know, it'd be nice for somebody who has a volatile currency to have access to those. So, you know, stocks stocks, bonds, and then you can imagine, you know, all of these sorts of so called dark pools. So, you know, still a large part of finance is people using Bloomberg and calling each other. And a lot of that, you know, like trading bonds and muni bonds and corporate bonds and things like that.
Speaker 8:There's a lot of interest from the banks to think about ways to use blockchains, to create essentially marketplaces there, you know, maybe permission marketplaces where only kind of certain participants can participate. For them, the benefit is, you know, why haven't they created a network like a marketplace before? Because, they, you know, they they don't trust each other. They don't want, like, who's gonna create it? Is Goldman gonna create it and JPMorgan's gonna use it?
Speaker 8:They don't trust each other. You know, they don't trust startups to do it because then the startup will start taking big fees. They've just sort of kept it informal and and by phone. So in a way, a blockchain kind of solves a political problem of getting these 20 entities or a hundred entities who previously wouldn't kinda coordinate together. I think that's one broader way to think of blockchains is like it's it's like if AI, you know, is solving all the problems in the world that that they need more intelligence.
Speaker 8:Right? Blockchains try to solve the problems in the world that need more coordination, right, or more, you know, kind of collective, collective action. Getting a bunch of, you know Blockchains are fundamentally social technologies, and it's about getting a bunch of, you know that's what money is ultimately social. Right? It's getting a lot of people to agree on a standard and to and to use the the same the same systems and tools.
Speaker 8:And so similarly with real world assets like that. And then there's other interesting ones to your question. Like, we have one called story protocol, a project we're investors in that's putting intellectual property on blockchains, and letting people, you know, do capital formation and licensing and so forth around, you know so you create a new, you know, a superhero theme thing and someone wants to make an AI remix of it and, like, how do
Speaker 3:they AI.
Speaker 2:Really important.
Speaker 8:Yeah. Right? And so we we think a lot about, like, in an AI world, like, how will, you know, creators get paid? How will IP work? How will how will how will money flow on the Internet in a world with abundant content?
Speaker 8:Right? Yeah. And and I think we think blockchains have an important role to play in that.
Speaker 3:How would you like to see the industry and kind of the world collectively try to solve social engineering hacks? Feels like Worldcoin is is one Yeah. Potential solution there, but I imagine there's a bunch of other sort of businesses that you could fund and then a whole regulatory piece as well, which is we sort of force these large companies now. Balaji described it as like, you know, to to basically hold these, you know, honey pots of of of data. And there's probably gotta be a better a better way?
Speaker 8:Yeah. A great question. So, yeah, you mentioned Whirlcoin. I'll just say briefly. So what Whirlcoin does is is what we call proof of humanity.
Speaker 8:So it's a way for you to get a cryptographic key that proves you're human. And the idea is in a world, you know, as we're moving too quickly with AI bots and deepfakes and so forth, it's useful to be able to say, hey, I'm truly a human. Then, you know, I can get a imagine a blue check on Twitter that actually, know, cryptographically means you're human and not just that you pay $10. We think that would be useful. It's sort of a missing, you know, kind of building block, so to speak, for the, you know, for the Internet that I think we all want.
Speaker 8:And so one thing we think about is like, what are those missing building blocks? You mentioned zero knowledge proofs. Zero knowledge proofs are, I think, a really interesting cryptographic breakthrough that I think people underestimate in the broader world how important they are. What they let you do is essentially prove things. So I can prove like a bank needs to know I'm a US citizen, let's say, or I have a certain income or certain profile of, you know, health data or so forth.
Speaker 8:But zero knowledge proofs that you do is I can prove that to the system without revealing any of that, like, my actual, you know, where I can I it can basically send me a a cryptographic kind of a game that says prove that you're a US citizen, and I can prove it back without revealing all, you know, my name and all the other kind of stuff that might that might dox me? Right? I mean, I just, you know, we just saw, like, you know, day after day, we see these giant hacks, KYC hacks. So for like, at this point, you should just assume all of your information sadly has been hacked many times. And, know, having Social Security as, like, your unique ID and password is just like a ridiculous system in this era.
Speaker 8:Right?
Speaker 3:So Yeah.
Speaker 8:We and meanwhile, we have these you know, we carry around these these supercomputers with with, you know, biometrics and advanced cryptography. Like, why aren't we using it? Right? The the problem is not the is not the the the tech, the core tech. The problem is coordination.
Speaker 8:Again, like, it's how do you everyone to agree on what the standards are. Right? And that's why I think blockchains can be important because it's really the the all the pieces are there, but how do you kinda put them all together in a in a broad kind of, you know, standard or coordinated system?
Speaker 3:Amazing. That's great.
Speaker 2:Thank you so much for coming on.
Speaker 3:Continue for Yeah.
Speaker 2:We could go way longer. We need
Speaker 12:to have
Speaker 8:you guys talk guys. It.
Speaker 3:It's great
Speaker 8:to see somebody at at contrarian idea that a tech show that actually likes tech is
Speaker 3:Yeah. What a concept.
Speaker 8:Very bullish on it. So thank
Speaker 2:you very so much. We'll talk to you soon, Chris.
Speaker 3:Have a good one. Bye.
Speaker 6:Bye
Speaker 3:bye. Next up, we have
Speaker 2:Kyle coming on. Yeah. I'm playing this Round of applause. You know, we're talking to some big people. Just because he's the number one guy on the Midas list doesn't mean you can't hit him with the Ashton Hall.
Speaker 17:Yeah.
Speaker 3:You can't hit him with some sound effects. I should have.
Speaker 2:But we have Kyle Simani coming on. Let's bring him in the studio. How are you doing, Kyle? Welcome to the stream. Welcome.
Speaker 1:What's up, John? What's up, Jordy? Pleasure to be here.
Speaker 3:It's great to see you.
Speaker 7:What's happening?
Speaker 1:Dude, I'm doing great, guys. I'm actually in Vegas right now. I'm actually looking at the Sphere out my window in my hotel.
Speaker 2:It's Bitcoin
Speaker 1:Vegas going on. It's a fun time
Speaker 3:in crypto. Company sponsoring the Sphere right now, or or maybe we Yeah. TPPN should buy the inventory at this very moment.
Speaker 1:I think I think y'all's faces would look really good at 400 feet wide and tall.
Speaker 2:Think that We should just be live broadcasting this there. That's the that's the real alpha.
Speaker 3:Anyway great to have you on. I've bunch of places to start with. I don't even have context. What event is happening in Vegas? I think Katie Han is there as well.
Speaker 3:Is that correct?
Speaker 2:It's Bitcoin conference.
Speaker 3:Bitcoin conference.
Speaker 2:Can you break it down?
Speaker 3:What are expecting? What's happening on the ground?
Speaker 1:Yeah. It's Bitcoin Vegas is going on, largest crypto conference ever, more than 30,000 people at Venetian Palazzo. Vance, either I just spoke or speaking shortly. David Tax is here. Bo Hines is here.
Speaker 1:Ross Ulbricht is here. David Bailey, Michael Saylor. Tons of tons of folks, are all here. Senators here, Lummis, Hagerty, whole bunch of other folks. So, politics is here.
Speaker 1:Wall Street is here. Industry is here. Yeah. Very, very exciting time in crypto.
Speaker 2:And what are the key indications or news items that people are looking for? Are there people still hunting for, different companies to establish Bitcoin reserves or news from the government? Like, what are the unanswered questions that people are looking for hints as to which way they'll break?
Speaker 1:I think probably the biggest questions are how is the Bitcoin's refuted reserve gonna be funded? Mhmm. You know, senator Lummis has proposed, the Bitcoin bill, which would which proposes open market purchases authorized by Congress. Mhmm. That hasn't made it very far in congress,
Speaker 15:but it's at least in
Speaker 1:the public domain. You know, when, the executive order was signed by president Trump a few weeks ago, it said that they can kind of fund the the strategic reserve using revenue neutral mechanisms. And so there's a lot of discussion today about what what exactly does that mean. Mhmm. Folks like Bill Hines and David Sachs and the administration are are certainly working on figuring all that out.
Speaker 1:They haven't shared anything publicly yet, but there's a lot of discussion about that. There's a lot of discussion around Bitcoin l twos. These are kind of ways to bring DeFi to Bitcoin, with, like, two or three or four asterisks after that end of that statement. But, like, a lot of people are trying to figure that out. And then, obviously, the kind of hot subject at the moment is these Bitcoin treasury companies.
Speaker 1:Mhmm. The most recent of which I believe is DJT, which is I think it just announced a 2 and a half billion dollar offering.
Speaker 3:Yeah. Is that Truth Social?
Speaker 2:Yeah. Yeah. Truth Social has
Speaker 3:And GameStop announced today. Announced as well. Purchase.
Speaker 2:Yeah, in some ways, the regulatory stuff happening right now feels like the kid who didn't do his homework until two minutes before the exam or something and is just cramming. Because crypto has been an important industry for a decade. People have been investing in this category for a long But now it's like the government's like, Okay, let's figure all this out. Is that just because we've really finally gotten to adoption and breached the technical milestones? Or do we and and I guess the question is, like, do you expect us to get through this regulatory kind of crunch period and then go back into build mode?
Speaker 2:And if so, like, what are the technical milestones that we're that we're trying to build? What what's coming on the horizon after we get through the political arc that we're in right now?
Speaker 1:Yeah. So, I mean, the reason we're here we're the reason we're kind of in this moment is, like, a lot of stuff building over the last ten or fifteen years and was really extenuated by the Biden administration. I I don't think our industry would be as politically relevant and as politically active, if it were not for the Biden administration so strongly trying to press on the the scales against against industry, and industry really mobilized against the Democratic Party in a meaningful way. And my sense is that most political strategists probably will tell you that, like, on the margin, the thing that moved the election in both congress and in the presidential in 2024 was the crypto industry in terms of dollars, reach, anger, PR, and kind of etcetera. That now has kind of swung from, very, frustrating administration to extremely accommodating and welcoming administration that we have today.
Speaker 1:The work that Bill Hines and David Sachs are doing in the executive branch is phenomenal. We're seeing awesome stuff out of DOJ, SEC, and CFTC on an almost daily basis now. And then the other big item is congress. There's the stable, you know, the the genius acts in in the senate today, and then there's market structure that that's coming pretty shortly. All that stuff is happening.
Speaker 1:So I think the reason we are where we are is, like, like, the pendulum is, like, kinda swung from one extreme to the other. Yep. I feel pretty good that we're gonna kinda basically get industry is gonna get, I think, most of what it wants Yeah. In the next few months. And that just then provides the foundation for crypto to really permeate all of software.
Speaker 1:Mhmm. Cryptosystems are the most basic level, just systems for moving money around, and they're much more better and efficient and global system, systems for doing that. And so my my hope is that once we get these final things done from congress and then the executive branch, then you see Facebook, Google, Apple, Microsoft, etcetera Yeah. Embed crypto into all of their respective operating systems. You have AI agents, you know, trading with crypto, whatever, and now crypto financial rails truly permeate global software.
Speaker 2:Do you think there'll be a realignment from the left around crypto, or do you think like, because it it did feel like it was bipartisan for a little bit, or at least it was just ambiguous on both sides, then it kinda broke right. But it's such a big industry that it feels like maybe the Democrats might wanna say, hey. Like, we're it's a it's a big tent. We're we're we're also pro crypto.
Speaker 1:Yeah. I mean, there's certainly a handful of prominent Democrats who have been pro crypto, folks like Richie Torres, senator Gillibrand. There's some others. I'm I'm sure I cannot remember their names off the top of my head. And we've been donor although we're primarily donors to Republicans, we are selectively donors to to some of those folks that I just mentioned.
Speaker 12:K.
Speaker 1:The party as a whole, I would say, has not really realigned and embraced crypto, and I I say I'm fairly surprised by that. It just seems kinda like a self like an own goal here. There's a handful of Democrats who, like, ideologically hate crypto, most notably senator Warren. But, like, the vast majority of Democrats, in in in in congress kinda, like, don't care or are, like, pro crypto.
Speaker 2:Sure.
Speaker 1:And so I I've been surprised by the, like, lack of warm embrace.
Speaker 2:Makes sense. Jordy?
Speaker 3:Mutual friend Jared Madfez asked me to ask you, what are you excited about in crypto that no one else is talking about yet or very few people are talking about?
Speaker 1:I am really excited for Deepin, and this is a a category that's been around in crypto for a few years now, and and we were very fortunate to help pioneer some of our early investments like Helium. But the deep end things are starting to really work. Helium, I believe yesterday or the day before was their first day ever. They had a million peak customers, on the Helium network, in one day. Helium, for those who don't know, is a is a decentralized wireless network.
Speaker 1:Anyone can stand up a hotspot in their house and provide wireless coverage, and other people can, like, use your network and pay you for doing so. We just invested recently in a very high profile, deep end project called Double Zero, which basically is bringing private fiber to anyone who wants to pay for private fiber per byte of data. And it's gonna go live over the summer, and it's gonna trade it's gonna really change low latency trading on on public blockchains. There's a handful of other kind of major deep end teams like Hivemap or Pipe Network and and a number of others that we're involved in. And I think these are you know, crypto is fundamentally financial in nature, but, like, finance is just hard for people to grasp.
Speaker 1:And these what's cool about these deep end use cases is that they are, like, fairly easy for for for people to to understand. And the first handful of those things are really starting to achieve escape velocity.
Speaker 3:That's great.
Speaker 2:How'd you meet the Solana founders?
Speaker 1:Yeah. I met Anatoli first. I I don't actually don't don't know who introduced me to Anatoli, but I was in, San Francisco in April of twenty eighteen. Yeah. I was at a coworking space, I met Anatoli on a Saturday night.
Speaker 1:And, I was sent he had sent me the white paper for the proof of history and Salana consensus white paper. I remember I read it and it was absolute trash. And I I was like, have no idea what this does. But someone told me Anatolio was really smart. So I met with him.
Speaker 1:And after meeting with him, the the thing that really stood out to me was of all of the l one all of the l one founders were, like, very academic in background and their pursuit and approach. And Anatoly was the opposite. He was like, hate academia. I don't ever wanna write a fucking paper. I don't ever wanna solve an unsolved problem in computer science.
Speaker 1:He's like, my only job is to, like, let other people solve problems, and then I'm just gonna, like, apply their solutions to making my software go fast. Yeah. And his whole career at Qualcomm and Dropbox and other places was just doing that. And I was like, I like this guy. This guy does not sound like all of the other l one founders.
Speaker 1:And so we we started to kind of back salon from very early on. Obviously, to meet Raj shortly thereafter, and the rest is history.
Speaker 2:Yeah. So, I mean, was was that investment did it feel like it was out of your sweet spot? Like, were you stretching in terms of what you're pattern matching against, or was it, like, delightfully contrary in your mind?
Speaker 1:I mean, look. Multifointing was very young. We were six months old at the time we kind of made that first investment, and I don't think we had even a sense of, like, what is our strike zone or not. We just kinda were, like, young and running as fast as we could and seeing what happens. In hindsight, I would say, like, multicoin generally likes to invest in more blue oceans than red oceans.
Speaker 1:Mhmm. And investing in an l one was certainly a red ocean investment. Yeah. And so when we invest in in red oceans, we just wanna be, like have a pretty pointed view on why the player we're betting on is is, like, the standout player. And as I was just saying, like, just at the founder level, Tolley's background was completely different than than the other l one founders.
Speaker 1:There's a number of other things that kind of stood out, but but that being the primary one. I would say now with seven or eight years of history looking back, I I don't think the salon investment, like, stood out as being fundamentally, like, out of strike zone. We knew we hated Ethereum. We knew that, like, there was problems, and we were looking for alternatives. And lots of people were showing up saying, like, look.
Speaker 1:I have an alternative. And so in that in that sense, it was, like, very kind of shot on goal.
Speaker 3:What's been your success rate of identifying new metas, like, you know, before other people? It feels like in crypto, if you're if people that are trading are trying to trade, you know, specific metas and then identify new ones. But as on as a VC, you really need to identify things two, three years, sometimes sometimes even more than that. Otherwise, you're just gonna be too late. Right?
Speaker 3:One once the thing is is already big, you don't necessarily wanna invest in the fourth or fifth player in a category.
Speaker 1:Yeah. I I feel very fortunate. We've been involved early in a in a number of of guys metas, for lack of a better word. First, probably being, like, high performance blockchains, being Solana. Second, probably being d pin starting with with Helium and HiveMapper.
Speaker 1:More recently, we've been very, focused on, on chain privacy. Most people in crypto have been talking about zero knowledge proofs for, god, five, seven, eight years now. We've scrapped all that, and we've made big bets in fully homomorphic encryption, which is a totally different cryptographic approach. So those are probably the three, like, I think, really big ideas where we were we were pretty early. And there's a number of other areas that are, like, smaller where I think we've been early.
Speaker 1:In terms of where, you know, the Meadows were, like, focused on today, I'd say it's, like, it's pretty obvious stuff, but, like, getting stable coins in the hands of people who want stable coins. We've invested in a number of p two p exchanges that make it possible for people in emerging markets in which have capital controls to get stablecoins despite their local governments. And so that we that's a lot of lot of focus area. And then we've been thinking about what are as more stablecoins come on chain, what are the secondary and tertiary impacts of that? And then we've been going along a lot of those things in both public and private markets.
Speaker 3:The, help helping, you know, people with capital controls, get on chain is interesting. It's kind of like crypto's outlaw roots in a little bit, but but very mission oriented is saying, we believe in economic freedom. Yeah. Yeah. Yeah.
Speaker 3:They're, you know, willing to go in and into certain markets and deliver that. So very cool.
Speaker 2:Very cool. Well, thank you so much for stopping by.
Speaker 7:Yeah. This is great. Fantastic.
Speaker 3:Hope the conference is great. Come back on the show anytime.
Speaker 1:Enjoy Jordan, John. Thanks for having me. Awesome to be here.
Speaker 4:Good, man.
Speaker 3:Talk to soon. Cheers.
Speaker 2:Bye. Next up, have Ben Pastornack, founder I met years ago because were both building in consumer packaged goods. He's gone on to crypto. I've gone on to media, but excited to get the update from him.
Speaker 3:Probably has to be the most viral new crypto app Yeah. In Yeah. At least a year. At least six months.
Speaker 2:At least six months.
Speaker 3:I'm excited to chat with him.
Speaker 2:So Ben, welcome to the stream. How are you doing?
Speaker 4:What up?
Speaker 3:Believe in something. Doing?
Speaker 4:Believe in Ben.
Speaker 3:What's going
Speaker 17:on? Welcome
Speaker 3:to the show.
Speaker 17:Thank you. Good to see you guys.
Speaker 10:How are
Speaker 17:you guys doing?
Speaker 2:It's good. We haven't talked in a few years. I'd love to just get the update. I have no idea what a tear you've been having.
Speaker 3:Friend friend of friend of artist, Dylan, is here at the studio. He's gonna do a live interview later. Yeah. And he brought up he brought you up. And John was like, Ben, pass your next?
Speaker 3:Yeah. Like the
Speaker 2:We talked a bunch.
Speaker 6:And then
Speaker 3:and had no idea. He's so I'm locked in on on traditional tech that he had no idea what you're up to. And then and then we explained, of course.
Speaker 2:So, Why why don't you actually just give me catch me up to speed on what you're building?
Speaker 17:Yeah. Well, Believe is a platform for belief and people empowerment. So if you want to contribute something to the world, if you wanna build something, if you're gonna create art, if you're gonna create a song, whatever it is, you can come to believe and raise the capital you need.
Speaker 2:Okay. Break the the how how is this different than NFTs? What what technologies are we leveraging? It's obviously somewhat crypto related, but then comp it to a Patreon for me.
Speaker 3:Well, Zoe, I'll give you some context. Luke Metro, the end of the show, I I believe he used Belief.
Speaker 2:This is Belief. Was Belief. Oh, Got it. John. Cool.
Speaker 2:John's familiar. Yeah. I I have I interacted with this.
Speaker 17:Cool. Yeah. Yeah. It's basically we enable people to launch coin on Solana super easily. Mhmm.
Speaker 17:You know, the the the tokenomics itself are pretty straightforward. What we kinda introduced to the space is, like, a fee that's collected. Yeah. Basically, a trading fee, and creators are able to raise money through that trading fee. And, yep, the the product went, like, super viral this past month.
Speaker 17:It's only four weeks old Yeah. Because you can launch a coin directly from Twitter. So we're kinda tapping into the existing trend of builders, like, building something, screen recording it, posting it on X Yep. And they can just tag LaunchCoin to LaunchCoin.
Speaker 2:Yeah. Yeah. So you're even removing even more barriers. You don't even have to go to the different website, no wallet or anything. But I assume at some point, can interact with the blockchain at, like, a lower level through the actual app, but the the the initial kickoff and instantiation happens all on X.
Speaker 2:Is that correct?
Speaker 17:Exactly. Yeah. So you you launch an X, and, you know, assuming your coin does well, you can download our app, link your X, and claim your fees, edit your project details. And we're also building kind of, an ecosystem for people to, like, integrate their coin into that product Yep. You know, engage with different mechanisms, and that's all through the app.
Speaker 2:So what sorry. What what is kind of like the optimistic use case here for, someone actually using this to fund kind of a new idea or a new concept? Because there there there are places where you can go and get a grant for something. Right. But increasingly, it's harder and harder to get a grant for for great art or even raise money for the next movie because of Hollywood and all these other dynamics.
Speaker 2:So what what does a win condition look like for you?
Speaker 17:Yeah. I mean, I think it's a different depending on the industry you're in. Mhmm. You know, tech obviously has venture capital, which is a pretty good system. Yeah.
Speaker 17:I think it is evolving just because, you know, I I guess the the big trend is you're seeing a lot of ARR, MRR, and people's bios. And I think thanks to AI, you know, engineers are way more efficient. There's, like, less of a need to raise a huge amount of money upfront. Yeah. So if you can, like I get yeah.
Speaker 17:I guess bootstrapping is kinda in, and this is just a great way to get started. So for tech, I think that's the use case. For other, yeah, you know, other industries, like, there isn't really a great way to fundraise for anything. Like, you could start with GoFundMe, but those, you know, generally haven't gone too far, I guess, in, you know, some cases, but pretty pretty mid mid outcome. So this can lead to, like, massive funding Yeah.
Speaker 17:You know, for for those types of projects.
Speaker 2:Yeah. Do you think that there should be a link between the token and the equity in a company that's eventually created? I imagine at four weeks old, you probably haven't figured out that interaction because that's probably the most complex legal menagerie you can imagine. But talk to me about the long term vision.
Speaker 17:Yeah. Well, so when we shipped them, we thought they would be purely, like, attention coins and speculative, but that quickly changed because, you know, the first launches that did really well started integrating their coins into their product, you know, introducing different, like, burn burning mechanisms. So I think that the the kind of way I view it right now is, you know, they're essentially, like, utility coins and, you know, depending on how I I consider ourselves to be, like, the stripe for coins. So we give developers the tools to, like, integrate their coin however they want. But at the end of the day, they're really versatile tools, and they're gonna come up with all different ways that kind of inspire us.
Speaker 17:Long term, you know, yeah, the regulatory environment is rapidly shifting. So I think that, you know, we're planting a lot of seeds today And depending on, you know, what happens here and it's looking pretty good so far. Mhmm. You know, you you can do a lot more in terms of equity, etcetera.
