A Founder’s Mindset, DePIN’s Breakthrough, and Stablecoin Models | Roundup

It doesn't matter, like, who's being hurt here? Actually, people are losing out on the amount of interest that they could be earning, you know what I mean?

Right?

Like, they're taking a risk. There is a risk by holding the stablecoin. You have to believe in the proof of reserves. They could depeg, as it has in the past. So the consumer that holds USDC is taking risk. Anyone that holds a stablecoin is taking some degree of risk, and they're being Shafted because they're not earning any of that or very little of that yield.

This episode is brought to you by Anoma, the universal intent machine introducing a new era of applications where you define the outcomes you want. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at anoma.net. Special thanks to Anoma for sponsoring today's episode. Let's face it, building on crowded L1s or expensive L2s is just not going to unlock the next generation of applications. Supercontainers offers dedicated, customizable app spaces running on Supra's 500kTPS Layer 1 blockchain, giving you complete control over gas tokens and fees. Get notified when Supercontainers are ready for builders at supra.com/containers. And we're live. What's up, Santi?

Oh, not much. How's it going?

Great. Just finished our, our— we do a monthly all hands with the company and we have, I think, 75 people now, somewhere between 73 to 77 people. And so there's a lot of new faces. So did a little like, you know, What are we— what are we all doing here? Like, what's the mission of Blockworks? What are we building?

And yeah, where are we rowing?

Where are we rowing?

Are we rowing in sync in the same direction?

Are we going in the same direction? So thank you for having me. I didn't get a lot of prep for this roundup, but because I was doing a lot of prep for the kickoff, but I'm excited to be here.

Did you ever think you'd have 75 people?

You know, I never thought Blockworks would get this big, but it's— I, pre-Blockworks, I always wanted to do this. This was like—

like when I say that again, you never thought Blockworks would get this big. So why did you do it in the first place?

When we, when we launched Blockworks, it was not this— there was no grand vision when we launched Blockworks. Like, we didn't sit down and we're like, we weren't like, okay, one day we're going to IPO and one day we're going to build this massive company. It was It was literally built out of a, hey, we were going to these scammy crypto events in New York. We thought that there was a better way to build crypto events in New York. We just wanted some, like, events that felt more institutional, less scammy. We're like, let's go host some events. I think we can make some money and, like, build, build, like, solve, solve a very small need here. I actually think that a lot of founder stories, like, I know you're listening to The Founders Podcast right now.

I was gonna jump into that.

I actually think a lot of the founder, the like big mythical stories of like this founder sat down and they had this grand vision. I think a lot of those are kind of become mythology, like later, later on. And if you actually, if you actually talk to a lot of founders and you get them to open up and be very honest about things, I don't— I think most of the best companies and the biggest companies, there was no massive grand vision. It was like just something small, trying to put one foot in front of the other from day one. And then you do that long enough, year after year after year after year. And it— before you know it, you open your eyes and it's something big.

But you have to believe that it can be big at some point. Otherwise, why would you do it? Because you have a high opportunity.

Ah, okay. There was— yes, there was the— okay, I see what you're saying. There was a belief that this would be big one day. Yes. Yes.

Like day one, you probably sat there, both of you, you left your jobs, you're not— you went to good school, you have other opportunities, looked and said, we can build the Bloomberg of crypto, this industry is going to grow, we can build the premier media organization, this can be big.

So from day one, that's not actually how it went. We— there was a whiteboard and we wrote at the bottom like, I think we can make $100K from this. There was no— there was no Bloomberg of crypto. That came years into it when we realized the extent of like the, the problem that I think we were solving. Like, it was originally, we are trying to build better events in New York City. And it was like, oh, actually, the whole industry kind of needs better institutional events. Oh, maybe the space needs podcasts too, and like better information. Oh, wait, maybe the space needs research too. Oh, and it sounds like, it looks like this industry needs better news. Oh, we're building what feels and looks like the Bloomberg of digital assets.

And at the time, was it out of, for lack of a better term, desperation? Did you have other options or was it just, I have— well, I don't like my job. I actually loved my job.

I actually wanted to build a data, a crypto data company inside of— I was at a data analytics company and I was pitching them on building actually what kind of looks like a Keiko or Amber Data, um, or Coin Metrics type of business inside of the data company. It was a company called Sisense. They competed with like Tableau and Power BI and Looker, and actually MicroStrategy too, is like the data analytics world. And so I wanted to stay at the job. They didn't want to do crypto and they didn't want to do like blockchain data stuff. And so that pushed me into going and launching Blockworks. But like, even if just to the, the, the original point of like lack of a grand vision. If you talk to like, if you hear Brian Chesky talk about Airbnb now, what is Airbnb trying to do? They're trying to like solve— I actually don't know their mission statement, but it's probably some grand big thing about like hospitality and experiences and like improving the human experience via like staying at places and human connection. At the beginning, I think they were just trying to make a dollar By— I think they were just trying to—

they were selling cereal boxes in the DNC.