Speaker 2:It's very interesting. Rudy?
Speaker 3:What's it been like building in crypto transitioning from it feel like to me watching what what you built with Simulate from afar, you know, it was always very high profile, always in the news, and more so than I think like a traditional CPG company. Totally. So in that sense, like just being good at thinking different and and capturing attention and leveraging that probably set you up pretty well for building in crypto. What what what have been some of the challenges? I imagine you're not sleeping a lot because every every time you go to sleep, there's something something's breaking or someone's yelling at you or something like that.
Speaker 3:But but what's it been like?
Speaker 17:Yeah. Well, you know, it's not my first rodeo to your point. And, you know, prior to simulate, I built a a social networking app called Monkey that has tens of millions of users to this day. So I'm I've got you know, I'm familiar building consumer software. I think to your point, yeah, the the crypto stuff is $24.07.
Speaker 17:So it's you know, in most spaces, you have kind of room to iterate and make mistakes. In crypto, the market is less forgiving. So it's, you know, it's a tricky balance because you obviously can't be stagnant, but you have to keep evolving and changing things. So, yeah, definitely a pressure cooker environment, but, you know, the outcomes are really crazy. And, you know, the cool thing I believe is we have, you know, dozens, if not hundreds of creators that have, like, raised funding.
Speaker 17:People have, like, quit their jobs and gone all in on whatever they're building, and it's rare you get to ship something and for it to immediately have a positive outcome for these people in a, like, life changing way. So for me, that's, like, super energizing, and I hope we can continue to do that at scale.
Speaker 3:What do you how do how do you think this evolves? Right now, it feels like Believe is a product for individual creators, entrepreneurs, artists like you're talking about. Is there a world? But but if you guys become, you know, Stripe for coins or or however you phrased it, is there a world where traditional companies in the future would would use Believe to get on chain in in some capacity? How do you think about that?
Speaker 17:For sure, yeah, we're already seeing that. So kind of the the biggest case study is Duke, which is, like, a venture backed company. I can't speak to their exact revenue numbers, but very serious company that has, you know, strong PMF. And they launched a coin, and their coin has, like, crushed it. It's brought them, a new revenue stream.
Speaker 17:It's, like, really activated, like, this new community for them. And, yep, Bobby, the founder of Jupe, has just, like, really leaned into that. So I think that is gonna definitely keep happening. And, you know, I guess, like, some of these individual builders might, like, launch a project that later evolves into, an actual company.
Speaker 3:Mhmm.
Speaker 17:And the coin is, like, yeah, could could definitely be tied to that, you know, watching things watching how things unfold.
Speaker 2:Wanna talk about the line between, like, good and bad projects, essentially. Like, there's two narratives. One is, look. It's all a casino. No crying in the casino.
Speaker 2:The the the the degens love to just do whatever and just, like, you know, like, you know what you're getting into. The the the the the the flip side of that is, like, you know, there there I I guess the question is, like, there are a lot of people that have launched stuff, and it's gone super well, and they built really cool things. There's other stuff where it's clearly just been like a rug and a mess and a disaster, and it chases them around the Internet for a couple months or even years. Where where is the line? What would you counsel people to, kind of rules of the road today for getting involved in this and not just frustrating a bunch of people and actually having, like, a good experience and and kind of not just obeying the letter of the law, but, like, the spirit of the law
Speaker 3:and Yeah. And on that, like, decision making around going you know, doing curation versus just creating a platform and letting people do kind of whatever they
Speaker 2:want. Totally.
Speaker 17:Yeah. So, you know, I I consider by the way, had Elon on earlier. Love Elon. He's great. You know, friendly with him.
Speaker 9:And Yeah.
Speaker 17:You know, also Pump is a huge innovator in the space. Yeah. I consider Pump to be kinda like the worldwide web and what we're doing to be closer to the App Store. Okay. You know, you can't completely curate for reasons that I won't go into.
Speaker 17:Like, we can't say, hey. This is good because, you know, if we if we do that, we're gonna be wrong some of the time.
Speaker 2:Sure.
Speaker 17:But it is quite easy to say, hey. This is bad. And when we identify bad actors, there's, like, mechanisms we can integrate to kind of, like, get basically disincentivize them from launching with us versus, like, one of these other platforms.
Speaker 6:Yeah.
Speaker 17:The I I think, like, the biggest thing for us is, you know, founder education. So, you know, I think most Silicon Valley Founders, like, 99% have, like, really positive intent with, you know, things they do. And it's our job to kind of, like, create harmony between the traders and the founders, and we can just do, like, a way better job at that. Similar to, like, you know, if you fundraise with, like, a safe or even if you do, like, a price round, your first time doing it, you know, there's usually a pretty big education curve. Like, a lawyer is explaining to you what these different mechanisms mean.
Speaker 17:Most people completely make a mess of it, but by their series a, they identify the problems they made. So there there is education with, like, existing fundraising mechanisms. And I think that for this tool, there's an education that we need to make, like, really easy.
Speaker 2:Yep. I'm I'm interested in I I we we've we've talked to some founders who have been kind of, like, curious about dipping their toes in the water. And
Speaker 3:Well, I remember it was we we we had some buddies
Speaker 2:Did it talk to people off the ledge.
Speaker 3:Yeah. After the Trump, you know, coin happened So
Speaker 2:why not me?
Speaker 3:We had some buddies that that were thinking about it. And and ultimately, at the time, I think they made the right decision not to do something. But things are changing week by week.
Speaker 2:And the trick is, like, it it feels like the the most basic thing would be, like, don't rug. Don't don't sell what you own or whatever. But there's this other dynamic that I learned about, and, this is probably obvious to everyone who's who's native to crypto, but, I could I could launch a coin, not sell any. Some traders should come in, pump up the coin Right. And then people buy when it's at the high.
Speaker 2:And then and then those traders sell, and I didn't rug, but, like, it feels like it rugged, people are like, I lost money on your thing, and then they're mad at me. And so I guess in terms of the messaging and the risk reward, how do you think the rule what's
Speaker 3:the rules rule? You're is there's a PVP dynamic. Totally. And so I'm curious for you at a platform level, do you think that do you think that, like for example, how how, you know, are there things you can do at a product level so that if an artist comes on to believe Yeah. Is like using the mechanism to raise money, you prevent it from turning into this, like, PVP warfare where people are duking it out.
Speaker 2:I feel like we're going to reinvent
Speaker 3:At the expense. Accredited investor laws because because the
Speaker 2:whole idea is, like, is, like, a venture capital firm can lose $100,000,000 on some crazy biotech startup or some hard tech startup, and it really is no crying in the casino. You know? It's like Yeah. It's like, you guys did your due diligence. You signed the documents, and you get you gave it a shot, and that particular technology didn't work out.
Speaker 2:And so as long as there's no fraud, like, you move on and you make money on the next thing. But for, you know, like like random retail people, sometimes they get caught up and they and and bad outcomes happen. I feel like there's some there's some vibes in in in the ecosystem that can just be enforced loosely. There's also some rules. There's some platform stuff.
Speaker 2:So I'm interested in kind of how you're how you're dealing with that because it's obviously gonna evolve a ton over the next few years. I mean, you're gonna
Speaker 3:be running this for a long time.
Speaker 17:Totally. Yeah. Yeah. To me, it's so so, know, pumping being the worldwide web, there's, like, very small mechanisms that you can integrate that I think just the whole space a lot safer. Sure.
Speaker 17:And, yeah, to to your point, read the snipers where they, like, buy large products, buy, you know, kind of dump at the top. There's, like, a lot of mechanisms, like, I'm seeing that I think are really interesting, which is basically, you know, having, like, you know, extremely high fees for the first, you know, x amount of seconds at trading so that, you know, the snipers will still get some ownership, but their Yep. The ownership is, like, greatly reduced.
Speaker 5:Got
Speaker 17:it. There's rate limiting, so there's, a max purchase amount, you know, for the first couple seconds. So Sure. Yeah. A lot of these anti sniper mechanisms are just, like, kind of evolving right now, and I think they're gonna lead to a much healthier ecosystem.
Speaker 2:That's
Speaker 17:interesting. And in addition, like yeah. I think it's, like, the the kind of fee it's it's it's hard to say what is good, but it's much easier to say what is bad. So if we if we do detect bad actors, it's pretty easy for us to kind of disincentivize future bad actors.
Speaker 2:Yeah. How much of the viral growth or the growth of the company right now has been would you attribute just to the specific kind of, like, viral growth hack of, like, being able to launch a coin directly on Twitter or X?
Speaker 17:Yeah. I'd say maybe, like, 50%. I think the, you know, the other thing is that, you know, within the the so and so trenches is, you know, they've been trading these kinda, like, traditional meme coins forever, and this you know, it's a really fun game that everyone enjoys. But there is hunger for a new game, and I think that the vision here has really, like, energized the whole space. So that narrative alone, I think, has done a lot of damage in a good way.
Speaker 2:The opportunity. Right?
Speaker 17:Yep. Yep.
Speaker 2:Yeah. Anyway, anything else?
Speaker 3:Very cool. We're good. This is great.
Speaker 2:Thank you so much for breaking
Speaker 1:it down.
Speaker 3:I'm sure you have a a bunch of new things to to work on in in the fifteen minutes that you've been on. So good luck building and Excited to follow.
Speaker 2:Yeah. Thanks for breaking
Speaker 16:it I actually
Speaker 17:like Yeah. Thanks for having me, guys. It's been cool to see everything blow up for you guys in a good way.
Speaker 2:Yeah. Yeah. We appreciate it. Thanks a lot. We'll talk to you soon.
Speaker 3:Great to chat. Cheers.
Speaker 2:Fantastic. Little round of applause. Love to see him him winning. If you're in CPG, credit to crypto.
Speaker 3:Yeah. I guess
Speaker 2:It works.
Speaker 3:It works. I guess that's the play.
Speaker 2:Every once in a while. Next up, have Tom from Dragonfly Capital coming in the studio. We'll break down some more trades and Yeah.
Speaker 3:Interesting to look at Funds are working. Companies like Pump
Speaker 6:Yeah.
Speaker 3:Which was only launched something like a year ago. Yeah. And now is done close to a billion dollars of revenue. Mhmm. Then you have Believe, and and both these businesses look pretty obvious in hindsight.
Speaker 3:Right? Yeah. But just required a specific type of founder to to unlock it.
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Speaker 3:Nice work, John. Turn the Let's bring in Tom.
Speaker 2:Let's bring in Tom. How are you doing, Tom?
Speaker 3:There he is. Good. Nice to
Speaker 11:meet you. Technology brothers. What's up? You guys.
Speaker 3:What's happening? How are you?
Speaker 11:Hey. Not a lot. Doing well. I'm I'm loving the suits. I mean, you guys always bring it, but you look great.
Speaker 3:Have you watched the stream at all? Are we asking too normie of questions, or are are we hitting the right topics?
Speaker 11:No. It's the right blend of norminess. There's a lot of stablecoin conversation, but that's to be expected. You know? People people love the stables.
Speaker 11:So Yeah. No.
Speaker 9:It was
Speaker 11:it's it's been good. It's been great.
Speaker 2:I mean, my my bear case on stables is I I went super long stablecoins, and my portfolio is completely flat. And so I'm looking for alpha. Give me some crazy ideas. What are you excited about right now that's not one year out, but ten years out, a hundred years out? What's the future look like?
Speaker 2:Break it down.
Speaker 11:A hundred years out, I think we're all gonna be dead and replaced by AAJN. So it's all good. I'm not I'm not too concerned about that. You know, on the stablecoin thing, I wouldn't sweat it. I think you're gonna get a little, you know, circle equity airdrop during the IKEA.
Speaker 11:They're gonna just air airdrop some shares
Speaker 7:to all the USDC holders.
Speaker 2:We're shelling for the US dollar.
Speaker 3:We're shelling we're we're we're Yes.
Speaker 2:US dollar shills.
Speaker 3:Yeah. Anytime anytime anytime a company sells Yeah. Like a a traditional crypto asset and buys USDC, they're defending the dollar.
Speaker 2:They're defending the dollar. Yeah.
Speaker 11:I I agree. I actually you know, I think you're talking about stablecoin. And people when people talk about stablecoins, they talk a lot about flow. Right? They talk about using stablecoins for payments, b two b payments, p two p payments, whatever.
Speaker 11:I think the stock thing is actually underrated, and there's a few people in DC who talk about this. I think Paul Ryan was actually talking about, basically, stablecoins being a way to, you know, mitigate a lot of The US debt because now you have all these new treasury holders. Mhmm. Tether is, like, the seventh largest treasury holder at this point. And I'm like, this feels like a very pro US bipartisan topic of, yes, we want people to be buying we want more marginal treasury buyers.
Speaker 11:Stablecoins provide that route. And it's, like, a little bit of, like, a you know, saying the quiet part out out loud, but I don't really care. I'm, you know, very pro US, and I think, like, using promoting dollars
Speaker 7:any of the of
Speaker 3:the digital assets, which people saw as alternatives to the dollar, are now some of the greatest defenders.
Speaker 2:It's kind of To dig into it, is is, like, Tether's the seventh largest holder. Is that because they displace, like, Fidelity by taking, like, all of the treasuries and they just move them over? Or are these can we really think of these as, like, net new treasuries that are being bought?
Speaker 11:These these are incremental. Right? Because these are people who are offshore. It's people who are in Argentina or Turkey.
Speaker 2:That makes sense.
Speaker 11:Certainly, maybe some of it is is cannibalistic. But Yep. For the most part, from what we've seen from and, actually, Rob Haddock, who's one of the GPs with me at at Dragonfly, just had a great stablecoin research piece come out yesterday talking about who's actually using stablecoins. And it's, yes, some people in The US and, yes, maybe some people who previously would have purchased treasuries through the broker. But, actually, it's it's people who are offshore, and that is actually, I think, kind of the the killer app.
Speaker 3:Mhmm. What is happening in the Asian crypto markets right now? I know you've spent a ton of time over the years kind of focused in that area. How is the regulatory environment kind of evolving? What does crypto activity look like?
Speaker 2:How do we get them to rotate entirely into USDC?
Speaker 7:Yeah.
Speaker 3:Yeah. That's part two.
Speaker 11:Alright. So while
Speaker 18:they're waiting for the airdrop.
Speaker 3:Here we go.
Speaker 6:No. I
Speaker 11:mean, Asia and The US have always sort of, I would say, specialized when it comes to crypto. Like, if you look back the past three, four years, Asia has really been running laps around The US when it comes to anything CeFi. You know, we're early investors in in Bybit and Bigget, which are now two of the largest exchanges. Incredible businesses. I mean, we're talking billions of dollars in in revenue.
Speaker 11:They some of the features and some of the products that they offered, US exchanges are just now sort of catching up too. So I I would cite as one example, a lot of Asian exchanges offered what we now call CDFI of offering a totally normal centralized exchange experience in the front end, but wrapping some sort of DeFi protocol on the back end to be able to offer people, you know, trading for new assets or to be offer, you know, lending and financing opportunities or yield opportunities or whatever is actually available on chain, but without all the complexity and yuckiness of, you know, having to manage your own keys, which is kind of what normies want. Coin Coinbase just launched, you know, Bitcoin backed loans using Morpho, which is an on chain lending protocol, maybe a few months ago. So this is something where The US is now just playing kinda playing catch up to what's been happening in Asia for many, many years. I think there's also been this trend of more, I would say, Chinese previously, like, O2O founders moving into crypto and, frankly, also moving offshore because they see, hey.
Speaker 11:Venture in China is, like, kind of dead. You know, the the domestic market's kind of dead, but I'm I'm really great technologist. I'm a really great builder. Building in crypto is a way to access a global user base and a global capital base, but, you know, with sort of the skills that I already have. And so, you know, we're early investors in Kaido, which is sort of this now it's been coined Infofy, which I don't I don't quite love, but I think it's a cool, like, concept of Sounds great.
Speaker 11:Yeah. Yeah. Basically scraping Twitter data right now, ingesting that, and and then sort of spitting that back out into a sort of gamified cloud system. They also do some really cool stuff with, like, transcribing all of these podcasts and just, like, giving you sort of, like, an alpha sense for crypto. But, again, that's, like, a lot of Asian talent now now sort of moving into
Speaker 2:crypto. Interesting.
Speaker 3:How are you thinking about the intersection of AI and crypto personally? We've talked with a number of people about the potential of stablecoins within agents, but there's a bunch of other
Speaker 2:How often should you pivot from AI to crypto and back? Is that every three months, every six months, Every two years? What are we thinking?
Speaker 3:No. But but in all seriousness, how how are you I mean, I imagine you're you're a consumer crypto investor. You need to get you need to get this bet right. Otherwise, you're gonna look like a fool in ten years. So
Speaker 11:I imagine this is this is what I have nightmares about.
Speaker 12:I I
Speaker 3:am sure you do.
Speaker 11:No. I I think we've we've been maybe a little bit contrarian when it comes to AI crypto in being more bearish on this category. I think a lot of sort of what AI crypto is broken down into is people trying to do decentralized inference, sort of this, you know, GPU marketplace. And this is sort of an, again, an old idea in crypto. This was something that, Gollum way back in the day was trying to offer for for video rendering.
Speaker 11:Now kind of coming back, there's decentralized training, decentralized data marketplaces. I think for the most part, this is just really tricky to build. Right? Like, you think about how you actually train a state of the art model, you don't use, you know, a million consumer grade GPUs all around the world. It's like you want one big colocated a 100 cluster.
Speaker 11:Like, you know, that is actually kind of the thing that you want. And so, like, a decentralized network actually, it's just like it it doesn't really have the right characteristics of something you would like, type of compute that you want. Compute is is not a monolith. The areas where I think we've been investing in AI, it's crypto in the area that we get really excited about. You mentioned sort of NPC and agent payments.
Speaker 11:I agree. This just seems like kind of a no brainer where you want deterministic final finality. You want your micropayments. Something that just like existing SaaS company, existing SaaS payment companies just aren't really set up to provide. You wanna be able to say, hey.
Speaker 11:I want, like, one simple API call for a fraction of a penny, and they're never gonna use the service again. That's something where stablecoin payments are uniquely enabled are uniquely positioned to be able to do this, but it's just not something that you're normally gonna see out of out of traditional payment companies. So we're investors in in a company called GoldSky, which is which is building in in this in this category. We're also, I mean, kind of on the acute topic. We're investors in in XO, which is is sort of borderline crypto.
Speaker 11:It's I don't know if you've you've seen them around Twitter, but, basically, they allow you to run sort of sharded inference locally on your own network. So let's say you have, you know, a couple Mac studios. They're really sort of specializing Apple Silicon right now. It will automatically discover and and execute, let's say, like DeepSeek r one across those different computers on your local network so you can run really great models on consumer grade hardware given sort of existing shortage of of of GPUs. And so you can imagine that, hey.
Speaker 11:If you can sort of distribute and and shard compute across your local network, maybe at some point in the future, you can actually do that across a global network. They're building towards that. I I I don't know if that's exactly the direction that they wanna go. But in the interim, you have this really, really useful tool that allows you to actually get access to local edge compute models, which I I think ultimately is is where that whole industry is going to go versus, hey. We're all gonna be running our own models on, you know, someone else's cloud.
Speaker 3:Back to the venture side, how do you see crypto funds evolving? It seems like there's a number of funds with massive AUM and maybe not enough places to bet on the equity side. Do these funds end up having, you know you know, be end up 80% sort of liquid, 20% equity, you know, sort of early stage focused? Or or how do you see that evolving? Especially, I was talking with with Ani on your team offline and and he was talking about how with AI being so deflationary, we just have companies now that have massive potential but just don't really need capital.
Speaker 3:So you're sitting in the investor seat being like, please take my money versus, you know, maybe ten years ago would have been reversed.
Speaker 11:Totally. I think, that is definitely a trend that we see. And I don't think it's even necessarily a a crypto venture thing specifically, but, I mean, you were talking earlier people throwing, you know, ARR in the bio, and it's like, yeah, that is downstream from just operators having so much leverage now that they didn't have before. Crypto amplifies that where now you can sort of go public. You can access a massive user base.
Speaker 11:You can be way more of revenue positive than you were before. And so maybe the history of of of crypto funds, just to sort of take a step back, if you think of sort of, like, 2017, '20 '18, for reference, Dragonfly was was started in in 2018, crypto was was was a monolith. You give some some some capital to a fund manager, and they're gonna decide, okay. I'm gonna buy some Bitcoin. Am I gonna gonna buy some ETH?
Speaker 11:Am I gonna invest in a, you know, early stage equity round? Am I gonna buy a SAFT? Whatever that sort of blend was, they're gonna be managing that for you. And oftentimes, that was in a true closed ended venture structure, but sometimes it would be in a liquid hedge fund structure with some side pocket. And it was like the whole thing was was kind of no one really knew what this asset class was going to look like, and so you you give capital to someone else, and they figure it out.
Speaker 11:There was also obviously a a a byproduct of the fact that even but getting access to something like Bitcoin previously was so difficult. Right? Like, you couldn't buy it through your brokerage, your bank, no ETFs. Most like, you had to use some wack custodian. The the whole process was very convoluted and so great.
Speaker 11:You've managed to do it in a fund. That's something you can underwrite, and and they can actually go and determine how much of the Bitcoin exposure that you want. You you fast forward several years, and now, hey. If you're a reasonably sophisticated LP, you can go and choose how much Bitcoin you wanna buy yourself. We actually don't buy major liquids in our in our fund at all, and it's like, I you don't need it.
Speaker 11:Don't need to charge you 2 and 20 to go buy Bitcoin or Ether or Sol or, you know, whatever it actually is. You can go do that for yourself. And so there's been more specialization in in the crypto fund area where now you have true dedicated venture funds like Dragonfly that are kind of doing, let's say, c through b, in addition to, hey, maybe doing some some treasury purchases for some liquid assets that we think have sort of venture upside. And then you have sort of true dedicated liquid funds. Maybe those are, you know, delta neutral funds or credit funds or actually just sort of long only discretionary funds.
Speaker 11:But there there's sort of this this true split, and I would say it's a bit like the sharks and the jets. I think the the, you know, the the liquid funds always talk shit about the venture funds, and the venture funds, I I don't really talk shit about the liquid funds. I think they're great. But it's it's it's you you know, there there's it's sort of the specialization in in the strategy. Maybe to what, you know, Ani was was mentioning and what you were mentioning earlier, Now the trajectory of fundraising goes, hey.
Speaker 11:We're gonna raise a pre seed, though maybe we'll raise a seed. Maybe we'll do an a TBD, but, generally, hey. You'll launch a token. Token will go public, and then maybe you'll do a treasury sale after the fact if you need more capital. And so if you've raised, you know, north of a billion dollars, to your point, where do you actually go and deploy that?
Speaker 11:Maybe you there are some equity only companies, and and, certainly, we we do a number of those where we think, hey. There's this company is gonna IPO. You know, we don't think there's gonna be a token. It can be just just a pure sort of revenue generating company, and I think that's, like, actually kind of a underrated area of of the space. But it's sort of unclear where the rest of that capital goes, which is why you sometimes see these very wacky rounds where some company raises some insane amount of money, you're like, what is going on here?
Speaker 11:And I think there's just this, lag effect between, you know, capital raised by VCs and then capital actually, you know, deployed into startups.
Speaker 3:What what keeps you up at night about the industry right now, Potential risks. It feels like the industry broadly, you know, this year has been up and down, but so has every year in crypto to some degree. But generally, the industry is sort of like riding on a high Yep. Getting more regulatory clarity. There hasn't been, you know, a $20,000,000,000 hack in a while.
Speaker 3:But, like, what what kind of what what kind of risk do you see at a at a high level that that that actually worry you?
Speaker 11:Yeah. A million things, honestly. It's it's an industry that is always changing, and and therefore, there's always more things to be worried about, but also things to be, you know, excited about at the same time. Maybe to your point around regulatory clarity, I'm more worried that we we don't get regulatory clarity. And we Yeah.
Speaker 11:Fail to get a stablecoin bill passed. We fail to get a market structure bill passed. Both of those are, in the short term, not terribly bad. I mean, I would say it's impressive how well stablecoins have have grown in spite of being in the sort of regulatory area. Mhmm.
Speaker 11:In the long term, the question is, can we get a digital version of cash? That is they can be they can have a privacy for peer to peer transactions, or or do we get true Panopticon status centralized control? That's something that is gonna be bad on, you know, a ten to a hundred year time horizon, maybe not so short term bad, but we need to sort of lay the foundation for that now so we we don't end up in that bad situation. I'm also, frankly, maybe a little bit worried about a lot of these sort of Bitcoin treasury structured companies. I I think there's only so much market demand for for these active convertible assets, and I'm like, it it is great when number go up.
Speaker 11:I'm I'm a little bit worried about what's happening when when when number goes down. Size down.
Speaker 3:Let's just give it up for when the number goes up.
Speaker 2:Yeah. Yeah. Just stop right there. You don't need to talk about when the number go down.
Speaker 1:Just focus on it. You off right
Speaker 11:happen, so let's let's not worry about that. But, overall, I mean, it is a great time in the industry. It feels like
Speaker 2:Fantastic.
Speaker 11:Like you're saying, it just never dies. Every time someone thinks it's over, that's actually the time that we're so back. That is that is the exact time to be back. And It's
Speaker 2:the best.
Speaker 11:It it you know, it feels like we're we're back now in in a big way. So Yeah. Yeah. We're we're really excited about where the future of the industry is going.
Speaker 2:Well, thank you for hopping on. This is fantastic.
Speaker 3:Thank you for coming on. Come back on again soon. I think you might be a generational yapper. You're one of us.
Speaker 11:You know, we lived a post. We died a post. It's it's all part of the same the same life cycle. So thanks for having me on.
Speaker 2:Alright. Thanks for coming
Speaker 3:on, Tom. Good to see you, Tom. Cheers.
Speaker 2:In the meantime, let me tell you about Linear. Linear is a purpose built tool for planning and building products I'm just gonna meet this
Speaker 3:system John.
Speaker 2:For modern modern software development, streamline issues, projects, and product road maps.
Speaker 3:I would bet that every founder that is coming on the show today already uses Linear.
Speaker 2:Don't say that. They're all about to convert with our coupon code.
Speaker 3:Don't have a code. We don't have a code. Linear is gonna eventually get to a 5% market penetration because certain companies will have two instances
Speaker 2:running. That's that's ideal. Yeah. That's our goal. We're trying
Speaker 3:to capture a 10% Yeah. Well of the TAM.
Speaker 2:Yeah. Yeah. We'll we'll we'll go into that more later. Next up, we have Constantine from Blocked Even here. Block Demon.
Speaker 2:How are doing?
Speaker 3:Welcome. Stream.
Speaker 15:Hey, guys.
Speaker 2:How's it going? Thanks for joining. Would you mind kicking it off with a little bit of introduction on yourself and the company just to get us started?
Speaker 15:Yeah. Yeah. No. Listen. It's a it's a great question.
Speaker 15:Block daemon, you know, the word daemon, means in computer science and operating system that runs silently in the background, and that's really, what Block daemon is. We connect institutions to blockchain networks, and we allow for compliant and secure monetization of the underlying fee and earn structure. Right? And so translated, it means we run nodes for institutions.
Speaker 2:Mhmm.
Speaker 15:And so we're pure b to b play, and and so we run core infrastructure. We run around 250,000 nodes across 40 different data centers around the world Yeah. Enabling basically institutions to purchase and hold assets in their respective consumers. That has been the the large sort of activity over the last five years. Right now, we're sort of pivoting more into the DeFi area of things, where the next few years are really all about allowing people to borrow and lend against the assets that they are now able to hold and buy a little more easily.
Speaker 15:And so Blockdaemon is
Speaker 6:an
Speaker 15:enabler. We're really purpose built to meet enterprise grade demand for infrastructure. A couple of things that are special, I guess, is that we are domiciled in The US for better or worse. And, you know, we've been able to attract very institutional capital. And so on our board governance, have people like JPMorgan and Goldman Sachs, and Citibank is another large institution with major shareholder status.
Speaker 15:And so we've got a really unique investor and partner group. I'd say out of the top 500 institutions offering crypto, 70% are customers of our infrastructure. And so, you know, we're we're very foundational to the space. We've been around for seven and a half years. We, you know, raised a bunch of money from, you know, said institutions in order to really bring institutions to crypto networks and do it in a way that's, as mentioned, secure.
Speaker 15:I'm from Germany. I've come from the cell network world, and I always describe nodes as cell networks.
Speaker 3:You said Nokia?
Speaker 15:Right? Yeah. Nokia. Deutsche Telekom actually is my claim to fame. I worked for, back then, a young man called Niko Sharowa who, you know, for a moment was president at SoftBank and now runs Palo Alto Networks and also was chief business officer at Google.
Speaker 15:And so there's been a lot of people who started and sell networks
Speaker 2:and figuring
Speaker 15:out how too. Make that data work.
Speaker 3:One network one type of network to another.
Speaker 2:Yeah. Yeah. It's all similar. There
Speaker 12:you go. Yeah.
Speaker 3:Well, can you
Speaker 2:give us a temperature check on the enterprise? In the last cycle, a lot of the pitches for the enterprise, there was a lot of exploratory budgets, a lot of, oh, maybe we can put our, our inventory on a blockchain, and we'll store the data. You know? And and but now are institutions coming around, and are they more up to speed on what crypto can do for them? How are they thinking about plugging in?
Speaker 2:And what what is what is kind of top of mind for crypto amongst, like, the Fortune 500 from what you've from what you've assessed?
Speaker 15:Yeah. So I think there's different categories. Right? And so first off, obviously, the core financial institutions, the Robinhoods, the Paypals that enable people to purchase crypto and hold it are now all investigating, you know, how do you earn using these assets. Right?
Speaker 15:And so I think you have existing fintech players that have offered basic crypto services that are now feel a lot more empowered in in, you know, what we call staking or DeFi to offer sort of earn adjacent products to their customer base. I think you'll see a big trend there. In the TradFi world, I think you're gonna see a lot more interest in wallets specifically, and so they're really at that stage of, like, figuring out, hey. How do we actually what technology do we use in order to custody crypto assets in our own infrastructure? And so I think, you know, in the past, basically, you didn't really wanna touch crypto or if you used a third party that you could point to if anything went wrong.
Speaker 15:And so now I think in the current iteration, all these institutions are really figuring out what their own proprietary basic solution setup is in order to custody assets and then also offer adjacent earned potential here. And so we see a lot of that. And with the sort of more Sony esque type of companies in the world, you see a lot of interest in building their own version of a blockchain, l twos. You know? I don't know if you remember the good old days when everybody had a totally permissioned little hyper ledger thing, going.
Speaker 15:I think, we've made some progress there.
Speaker 3:It is a funny thing. It's like we should we should pay attention to this crypto, you know, thing and then, oh, we should just make our own blockchain. That's that's the that's the way to get involved. It's
Speaker 15:it's Yeah.
Speaker 3:That definitely was a Yeah. Yeah.
Speaker 6:Should start
Speaker 2:our own Visa network competitor.
Speaker 6:Yeah. Like,
Speaker 8:yeah. Why
Speaker 12:not? Why not? It's
Speaker 3:like That's right.
Speaker 6:What
Speaker 3:go for it.
Speaker 15:Yeah. And that has changed with, like, the, you know, the optimism, the ZK Zinc, Arbitrums, like, you know, people being able to easily spin up a sort of permission chain on a public network. Right? And so there's been some progress there, and we see quite a bit there. And then, obviously, all the ETF stuff and and and technology that's that you need in order to basically custody these assets and offer yield over time.
Speaker 3:What what legacy, you know, we've had a bunch of interesting conversations today and different perspectives. And it feels like in many, you know, the the irony of stablecoins is that in many way, they actually sort of expand and support the dollar. Right? So this Mhmm. Crypto being this sort of disruptive force is at the same time propping up this sort of legacy system.
Speaker 3:What areas of traditional finance do you feel like are are most prone to disruption over the next decade? Yeah. I mean, well Because it and and the context is like those legacy institutions are coming to you now or they already have and they're saying Let's not get disrupted. Disrupted. Right?
Speaker 3:Like, we don't wanna be Nokia, basically.
Speaker 15:Yeah. Yeah. Well, I think interestingly enough, everyone is and thank you
Speaker 3:for pointing that out. I feel
Speaker 15:like I joined Nokia in 02/2005 on top of the world. I left in 02/2010 after I ran it into the ground. And so, like Hey.
Speaker 3:At least you could joke about it now.
Speaker 12:Yeah. Exactly.
Speaker 15:No. I mean, I was obviously a, you know, small little figure there. But it was an interesting learning. Right? Because ultimately, you had an entity that was very, very good in building really complex technology in thousand different versions, but very, very bad in streamlining singular software tools across its platform.
Speaker 15:And so I think you'll find that financial institutions have a sim similar risk. Right? Like, the the IT stack of a large thread file is insane. You know? I mean, it's probably a akin to what Elon Musk when he talks about Doge.
Speaker 15:You'd be surprised about how a lot of these systems actually still are. I mean, if you look at the structure of the swift network, that obviously is one. Sorry, guys. And then you also, just the ERP systems underneath it are so complex. And, you know, JPMorgan has a hundred thousand engineers, and they keep on building and doing stuff.
Speaker 15:And so pivoting away from that our current infrastructure is really, really difficult. And, you know, they're starting to do it. I think, frankly, I think we're we're all way behind here, you know, even as institutions, because the beauty of AI and blockchain and the opening up of financial systems via Bitcoin is gonna accelerate the movability of money. And so remittance specifically are sort of areas where I think time's running out for institutions. You know?
Speaker 15:It's like either you can innovate really, really quickly or people are gonna find other ways to do it, you know, and let it be a Coinbase issued stablecoin or something like that that, can actually take care of a lot of these things. And so it's gonna be really, really interesting how, financial institutions hold on to also the custody component. Right? And crypto has a self custodial cryptographic sort of component. And if you think about what you pay your bank, first and foremost, pay them so they hold custody of your assets.
Speaker 15:Right? And so often custody can be fairly archaic. But with that custody, you also obviously lose a lot of control. And, you have technology and solutions today that can replicate basically what an institution offers here for zero cost. Right?
Speaker 15:It's really the consumer that is nervous in touching them. And and the infrastructure currently is way, way too complex for anyone to use, but you're gonna see a lot of improvements there on the user experience front. Also with AI, I heard you guys mention AI, and obviously, you know, you gotta pivot into AI every three months. But I think one use case that I kinda wanna point out that we're working on that I think is really interesting on the wallet layer is using AI to issue very simple commands to crypto networks. Right?
Speaker 15:To just say, hey. I just wanna send Ethereum to this address. Yeah. You know, like, kinda and that can be Can
Speaker 3:I it'd be nice if you could tell a wallet, you know, an AgenTek wallet, just make me a 10% return daily Yeah? Yeah. Compounded daily. Yeah. Just forever.
Speaker 3:Please. Don't make mistakes. Just give me a
Speaker 2:10 bag. 10 access.
Speaker 3:Right. But, you know,
Speaker 15:but basically make the interface that simple. Right? Yeah. Hey. Wire securely a hundred dollars, to France.
Speaker 15:Know?
Speaker 6:I don't
Speaker 15:know if they need it. But, you know, we can, those type of things, I think, are gonna be real improvements on on how this works.
Speaker 7:Yeah. Jordy?
Speaker 3:How what's happening with emerging markets? We've talked about with other guests today around the risk that certain governments might not want their citizens to be, you know, selling their native currency for something like stables or or other assets. And so how much attention are you paying to the policy decisions in markets outside of The US, or is that not a focus for you right now?
Speaker 15:No. For sure. I mean, the outside of The US is still our largest market because we were in The US and and obviously got clobbered by regulators and and by basically Operation Chokepoint two point o. And so we expanded massively into Asia. Asia is a really exciting market for us.
Speaker 15:You'll see a you know, Asia's lots of things, lots of different technologies and and and standards. And and, you know, you have the full spectrum of really, really dogmatic and and suppressive systems and very, very open ones technically. And so, yes, we follow this very closely. I think, if I may age myself again, you know, it reminds me a little bit back in the day, we're trying to figure out how to distribute music via digital channels on on in cell networks. Right?
Speaker 15:And so Yeah. Once you pixelate stuff in ones and zeros, it's just really difficult to contain it. Right? And and you're gonna see that with currencies on a very basic level as well. Right?
Speaker 15:Like, it's just like, you can try and do the China and ban Bitcoin and things like that, but the reality is it's a temporary solution. People are gonna find ways around it. And so I think we we've we've Yeah.
Speaker 7:Like, the
Speaker 3:the piracy media piracy has not been solved. Right? Like, at all. Not even close. Right?
Speaker 3:It's probably easier than ever to get movies online that that that, without, you know, paying for them. Yeah. So the idea that you're gonna sort of regulate crypto out of its existence is is a bit silly.
Speaker 2:Last question for me. MCP, people have been talking about potentially integrating stablecoins into that standard. Where how do you see it evolving? What are you excited about? Or do you think it'll just live side by side with crypto rails?
Speaker 15:I mean, it's a good question. I mean, I have a preference. Right? I think Please.
Speaker 2:What is your preference?
Speaker 15:Well, my preference is that it's all integrated in one. Right? Like, I really wanna, ultimately, I'm I'm a old school crypto guy. I want access and and inclusion via crypto rails for everyone that no single entity can control. Right?
Speaker 15:And so my job is to bring a substantial amount of volume from hard coded institutional rails into open source on chain networks. Right? And so that's my preference. I think, it's, gonna take a minute, with regulators, even though we have a much better, administration that's a lot more open to thinking about how to regulate this and a market structure bill coming that we're working with and and and trying to ensure that this gets done correctly. I I think it's gonna take a few iterations.
Speaker 15:You know? Like, we're gonna get something done, some regulation at first, and some of it is gonna be good, some of it is not gonna be so good. And then we gotta see how how how much support the industry can can continue to garner across also the aisle, basically. It has to be a bipartisan issue on the regulatory front as well if we wanna real see real real progress. And so but, you know, obviously, we're we're very optimistic here that we can come up with something that is as open as possible and replace as many of the legacy rails as possible.
Speaker 2:Fantastic. Thank you so much for stopping by. Hope you have a great rest of your day. Yeah. Really good.
Speaker 2:We'd love to get the update from you as as things progress and we get more clarity on the regulatory side too. But thanks so much for stopping by. We'll talk to you soon.
Speaker 3:Cheers. How are doing?
Speaker 2:Next up, I gotta tell you about Numeral. Sales tax on autopilot spend less than five minutes per month on sales tax compliance benchmark series a.
Speaker 3:Benchmark series Yeah. I wonder how sales tax
Speaker 2:Well, you know who has to pay sales tax? Pudgy Penguins because they sell real things in the real world.
Speaker 3:Oh, yeah. They do. They do.
Speaker 2:They do. And we have Luca from Pudgy Penguins coming on the stream next talking to us
Speaker 3:about make the next
Speaker 2:twenty minutes us pitching you Exactly. Exactly. How are you paying sales tax? Let's get to the really important questions.
Speaker 17:Yeah.
Speaker 2:We don't wanna know what the AP market
Speaker 3:people wanna know.
Speaker 2:We wanna know about your sales tax stack and how numerals fitting in. Luca, welcome to the stream.
Speaker 3:We are, of course,
Speaker 2:joking. How are you doing?
Speaker 3:What's going on? Welcome.
Speaker 7:Hey, guys. Happy to be here.
Speaker 2:Thanks so much for hopping on. I'd love to start with kind of the a little bit of the history of Pudgy Penguins because I know that there's been, like, a series of eras for the company, and you're obviously taking it in somewhat of a new direction or expansion now. But what's the story that you tell about the genesis of the project, your involvement over time and like where things are going?
Speaker 18:So the the sixty second version is I was a huge collector of Pudgy Penguins when they launched about three and a half years ago. They were kind of one of the three golden projects of the NFT bull run. It was really Bored Apes, Punks, and Penguins. Yep. Unfortunately, Penguins kind of got mismanaged.
Speaker 18:They were founded by a bunch of 18 year olds in their college dorm basement with no operational experience. So no fault to them. You know, Bored Apes ended up being a $4,000,000,000 business. Punks became a legacy collection with a multibillion dollar market cap, and Penguins kind of, withered withered to the wayside. But at that time while I was collecting the NFTs, I was a CMO and co founder of a company called Gel Blaster, was North America's fastest growing toy business.
Speaker 2:No
Speaker 18:way. I was really involved in just IP and
Speaker 3:getting for the studio.
Speaker 2:Yeah. I I I see those ads all the time. I didn't realize you were behind those.
Speaker 3:Ben, Ben, order some gel blasters right now.
Speaker 18:I'll you guys sent. I'll send some to the office. Fantastic. That that I was I was really immersed there. And so when I just closed my eyes and I thought Pudgy Penguins, I just thought this is a multi dollar business.
Speaker 18:And so rather than being like a a disgruntled holder who was complaining all day, I decided to step step up to the plate. And I bought the project for about 2 and a half million bucks 3 years ago, April 4. So we're about three years and three and a half months into this. I think what we wanna be today is I think twofold. I think on one side of the spectrum, we wanna be the face of crypto.
Speaker 18:When you think, crypto today, I think crypto is intimidating. It's taboo, but I think there's no better way to invade the hearts and minds of everyday consumers and with cute pudgy penguins. And I think there's no better representative from a mascot perspective for the industry than the pudgy penguin That's fair. You know, the the story all encompassing. And on the other side of the spectrum, we wanna be the face of penguins around the world.
Speaker 18:When you think penguins, I want you to think pudgy penguins. And I just believe that the penguin animal is severely underdeveloped.
Speaker 3:Do you do you guys give do you guys, like, do any charity things for the actual penguins? You know, kind of like a royalty, a little giveback for the
Speaker 7:those staff?
Speaker 6:We've we've done a
Speaker 18:couple activations. I think, children's, children's health and penguins, I think, are the two places that we donate and we're charitable.
Speaker 2:Makes sense. Awesome. Very You mentioned that the the early Pudgy Penguins community was unhappy with the development of the project. It sounds like that's in contrast to the other, NFT projects where people were satisfied. But from my perspective, like, a lot of these, they the 10 k NFTs go out, they mint, and then I don't really engage with these projects deeply enough to know, like, what is the community clamoring for?
Speaker 2:So what was the community in Pudgy Penguins clamoring for that they weren't receiving? And then what are you building that actually will satisfy the community or what are they asking for and what are you trying to give them?
Speaker 18:Yeah. I think what every community member in crypto wants is productivity and pushing the boundaries and forward progress within, you know, both the the internal IP and maybe just for the category in and of itself. But just to be clear, like, we bought Pungy Penguins under the guise that the NFT race and the NFT build out was severely underdeveloped, and there was a bar still yet to be set. And we bought this business to win in this category and ultimately to win in the broader crypto category. And so I think from our perspective, it's not just winning for our community members within our small niche and within our, you know, within within the Pudgy Penguin universe, it was really winning for the entirety of NFTs.
Speaker 18:Because prior to us, NFTs stayed in this digital universe and this, you know, vision that Ready Player One was gonna come twenty years earlier than it actually was going to come. And I thought, you know, if this was the next generation brand and all of these companies were raising billions of dollars under this guise, then as a brand builder for the last eight years, I felt like they just weren't doing all of the obvious things that all these brands have to do to win. Are we going digital? Is everything gonna be digital twenty years from now? Sure.
Speaker 18:But today, people need physical interactions. And I think that's a huge reason why we've won and we've been so successful the last couple of years is we really blended the two worlds. Right? We have, you know, toys in 10,000 retailers. Every toy is tied in with an NFT and crypto experience.
Speaker 18:And and the whole thing really segues. You would build this thing the same way you've, you know, Hasbro or or Mattel or Disney would build it, but it's crypto native, it's internet native, and I think that's the difference.
Speaker 3:How do you balance developing the IP in the way that you believe will create the most value long term and and kind of the the desires or or wishes from the the community of initial holders. Right? Because as a business, you constantly need to be evolving, reinventing yourself. And I imagine there's a bunch of good parts about having this super loyal dedicated fan base that's, you know, heavily invested in the projects. But then there's also some hard decisions to make at different times.
Speaker 8:Yeah. Think the community's bought
Speaker 18:in under this guise that we are creating the internet's Mickey Mouse and that everything that we do is to support that thesis and they're aligned in that vision. I think the problem or not the problem, but I think the hard part about this business and it's and it's relevant for a lot of crypto founders, but I coined this, like, three years ago, which is we're basically building a publicly traded startup where I have all of the cons of being publicly traded with none of the pros, and I'm a startup. Right? If I shit the bed, right, my pry and price in crypto is the best marketing because it's such a hyper financialized asset class. And and and, you know, I do something great, price goes up, you know, holders are in the money.
Speaker 18:The more in the money they are, the more they champion, the more they recycle those profits back into the product, and the different the the different product lines that we have within the business. But then obviously, you shit the bed, you know, it it the the the financialization to me is is a hyper form of alignment. And it can be your greatest superpower, which I think we've been able to harness and galvanize over the last couple of years, or it can be your greatest kryptonite. And you've seen situations like this with basically ninety eight percent of founders in crypto is that ends up biting them in the ass. They make one wrong step.
Speaker 18:They don't have that relationship. They don't have the rapport, the community, and the whole thing just kind of backfires.
Speaker 3:Yeah. Do you think if you look back at at the NFT category holistically is are projects is part of that kryptonite just being over capitalized? Has that much of a strength have have you you know, I don't know how how resource constrained you guys have been exactly, but I imagine it's quite a bit more constrained than than many other many other projects in the space, especially as, you know, certain projects got marked, you know, really really high, a bunch of capital flooded in and I don't really have a good lens on on how that's worked out.
Speaker 18:Yeah. I I think that's just entrepreneurship one zero one. I mean, crypto in general makes people more money than they're supposed to make. You know, it's kind of like, there's an arbitrage that I talk about a lot where, you know, there's a real opportunity for builders in Web two to come here because the premium on users and success here is probably 10 to 15 to 20 x what it be in the what what it would be in the real world. Meaning, like, the EBITDA of Pudgy Penguins, you know, might be, you know, we might be a 303 hundred and $50,000,000 business today.