Like, yeah, and they were trying to like give people a place to stay during the DNC in San Francisco or something.

But I— and maybe you're right. Like, I mean, I— we tend to glorify these founders and the success of them, and we fit a narrative after they are successful to make it sound like this sort of fairy tale of sorts. You kind of get the feel, but I don't know, like, I do feel that, like, in order to stay very motivated and driven, like, the certain purpose and, like, when— and maybe it's just different, but, um, like, for me, for instance, I decided to leave my job and invest full-time and then ended up joining ParaFi. Like, in those moments I appreciate, like, you know, you take a pay cut, you compromise on things because you believe in the opportunity. So I'm not, I'm not sure we're like disagreeing, but I'm just, I want to like really understand, like, you, you ought to have believed that there was a huge opportunity because you're interested in crypto, you're building a service around it, or you're just, or you're just more satisfied in driving utility pleasure out of like building. So I don't know.

I believe so. My— I believed there was a, there was a big business to be built here. But I think there's a— I think a lot of the grand vision stuff comes later in a founder's life when they realize that it's actually easier to motivate other people and easier to motivate yourself with a big vision and actually trying to accomplish something incredibly difficult is oftentimes easier than accomplishing something hard. Because if we were going out trying to hire people and trying to raise money or trying to whatever it was, and we were saying, hey, we're going to, we're going to build better events in New York City, we're not getting the best talent, we're not hiring the best talent, we're not keeping people, we're not giving them equity packages that they believe in, we're not raising money. Right. But when you start And we're not also, we're not motivating ourselves to like, that's not a very motivating thing. But when you start dreaming bigger, you actually, I think, make your life easier. But what I'm saying is, you know, I was 23 when we launched Blockworks. There's a naivete to being 23 and building our first business. This is my first, like, real business where I was just like, we just need to survive. Like, we just, we just literally need to make, you know, we were paying our employees on Venmo because we didn't know how to set up a payroll system. Like, it It was, it was so bare bones that it felt, it felt like where we're at today. Even though we thought we could achieve it in our subconscious, it was like, so out of our wildest dreams that it was, it was tough to think about.

Yeah, I think dreaming big is not incompatible with doing day-to-day stuff to survive.

Yeah.

But I do think that dreaming big is a prerequisite combined with the naive naivete of not understanding how difficult it's going to be to go at it. Yes, but you have to have the focus of the day-to-day. Like oftentimes, and I've been juxtaposing a lot of what I've heard and been hearing in the Founders Podcast with my portfolio and my interactions with founders, and I, I, I see that, like, I think a hallmark of a good founder I'd be curious to get your perspective. Is he believes in something big but is extremely focused in the real-time present, surviving? Most of them have like on the daily near traumatic like death experiences, but they're focused in the day-to-day. Yeah, if that makes sense.

I, I agree with that. There's actually a book called, um, Only the Paranoid Survive by Andy Grove, which is like IBM. Intel.

Intel. Intel.

Great book.

Yeah.

I mean, just crazy stories. Like there was a moment in time when he realized they had to pivot. He laid off— I think they had like 3,000 or 4,000 employees. He laid off 98% of the company and pivoted the company. I'm sure I'm botching that story a little bit, but like the guts that it takes to do that is, you know, most founders would be like, maybe we'll cut like 10% of the company. It's like, I mean, the conviction there is real. But yeah, I mean, we also like I remember sitting with this early advisor that we had who tried to get like 35% of the company and it ended up— we didn't end up building a relationship with that guy. But like we, we, we told— he's like, what's your dream? We're like, we want to overtake CoinDesk. We were— it was—

there it is.

It was, it was Mike and I and we're like, but we don't think that's like, that's so— that's like, like they have a— at the time they had 165 employees and we had zero employees. And he's like, you just need to put their face on a bulletin board and like they're the 800-pound gorilla and you need to carve out a super specific niche and you need to win that niche and then you can expand to a slightly broader niche and a slightly broader niche. And before you know it, like, as long as you can survive, you will chip away at their lead. And I think, I mean, it took way longer than we thought, but like 7 years in, I feel very confident saying we have like that's not the company on the bulletin board anymore.

Yeah, you have to survive. I mean, I think that's every time and time again. I mean, David from Founders Podcast, like, you just have to, like, really, you really just have to survive. And a lot of times your competitors will just do things that compromise their ability to survive. And if you are there in a position of strength, you can capitalize on that in a very meaningful way.

It was interesting. Oh, go ahead.

Well, I've been asking this question to founders and just people that I've come across is like, at what point did you know you were a builder? Did you ever see yourself as a builder? Because I found myself telling myself, I'm— you're not a builder, I'm an investor. Uh, like constantly thinking, okay, what's my edge? And if I'm investing, what's my edge as an investor? Which is also really hard to answer because again, you get into discussions of how much of it is luck, how much of it is skill. And I appreciate in entrepreneurship, there's also an element of luck. But I'm curious, in your evolution as a, as a founder, like, when did it actually click? Or when did you believe that you were a builder?

I mean, for me, it was, I was probably 10 years old. Like, I, this is the only thing I wanted to do is go build. I never had a dream of working. I've been, you know, a lot of people you meet in college, they would go to the business school, and then they want to go work in investment banking. And then they were on work in finance.

You'll see.

Yeah, yeah. One of the— JP Morgan, this prestigious place. And then, okay, and that's what a lot of my friends did. They did IB for 2 years, then they did PE for a couple of years, and then, you know, maybe they go to a more boutique firm and something like they followed that track and they're crushing it and it's great. It never— it was never of interest to me. The money aspect was never the interest. And I think a lot of it is now. No, it's really not. Now, I think that you need a basic amount of money to be a little more calm and be able to take big risks in life. But, and without that, it actually gets tough to take those risks. But no, it's like, it's the idea of building something and getting something off the ground and then scaling it. Like, that is just the thing I could do for the rest of my life. There's a, there's a, I think, a framework you can use to think about this, which is like, okay, it's the end of a day. It's like a Tuesday. It's like a normal Tuesday in October. You end the day, long day, meetings, calls, doing shit. Someone says, Santi, how was your day? Says, great day. There are two types of people. People who say it was a great day. I learned so much. I had the most interesting conversations with people. Like the ideas that I'm kind of like, processing these ideas from today. That's, that's one group of people. Those people actually oftentimes make the best investors, I would say. There's another group of people, which is, it was a great day. I got so much shit done. I got so much done. I bulldozed through these big projects. I knocked like 15 things off my to-do list. And I made a lot of progress thinking through like this launch strategy, this new product. That those people oftentimes make the best founders, I would say. And it's not one for one. It's not, it's not a perfect correlation. But that's— I've started to notice that in talking to different people. Yeah. What do you think you are?

I'm an investor. But I've opened up to the idea of being a builder. I mean, ultimately, at ParaFi, we built an organization, like we built a franchise, we built a team, we're certainly they're much more nimble teams and very quantifiable. You know, you hire an analyst, you hire someone into the organization, if they're not performing, like, it's very clear. Like, the attribution piece is easier. So, but I've had, like, I started— the reason why I became interested in investing was, uh, I started a tutoring business in high school. I was tutoring all my friends, and I was like, Oh, this is great. Got me thinking, if I want to sell this business, A, can never get big enough because it's constrained by number of hours in the day. You know, it's a business that doesn't scale exponentially. And that was the big aha moment in my understanding of the power of technology and really trying to do everything to work less and make technology work for me and allow business to scale. But I've opened up to the idea of being a builder. Again, looking at my portfolio, I've often found myself working a lot with founders, and it is unclear to me why I couldn't do it in a better capacity. Um, and I just think the quality of builders in crypto hasn't been as strong.

Yeah.

And the opportunity is really big, and that's why some teams have been successful, I think.

Yeah.

Because its market has just grown a lot. And if you're in the right narrative area you can really capitalize. And I'm not diminishing, by the way, um, because I've been on the investing side. But yeah, it's just been a combination of things that, uh, I've, I've said differently. I'd— I've opened up to the idea of building something. If I'm going to launch this private equity fund, which I'm going through right now, that is building. It's still investing, but it's building, right? You have to inspire people to join. Both investors and people in the team, whoever I hire. And I think that there's, I guess I'll say, I would've thought before that the, if you think of two circles, one as the skillset for an investor, the skillset of a founder, I would've thought that there would be limited, little overlap. And now I'm of the mind that these two circles are very concentric and like the surface area between these two skillsets is actually greater than what I initially thought.

So do you think of, you know, Ben Foreman from ParaFi as a founder? Do you think of Avichal at Electric as a founder? Do you think of Hasib at Dragonfly as a founder?

Absolutely.

Absolutely.