Speaker 18:You know, we've created, you know, 5 plus billion dollars in value over the last couple of years and, you know, our total ecosystem is north of $2,000,000,000. So I think from our perspective, it's really just a matter of, you know, being being resource constraint has been the the one of the biggest things for us. And it probably the thing the lens that I'm most proud about. I mean, our our next 10 competitors that we've outperformed over the last couple of years have, you know, 9 figures in funding, whether it's from venture or community. But that's naturally every entrepreneur gets gets into that problem at some point, unless you really, you know, fight tooth and nail over the course of a long period of time to earn that capital.
Speaker 18:But in crypto, you can make a lot of capital and raise a lot of capital really quickly. And the NFT cohort of 2020, '20 '20 '1 is exactly that. I mean, guys made, you know, 50, a hundred, a billion dollars, you know, within twelve months of being in business. You're not gonna be a superstar organization, you know, off of that type of growth, unless you're just a one in a million entrepreneur and group. But that that that wasn't the case here.
Speaker 18:And so I think I think us being scrappy has been huge for us. We raised, you know, 9,000,000 our seed round and and we haven't raised anything else for Pudgy since then. And and, you know, this year we'll do $4,050,000,000 dollars in revenue. So, you know, so far so good.
Speaker 2:That's awesome. Can you talk about, the the decision to surface crypto functionality to the user, to the customer? The Instagram has 1,800,000 followers, never really mentions mentions crypto. There's a world where you're communicating to a non crypto native audience. You have a different group of customers that's very crypto native.
Speaker 2:How do you balance those things out? Is it all just one on ramp one direction or the other direction? How do you think about that that dichotomy? Yeah.
Speaker 18:Yeah. So I'm a consumer product guy. And on on in consumer products, conversion's an action. In in crypto, I and I think with building IP and character and love and affinity, I think conversion is a process. Right?
Speaker 18:And so I think the idea that, you know, you immediately sell people on something that is still taboo and still intimidating, think is a mistake. And so my my my objective is how do I create love and affinity around this character, you know, positive impact around this character, positive association around this character over the course of time. And as they become super fans and participate in fandom, they then go and figure out that this is crypto and go down that rabbit hole. And I think that's a really beautiful story. Now on one side, that's epic.
Speaker 18:But I think a lot of people always misinterpreted our strategy, which is like, oh, how do you get the non crypto user to then go buy our assets, whether it's our token or NFTs? And it's actually a misappropriated, way of how I think people look at the strategy. It's more impactful if you're a crypto native. Let's say you're a crypto whale and your mom or your cousin or your niece or your nephew or your son or your daughter is then participating in a pudgy penguin buys a pudgy penguin product at Walmart or shares you with an Instagram piece of Instagram content or a game or something like that, that moment for that crypto whale is then like, oh, I've been in crypto for how long. You know, nothing has has transcended into my family the way that this has.
Speaker 18:This is clearly doing something for the industry that that nobody else is doing. And that's kind of like our edge. It's like, we believe crypto is for everyone. And but right now, it's not positioned for that. Right?
Speaker 18:It's positioned for the finance bro, for the cool guy. But, you know, if we really want crypto to succeed, it's gotta be for the woman. It's gotta be for the child. As silly as it sounds, those kids are becoming crypto native. And an anecdotal story that I think your audience will love is, you know, I started to meet some of the top Solana traders over the last couple of months.
Speaker 18:These kids are 16, 17, 18, 19, 20. Mhmm. Guy guys who made $2,030,000,000 dollars in cash, right, are 16, 17 years old. Couldn't couldn't cook a steak medium rare if they wanted. Those are the crypto native.
Speaker 18:Right? And and and that next generation will actually be native unlike, you know, you or I who maybe saw the world before crypto. Yep. You know, we're crypto adjacent and we're crypto familiar, but we're not native. This next cohort that's coming in the next five to ten years will be crypto native, and that's the audience that I really wanna speak to.
Speaker 2:That's pretty awesome. Talk to me about the decision to, trade offs between the Ethereum blockchain and Solana. Obviously, the project originally launched in Ethereum, but the Pudgy token is on Solana now. What are the trade offs? How do you think about those?
Speaker 2:Is there one PowerLaw winner that's running away with the game, or is there a world for both?
Speaker 18:Yeah. I think they've they they're functionally trying to achieve two different things in my I think Ethereum's goal and objective and mission is to be a decentralized network state, which I think is really important for the sake of humanity. Right? Like, if you if you weigh a bunch of different variables, AI, and and just everything that might come into the future, like, having a decentralized network state is really, really important.
Speaker 6:Mhmm.
Speaker 18:And and I think it plays its role really well doing that. I think Solana is the first blockchain that I've really interfaced with, from from an outside org in that I think is really trying to be an organization that's built to win. Right? And they and they and they want to capture as much, you know, value in winning and building the biggest and best blockchain in the world and then all the things that come with that. Right?
Speaker 18:Like low latency, really fast, amazing BD, getting all the top advisers in to come and help, you know, bootstrap and and and help, you know, ecosystem apps. It's really run like a like a Silicon Valley organization. And its function, I think, is to win. Right? But there's two different functions, I think.
Speaker 18:I think building a centralized network state and building a blockchain to win, right, and to dominate, you know, tech and and to you know, because blockchains fundamentally are what are they really? Right? A lot of people tell themselves a lot of different stories. To me, they're borderless payments. Right?
Speaker 18:And they're global and they're globe so global liquidity and global composability. Right? Like, those are its two functions. And if you actually understand that as, an entrepreneur building in the web, those solve two really big problems. Right?
Speaker 18:Like like, immense problems. Right? Like like Stripe used to you know, Stripe and PayPal would take your money and shut you down and do the whole nine. You know, like, blockchain will will remove that edge. And so I think they're functionally two different organizations.
Speaker 18:I think from our perspective, we wanted to launch our token because we wanted everyone to have a piece of our main character, this Internet's Mickey Mouse. We wanted our followers on Instagram and on YouTube and on TikTok to be able to participate, you know, in purchasing that token. And today, it's hard to argue that Solana doesn't have the best experience for that person coming from Instagram to then go in and and and purchase something quickly. Right? Like Ethereum today, even with cheap gas fees, like no one wants to spend a couple bucks, you know, on on some gas fees even even when it that's relatively low for the ecosystem.
Speaker 18:You know, they don't wanna spend a couple bucks buying the token, that's about it. So it seemed like a good fit.
Speaker 2:That's awesome. Well, thank you so much for stopping by. This is fantastic conversation.
Speaker 3:I really appreciated your perspective. We'd love to have you back on again for for a longer interview.
Speaker 2:Yeah.
Speaker 3:This was great.
Speaker 2:Yeah. And I'm excited for our gel gel blaster nerf battle, basically. Yeah. We need
Speaker 3:I need to be able
Speaker 18:help address. It's gonna be pretty obnoxious. The package is on
Speaker 3:the event.
Speaker 11:So stay tuned.
Speaker 2:Okay. Great. We'll talk to you soon.
Speaker 3:Amazing.
Speaker 2:Thanks for
Speaker 3:coming on. Cheers.
Speaker 2:Bye. Really quickly before our next guest, public. Investing for those who take it seriously. Multi asset investing, industry leading yields. They're trusted by millions.
Speaker 3:Of course, crypto.
Speaker 2:And They've got crypto on Facebook.com. Have an in person guest in the studio. First He's gonna take my
Speaker 3:seat person guest.
Speaker 2:Ever. Welcome to the stream.
Speaker 3:Do you guys need to swap, headphones?
Speaker 2:I'm just gonna talk to you directly.
Speaker 17:Okay.
Speaker 3:Good.
Speaker 1:Cool.
Speaker 3:Cool. Cool. Cool. I should've worn my suit. I know.
Speaker 3:You should've worn your suit. I mean, it's it's it's
Speaker 12:Feel so under dressed.
Speaker 3:Yeah. Well, fitting that you're the first guest. You've been a close friend and adviser to the show here informally. Yeah. Thanks so much for having For a long time.
Speaker 11:Crypto Day.
Speaker 3:Crypto Day. It's been it's been very fun. It's it's such a it's amazing to get perspectives from so many different parts of the industry Yeah. Investors, etcetera. And there's a lot to be optimistic right now.
Speaker 3:A lot more so than when you started Crypto the Game.
Speaker 12:Yeah. I feel like we've launched season one kind of in the depths of the bear market. It was, you know, early early twenty twenty four. I was was trying to think about what to do next and and I know we had spoken
Speaker 3:Well, you had had this idea forever.
Speaker 12:Years. Yeah. I can kinda give you the whole the whole backstory which I know you know but could probably be helpful context for listeners. But when I was first started working on it for real, everyone was like, you're crazy to build Encrypto right now. But in hindsight, it was kind of the best time to launch.
Speaker 12:Totally. But, yeah, I mean, I I kinda grew up an obsessive Survivor fan. Watch every single season. They just announced the cast for season fifty. I was like off camera reading up on that and apply every year.
Speaker 12:Never got a callback. But kind of played this CD ROM version of Survivor called Survivor Ultimate with my friends growing up. And it was like very very rudimentary. You picked your drive mate. You you know played tic tac toe for immunity and you voted each other off Yeah.
Speaker 12:Against the computer. It was like very very early like early two thousands. And I don't know, just kind of like always envisioned this world where I could play a version of Survivor online with my friends. Fast forward to my professional life. I worked at HQ Trivia for the Rise and Fall which That's if you're listening, know you might might remember a live interactive game show and started my career in TV but joined HQ for kind of the grand vision of a live interactive TV network.
Speaker 12:So, in the same way that HQ took a game show and made it live and mobile and and interactive, the same could have and should have been said for a Shark Tank format or a talent competition or a dating And of course in my mind, a Survivor show. So I actually first pitched the idea for what is now CTG internally at HQ probably six or seven years ago now which is crazy. And then, yeah, it's just one of those ideas that kept coming up. I think I pitched it as an idea for a party around Drop.
Speaker 17:Yep.
Speaker 12:And just kind of like, you know, was was starting to think about what was next a couple years ago. And
Speaker 3:Well, it's interesting because it it was this one of the most complex products that you can build. Right? Yeah. This like social interactive multiplayer constantly evolving game that's happening on chain. So watching you watching you build it, I mean, you and and Tyler and Brian and and and the team just did it very quickly and then got to market.
Speaker 3:And I and I remember it very quickly took off and you very quickly were just I I you probably didn't sleep the the first week?
Speaker 12:No. Not at all. I mean, it is it kind of ballooned into this twenty four seven game show. I mean, I I kind of assumed, you know, the way that it's set up, it's it's a ten day season. Every day kind of follows the same format of a daily immunity challenge in the morning.
Speaker 12:Think like classic arcade games or crypto puzzles or digital scavenger hunts. If you win that challenge, you have immunity and you're safe from the vote that night. Yeah. Everyone else votes people out. Basically, last person standing wins the pot.
Speaker 12:And I kind of assumed people would log in in the morning, meet their tribe mates, make an alliance, register a score of a game, go back to work, and then kinda come back on that night to vote. But it it just was so so so time consuming for the players. And and as a result, it was just twenty four seven.
Speaker 3:No, I remember. Were weren't people basically calling in sick or taking vacation days so that they could just fully walk my like
Speaker 12:most heavily requested question basically from players between seasons is like, when's the next season so I can request my PTO?
Speaker 3:What was that early controversy you guys had? I think you navigated it well Yeah. Obviously because it turned into a second season and then an acquisition by Uniswap. But I feel like you quickly ran into the nature of crypto is that you're talked to I forget who we were talking about this, but maybe it was Balaji. But crypto, because it's so financialized, is effectively incentivizing constant penetration testing and incentivizing the world to basically try to hack your system.
Speaker 3:And I forget the guy's name. Anish. Anish. I'm sure you guys are buddies now.
Speaker 12:Yeah, mean, we made up in the DMs for sure.
Speaker 3:Yeah.
Speaker 12:Yeah, so the way that it works is basically you buy your entry for 0.1 ETH. That entry goes towards the prize and the entire prize pot goes towards the winner at the end. And I was always kind of concerned that there could be some sort of Sybil attack someone would try to buy up 51 percent of the entries and basically guarantee themselves a victory. There were a couple things we did to to try to prevent that. And we for season one we kind of kept entries uncapped so that people couldn't like necessarily figure out what the 51% mark would be.
Speaker 12:But yeah right before the entries locked and the season began, Anish and his army of bots basically bought up most of the slots. And kind of wearing my like web two HQ trivia hat, I was like, oh bots are bad. Basically like kicked them all out. And was like this is this was built for real people and real players And you immediately got the wrath of Crypto Twitter, which somehow happens every season to the point where a few friends joke and think that I'll intentionally drum up some CT controversy so more people talk about
Speaker 3:More attention.
Speaker 12:Yeah. I mean, I immediately realized that bots aren't bad in this world. And so
Speaker 3:It's part of the game.
Speaker 12:Yeah, we ended up refunding a niche and making things right. And he was so nice. And you know, we we ended on good
Speaker 3:terms. What was it like bringing Web two or sort of traditional companies into CTG? Because I I remember you had some pretty high profile partnerships as well.
Speaker 12:Yeah. Adidas actually sponsored a challenge during season two, which was our season two controversy. Wow. No, it's all good. But yeah, mean, it was so so incredibly like humbling and refreshing to see that basically after the virality of season one, a brand like Adidas kind of saw this little internet experiment and decided to reach out and ask to be a part of it.
Speaker 12:Yeah. Yeah, we had six sponsors for season two, each sponsoring a different challenge, one of which was Adidas. The rest were all kind of like crypto native brands. One of which being Uniswap and that kind
Speaker 3:of Do you expect legacy brands to get more involved with crypto? We we we every once in a while, we'll see them dip their toes in whether it was Adidas and CTG or Nike with artifact. Right? Yeah. But but it feels like that's died off a little bit.
Speaker 3:But at the same time, institutions are getting more involved with crypto than ever.
Speaker 12:Yeah. I think eventually we'll see it. I still think it's kind of a dirty word with like the big Fortune 500, like non crypto brands. Yeah. The Artifact example like didn't go well for Nike.
Speaker 12:I would say the CTG example probably didn't go well for Adidas which is like a whole another conversation. But I think we as in crypto builders and pretty much everyone that's been on the show today and that you will speak with has seen some sort of like the wrath of of the trenches and the army. And it's not a great feeling. And if you are a large like Fortune 500 brand with like a crisis comms team and you're kind of like seeing all of those replies and folks feel like basically when the crypto Twitter army goes after brands, I think it's really hard to deal with. So having said all of that, as the experience in the UI and the UX gets better and things like Privy improve the login flow and wallet creation and kind of abstract away all of basically all of the crypto from these experiences.
Speaker 12:Think like big brands won't necessarily know that they're doing quote unquote crypto integrations. It'll all just feel like the Internet.
Speaker 3:That makes sense. How how have you seen crypto? I would put CTG in the category of of crypto entertainment or crypto gaming.
Speaker 12:Yep.
Speaker 3:It's one of the few games that that it feels like crypto Twitter, crypto X, like, really played and got hyper engaged with even though it was at a small scale. Have you seen any other games really capture people's attention? I know there was a bunch of like open world games that raised massive amounts of money Yeah. But then haven't seemingly haven't delivered.
Speaker 12:Yeah. Ironically for a a crypto game founder, I'm not much of like a gamer myself. I think of as much more of a game show than like a video game. But in my mind, the closest example is Yapster which is is also very heavily inspired by HQ Trivia. Don't know if you've played around with Yapster but it's an interactive game show where you basically can submit memes.
Speaker 12:The players can vote on the memes and like the winning meme each show is launched as a token. So it kinda has that and it's 100% live and everyone kind of like votes in real time. There's a chat functionality. And because of the speculation of like the token that like basically wins at the end, it has that feeling of a live show. So I would put Yapster in my mind as like the only other kind of like live interactive game show that's like really really exciting me right now.
Speaker 3:And how how big can something like that get in your mind? I think huge.
Speaker 12:I mean, there's like the secret sauce at HQ was that you could win real money. And like that is the case for like most of these crypto game shows. I think Yeah. The difference with CTG and Yapster is that there's kind of only one winner each time. Yeah.
Speaker 12:Whereas with something like HQ, tons of people could win. But at the same time, because of that, you had folks basically winning like 25¢ or less than that with HQ because it grew so big. So, yeah. I I think like don't necessarily know that like a live interactive meme coin show is gonna onboard the masses. But there's like tens of thousands, if not hundreds of thousands of people on crypto Twitter right now.
Speaker 3:What what are you seeing right now on because I know you'll end up advising or investing in in other early stage crypto projects. What are you seeing far kind of trends in the early stage? You clearly made the decision with CTG not to raise money. Yep. And you had every opportunity to.
Speaker 3:I remember in the early days you would ping me and you'd be like, oh, this fund, you know, and
Speaker 2:I would,
Speaker 3:you know, we we would have I I remember having kind of conversations about why it would probably not be good for CTG if you were to raise. And then, but many people I think wouldn't have made that same decision.
Speaker 12:Yeah. No. I think with regards to raising, I think like not every single idea has to be a venture scale idea. I mean, we've spoken a ton about this, you know, offline. But I, you know, I think CTG was dreamed up as initially a drop, like a personal drop.
Speaker 3:Yeah. I
Speaker 12:think that it's not like HQ in the sense that we really embrace seasonality and try to be very close to a TV show. And so we can technically go off air for like months in between. And I think the players need that because it's so intense. We need that because it's so intense. And Yeah.
Speaker 12:Yeah. I think, you know, if we had Race, we probably would be on that, like, hamster wheel of like having to build some sort of scalable platform. So communities and people can kinda like spin up their own versions of the game. And it was just like a very manual process. And I I felt like it it wasn't necessarily the right choice for CTG.
Speaker 12:But I don't know. I'm I'm excited about Pixie Chess which I know, you know, our friend Josh has started. And for those listening that aren't familiar the way that it's been described to me is is basically like a noun style auction for different on chain chess pieces that have magical powers. So you can imagine a queen that goes invisible or a bishop that can go backwards, forwards, sideways, etcetera. And every single day there's a different auction.
Speaker 12:You essentially acquire these pieces, add them to your deck, and the funds from those auctions go towards different Grand Slam tournaments that you can like take, basically take your deck with you and and and play against others. Really excited about that. I've been playing around with Vertigo which is a new like decentralized exchange on Solana that's like anti sniper. So I know we, you know, we spoke you you guys spoke to to Ben and Alon and and you know, a lot of these token launchers and and tokens kind of have a a sniper problem basically where someone will buy up most of the supply and instantly dump it. So I think like building exchanges with like cleaner token protections and and anti sniping mechanisms is something that's just gonna be net beneficial to to everyone.
Speaker 12:So Yeah. Yeah. Those are a couple of things that come to mind. And then the last is probably TokenWorks, which is like the closest thing we have to crypto mischief. They do different like token drops.
Speaker 10:Yeah. Think I saw
Speaker 3:you posting about that.
Speaker 12:Yeah. Really excited. So is Brian Armstrong next?
Speaker 3:I think so. I think we'll see. I get
Speaker 6:in there.
Speaker 3:Check the calendar. Well, you for coming You're first the first official Yeah.
Speaker 12:Oh my god. Thank you so much
Speaker 6:for having me. Not on the set, John. But there you are. Thanks
Speaker 3:for coming on, Dylan. Thanks for all the help on the show. We
Speaker 2:got Brian Armstrong next.
Speaker 3:The gong is
Speaker 2:still studio of this gong. The gong the gong the real gong rings much longer than the fake gong.
Speaker 3:Yep.
Speaker 2:While we're waiting for Brian, let's tell you about Adquik. Adquik dot com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Adquick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe.
Speaker 3:It's out of home built different, John.
Speaker 2:It is. It is. And we have Brian Armstrong here. Welcome to the stream, Brian. How are you doing today?
Speaker 10:I'm doing great. Thanks for having me, guys. It's great
Speaker 3:to have you. Much. Welcome.
Speaker 2:I don't even know where to start. I mean, we were kind of in the y same y c batch. My first company was in y c summer '12. Has been It was Soylent or
Speaker 6:Yes.
Speaker 2:Soylent. I it's it's a weird story because I joined the company shortly after YC, and I was in a different YC company. So, but that's a story for another day.
Speaker 3:I I give, John, problems all the time for for not tapping you on the shoulder and demanding that you take an angel check Yeah. In that era. But anyways Yep.
Speaker 10:Well, 2020 hindsight, I I can assure you we were not like the hottest startup in that YC batch at the time. I mean, it was hard to actually raise our seed round, etcetera. But, you know, obviously it worked out.
Speaker 4:It was Yeah.
Speaker 10:Not not obvious, though.
Speaker 2:Yeah. Was it was it what was the incentive for joining Coinbase back during the YC days? Was it a full Bitcoin as a referral Yeah.
Speaker 10:I mean, I was kind of stealing a page out of the PayPal, book where, you know, everybody would get about, I think you could yeah. If you invited your friends and they onboarded, they got $10 of Bitcoin, and you got $10 of Bitcoin. And at the time, that was like about 1 Bitcoin. So
Speaker 2:So crazy to think about.
Speaker 10:Yeah. And there was a lot of people I went around to probably a thousand or more people in the Bay Area at that time, and anybody I could find, I'd be like, hey. Do you want some Bitcoin? Like, I'll send it to you on my phone, and I'd try to get them onboarded to the Coinbase app. And, yeah, I think when we started out, it was, like, 5 or $6 for a Bitcoin.
Speaker 2:Yeah. Yeah. Yeah. So so how do you tell the story of Coinbase now? I mean, it's such a huge story.
Speaker 2:Do you think about it in particular eras? Or is the going public era a different distinct era? Or or do you do or do you even map it to, like, the the the bulls the bull cycles and the and the bear cycles? Is that does that have a a tangible feel in the Coinbase story internal to the company?
Speaker 10:Yeah. Yeah. Well, I I think of it in different so Fred Wilson had this great thing he told me one time. He said, like, companies have multiple founding moments on the way to being a public company. Yeah.
Speaker 10:And that was definitely true in our case. So the first era was was like Fred Orson and myself in an apartment just grinding it out, like, you know, fourteen hour days, just doing everything ourselves, answering customer support tickets, like trying to recruit people, trying to get anybody to join, writing code this ourselves. Right? And so that was, like, the pre product market fit. Like, how do we try to get something moving?
Speaker 10:And then you go through hyper growth. Right? And your problems totally change, which is, like, how do we get a real set of leaders into this company? How do we not get hacked? How do we go raise more money?
Speaker 10:Like, build a real board. And so you go through this period of hyper growth where we were like we never managed anybody, but we were suddenly, were managing 25, 50, a 500 people, and we were we were hyperscaling just trying to keep up with all the demand. And then, you know, crypto went through ups and downs. Eventually, Fred decided to go found his own company, which was super successful, like Paradigm, and he's doing another company now. So I had to bring in an executive team.
Speaker 10:That was, like, its own experience with a bunch of infighting and blowups and drama. And I finally got a exec team that worked, and then we went public. And, you know, Emily Choi is, like, our president and COO now, so she's like you know, it's multiple foundings along the way to get to these eventual outcomes. It it takes like ten years to be an overnight success, quote unquote.
Speaker 2:What a Overnight success. We love overnight. We love ten year overnight success.
Speaker 3:Hey, we lost the overnight success button.
Speaker 2:We have a soundboard, and it plays overnight success.
Speaker 3:Every time somebody says it took them ten years to really be successful, we hit that. But Yeah. What other industries did you look have you looked to for learnings to kind of like build through these boom and bust cycles? Because it feels like, you know, you guys are acclimated to that now. But I know this is, you know, the case.
Speaker 3:Oil and gas is is probably a prominent one. Did you were you able to pick up anything from outside of crypto to help you steer the ship through cycles?
Speaker 10:Yeah. A little bit. I mean, every company has different challenges, so I actually don't think ours are that bad. But one of the one of the challenges we had when we were getting ready to go public was, like, our revenue was super unpredictable and volatile. Right?
Speaker 10:Like Mhmm. We'd have a trading quarter where we would just blow it out of the water, and we'd be, like, printing money, and then we'd we'd it'd be down, like, 70% the next quarter or something. And, you know, in the public markets, investors really love you to have these predictable revenue streams. I don't actually, I I still don't, to this day, know why they're so fixated on that. It it seems like they should be thinking about the growth potential, but they love the predictability of it.
Speaker 10:And so, yeah, we had to look at oil and gas. There's like some energy broker like, you know, actually, the traditional brokerages like like Nasdaq and NYSE, like, they have the same issue. If they can tell you one of them told me one time, he's like, if you can tell me what the S and P 500 is gonna do next quarter, I'll tell you what our revenue's gonna be. But of course, like, if you can do that, you you yeah. You got you got like you got it made in other ways.
Speaker 10:So but, you know, whenever I'm I feel like we're having a bad time, I always look at, like, the hard tech companies. Right? Like, the biotech companies in the public markets get beat up way more than we do. They have much less predictable revenue. Their revenue is pushed out way farther.
Speaker 10:All my friends who are working on hardware companies, I'm like, wow, they're really doing entrepreneurship. Know, I'm like, they're they're they're always calling me up and like, I've got four weeks of cash, you know. We're trying we're trying to raise money, and I'm like
Speaker 3:Bail me out. You've been
Speaker 10:trying to raise money, like, every month for the last eighteen months, just living, like, one month to the next month, and, like, those guys have true grit. So in software, our margins are high, and it kind of covers up mistakes that we make, and we actually had revenue relatively early in our journey, whereas in like, in biotech, you have to invest in it for ten years to try to get your first dollar of revenue sometimes.
Speaker 2:Yeah. There were a whole bunch of narratives around crypto back in 2012, even before decentralization, resistance to government control, anonymity, just faster payments, all these different things. What's the state of the union from your perspective? How would you grade the the the different executions across the original goals? Some of them have just kind of fallen by the wayside as we found different solutions to those problems.
Speaker 2:But what are you what do you think we've knocked it out of the park on, and what do you think we still have a lot more work to do on?
Speaker 10:Well, the ultimate vision for crypto was always economic freedom in my mind. In fact, that's the mission of Coinbase is to increase economic freedom in the world. So that's like how to give people more self sovereignty, more control of their money. It enables them to not only live a freer life and have things taken away from them, but it also it's better for society, because if we have a society with good property rights and sound money and rule of law and these things, you can actually try more things. If people are rewarded with the upside of their labor, they're to go try more ambitious things in the world.
Speaker 10:So you see that there's actually economists who measure across different countries like how high is economic freedom. And you see that in high economic freedom countries, there's, like, higher GDP per capita, but there's also, like, less corruption. There's less war. There's lower infant, you know, lower infant mortality, like, these kind of downstream effects. So Mhmm.
Speaker 10:The ultimate potential of crypto is to get more economic freedom in the world, and we've been trying to push on that through a variety of ways. Like, one way we've done it is by getting legislation passed in The US or pushing on that. We had a big influence in this last election. The crypto voters showed up in a massive way. We had, like, 2,000,000 advocates who raised their hand in The US saying they wanted to elect a pro crypto congress and candidates.
Speaker 10:We had, like, couple hundred million dollars in the in the fair shake super pack. And so we now have the most pro crypto congress that we've ever seen, and we're on the cusp of getting stable coin and fair and market structure legislation passed. The other thing is we've been pushing on our products. Right? They have to be easier to use for the average person.
Speaker 10:Like, the early crypto products were just it felt like some computer scientists came from on high down the mountain, and they tried to make this accessible to mere mortals, and, like, that was never gonna work. So the products are slowly getting easier and simpler for average people to use, and crypto's growing into these areas like payments and tokenizing securities, and it's not just like trading as a as a use case. Right? So we're getting closer and closer, but ultimately, I think crypto is gonna update the entire financial system globally, and like the majority of all payments will run on these crypto rails. They're just faster, cheaper, more global, and that's how we're gonna get more economic freedom in the world.
Speaker 2:That makes a lot
Speaker 6:of sense.
Speaker 3:Do you think the conversation around economic freedom over the next few years will shift away from The US and more towards emerging markets who are adopting digital assets but, may face, you know, pushback from from their governments in, you you know, potentially even more aggressive way than we have in The United States over the past four or five years?
Speaker 10:Yeah. It's a great point because I think the unmet need is higher in some of these other country emerging markets, right, where people like in Turkey, they're getting, like, 70% inflation a year or something. It's just like it's devastating to their entire economy. People have very high demand for the dollar and then bitcoin. Same thing in Nigeria, etcetera.
Speaker 10:Now some of those markets are going to be very resistant to it, like especially if the government is not fully aligned with the people's interests. Like the government wants to run their fiat currency because then they can kind of print money and abuse it, and, you know, it's it's one of these kind of original sins of like fiat currency. Right? So or like some of these these markets have capital controls, right, like in India. So I I think the governments will be somewhat reluctant to embrace crypto in some of these places, but the the average person will love it.
Speaker 10:Like, the people are demanding it. They're rushing toward it. The governments are a little hesitant, and so in democratic countries, it'll be it'll be allowed because more people will vote for it. But in places like China, they're really cramping down on it. You know, I don't think North Korea is gonna add it anytime soon.
Speaker 10:So it's a little bit like the Internet. Right? China has the great firewall of China. North Korea has their own private Internet. And so some of these, like, really corrupt regimes, I think, will have they'll try to crush crypto, but in most places in the world, it'll happen.
Speaker 2:North Korea even has their own Linux distribution, Red Star Linux. Did they?
Speaker 3:I didn't know that. They gave it a cool name.
Speaker 12:I mean,
Speaker 3:you gotta admit it's a cool name.
Speaker 2:It is a cool name. Yeah. I wanna talk about Base. Obviously, it's powering a lot of, consumer crypto use cases right now. Like, what how did that come about?
Speaker 2:What has it been like incubating something like that inside Coinbase?
Speaker 10:Yeah. A lot of people have asked me about that because they're always surprised that, like, a relatively big company can still innovate or whatever, but I think the way that it you know, I can't take too much credit for it, by way. The big the biggest thing that I did was I we have we have a very entrepreneurial culture of different people we've brought in, and Jesse Pollock came to me at one point, and he was like, hey, I want to work on a new chain. And I was like, cool. Like, take a small team, go run at it, you know, like, two pizza team or whatever, like, five people.
Speaker 10:And I had no idea if it was going work, but the biggest thing I didn't he deserves all the credit, to be honest. The only thing I did was I kind of shielded it from the rest of the organization a little bit and just gave them time to cook. And he went through like five or six iterations, and I I saw a couple of these along the way, and I was like, honestly, I have no idea if this is gonna work. And it turned out to actually really hit. And so that's if there is, like, a secret to this, which I don't I don't know if it's a secret, but it's like you have to allocate some percentage of of your budget to these venture bets and taller and make them small bets because, you know, you want to have two two, three, four people, like, working on it, kind of like a y c company, not like don't put a hundred people on it or something.
Speaker 10:It's going be like a big bureaucratic thing. As long as they're small bets, you can tolerate, like, you know, 75% of them not working out. And once in a while, something hits and it pays for all the rest of the bets. I mean, it's just it's kind of like having a venture capital internal at the company. So we actually set up this thing called we call it, like, next bets.
Speaker 10:And twice a year, anybody in the company can come pitch. It's like a group of people. We call it like internal venture capital, and they're basically the people who run different product groups, but there's also some really kind of like smart young engineers, etcetera. Basically, if any one of them raised their hands and said, I want to fund that out of their budget, then you're greenlit to go do it. You don't have to get a unanimous yes.
Speaker 10:You just need one person to say yes. And there's there's actually some pretty big like USDC, I will tell you, actually voted no on USDC to, like, which was a terrible now it's like it's like almost a billion dollars of revenue or something for us. And and I I voted no because I was, like, a little skeptical. I didn't think it was, like, decentralized enough or something. But luckily, somebody else on our team voted yes.
Speaker 10:So it got funded, it turned out to be a massive So it shows you how much I know.
Speaker 2:That's incredible. I wanna talk about, putting stocks on chain. You go back to that original, like, Peter Thiel lecture in the nineties talking about maybe we could have a digital dollar that's not backed by gold or the treasury, but actually backed by stocks. Is there a world where that happens? What needs to happen?
Speaker 2:Is there a world where Coinbase shares are securitized on chain? And I I know you probably can't give, like, forward guidance around that, but, like, walk me through the the the the changes that would need to be made, and is that even a good idea in your mind?
Speaker 10:Yeah. Well, just starting first with that PayPal point that you made. I mean, there's a great book, I think it's called PayPal Wars. I believe it's about the founding of And, you know, it really there was a lot of, like, that libertarian ideology of economic freedom was in the founding team. As you can imagine, they went on to do many other things.
Speaker 10:And I think in many ways, is fulfilling the vision that the early PayPal team started with around economic freedom. And the the main reason I can think of for that I mean, there's a lot of reasons. They got acquired by eBay, etcetera. The the team changed some of the motivations. But, like, at the end of the day, nobody wanted a US company to run the global financial system.
Speaker 10:Like, if you were the Indian government or random person in some country, like, you didn't do I really wanna put all my money in some US company? But if it was a decentralized protocol that nobody controlled, like, kinda like the Internet, it's like, okay. We'll all kinda integrate with that. And so Bitcoin was, like, the key innovation, I think, that unlocked that opportunity. Let's you also asked about, like, kind of tokenizing securities, and I I do think that's an exciting area.
Speaker 10:We're we're pretty interested in that as well. You know, it's like the trading of stocks is just one more area of financial services that could be improved by crypto. I mean, as
Speaker 6:an
Speaker 10:example, there's a lot of people around the world who want access to US securities, but they don't have a simple way to open a brokerage account and track that. So it's like the international access would be better. You could get like perpetual futures markets spun up for these stocks, which would give traders more leverage. You could do twenty four seven trading. You could do fractional shares.
Speaker 10:So I actually think, like, most traditional securities are gonna get tokenized on chain in the next five years. We we've been working a little bit with, like, the SEC task force on this and trying to find the right path to do it. So it's something we're interested in, but, yeah, obviously nothing to announce today.
Speaker 3:Where are you getting the most leverage from AI internally? I can think of a bunch of different potential applications, but I haven't seen you do online virtue signaling
Speaker 2:about it yet,
Speaker 3:like other certain CEOs have. But I'm curious, you know, what what you're excited about.
Speaker 10:Yeah. Okay. Well, so I think we're doing a lot of the current best practices that most people are doing with well run companies. And then there are a couple areas on the horizon that were that are more crypto specific that I'll tell you too. So, I mean, the basic ones you probably know, it's like we got we onboarded all of our engineers to copilot and cursor and and everything like that.
Speaker 10:So we got a % of them onboarded. That was good. Customer support, I think, like, maybe 60% of inquiries are being answered by AI now, which is really good. We also, for a long time, have been building AI models around fraud prevention and, like, detecting risky transactions. But you can yeah.
Speaker 10:Obviously, like, any process within the company that has a clearly defined input and output, you can train a model on, and generating compliance reports. Like, there's so we're trying to integrate it everywhere. The ones that are a little more on the frontier or, like, crypto specific for us so one is that I guess people are calling it agentic commerce, right, which is, like, you know, your agent is increasingly kind of like your assistant, and it might need to book you a ticket to go somewhere, or it might need to get through a paywall or something. Like, if you're like, hey, go read all the research papers from Nature on this topic and give give me a report, like, okay, those cost money to ingest it. And so AI agents are gonna need to have a wallet to go pay for stuff.
Speaker 10:We think that crypto will be the backbone of that. Like, USDC on base is is starting to be adopted by some some of we we actually released this open source thing called agent kit, which makes it easy for any LLM to have a wallet. And we're working on a couple of checkout type solutions with other players that we'll announce soon where a the AI agent can actually get through the checkout flow in many of these ecommerce sites and pay with USDC on base. So I think agentic commerce will be a big one. I think it's also we're gonna get, like, AI agents that can be kind of like your RIA, like your registered investment adviser, or almost like your your trading bot.
Speaker 10:So imagine, like, you you you're in the Coinbase app and you kind of tell them, hey, I want to put like a thousand dollars or $10,000 something into this account. And you're talking to a trading bot and you're like, just go make me money, you know. I I don't know, like
Speaker 3:make mistakes. Don't make tell it, you know, make me I I joked about this before, 10% compounded return daily. Don't make mistakes.
Speaker 2:Don't make mistakes.
Speaker 10:Yeah. And it it may have some questions for you, or like it may make mistakes, and like there's a lot of details to figure out, but I think having a trading bot, like, do a lot of that for you, and it's like, hey, make like, if I if it goes up a lot, lock in some gains, you know, so I don't regret it later. Or you can give it kind of abstract concepts like that, and it'll go it knows how to make the limit orders for you or whatever.
Speaker 3:Yeah. How how do you think that do you imagine that type of capability really being dispersed? Because I imagine I mean, obviously, there's people with, you know, trading bots today and they're actually I imagine some of them are so effective that they just say, well, we don't actually wanna release this because we should just use it ourselves. But it it sort of could potentially tie into this dynamic between closed source AI and and open source AI. And is that do do you think part of Coinbase's opportunity is to fact if you know, make sure these types of tools are available to as many people as possible versus just a a handful of of traders?
Speaker 10:Yeah. It's kinda I mean, so we we're not doing prop trading on our own balance sheet, so we're not, like, trying to be a hedge fund or something with a proprietary algorithm. So our goal would be to, like, make this available to as many consumers as possible. And yeah. I mean, it might it's kinda adjacent to financial literacy.
Speaker 10:Right? Like, many people might come in and be like, yeah, I want to make, like, crazy returns, and this thing can kind of tell you, well, okay, that's pretty high risk. Like, why don't you, like, dollar cost average into this diversified portfolio over time, and, like, it that would might be more in line with your risk appetite. But if you want to take 10% of it and try something more high risk, like, know, so it can it can teach people about these concepts and while also doing what they ultimately want to do, what they would have done anyway in the app, but it's just making it easier for them.
Speaker 3:Totally.
Speaker 2:Can you talk about the extortion attack, how you handled it? And I'm particularly interested in going forward, there's a lot of tools in your toolkit. You can throw more money, more people, more technology at the problem. What's gonna what what's the next few years look like in terms of beefing up security?
Speaker 10:Yeah. Yeah. Well, I I mean, we've had a really good track record on security at Coinbase over the last twelve years. And even in this attack, you know, we didn't see any private keys or funds accessed directly by the attacker. So what they unfortunately, they were able to do is they were able to bribe some of our customer support agents and to share with them, like, personal information on on customers, like name, address, And, you know, they want this information.
Speaker 10:Attackers want this information because they want text people, call people, try to socially engineer them and to get them to send their money. And so, unfortunately, they were able to successfully do that with a handful of customers, which we've reimbursed a % at this point. And then they sent us this demand. Once once we were you know, they realized they'd been found out and customers were kind of getting educated about this. They sent us this demand for $20,000,000, or we're going to release all this information.
Speaker 10:And it was an interesting moment. You know, we came together and thought about it. And, you know, on the one hand, we could have paid them the money. Right? But we were we we talked to a bunch of security researchers and people, and they were like, you know, there's really what typically happens in these cases is you if you pay the extortion, they're just gonna come back in three months and extort you again.
Speaker 10:Yes. And and you it's like, do we really want to be in this situation where we're like funding their next attack and like rewarding this kind of behavior, or do we want to try to create a deterrent to this kind of behavior? So we we decided to flip it, and as you probably saw, we put out a $20,000,000 bounty for any information leading to their arrest and conviction. And that's been kind of a crazy experience. I mean, just as one data point for comparison, after 09/11, the US government put out a $25,000,000 bounty on Osama bin Laden, and we put out a $20,000,000 bounty on these guys.
Speaker 10:So we had like maybe 5,000 like tips or inquiries like come into the the email that we put out there. Most of it was junk and we we kind of wheeled it down. There's about like 70 or so credible leads, I would say. And we always have to be a little careful because some, you know, some of these could be like the the the threat actor themselves sort of trying to throw us off the trail or run down some wild goose chase. Some of the other people sending in tips or leads are like other threat actors who kind of have beef with these guys or like they're it's kind of like no honor amongst thieves.
Speaker 3:Right? Yeah.
Speaker 10:So, you know, I'm which is fine with me, but it's
Speaker 3:No. I I really enjoyed the the you know, I saw the video that you put out and I enjoyed imagining the dynamic of the thieves real know, sitting sitting around a table realizing that Oh, no. You know, that this sort of game theory of who's gonna turn in who, you know, it it was a it was a nice it was a nice visual.
Speaker 10:Yeah. Yeah. So that's exactly what we're we we wanted to create was a real a real deterrent here. Was like, you're if you're going to attack our customers, you know, you need to look over your shoulder and always wonder like who's going turn me in or who did I interact with in my entire life who might have known about this who's going turn me in. So anyway, I can't say too much more.
Speaker 10:Working closely with law enforcement, but we're going to run down those leads and and hopefully get a good result. I mean you you asked about beefing up security too, I think. And
Speaker 2:Yeah. Just kind of going forward, you can imagine, let's let's hire more people, better people. Let's throw a technology at this. Let's monitor comms and where data is flowing. Is this more of a technology issue or a talent issue or an oversight issue or policies?
Speaker 2:Like, what like, how do you see investing in the next
Speaker 3:round of security? Thing that popped into my mind, the way that you're already leveraging AI, is there's a world in the future where a more secure CX function would be entirely code. Right? And and you wouldn't it it'd be much, you know, you could create a environment for Yeah.
Speaker 2:Or at least AI oversight of everything of every interaction. But, yes, I'm interested to hear what your take is.
Speaker 10:Yeah. Well, it's a great point. I mean, the the 60% of inquiries being answered by AI now, I mean, they're they're not going to get bribed. I mean, there are other threat act threat threat vectors with AI too. Because people are always trying to jailbreak these agents and things.
Speaker 10:So it's not there's not a perfect solution and and I don't think we're going to have we're we're still going have like human in the loop on a lot of things for a long time. Yeah. But yeah, there you know, never let a good crisis go to waste. Like this was definitely a good moment for us to go implement a bunch of changes and we mobilized a team of about three or 400 people like right away that just went into overdrive kind of trying to lock down a lot of these systems. A lot of it was not just our own systems.
Speaker 10:There's vendors that we work with that, you know, we needed to push them to hit a higher bar as well. We did relocate some of our customer support operations. You know, the ones that got targeted the most were these overseas contractors and things like that. And, you know, you can imagine, like, some of the money being offered as bribes would have been, like, pretty impactful even in The United States if people were there. We we need to have twenty four seven coverage, etcetera.
Speaker 10:So it's not a perfect solution to like just move it all in The US and pay people more. Like, it doesn't a % solve it, but we are relocating some of those support operations and then essentially just hardening our systems. Like, luckily, we had we had some good controls already that which limited the scope of it, but we obviously didn't do enough, and so we've gotta keep investing in that.
Speaker 3:Yeah. Do you have any advice for younger builders, maybe the the younger version of yourself? You know, we had Chris Dixon on the show Mhmm. Earlier today, and he said that crypto you know, one of crypto's biggest problems now is just a lack of talent. There is talent here, but it's probably, you know, could have 10 times more Yeah.
Speaker 3:To create a lot of of great outcomes. I'm curious if you if you feel the same way around kind of talent in the industry today.
Speaker 10:Yeah. Well, think there's a we we're we've never been we've never had it easier actually recruiting great people into Coinbase. I I think there's there is like a great and probably that's due to our scale. Right? Startups have to really fight for talent.
Speaker 10:But I think if you look at like the top five most exciting tech trends in the world right now, like my five would probably be AI, crypto for increasing economic freedom and all that, brain machine interfaces, fusion energy and longevity, I think, is also in no particular order, by the way. Like, you know, there's a biotech company I co founded called New Limit, is working on epigenetic reprogramming, which is really cool. A longevity company.
Speaker 2:Talked to the founder. We were blown away. We came away extremely excited by that conversation.
Speaker 10:Nice. Nice. That's awesome. Yeah. I mean, so I think to me it's like how do we accelerate progress?
Speaker 3:Sure.
Speaker 10:And I think the smartest people from a talent point of view, like the smartest kids up up and coming, you know, people, whatever, they all want to work in things that are going to change the world. So, like, those are those are the top five. And, you know, I think like, there's actually a pretty incredible amount of talent in crypto. It's like you just got to go try you got to go try ambitious bets and be okay with some of them not working. Like, I think sometimes people think that, well, Coinbase started and now it's big and so they're just a success.
Speaker 10:And it's like Mhmm. No. That's not true. Like, we're we're trying these venture bets all the time. Like, I told you about USDC and Base.
Speaker 10:I mean, there's others that didn't work. Right? Like, we we launched Coinbase NFT and it was pretty much a flop. Like, we launched Coinbase in Japan. We invested all this money and time, like, didn't work for a bunch of reasons.
Speaker 10:I can tell you if you want. And we shut that down. And so we're constantly, you know, stay hungry, stay foolish. Like, we're trying new ideas a lot and you have to be okay with, like, two or two out of three or three out of four just not working.
Speaker 2:What about the Super Bowl ad? Was that a similar one person green lights it, and who green lit it, and what was the what was the story with the QR code?
Speaker 10:Yeah. Well, as as usual, like, success has many fathers and mothers, but, you know, it it partially came out of a rushed like a short time, you know, time constraints breed creativity. Right? So we actually didn't I think by the time we bought the ad, we didn't have enough time to, like, go film something for months and months. And so the team just got really creative, and and I don't even remember who it was in the meeting, like our our CMO, and there was an agency involved, and it was a collaborative effort where someone was like, you know, well, what if we did kind of like a direct direct marketing type campaign where we want people just to install the app, but the you can never measure the result of most of these brand ads.
Speaker 10:Right? You're always like, don't know. Did it drive revenue or not? Nobody really knows. So we're like, well, we could actually measure how many people just like scan it and sign up if we if we just put a QR code on
Speaker 3:the screen.
Speaker 10:So I don't remember who said it actually in the room, but it obviously it worked. It was cool.
Speaker 2:Yeah. And and and you tracked the ROI and it was positive?
Speaker 10:Okay. So that that's actually a very complicate we we look at the
Speaker 3:I wouldn't
Speaker 10:Pour you with the exact details, but long story short, like so our site actually crashed because we got about like
Speaker 2:Yep.
Speaker 10:20 it was like 20 or 30,000,000 visits in in twenty seconds.
Speaker 3:Oh, my And
Speaker 10:we we knew there was gonna be a big surge, and so we had like I think the first page loaded and it was heavily cached, but then like 20,000,000 people started going through the sign up flow and like everything shut down. So we had to email a bunch of them later to come actually come back and finish it. Long story short so we lost like probably about a third of the value in just like overwhelming demand that we unfortunately couldn't scale to, but it would have been very profitable. It's it was still profitable depending how you count it.
Speaker 3:The fact that we're talking about that today means something.
Speaker 2:Very memorable.
Speaker 10:Yeah. Very memorable. Value alone maybe maybe paid for itself even with Yeah. None of the direct revenue.
Speaker 2:I have one last question, then we'll let you get out of here. And feel free to just, take it as, like, meta commentary on the nature of the question. But who is Satoshi Nakamoto?
Speaker 10:So the official answer is it doesn't really matter because like the idea stands on its own and so if anybody ever comes out and we find out who it is like in their their will or you know whatever. But but the the unofficial answer, I think, is is probably some combination of, like, Hal Finney and Nick Sabo and maybe one other person. But that's my guess is that it was a collaboration between those people and, you know, but ultimately it doesn't matter. Hal Finney is frozen at Alcor, but he's he no longer living, so we don't, you know but maybe if Alcor actually works, which is a big if, in the future we could bring him back to life, we'll find out.
Speaker 2:Yeah. That'd be amazing. Show then.
Speaker 3:Yeah. We'll have him on the show. We'll have him on the show.
Speaker 2:Yeah. That'd be fantastic. Jordy, any other questions?
Speaker 3:No. This was great. This is fantastic.
Speaker 2:Thank you so
Speaker 3:much. You're you're our first public company, Fortune 500 CEO.
Speaker 2:Yeah. That's right. So thanks for doing this.
Speaker 8:This is
Speaker 2:a big milestone for us. We really appreciate it.
Speaker 10:Well, I love that you guys are championing tech and it's yeah. The Yeah. The enthusiasm is palpable. So I I get to see your clips all
Speaker 2:over the Enthusiasm. What are you talking about? Enthusiasm. We're gonna
Speaker 6:need a big we're gonna need a bigger gong.
Speaker 3:We're gonna
Speaker 2:need a bigger Gong. Thank you for stopping by.
Speaker 3:It's great having you on, Brian. Yep. And Alright. Thank you for the work that you do. We'll talk
Speaker 2:to you soon.
Speaker 10:See you guys soon.
Speaker 3:Bye. Cheers.
Speaker 2:Love it,
Speaker 3:John. Great great hit.
Speaker 2:The the the Gong is it's working wonders. Next up, we have Suna from Volt Capital coming in. Is it Volt?
Speaker 3:I'm gonna take one minute. Yeah. I'll be right back.
Speaker 2:I'll talk to Suna. Let me tell you really quickly about Wander. I gotta sing the song alone. Find your happy place. Find your find
Speaker 3:your happy place. Find your happy place.
Speaker 2:Book a wander with inspiring views. Hotel creative series b today. Today. Congratulations.
Speaker 3:Hit the gun one more time.
Speaker 4:I mean
Speaker 2:You're already on your way out. Got a size one for a wander. $50,000,000 series b. Congratulations to
Speaker 3:the team. Andrew, Kyle, the whole team.
Speaker 2:Fantastic. You guys are crushing it. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better folks.
Speaker 3:And John Andrew is coming on the show tomorrow. Fantastic. Very excited about that. Fantastic. But amazing milestone.
Speaker 2:Well, stay locked in. We got four more guests. Our next guest is Suna. Hopefully, we can bring her in and and keep the conversation going. How are doing?
Speaker 14:Hey.
Speaker 2:Oh, sorry. Good to meet you. It's been it's been a big stream, been a big day, but glad to have you here. Would you mind kicking us off
Speaker 14:with list. I was so happy
Speaker 2:about
Speaker 14:it.
Speaker 2:Oh, yeah. Yeah. Yeah. We we it was it was great puzzling everyone together, getting everyone. It's also hard because I'm not as it's very clear from this stream, I am not crypto native at all.
Speaker 2:And so the first time we we tried to schedule this, we tried to schedule you was, during that big crypto conference in Dubai. And everyone was like, what are you thinking? Everyone is going everyone who matters in bit in in crypto is going to be busy, and they're going to be twelve hours off your time zone. And then we wound up scheduling it today, and there's this massive Bitcoin conference. Unfortunately, some people, you know, were able to hop on the stream.
Speaker 2:But it's but it's a great community. And so everyone's been able to break it down and explain it like we're five because we effectively are. But would you mind kicking us off with an introduction on yourself and, and, yeah, what you what you're excited about?
Speaker 14:Yeah. Sure thing. So I am at Volt Capital. What we focus on is pre seed and seed crypto companies.
Speaker 6:Mhmm.
Speaker 14:And, I mean, the reason we even started Volt Capital is if you look at the landscape of crypto funds, there aren't really that many that have a senior partnership that have all founded companies before
Speaker 2:Oh, cool.
Speaker 14:Or built a team from the ground up, and that really is the DNA of the fund. And so what we what we do is we focus on founder first philosophy in terms of the in terms of how we index on investments, and then also we've all been founders ourselves as well. And we're focused in terms of, like, on a barbell strategy in terms of the thesis. Mhmm. One, there's there's
Speaker 6:a,
Speaker 14:like, there's established markets, like, and by the way, this isn't live. Right?
Speaker 2:It is.
Speaker 14:Oh, okay. Oh. You are. So there's there's established okay. There's established markets like, payments, DeFi.
Speaker 3:Yeah.
Speaker 14:And okay. I think the camera's okay. There's established markets like DeFi payments, stablecoins that are taking on these tens of trillions of dollars markets. Sure. But then also I mean, if right now, the rest of the world is waking up to stablecoin potential.
Speaker 2:Yep.
Speaker 14:Stablecoin started about five to seven years ago.
Speaker 2:Yeah.
Speaker 14:So if you look at what the net new narrative is right now, it's largely around real world case applications for crypto. And what we focus on is largely, crypto AI intersection, and then that oftentimes look like crypto and robotics or, like, crypto and Yeah. And strictly crypto and AI or also Deepin. And, Jordy, I know, like, you and I had collaborated on that essay a while back where Yeah. We go through the different, verticals and potentials.
Speaker 2:That's cool. Yeah. What what is the state of real world assets on chain? I remember during the last cycle, Sam Altman or, Sam Lesson was on the, Logan Bartlett Show talking about maybe your mortgage will be on chain, maybe physical real estate will be on chain at some point. And there was a whole bunch of legal and technical and financial issues to work through to actually make that happen.
Speaker 2:Are people optimistic about that narrative in real world assets, or has it moved to a completely different trajectory?
Speaker 14:Yeah. No. We're absolutely excited about that, I think, for a few reasons. One is institutional demand is here. Mhmm.
Speaker 14:Secondly, a lot of the tech has been figured out, but the tech wasn't really the tough part. The tech was probably a iota of it. If you look at the distribution of teams, it's like, oh, you have an engineering team, like, 20 or 30, but then you have, like, hundreds of people focusing on recourse. And the ratio was pretty disproportionate in terms of what they were focused on. And with regulatory language being cleared up and getting more approval from the administration and, I more legitimacy for the space.
Speaker 14:It's it's really paved the way. But what we're focused on when we talk about real world applications in addition to that are, like, we're seeing companies at the intersection of crypto and robotics that are finding innovative ways to collect and check for quality assurance of data in massive global ways that you aren't able to do, with existing rails, particularly for robotics because there isn't really a common crawl equivalent for robotics. Like, there isn't a way we train, Web two or, like, Internet LMs. And then, also, like, space and crypto. We're seeing companies build at the intersection.
Speaker 14:They're, like, out of study research, so, like, really, domain experts in space that are finding really interesting ways to create data marketplaces at the intersection of crypto and space.
Speaker 3:Drew? One thing that we've seen and great great to see you, by the way. One one thing that we've seen from, I think, a number of the different conversations today is it feels like consensus that agents will use tokens
Speaker 6:Mhmm.
Speaker 3:Or that the agentic web will be leveraging tokens. As an investor, what are the kind of different kind of layers of the stack that you're looking at? Whether it's, you know, the agent layer, infrastructure, the actual tokens themselves. How are you thinking about investing into that trend broadly?
Speaker 14:So I'm gonna say something contrarian around banking agents. And I don't think from a venture standpoint, it's it makes sense to to to invest, like, via private equity, particularly because a lot of that value capture is going to be done through enterprises. We already saw Coinbase roll at x four zero two, which allows agent to agent payments. Mhmm. And they already have massive distribution channels.
Speaker 14:So you are already starting off with a massive disadvantage as a startup. And instead, what we're looking at in terms of Crypto AI, there's a lot to be done on synthetic gen synthetic data generation.
Speaker 11:Mhmm.
Speaker 14:There's a ton to be done on the federated learning side in terms of, like, how do you train models when you're dealing with sensitive data around health or finance. So there are way bigger markets to go after that I think are more appropriate for startups versus companies that can be rolled out, yeah, as we've already seen from from these larger incumbents.
Speaker 2:Yeah. We're talking to the founder of PrimeIntellect, kind of similar idea of distributed computing, wiring it all together with crypto makes a ton of sense to kind of use those latent resources. But you're saying that the same thing can exist for data markets. Is the is the is the goal there? Is it is it like, with with regard to, like, robotics data, you would think that if this if this evolves the same way that, like, the LLM, RLHF market evolved, you know, it's like Scale AI is just gonna go and centralize it all and then sell access to that.
Speaker 2:Is there some sort of underpinning fundamental difference with robotics training data that would make it more native to an on chain environment?
Speaker 14:Yes. So a few things. So one is, up until recently, a large way that we would train these robots is through physical sensors and actually having to run physical simulations. Sure. And what DeepMind came up with was a paper last year where they show that you can train robots purely on egocentric vision data.
Speaker 14:Mhmm. And egocentric vision data is point of view data. It's like GoPro video.
Speaker 2:Yeah. Yeah.
Speaker 14:So, they train robots to play soccer using ego centric vision data or this video. And there isn't a common crawl equivalent or just, like, these massive datasets where you have footage at the right angle or right height to then feed to these robots to be able to train them. And the problem is not everyone has, like, the balance sheet of, like, a Tesla or, like, the ability to go and then collect that. And so the best way to do that is distributed in a distributed way. And so there are companies that are working on, on one hand, compensating users for uploading video data that specific companies need.
Speaker 14:But then on the other hand, and this like, where more, like, the Scaly I piece comes in, is you can disincentivize or slash users, essentially, like a built in, penalty for uploading poor quality data that's, like, pixelated or at the wrong height or angle and streamline that all in the protocol level. Yep. And so that unlocks a massive amount of potential in terms of the economics of these marketplaces, in terms of amount of data that you can collect, and the diversity of the set of data.
Speaker 2:Yeah. It's interesting to flip around because we were we've been talking about v o three and Google's massive advantage there with the YouTube dataset. I've produced I mean, through the show, we produced hundreds of hours of video content. It goes on to a few platforms. It doesn't go on to every platform.
Speaker 2:Like, now we're on most of them, so most of the hyperscalers could effectively train on our data. But if a YouTuber and you're just releasing on YouTube, vending that data to another training platform is something that's not really accessible because, obviously, YouTube's not just gonna go license, all that data to another to another company to train. Very interesting.
Speaker 14:The problem is for robotics. Right?
Speaker 12:Because you
Speaker 14:actually have specific footage. What,
Speaker 3:how what is the state of the crypto seed market today? Is it is it collaborative, sharp elbows?
Speaker 2:Also, I mean, the dynamic I'm interested in is, like, it seems like it's easier than ever to just, like, spin up a coin in two seconds with one of these new pump coins and then that's your seed round. But it feels like that's still not a perfect substitute for traditional venture capital. Is that competitive with what you do these days? Like, there's so many alternative sources for funding in crypto.
Speaker 3:In many ways, you could also make the argument that companies are going, you know, to, you know, creating tokens
Speaker 6:Mhmm.
Speaker 3:So fast that it's potentially good for seed because maybe you need a seed round, but you don't need the series a or the series b.
Speaker 2:Sure. Sure.
Speaker 3:And, you know, maybe limit dilution.
Speaker 2:I'm curious when Yeah.
Speaker 14:Yeah. So every cycle, we see this meme where it's like, will crypto kill VC? And every single cycle, it doesn't work. And the reason is because the quality of capital matters. Mhmm.
Speaker 14:And what founders what first time founders or founders or people that aren't even founders, what they don't realize is that when you have and and you guys it's like when you have a venture fund on the cap table, it's not just getting the capital. Capital is now commodity more than ever. Mhmm. It's the support you're getting from that particular fund Mhmm. And the legacy or brand name that they're going to give your company to help de risk it, which helps you recruit better, you know, be on on news outlets or otherwise, you know, wouldn't wouldn't really listen to you because you don't have a brand name around you, and it's just your startup.
Speaker 14:And so those intangibles matter more than the capital you're taking on, and that's the lesson that you see these founders learn over and over again
Speaker 3:Mhmm.
Speaker 14:When they think they can just, like, launch a meme coin and then call that their financing for
Speaker 6:the rest
Speaker 14:of their lives.
Speaker 2:Yeah. What what are the other value adds that VCs are pushing right now? In defense tech, we're seeing VCs effectively set up, like, lobbying firms in DC to help with that go to market with the Department of Defense. I imagine that at least staying ahead of regulatory changes in crypto makes a lot of sense. But what are the other vectors other than, hey.
Speaker 2:We might refer a couple engineers. We might get you a couple press pieces. What are the outside the box value adds that a VC can bring to the table?
Speaker 14:Yeah. On the defense note, I've also heard of some funds purchasing the American flags that they all have and protect against because there's actually, like, a division of the government that provides them for
Speaker 2:totally
Speaker 14:flag you're not getting it from Yeah. You know, any retail
Speaker 3:stores. Awesome.
Speaker 14:But inter and that's, I guess, out of the box in defense. But in terms of out of the box, like, value add and crypto, there are the universals, like you said, like recruiting and, you know, helping to go the road map and and helping, like, next rounds of financing. But one thing that we're doing at Vault that I think is pretty unique is we're actually building a simulation engine for deepened protocols
Speaker 6:Mhmm.
Speaker 14:Where you can input different param parameters for the network that you're building out and see based on average inflows and outflows how you can expect that network to perform in different environments over time. And you can Interesting. Update number of nodes, number of like like, what you anticipate and number of end users being. And so getting really sophisticated around technical value ads that help the team move the bottom line in terms of revenue generation, I think, is the the real thing that crypto venture funds should be focusing on beyond introductions to people that can recruit or market makers and things like that.
Speaker 3:What do you think the the first truly breakout dPEN product will be? Is it is is WorldCoin classified as as dPEN, or is that not the right framework? I know there's there's the cell company. There's hotspots. But but what what do you what kind of categories broadly are you most excited about?
Speaker 14:Yeah. There's this joke where if you squint hard enough, almost everything's deep end. Like, even Bitcoin is is technically deepened because there's a hardware component. But, Worldcoin absolutely has broken through mainstream. I mean, they were just on the, like, Time magazine cover.
Speaker 14:The things that we're more broadly interested in regarding deepened are, like I said, the crypto robotics angle, but then also the crypto space angle.
Speaker 2:Mhmm.
Speaker 14:So there are teams that are building out I don't know if you've seen that chart from our world and data where you can see the number of objects we've launched into space.
Speaker 2:Oh, yeah.
Speaker 14:And it is just I mean, it's not even hockey stick growth. It's like a vertical line almost, and these are, like, CubeSats, probes, landers, like, whatever, or crew landers and others. And and that that's gonna be a problem real fast. Right? Like, we need better anti collision software.
Speaker 14:We're able to track, like, silent satellites, which are almost like second strike defense capabilities, but in the sky. And one way to do that is by booking out commercial grade telescopes and being able to have eyes on the sky data that way. But, usually, they're booked out days in advance. You have stale data when you get access to that. The other way is to just crowdsource it.
Speaker 14:Like, a lot of people have electronic telescopes to use anyway around the world that are hobbyists. They're taking imaging of the sky twenty four seven, and you can compensate them. And then on the demand side, charge companies to access that data. And so we're seeing a lot of interesting plays around orchestration data marketplaces that are tackling very unique dynamic up to the minute data that we don't have in traditional rails.
Speaker 2:Very cool. Very cool.
Speaker 14:I think the broader
Speaker 3:I don't wanna make too much of a joke, but I do think we should let the aliens access pump, you know, a pump
Speaker 2:For sure.
Speaker 3:They should be able to One
Speaker 2:hundred percent.
Speaker 3:Extraterrestrials should be able to launch.
Speaker 2:That's the first thing they should do when they arrive.
Speaker 3:It's kind of a gateway.
Speaker 2:Kind of welcome to America. Yeah. Welcome to humanity.
Speaker 3:But I I I believe we should put crypto in space.
Speaker 2:I agree.
Speaker 3:I'm excited.
Speaker 2:Crypto everywhere. Thank you so much for stopping by. This is a lot of fun.
Speaker 17:Yeah.
Speaker 2:We'll talk to you soon.
Speaker 3:Thank you for helping us understand these different
Speaker 2:things. This is great. Very cool. We'll talk to you soon.
Speaker 1:Have a
Speaker 3:good one too, man. Cheers.
Speaker 2:Next up, have Mert Mumtaz from Helios coming in the studio. We we'll get a little intro from him. We gotta tell talk to you about Bezel first. Your Bezel concierge is available now to source you any watch on the planet. Seriously, any watch.
Speaker 3:Rich Bitcoin at a hundred
Speaker 17:and 10
Speaker 2:ish k. You gotta
Speaker 3:You gotta take
Speaker 2:it into Nautiluses. Welcome to the stream, Mert. How are doing?
Speaker 19:Good, sir. How are doing?
Speaker 2:I'm great. Would you mind taking us through a little introduction of yourself and your company just to kick us off?
Speaker 19:Sure. Of course. Yeah. My name is Mert. I work on Helius
Speaker 6:Mhmm.
Speaker 19:Which is not Helium. I know Kyle was on. He was talking about his investment in Helium, we get confused a lot. Yep. And Helius does infrastructure, high performance infrastructure for Solana.
Speaker 19:Mhmm. And I also shitpost a lot on the Twitter.com.
Speaker 3:That's great. Let's give it up for
Speaker 2:for Yeah.
Speaker 6:Sounds like
Speaker 2:you're doing god's work. Does infrastructure mean in this context? Are you building data centers? Are you just managing them? Are you just deploying nodes?
Speaker 2:Are you writing software? What's the shape of the team look like?
Speaker 19:Yeah. I mean, the the short answer is yes. And and what I mean by that is we do some combination of all of those.
Speaker 3:Yep.
Speaker 19:Probably the least worst way to think about it is like some combination of Cloudflare, AWS, and maybe Stripe. And so in this context, we basically help developers, or traders or whoever wants the data to get data from Solana super fast in a structured way and also write data to it super fast.
Speaker 2:Got it. What what are the different trade offs? You mentioned Cloudflare. Like, is geolocation important as, you build out infrastructure like this?
Speaker 19:Yeah. So it depends on the blockchain, but Solana has a lot of pretty advanced trading activity.
Speaker 6:Mhmm.
Speaker 19:Now the assets that they're trading might are are a little funny because you might get, like, not Citadel, but, like, let's say similar types of players really colocating their servers to ape like Farcoin or something. But, like, the the colocation and, like, these latency games do play a a pretty big role.
Speaker 2:Yeah. How how are how advanced are the high frequency trading operations? What are they using? I know Jane Street writes everything in OCaml. Are we seeing, like, low level programming languages being used to trade these meme coins now?
Speaker 19:Oh, yeah. Definitely. Okay. Like, you you have people I mean, I don't know if the audience here would consider, like, C and Rust that low level, but, like, everything from C and Rust to some people will get extremely degenerate and start going into assembly for certain parts of the stack or like raw networking code.
Speaker 16:That's amazing. So,
Speaker 19:yeah. It's it's quite a serious game played with very interesting assets. Lot of fun.
Speaker 3:What what kind of players exist that don't like to talk about what they're doing and aren't aren't loud that that maybe aren't that maybe aren't doing anything that's that's, you know, morally wrong or anything like that, but are just sort of Under the radar. Under the radar.
Speaker 2:They just don't want to talk about their alpha because they don't want to bring a bunch of So
Speaker 19:the question is what kinds of people like that exist?
Speaker 3:Yeah. Like, are they What's
Speaker 2:the shape of their operations? What's the scale? These
Speaker 3:the What are different types of
Speaker 2:Are they are they coming from other or is it is it a new desk and an existing hedge fund? Or are these completely new operations that have just scaled up from like an individual trader?
Speaker 19:Yeah. That's a good question. I think it's it's pretty unique in that you have the existing types of like ones from Chicago or New York who will have some sort of operation. Not all of them, but like probably the ones that you know of already from TradFi. A good amount of them are already kind of playing this game.
Speaker 19:And then they'll compete with, like, a set of interesting actors. Some of those actors might be, like, some of the prop trading shops from, like, Tokyo or or just other parts of Asia. But then they'll be, like, competing with, like, this random 17 year old kid from like Estonia in his basement. And like that kid actually tends to compete. And it's not just like a specific kid here, but like that persona.
Speaker 19:And so crypto is interesting because you now have all these guys kind of on the same roughly the same playing field. And it's interesting because it's also kind of why Solana was started by Anatoly, which is he basically wanted he he had this vision that I think he got a front run, like, once or something on on one of these things, he got so mad. He's like, okay. You know what? I'm just gonna build, this decentralized Nasdaq where everybody can compete.
Speaker 2:Totally got it done. That's amazing. What is what, in your mind, what's the most important, elements of the Solana road map going forward from here? It feels like a lot's been built out. There's a very healthy ecosystem, but job's not finished.
Speaker 2:What's what what in your mind is, like, the most exciting upcoming improvements?
Speaker 19:Yeah. So we have a very detailed roadmap that I wrote about on solaneroadmap.com. And when you go to that site, basically, you'll see four words and it just says increase bandwidth, reduce latency. Mhmm. Nothing else to it.
Speaker 19:And basically, everything is centered around making the thing go faster. And, like, there's a I think, Kyle was talking about, double zero as well, which is like a new fiber layer where you can, do some more advanced like network level filtering. We we have, like, jump, for example, building a new clients in c, which is meant to be much more performance. But everything, roughly speaking, on the tech side is always centered around how do we just make the thing go from point a to point b faster. And and and from a, let's say, a cultural or socioeconomic lens, it's very much about what we call the fat thesis, which is founders apps tokens.
Speaker 19:Mhmm. So it's really just how do we attract how do we form this association in somebody's mind if they're like a product builder? How do they think about or why would they think about Solana first? Right? So that when you have Ben Pasternak or Lukas of the world or Elon, why should they pick Solana?
Speaker 19:And that's because, like, people like me, but also everybody from Solana Foundation and and, like, investors and whatnot. How how do we set up, the best friendly friendliest founder infrastructure? So it's kinda like, you know, the Y Combinator of crypto in a sense.
Speaker 3:Yeah. What is the state of The UAE crypto scene? And and how much do you actually feel inclined to travel outside of The UAE versus just waiting for people to come to you?
Speaker 19:Oh, that's a great question. Well, I I am in The UAE, like, 360 out of the year. But then now I'm in Montana where it's like UAE has no nature and then Montana has all the nature. So it's like this barbell strategy. But like so I'm I moved to The UAE from Canada, Toronto specifically Mhmm.
Speaker 19:Where like it is illegal to hold over or trade over 30,000 CAD, which is really like $8 USD worth of any coins except for Bitcoin, Ethereum, which fair enough. And then Litecoin and then Bitcoin Cash. Okay? So like Vintage. And leverage trading is illegal.
Speaker 19:Yeah. So just to give you an idea of what these are
Speaker 2:He banned leverage? That's so un American. I'm unsurprised. I shouldn't be surprised, but I am. Okay.
Speaker 2:So think
Speaker 19:I think it's because, like, one of the pension funds was, an investor in FTX or something. Oh, yeah. That's right. Which, you know, But, like, in The UAE, in terms of crypto specifically, for example, I can pay my phone bill in USDC, and I have, which is pretty crazy. That is crazy.
Speaker 19:And and and the government actually is, like, quite interested in, like, getting you, you know, on on the phone and and really trying to work out how do we actually, like, support the builders here as opposed to some other jurisdictions? But, like, the way I like referring to it is kinda like the hotel for crypto where, like, it's kinda just in the middle. So whenever you're flying anywhere, people just stop by. I remember the last time you wanted to host host this crypto day. Yeah.
Speaker 19:There was, like, a massive conference there.
Speaker 3:I was in charge of what you're doing. I know.
Speaker 2:I know. It really shows you how how native I am to crypto. I'm completely out of the loop. In fact, it ties to my next question. The last the during the last cycle, I I I was really captured by the story of Solana.
Speaker 2:I thought the founders had a fascinating story. Obviously, still kind of coming from the outsider perspective, but I appreciated the technology they were building. There was that meme of, like, SQL Lana. It's not as decentralized as it should be. It's not it's not as pure of a technology as other as other chains.
Speaker 2:Talk to me give me an update on that. Has has that have the problems that people were surfacing, have those problems been solved, or were they never problems to begin with? Is it all just memes, and it doesn't really matter because it's just about the perception? Obviously, the perception of Bitcoin has changed a ton. It was originally like, oh, it's gonna be completely private privacy based and, you know, it's very traceable.
Speaker 2:There's been an evolution of the Bitcoin narrative. Has the Solana narrative evolved and kinda take me through the last couple of years?
Speaker 19:Right. So I with with with Twitter, most of the debates or discussions, let's say, happen on crypto Twitter, which is an amazing place for intellectual sparring,
Speaker 3:let's say. Rigor.
Speaker 19:Definitely nothing gets straw manned or taken out of context. So like Sequelana, for example, was a jab from somebody from Ethereum who obviously is not a very big fan. Yep. But that's okay. And it it, you know, it was basically trying to draw the parallel that Solana is actually like this centralized database.
Speaker 19:Yep. And and basically, I made somewhat of a career out of saying that's wrong aggressively on the Internet. And and and and it's of course wrong because fundamentally, Solana is a blockchain where you have thousands of different nodes. And really the what a blockchain does is it's a bunch of different nodes functioning as one node. Right?
Speaker 19:So that you can't you shouldn't be able to actually tell. There was some certainly quite valid criticisms and there are still today. One of those was that, like, Solana would go down at, like, very high activity. Right? So in 2022, there was this whole NFT craze where people would, like, really try to mint pictures of, like, these stones pixelated apes on the Internet.
Speaker 19:And and it started on Ethereum, but then Ethereum fees obviously went up, and so they came to Solana. But, like, Solana was not expecting people to be that passionate about certain pictures. And so that exposed a lot of interesting engineering problems in the core architecture. And we basically took those learnings and then we we iterated a few better designs for the blockchain. And so what that allowed for is now when the next cycle came, which was with, you know, I mean points and, you know, the the president of The United States launching Trump coin and then his wife following right after that.
Speaker 19:Mhmm. When that actually happened, this time the chain was actually ready to handle it, and that's why Solana has been basically, like, the main venue for most of these Where were
Speaker 18:you when where were
Speaker 3:you when the the the you opened X and saw the the president posting a meme coin? Do you remember where you were? Are you sleeping?
Speaker 19:Oh, man. This this is a okay. So I had just bought Eight Sleep. Okay?
Speaker 3:No way.
Speaker 19:It was it's it had just came to The UAE.
Speaker 2:It's literally the last ad we have to do the
Speaker 1:second Perfect segue. Ago.
Speaker 2:Five year warranty, thirty night risk free trial, free returns.
Speaker 3:Code TBN. TBN.
Speaker 2:Free shipping. You Check it out.
Speaker 3:It's I continue. You're in a deep slumber. You're like, night you got Yeah. Ninety minutes of deep sleep. You get You're comfortable.
Speaker 3:Somebody shake you awake. What what happened?
Speaker 19:Yeah. So I'm like, extremely pumped. I'm like, oh, God. This is like the first night I'm gonna get a great sleep tonight. And at like I don't remember quite the time, but I I remember just getting all these calls.
Speaker 19:And like I slept through most of them because of how good the the like was a new future on it. And and and then so, one of them finally broke through. And and I opened my phone and I was like, oh shit. Solana has gone down. Gonna kill myself.
Speaker 19:Everybody's gonna troll me on the Internet. And then I look at my like company Slack because we power like a lot or most of the infrastructure on Solana.
Speaker 3:Yeah.
Speaker 19:And then I'm like, dude, how come I'm getting paid so much? And then my co founder is like, oh yeah, like Trump launched a shit coin. And I was like, what? And I was like, this real? I was like, Chad, is this real?
Speaker 19:But then like, it was handled so well by, like, the existing infrastructure and the team that, like, nothing was actually happening except for just a lot of, like, shenanigans on the Internet. So so that was that was the story of Trump. And it was a very chaotic day. And then so at the end of the day, was like, oh, finally, let me just crack open a beer and and and, you know, watch like an episode of Mad Men or something. And so I sit down and I shit you not, the the second I cracked it open, I get another call and it's like, dude, Melania just launched a coin and it was like that George Bush meme
Speaker 7:Yeah.
Speaker 19:Where it's like Let's
Speaker 6:just pick
Speaker 19:share coin is at the blockchain. And I was like, oh, no.
Speaker 2:Oh, my god.
Speaker 19:And then, that's when things started going really haywire because you could not tell if it was a hack or like it was legit. Yep. And and so those were a very fascinating it was very hard to describe to my dad what was happening and what I do for a living.
Speaker 2:That's hilarious.
Speaker 3:Hey. Well, hopefully he understands
Speaker 2:What fantastic war stories. Yeah. Thanks thanks for taking us through those. Those were really fun. It was great talking to you.
Speaker 2:We gotta have you on again. This is this fantastic. We'll talk to you later. Have a great time.
Speaker 3:Cheers, Mert. Have a good one. Enjoy Montana.
Speaker 2:Get a nice nice round of sleep. Well, next up, we have Dan from Farcaster coming in the studio. And big news, you can watch TBPN on Farcaster. Someone built a Farcaster mini app. And Which is a very
Speaker 3:cool, novel Yep. Sort of experience Yep. You have on Farcaster. Yep. People can create kind of sub apps within the app and they live in the feed.
Speaker 2:Yeah. Let's bring Dan in.
Speaker 3:I think it's Jamie Hoffman who built this for us.
Speaker 7:See you guys.
Speaker 3:Dan. What's going on? Are you talking
Speaker 7:about the pirate feed of TPPN?
Speaker 3:Yeah. Authorized reproduction of our company.
Speaker 5:It's authorized. Long as
Speaker 2:it has our ads on there, we're happy.
Speaker 3:We're it's authorized. Guys are
Speaker 7:like the Grateful Dead. Anyone can record Yeah. The episode as long as the ads are
Speaker 2:on
Speaker 3:there.
Speaker 2:Exactly. Exactly. It is it is fascinating because I remember I mean, when Forecaster dropped, it was, like, very much, like, it looked a lot like Twitter back then. But you look at the trajectory of the two platforms, and now, like, you think about, like, oh, you can build a mini app that, like, repurposes TBPN. And, like, that is something that's completely on not on anyone else's road map.
Speaker 2:And and the product's evolved in a very, very interesting way. So, I mean, anyway, can you just give us kind of the update on, like, how things are going? What what is the current pitch for Farcaster? Where do you see it going? And kind of take us through a little bit of Yeah.
Speaker 3:I have to say
Speaker 2:Yeah. Please.
Speaker 3:Dan and I were neighbors. Oh, really? Lived on the same street.
Speaker 2:No way. Very cool.
Speaker 3:And it's just been amazing to watch Yeah. To watch you build Farcaster in such a intentional way from the very beginning. I think you kind of had Yeah. I don't know if you had a master plan but you you guys seem to have this pace of building but also like patience and just like long term thinking the entire time.
Speaker 2:So Yeah.
Speaker 3:It's been awesome to see.
Speaker 7:Well, first of all, thanks for having me. I wanted to point out that I am the almost last person in the the group chat that started the MOZ podcast back in the day that's been on your show. Antonio has not been on your show yet.
Speaker 6:We got you.
Speaker 3:We missed him. We missed we missed Antonio today. That was a miss by
Speaker 6:I'm just
Speaker 3:gonna say,
Speaker 7:I'm so happy I'm on this show before Antonio. Yeah.
Speaker 3:Yeah. Bragging rights forever.
Speaker 7:Yeah. Exactly. Yeah. But
Speaker 2:Open invite to Antonio.
Speaker 3:Yeah. So
Speaker 7:Farcaster, five years in this year Wow. When we started decentralized social, pretty contrarian.
Speaker 3:Yep.
Speaker 7:I think Elon changed the the dynamic a bit in the sense that all of sudden people got interested in building alternative versions of Twitter. I think we've tacked more into crypto over time. Mhmm. And so I think where we are today is we're a decentralized social network, but it's targeted for crypto native folks. Right?
Speaker 7:So there's a built in wallet and mini apps, as you point out. Mhmm. And so it just if you want to do fun things in crypto, you use Forecaster. And we're increasingly making that happen in the sense that we support a bunch of different chains. So you can use Ethereum, you can use Base, you can use Solana.
Speaker 7:I think we're going to add other ecosystems over time. So if you can kind of think of like, if you've ever had to do something in crypto where your friends tell you, oh, you got to get into this, you got to mint this, or do whatever thing that you're trying to say, you could just get on Forecaster and it's like two taps away. And then there's no complexity around switching chains and bridging and gas and all this sort of kind of stuff that if you if you talk to like the average Web two founder, it's like the the UX that's acceptable in crypto is crazy.
Speaker 2:Yeah. So,
Speaker 7:you know, 2025, we finally actually have the infrastructure to be able to like build decent consumer experiences. And so Yeah. That's what we're trying to do.
Speaker 2:Do you think you ever loop back around and go back into crypto non native folks and tuck some of the crypto features under under kind of like a stablecoin wrapper or something that, like like abstracts it away over time because you you you've gotten that, like, core fire going, and then you need to turn it into, like, a raging fire in people. I guess the meta question is, like, in in ten or twenty years, does the average consumer just in America, are they are they do they does everyone become crypto native, or does crypto native cease to be a cease to be a concept? Because everyone just I
Speaker 7:I think it's probably more ceased
Speaker 3:to be
Speaker 7:a concept in the sense that I think stablecoins are working. So we do all of our weekly rewards. So we pay out $25,000 a week in our version of X payouts. Yeah. Yeah.
Speaker 7:It's a little bit broader base,
Speaker 2:and and you
Speaker 7:can be a much smaller account and get it. We do that with stablecoins. So we do that every week. Works perfectly fine. We didn't have to integrate any other fintech provider or there's no just every user has a wallet.
Speaker 7:We're able to stream stablecoins to them for a ridiculously cheap amount
Speaker 2:That's amazing.
Speaker 7:In terms of like fees. There you know, so there's no middleman. So that that that's for sure working. I think so we we originally tried to do this whole thing where were using crypto under the hood, but the whole point is, like, we're using it as a technology, not the kind of forefront. And I think that the reality is 2022 left crypto with a pretty big black eye with, like, FTX and a bunch of that other stuff.
Speaker 7:And so I think there are a bunch of people that I think otherwise are pretty intelligent and and I would say reasonably open minded. But when you talk to them about crypto, they just they they froth at the mouth in terms of, you know, it's all scams and griffs. Yeah. Yeah. And look, there are plenty of scams and griffs.
Speaker 7:Like, it's it's a reputation that it's earned over time. But I actually think there's plenty of good stuff being built in increasingly. And so I think stablecoins is probably the the thing to highlight in the sense that that's just been chugging along. Right? And and where did stablecoin start?
Speaker 7:Tether was a scam and a grift that for ten years everyone kept saying, it's it's it's on the verge of exploding. Right? And it's now the most profitable business in the world. Think it's like they make like $80,000,000 per employee. Yeah.
Speaker 7:And so stablecoins have taken a while to bake. The infrastructure is finally there where it's like I mean, now Stripe's in it. Right? It's like Ramp, your one of
Speaker 2:your sponsors.
Speaker 12:That's good.
Speaker 7:So I I I think like stablecoins are just going to make crypto way easier. And then I think that there's this concept of embedded wallets, which you you know, you may have heard of, but like there are a bunch of providers. We use a company called Privy. And basically, I think over the next three or four years, like every app, whether it's like a, you know, kind of fintech app or consumer app, will have built in wallets. They probably will use stable coins.
Speaker 7:Now whether you can buy like fart coin or whatever meme coin in your, you know, Bank of America account, probably not. But I do think everything will get kind of like crypto enabled.
Speaker 2:Mhmm.
Speaker 7:And to the degree that you're using a more crypto forward product like a Coinbase or a Robinhood or like a completely crypto native product like Forecaster, I think that's just like a more of a personal preference.
Speaker 3:It's top of mind for me. Yesterday, you launched Farcaster Pro subscription. You you you brought the the 10 k NFT collection back. Talk through the whole process there. You know, why why use kind of that mechanism and and it and it's sold out.
Speaker 3:So it sounds like, you know, a cause for celebration.
Speaker 7:Yeah. As Kobe would say, job's not finished. So I think Yeah. Like, good good progress. I mean, we sold 10,000 a hundred and $20 subscriptions with stablecoins in a little less than six hours.
Speaker 7:The % of of the revenue we're generating, so this is kind of like for the protocol, is going back into to creator rewards. So effectively, we've doubled the amount of, like, weekly payouts we're gonna do for the next year. Awesome. And I think I think you had Chris on earlier, but this idea of, like, a zero take rate network, I think, is pretty powerful. And and going back to your question, John, over, like, how do you actually get out of the, like, crypto native and move towards a broader base?
Speaker 7:It's just like most social networks you use today, what percentage of the value are they capturing? Like, you know, Meta's market cap's pretty high. Like, they're capturing a lot of that I think that the way for protocol based social networks, and and specifically ones that use crypto for the economic plumbing, the way for them to win is to have it be as close to zero take rate as possible. And and basically, you, by participating on a on a crypto social network, one, you're you're, you know, decentralized social network, you you actually own your audience. You can't get your like links nerfed.
Speaker 7:Mhmm. You guys are building like an amazing media If you lost your ability to do streaming on a couple of the major platforms tomorrow
Speaker 2:It would rough.
Speaker 7:Hurt your growth. And so the idea of like actually having a social network that you can be guaranteed to have direct access to your audience. Think that's
Speaker 2:No, built different. We would just mail everyone a DVD every day. Easy. Daily. Problem solved.
Speaker 3:Daily DVD. Daily DVDs. With stablecoin payments.
Speaker 2:Yeah, with stablecoin payments. I want to know about some of the economic incentives on a social network. It's been like the micro payments thing has been floated around. Is there a world where with AI slop, we need to be charging people to post? Or can just algorithmic feeds kind of sort out the wheat from the chaff?
Speaker 2:Does any of that make sense? Are there any new trends in kind of, like, the design of a healthy social network that has high, I guess, not just high retention and ARPU, but also maybe high NPS. Because the the classic thing with a social network is, like, it's printing money, but everyone says they hate it.
Speaker 7:Yeah. So I think that's a stated reveal preference where
Speaker 2:Exactly.
Speaker 12:I agree. People are they actually
Speaker 2:love it.
Speaker 3:Totally. I completely agree. So yeah, what you But I actually think
Speaker 7:if you bring up a great point, and we are for sure at the forefront of this because if you know anything about crypto and people think there's an economic incentive, you bring up a lot of coin operated
Speaker 6:Yep.
Speaker 7:Users. Right?
Speaker 2:Yep.
Speaker 7:I think that any version of pay money as solely a mechanism for like, oh, there's some version of quality or non bot like behavior, not going to work. Mhmm. I think any version of I prove that you're a human. Well, you're proving you're human, but I could go use chat GPT to write the responses. So like Yep.
Speaker 7:I think this is an extremely hard problem. If you actually go look at like Meta's ten k's, they specifically say that like, they are the biggest and best in the world. This is still an extremely hard problem for them to solve. They estimate something like 10% of like all users are potentially like spam or Wow. Right.
Speaker 7:Is it still That's wild.
Speaker 2:You know. Yeah.
Speaker 7:But I think it'll be kind of a a variety of tools. Right? So I think economic activity is really hard to fake. Like one thing we had yesterday is a bunch of accounts paid a hundred and $20 to a protocol. No refunds.
Speaker 7:Right? Like, you know, stablecoin is a nice thing. It's like you can't charge that back. Whether they're a bot or not, that money is now going to an algorithm, this is where I'm actually a big fan of algorithms. Now, maybe algorithm choice we could talk about, but Mhmm.
Speaker 7:The algorithm, if you design it right, is going to reward the interesting posters, the best posters, and you're extracting revenue from the bots. So I do think charging is actually a good idea, and then I think algorithms are the way to actually, as you point out, wheat wheat from the shaft, so
Speaker 5:to speak.
Speaker 3:How do you see crypto long term as a funding mechanism for creators, artists? I mean, had Ben Pastranak on earlier today to talk about, you know, his vision for Believe. And it's, yeah, you you people are using it to create meme coins. They're also using it as a, you know, funding, you know, funding mechanism for for different projects. And and I bring it up because we've talked about, you know, we had Chris Best from Substack on maybe a week or so ago.
Speaker 3:And and there's this idea that like people subscribe to Substack to get value in the form of content, but it's also a mechanism to just support support somebody to just do interesting things in the world and be able to spend all their time, you know, thinking about a specific area or sector. And it feels like there could be some element, you know, some I could imagine a world in the future where Farcaster is powering that type of of activity. Is that correct? Incorrect? Is that a is a is that a problem space that you think about?
Speaker 7:Yeah. Although I to to Substack's credit, I think they're doing better than the vast majority of Web two in the sense that I think what they take 10%. Yeah. You know, like YouTube, I think what is it? Seven thirty seventy thirty cut in terms of I think they take 70% and you get 30.
Speaker 4:Yeah.
Speaker 7:Right? So so so like we're improving in the web two spectrum. I think what crypto does in a world where the UX is good and it's pervasive. I think these are like embedded wallets with stable coins. You you just start competing things down to zero.
Speaker 7:Right? Like the ability for the platform to take a cut of payments, I think drops pretty significantly. Yeah. And what the platforms that do take a cut, they are going to say, hey, I'm getting you distribution. Right?
Speaker 7:If if you go on an app like Substack, a lot of then you talk to Substack newsletter writers, they're getting a lot of their subscribers these days from the Substack app. So that's value that Substack is providing. I think where crypto is interesting is that, you know, like basic payments are like, you're you're talking like 10% improvement, like marginal improvement. And I think where you're looking for is like 10 x improvements. Yeah.
Speaker 7:I said, you know, you're pretty aware of the space and and believe is a great example. This is like, I think capital formation, fundraising with big quotes around that, because obviously that's a pretty loaded word. But the ability to kind of like Internet flash mob money into a certain thing, whether that's a meme coin or like a GoFundMe equivalent or a Kickstarter actually, someone built a mini app with stablecoins called Crowdfund on Farcaster. Basically, it's
Speaker 3:Very cool.
Speaker 7:Kickstarter. Right? Like, use a smart contract. You put your USDC, like, stablecoin in. And if it hits the funding threshold, it's unlocked.
Speaker 3:So makes sense it makes so much sense as
Speaker 7:ten years ago. Now now it's a someone five coded over three days. Right?
Speaker 3:Yeah. It makes so much sense as a mini app because in many ways people would just go to GoFundMe, create this thing, and then take it to social to promote it. And why doesn't it just exist natively in the product?
Speaker 7:Yeah. And and I think the other thing that you you have is like the liquidity in the sense that I'm not fragmenting. I don't fund my FundMe wallet over here, or I have to like connect this payment method for the seventh time. And again, anytime you're using like a card based payment method, Visa and MasterCard and the banks are getting their 3%. Right?
Speaker 7:So I think it it will be slow in in many cases, but this stuff will just become increasingly pervasive and people will choose it if the kind of like platforms or creators are giving an incentive. Right? Like if I can not have to pay 3% to a card network by having used a stable coin, I'm gonna make that the default payment off And maybe I give you a 2% cash back or you get some loyalty points or an NFT or what whatever reason to to get you to switch your your payment method.
Speaker 3:Yep. What are what are you seeing how how do you think about international long term? I know the Farcaster network is like default international because Yep. Because crypto is default sort of borderless in international. But I I feel like the the conversation in in the the beginning of the twenty twenties is really around social media censorship.
Speaker 3:And then, you know, we had Balaji on the show earlier, and he's talked about this moment with X where he created this kind of fragmentation and, you know, censorship on on X potentially being solved. But then there's plenty of countries, you know, globally that that are that have even bigger issues than we have today around censorship. And so how how do you think about, you know, enabling enabling free speech through Farcaster over the long run?
Speaker 7:Yeah. So we're a US based company, so I'm a big believer in the constitution and US laws. Farcaster basically is exporting that as like our social networks policy. Yeah. So if I get a local jurisdiction somewhere in the world and says, please remove these activists from Farcaster, To quote Elon, they can shake their fists at the sky.
Speaker 7:Like like, there's we're we're beamed in over the internet. If you want to block, you know, our our our app or or the network, go for it. But I think But then in theory, somebody
Speaker 3:a dissident could build up spin up a new iteration of the app on the Farcaster network theoretically, and it would be out of your control. Right? They say it's
Speaker 7:In in addition, that that that person could be directly posting like via the command line or something
Speaker 3:Yeah.
Speaker 7:And having it go to out to a global audience. And so Yeah. I think that the the network design of Farcaster looks a lot more like a blockchain under the hood. Mhmm. And one of the reasons is it actually provides really strong censorship resistance, whereas something that's a bit more federated, so if you kind of look at like Mastodon or Blue Sky, like there are instances where they're already complying with local law of like, okay, well, we won't be able to serve our other users in this country Interesting.
Speaker 7:Because they will just shut down the whole site. Yeah. I I I think, again, I it's it's not like a primary consideration, but should we be successful in continuing to scale the network, I'm I'm confident that if if you think that The US free speech laws are like a good baseline global policy, that's basically what Forecaster is gonna fall in terms of our app.
Speaker 2:Yeah. Amazing stuff. Thank you so much. We'd love to have you back and get more updates.
Speaker 3:Again soon.
Speaker 7:Thanks for having me.
Speaker 6:I hope
Speaker 3:have some of the best shows. I I I'll put it on the record. Please. The best taste in crypto. Yeah.
Speaker 12:And I
Speaker 3:put it out there. It it shows up in the it shows up in the app and and everywhere. And, yeah, it's great great to finally have you on. Come back on again soon.
Speaker 2:Love the new studio. You.
Speaker 3:Yeah. Come by. Do do your next appearance in person.
Speaker 2:Yeah. Yeah. That'd be great.
Speaker 3:It's it's only three hours away from the West Side
Speaker 12:in Hollywood. Cheers, Dan.
Speaker 3:Have a good one.
Speaker 2:Next up, we have the CEO of Lava, Shazan, coming in the studio. We've been talking about with Bitcoin, it's at a hundred and 7. You can lend against that. You can borrow against that. You can buy a Patek Philippe.
Speaker 3:Yes.
Speaker 2:No brainer.
Speaker 3:Yes.
Speaker 2:No brainer. Use leverage to buy to buy a luxury watch. Anyway, welcome to the studio. Shazan, hopefully, he is here. How are doing?
Speaker 17:Hey. Can you hear me?
Speaker 3:There he is. Yes. We can. Welcome. Nice
Speaker 16:to have you here.
Speaker 2:Kick us off with an introduction to Lava, and then I definitely wanna know about the announcement that just went down.
Speaker 16:So Lava is the most secure way to borrow against Bitcoin. So a lot of Bitcoiners, they believe that Bitcoin is the greatest appreciating asset of all time, which, you know, historically, it has been. And if you can avoid selling your Bitcoin, why wouldn't you? And, historically, if you wanted to borrow against your Bitcoin, you had to use a custodial platform. So give full ownership of your Bitcoin to someone else and should've trust them with it.
Speaker 16:And we all know kinda what happened with these custodial platforms like FTX or BlockFi or Celsius or Voyager. They took your Bitcoin. They'd start trading it or rehypothecating it. And, ultimately, over the last few years, these custodial platforms have lost around a hundred billion dollars in customer funds.
Speaker 2:Wow. That's so much money. We don't like losing money.
Speaker 3:Not good. Not good. Good. That's insane.
Speaker 6:Not good
Speaker 16:at all.
Speaker 2:So what's the solution?
Speaker 16:So Lava, what we've done is we've embedded the logic for a loan into a Bitcoin smart contract, which basically means that when you borrow against your Bitcoin on Lava, you can verify on chain. Like, you can go to, like, a block explorer, for example, and see that your Bitcoin is safe and secure, that it's not being rehypothecated. And you have cryptographic guarantees. It's not just legal or reputational assurances from Lava that your collateral is safe. So that's why it's the most secure way to borrow against your Bitcoin.
Speaker 16:And not only that, Lava has the lowest rates on the market, even lower than custodial platforms by 20 to 30%, and we can fund loans of any size.
Speaker 2:You said Bitcoin smart contract. I thought that was an Ethereum thing. How how is this working? Is this new technology? Is this something that wasn't possible previously?
Speaker 2:Because the basic pitch seems like we should have been doing this all along. So Yes. Yeah. Had what needed to happen to get us to today?
Speaker 16:You know, it's it's kinda surprising to me because Bitcoin always had, like, scripting. Mhmm. Like, it Bitcoin's always had, like, programmability. It's not just, like, moving money from one address to the other. Lava's kinda leveraged certain, like, core Bitcoin primitives to kind of take that and use what primitives Bitcoin has available and create this, like, loan contract.
Speaker 6:Does that
Speaker 16:make sense? Yeah. Bitcoin's not, like, Turing complete. What you can't do is, like, you can't do all sorts of things that you would wanna that you could do in Ethereum on Bitcoin, but you can do certain very important things. Mhmm.
Speaker 16:And one of those is noncustodial borrowing. And, honestly, if you look at the rest of crypto, I think the majority of, like, the main use case of DeFi really is, in my opinion, being able to borrow against an asset and see that it's safe and secure.
Speaker 2:Now I imagine that it's pretty expensive. That's the whole narrative. May maybe that's not true, but it feels like if I wanna borrow 50¢ against my Bitcoin, probably not gonna have a good good time. Is that roughly correct? Like, what where does it start to make sense?
Speaker 2:You know, taking out a hundred thousand dollar loan, the gas might be or whatever the equivalent is might be a little bit more reasonable. Is that is that roughly correct?
Speaker 16:The gas fees on Bitcoin are extremely like, they're it Bitcoin is, like, really inexpensive right now.
Speaker 3:Like,
Speaker 16:fees are, like, less than a dollar. But what you could do is, like, you could lock a bunch of collateral up and Yep. Over time, take out more and more in loans. Right? So Sure.
Speaker 16:We have a product in beta right now where you basically can lock your Bitcoin up and get a card. And as you swipe the card, more and more gets borrowed. It's kinda like a line of credit, if that makes
Speaker 2:Yeah. Yeah. And then what what what was the announcement today?
Speaker 16:So today, we actually, like, fully officially announced lava loans, like, out of beta alpha. We announced that we could fund loans of any size from a hundred dollars to a billion dollars just based on the capital that
Speaker 2:is A billion dollar loan? Yes. That's so insane.
Speaker 16:And we've already done we've already made loans, like, millions of dollars and like, single loans that have been worth, like, $5,000,000 already, which is pretty interesting. And we announced that our rates are, like, 20 to 30% lower than the next best rate on the market.
Speaker 2:Mhmm. And then walk me through all the different counterparties who's getting paid. Obviously, as a consumer, I have a Bitcoin. I want to take a loan against it. At some point, I'm probably getting stable coins out.
Speaker 2:But then who's on the other side of that contract? How much money are they making? How much money are you making?
Speaker 16:So there's a bunch of different lenders on the other side that Lava works with to facilitate these loans. So as a borrower, the way it works is you go to you download Lava. You put your Bitcoin on there. Mhmm. It's all self custodial.
Speaker 16:You say, okay. I wanna borrow $10,000 for one year. And then your Bitcoin gets moved from one address to this, like, smart contract address. And when that happens, you get stable coins directly to your lava app. That's all abstracted away from you.
Speaker 16:For us, in Lava, we leverage stable coins because they enable us to do instant dispersal of loan capital.
Speaker 2:Yep.
Speaker 16:But they're it's just seen as dollars. Like, you just see, like, dollars coming into your Lava app. And you can even use Lava to withdraw those dollars to your bank account.
Speaker 12:Sure.
Speaker 16:Within Lava, you you also have global free instant dollar payments. So kinda like with Cash App, Venmo style payments, you have that within the app for free as well. You don't have to worry about any of, like, the blockchain complexity. We abstract away all the blockchain stuff, the gas fee stuff, the Yep. Stablecoin stuff.
Speaker 16:And you can even use a card that we could issue to you to start spending those dollars that you've borrowed.
Speaker 2:It's cool. And then what drives the interest rate? Is that just driven by Bitcoin volatility, or is there some sort of, like, underwriting of the individual? Because I imagine it doesn't necessarily need to
Speaker 3:know anything about me other than the fact that, like, the Bitcoin is in the is in the wallet, and that's it.
Speaker 16:Yep. Exactly. There's no, like, underwriting of the individual.
Speaker 2:You're right. Gets the same interest rate?
Speaker 16:Yep. Yeah. Exactly.
Speaker 2:And how are the interest rates calculated? Where are they sitting right now? Where they've been historically? And and and how how do the lenders, like, think about that risk?
Speaker 16:But today, if you borrow, you can get a loan from 5% for a one month loan up to 9.99% for a twelve month loan. And that's where, like, the sweet spot in duration that people want. People can, like, refinance, like, extend their loans later Sure. If they want to. Yeah.
Speaker 16:And, like, Lava earns, like, a little bit of a spread, and the rest is kinda sent to the lender, essentially, like, the rest of the interest payments. Historically, the I think over time, the rates will just come down. I mean, they're always gonna be somewhat variable to whatever, like, the treasury rates are. Right? Because you're gonna want some premium over that.
Speaker 16:But I think long term, the rate for a Bitcoin backed loan should trend towards the rate for a bar against equities. And in fact, like, bit bar against bit like, lending against Bitcoin is a lot less risky than lending against equities because it trades twenty four seven.
Speaker 3:Sure.
Speaker 16:So it's way more liquid. It will over time, it is already more liquid than most, like, stocks, like, individual stocks. Right? And as the market cap grows, it will become the most liquid asset in the world. So I think you could even argue today it is that because it trades twenty four seven.
Speaker 2:And is there some sort of, like, reserve ratio where if you have 10 Bitcoin, you can borrow x amount against that? Or
Speaker 7:Yeah. How does it collateralize?
Speaker 2:Yeah. How does volatility work here? Because I imagine if you borrow if you borrow against all of your at some point, they're gonna take your Bitcoin. Right? Like but but but what what triggers that?
Speaker 16:So when you borrow, there's, like, an LTV. Right? So kinda like if you borrow against your equities, you can maybe get 50% against the value that you collateralize, which is similar to how Lava works. And there's flexible LTV. So maybe if you wanna be very conservative, you might only wanna borrow 20% against the collateral that you put up.
Speaker 16:Yep. And then every loan has a, like, a price a liquidation price. Right? If Bitcoin gets there and you haven't repaid your loan or added more collateral, there will be a liquidation. But you can kind of verify that.
Speaker 16:Lava sends you notifications all the time to make sure you're you're aware if you're getting close to that liquidation price.
Speaker 2:Yep. That makes sense. Jordy, any other questions?
Speaker 3:No. Very cool.
Speaker 2:This is fantastic.
Speaker 3:Of our listeners are gonna go Lava up and use it to buy fine
Speaker 2:Swiss I I I guess my my my last question is there's there's there's this weird dynamic in crypto right now where there are some seriously scaled founder mode companies in the space that have huge distribution advantages that can that can offer competitive products. And then there's kind of this history of when something's working, it gets forked and open sourced, and and there's a lot of competition there. How are you thinking about the competitive landscape as it evolves over the next couple of years if you're really successful?
Speaker 16:It's interesting. I actually think there's no company in crypto today. Like, I very I very much view Bitcoin as being very distinct from crypto. I think Mhmm. A lot of the companies in crypto today are serving this, like, trading speculation use case.
Speaker 2:Mhmm.
Speaker 16:Whereas Lava is really serving this Bitcoin savory use case. Like, these there's these Bitcoiners out there. They don't touch any asset in crypto other than Bitcoin.
Speaker 6:Yep.
Speaker 16:They just wanna save in it. And what we're really building are are, like, North Star is whatever Fidelity kind of offers equity asset holders, we want to offer Bitcoin asset holders. Mhmm. So there's people out there that we're serving that have basically replaced their savings portfolio that's, you know, with equities or real estate, which is Bitcoin. And they don't really have a trusted brand that they can go to, that they feel is secure, that they can rely on to borrow against their Bitcoin, to start spending dollars to buy more Bitcoin.
Speaker 16:And that's really where Lava is headed to.
Speaker 2:Is that a common use case? People take a Lava loan and just buy more Bitcoin?
Speaker 16:So some it's not, like, the most common use case. We've had people borrow against their Bitcoin to buy houses, which is pretty interesting. Buy cars, pay their taxes. Yep. Like, fun, like, vacations.
Speaker 16:But there are some people who will borrow to buy more Bitcoin. But what what's, like, more interesting is a lot of people come to Lava. They borrow against the Bitcoin, but then they, like, stay to do the other things that they were already doing. Like, do, like, dollar payments. Or when they do wanna buy more Bitcoin later, they can actually do use that use Lava to do that as well.
Speaker 2:That makes a ton of sense. Well, good luck. Thank you so much for hopping on. This is great. We'll talk to you soon.
Speaker 3:Congrats on the launch. Yep. Cheers.
Speaker 2:Bye. Next up, we have a last minute ad. Brandon. Last minute
Speaker 3:surprise guest.
Speaker 2:Surprise guest.
Speaker 3:Brandon, cofounder and CEO of Phantom. Phantom. One star.
Speaker 2:Wallet. Yeah. I think so.
Speaker 3:How many billions they're worth now. Brandon, welcome to the show.
Speaker 4:Hey. What's up, guys? Thanks for having me. The wallet king.
Speaker 2:The wallet king. The second greatest wallet salesman in the world. One of our old friends. To Sean Frank, the CEO of Ridge Wallet, direct competitor to you.
Speaker 3:Direct competitor. Both whole
Speaker 2:Phantom Wallet, Ridge Wallet. You can only have one. Collaboration.
Speaker 4:Yeah. Got we got them on the bull's eye in the office.
Speaker 12:Yeah. Yeah.
Speaker 3:Sean, you're on notice. Yeah. What's happening? Where where are you right now? Are you are you in Vegas like a lot of our other guests or or or Dubai or Monaco?
Speaker 4:In San Francisco. In in the trenches,
Speaker 3:so to speak.
Speaker 2:The trenches.
Speaker 3:The trenches of Essen. Yeah. That's good. That's where
Speaker 4:that's where I'm from.
Speaker 3:Awesome. Mean, how how are the trenches these days? I don't think fandom needs a a ton of introduction. But because our audience is not typical super crypto native, it'd be great to give a quick kind of backstory on your history and then the company. And then we can kind of talk about a number of other things.
Speaker 3:That would be great.
Speaker 4:Yeah. Totally. Well, yeah, thanks again for having me on, guys. And even though you guys have been on quite the crypto marathon today
Speaker 2:That's a
Speaker 6:good thought.
Speaker 4:How long have you guys been going at it? Like, since
Speaker 2:about eight Since eight and
Speaker 3:a half.
Speaker 2:I think I finally understand it. It's like it's like electronic money is what I'm getting from people. It's money but digital. Digital money. That's the that's my takeaway.
Speaker 3:The big takeaway from today for now.
Speaker 2:Takeaway. Yeah.
Speaker 4:Well, totally. Yeah. I can I can give a a brief overview about Myself, Phantom? Cool. You know, got my start working in Silicon Valley back in 2013 at Twitter Mhmm.
Speaker 4:Pre IPO. Sort of that's where I cut my teeth on building mobile apps, you know, working on tech that reaches millions of users. Around 2017, I was bitten by the crypto bug, that's sort of like the white paper ICO era. I did a tour of duty there from 2017, '20 '20 '1 at this early stage DeFi startup called Xerox, which is still very much around active. It's where I met my two other cofounders.
Speaker 4:And that's basically where we decided, hey. You know, at that time, most used wallet was MetaMask. Mhmm. We had this kind of very unique perspective, not only being power users of MetaMask, but also developers in the ecosystem as well. And, basically, recognize that the number one problem holding crypto back today still, back then today still is is usability, and the wallet is essentially the key to unlocking the ecosystem and supercharging everything that everyone everyone had had been working on.
Speaker 4:And so, yeah, that's when we decided to to start Fantom. And, yeah, four years later, Fantom is now biggest wallet in the ecosystem.
Speaker 3:What what went into the decision making to choose Solana when you guys came out with Fantom? I know now you support a bunch of different chains, but I'm sure that was somewhat contrarian at the time or at least, you know, very early to kinda make a bet.
Speaker 4:Totally. Yeah. I mean, I think, I mean, I think the initial insight was focus on like, build a wallet that focuses on ecosystem on a on a ecosystem that was not Ethereum. You know, we had spent, you know, four years in the Ethereum space and I think had a number of pretty interesting insights. One, MetaMask continued to be sort of this monopoly monopolistic product.
Speaker 4:And despite a number of different attempts, they were sort of everyone kind of understood and, you know, there it's not great UX. So, like, obviously, we should try to attack them by solving that problem. But despite that, it was very difficult for people to break through. And then I think the second thing was after spending a a while in Ethereum, we kind of actually just got a little bit, I think, jaded by the culture being very dogmatic versus pragmatic and not really emphasizing user experience, cost efficiency. And so I think those two kind of insights combined decided, hey.
Speaker 4:How about we we essentially create our own home turf on an up and coming ecosystem that ended up that choice ended up being Solana. And that was that was all being contemplated, like, late twenty twenty, so that was pretty early on.
Speaker 2:Yeah. A lot of people have flagged that dogma today. What is the shape of the Ethereum dogma right now? Like, what are they dogmatic about specifically?
Speaker 4:Yeah. Well, it's definitely it's definitely ebbed and flowed. I mean, I think from the very beginning, it was it was all about decentralization at all costs Mhmm. Which and decentralization as this meme, Mhmm. Which was attracted a number of different folks for a number of different reasons.
Speaker 4:You know? People who are more anti disestablishment, people who felt like decentralization was a a method of security Sure. And and all of that. And I think that it ended up it the spirit of it makes total sense and and is something we should all be striving for. But I think in practice, the sort of decision by committee nature that that kind of bred ended up basically, fast forward into the state of Ethereum today where it's like, there's no really cohesive strategy, I guess.
Speaker 4:There's no there's a lot of different competing l twos and different technologies. And it's that the end states, it's very confusing and quite frankly, dangerous for, like, an end user to use. So
Speaker 2:Yeah. Yeah. It makes sense.
Speaker 3:Have you I'm sure you guys have been hit up by a bunch of your investors, you know, sending you tweets about pumps, you know, revenue being like, hey. Have you guys thought about, you know, doing this? And from what I can see, you guys haven't built a launch pad to date. Talk about how you view Phantom's interaction with some of these new we've had both the founder of Pump and Believe on today, which are getting quite a lot of attention. But I'm curious to get your point of view on how you think of that market or category evolving and how you see Fantom interacting with it.
Speaker 4:Yeah. Totally. I mean, you know, really at the end of the day, it's all about tokens essentially. Tokens being this common sort of protocol and format that is emerging from the ecosystem. And then all of these apps sort of in this open and permissionless way coming out and creating different mechanisms for creating tokens.
Speaker 4:And so I think what we're trying to do is just ensure that users can navigate this new trend and meta, like, in the safest way possible. And and that's something that we've done a number of times before, whether that's with the NFT wave or whether that's for, you know, emerging stablecoins and and real world assets trends. And so, yeah, I think we're just kinda trying to promote the folks to sort of easily discover and use these things and, yeah, kind of see how how all the trends shake out. But yeah.
Speaker 2:Can you talk to me about Apple's role in this ecosystem? I remember I first onboarded to Phantom as a Chrome plug in. I believe there is an app, but Apple has not been historically the most receptive to crypto nay native apps interfacing with all the different UI elements all over the phone. Coinbase was kicked out of the app store for a while. They came back.
Speaker 2:And so what has it been like historically? And
Speaker 3:then I love thinking about the Apple execs being like, wait. Coinbase does billions of dollars in volume, and we're not taking 30% on
Speaker 2:that? No. No. No. No.
Speaker 2:No. But it it it feels like from the other stories that are going on in Apple world that there's a little bit more pressure right now than in years past to open up, whether that's the Siri button for other AI apps or the App Store with what's happening with Fortnite and Epic. Give me, like, the state of the union on how easy it is to implement crypto wallet features on Apple and where you see it going over the next few years.
Speaker 4:Mhmm. Mhmm. Yeah. So, yeah. Interestingly enough, like, when we started like, you called out when we started Phantom, we actually started Chrome extension first.
Speaker 4:That was actually a pretty contrarian thing to do. I think it was kind of a mixture of a couple of different reasons. One, the predominant use case of crypto at that time or on chain crypto being DeFi and that being sort of more of a power user thing that people like to do on desktop anyway. And I think the also, the prevalence of sort of Ethereum as the main l one that people are using. Ethereum is just not really compatible with mobile as a technology in terms of people who wanna use people people wanna use things on mobile.
Speaker 4:They, you know, they want things to feel fast, cheap, instantaneous, you know, fleeting, all of that. And so nowadays, because you're seeing the protocol layer of crypto get an infrastructure layer get a lot more mature, now we're seeing the a lot more prevalence of crypto on on mobile. So I think in the next couple of years, mobile is gonna be a huge story story for crypto. And, yeah, I think generally, you know, personally, we've we've had a great relationship with Apple. We've never had any big scuffles or had the app taken down or anything like that.
Speaker 4:Like you said, I believe that as an eco as an general tech player, they become more open and are facing down a lot of competitive pressures in in different areas like the epic case and and all of that. So, yeah, I mean, I do expect them just very similarly to all other a lot of other tech players, like big fintechs, etcetera. I do expect them to be embracing crypto more and more often or sorry, more deeper. And yeah. Yeah.
Speaker 4:And making it bit easier for for folks to deploy apps.
Speaker 3:Last question on my side. What is the state of SF's crypto scene today? It's certainly not getting nearly the attention that AI is. But but is it alive and well? Or are you traveling a lot and and hiring outside of the city quite a bit?
Speaker 3:No. Yeah. I mean, we
Speaker 4:so all three cofounders are based out here in SF. I've been living here for twelve years now or so. And, yeah, Cryptocene is definitely it's definitely not AI, but it's it's alive and well of us, folks like Paradigm, Alchemy, some of the a sixteen z folks, etcetera. Yeah. So, yeah, definitely alive and well.
Speaker 4:New York is definitely another huge scene, but I think places like Miami, they kind of they kind of turned over a bit during COVID.
Speaker 2:I love Miami.
Speaker 19:I love Miami. Love Disney.
Speaker 2:We're in the Miami Of California. We're in Los Angeles.
Speaker 3:We are.
Speaker 2:What's got to like?
Speaker 3:This has been fantastic. Thank you for joining and capping off.
Speaker 2:Thank you so much. The first inaugural Crypto First week, maybe we should make it weekly. Weekly Crypto
Speaker 15:Day.
Speaker 3:Sounds like A lot. A lot. But maybe quarterly.
Speaker 2:This has been fantastic. Thank you so much for joining Thanks
Speaker 3:for popping on. And good luck. We'll see you soon. Cheers.
Speaker 2:Bye. This entire stream has been not has not been financial advice. I was thinking we should ask the guests, hey. Just just why don't you close out with some financial advice for us? How much everyone would hate that?
Speaker 3:Never. We never give financial advice.
Speaker 2:Massive massive success. A couple
Speaker 3:of golden retrievers.
Speaker 2:Yeah. Yeah. We're just having fun out here talking.
Speaker 3:You ever
Speaker 2:Pushing five hours on the stream. Pushing 42,000 viewers. Thank you everyone who tuned in. I think this is officially our biggest stream ever until tomorrow.
Speaker 17:Thank you.
Speaker 2:Until tomorrow when we got Ashley Vance on the show. It's gonna be a hundred
Speaker 3:We got we got some hitters.
Speaker 2:We we we do have some hitters tomorrow, and there's some big news coming.
Speaker 15:And
Speaker 3:our first Fortune five hundred
Speaker 2:Huge, huge milestone first.
Speaker 3:First of many. First of many.
Speaker 15:Huge milestone.
Speaker 3:Anyways, thank you folks for tuning in. You to our sponsors.
Speaker 6:Was long
Speaker 3:day, but it was a great day. It was a great Thank to our lovely sponsors. We will see you tomorrow. Goodbye.