Because they need to inspire. Again, you just said it. You need to inspire other people to believe in your mission as a, as a builder. You need to— you know, I think the best founders hire exceptionally well, fire also exceptionally well. And you need to motivate and inspire people to get the best out of them. Yeah. And I think in investing, it's similar to that, right? If you don't have any money to invest, and so you need to convince potential LPs, you also need to bring in really smart people within the organization. And so absolutely, they're builders.

So do you think that— let's, let's, uh, who are some— do you think Ray Dalio Henry Kravis, um, you know, Mark Rowan, are they as good of founders as the Evan Spiegels, Zuckerbergs of the world?

Why not? Yes. If you can compound and deliver above-average market returns for—

in—

think about how competitive the industry is. And if you're able to build an organization that delivers above average, above market average returns for a sustained period of time, you've built an exceptional organization. And I think that skill set is very much of a builder. We don't talk about it enough, but like Ray Dalio, you could think about the way that he sort of pioneered radical transparency within an organization. That's a key insight that he had, and it works. It's difficult. You could argue that it's somewhat similar to how Bezos constructed the culture in Amazon, which is ruthless candor, search for truth. Uh, so yeah, again, the similar skill set. One probably gets probably more credit. Um, well, actually, I don't know, but certainly in crypto we do hear like, oh, these VCs don't build anything. I'm like, you are very mistaken. Well, and in traditional capital, like, no, I don't—

like, people don't people don't really think of the founders of like Leon Block, uh, Black and, uh, you know, Mark as founders. They think of them as like brilliant investors who built Apollo or, you know, Henry of KKR. Like, I don't think he gets bucketed as a founder.

Um, I think they are. I mean, the managerial, maybe day-to-day is less intensive perhaps, but, you know, Parify had I really admire Ben because he was very good at that. Like, he, you know, and I'm not as good at— like, I would, in a vacuum, would just 100% of my time just want to read. Don't— not bothered. I need to think. But you have to, you know, you have— you know what I mean? Like, I don't think of myself as autistic, but I do like my alone time to do, like, thinking. But when you meet with the heads of these firms, private equity firms or hedge funds, I think a lot of their time is spent actually doing internal stuff.

Yeah, fundraising or selling. It's, it's with people. Yeah, it's externally with people, it's IR, it's internal. Yeah, you know, it's funny because as the— building a company is a game of leverage because the more people you're initially you start out doing everything yourself and then you're like, oh shit, I need more people because I need leverage. I need leverage to go, you know, the more leverage you have, the more of an impact you can start to make. So then you start hiring people and you get really good employees and talent and people join your company and then you get more and more leverage. And then if you extend that out, right, Blockworks, let's say, I think we have 75 people today. Let's say Blockworks had 75,000 people. What is your job at that point? You're basically an allocator of capital. Like if you, if you run IBM or resources or yeah, yeah. If you run IBM, you are an allocator of capital and resources. If you run a KKR fund, you are an allocator of capital.

So both internal and external.

Yeah. Yeah. Yeah. Yeah.

So that's anyways, it may not seem like a big insight, but I've been thinking a lot about that because, you know, I'm like, well, why not? Right? Why can't I be a builder? And so I've been like re— I've been thinking about that. And of course it helps, you know, you can't help, you can't but be inspired listening to Founders Podcast and hearing these incredible stories. And I think he does a really good— while I do agree with you that we tend to perhaps overfit a narrative, focus too much on a person, not an organization, and, you know, history the way it's sort of constructed is very much in hindsight. But like, I still believe that it's just really interesting that I think he does a really good job of grounding it and laying out a very like realistic picture of like how a lot of these companies that are now giants like went through near-death experiences and they were very fragile and trials and tribulations of these founders. And I think it was, um, It's very refreshing to hear.

Yeah. Um, how's your idea going?

Good. I've been spending a lot of time talking to founders within the portfolio that I can actually support by having this fund. Um, as opposed to thinking of a particular fund size, I'm more interested in can I identify 3 or 4 companies and then inverting that way and then saying, okay, this is the type of fund and, uh, and we're going after these type of companies. So being more specific. So I still need to do more work, but it's really fun.

Yeah, nice. Um, how's Oktoberfest? Oh, I should have started there.

I, I, so we can pause. If we can pause, I can actually go and dress with this thing that I got, which is a traditional, like—

Oh, we don't need you to dress. Hold on. Oh, but I have it here.

The Hold on, hold on, hold on, give me one sec.

Oh, let's zoom in on this guy.

Oh, look at him. Well, listen, I got— so we, um, shout out, uh, Simon is, uh, to my left. He is the founder of Moonrock Capital. Excellent guys, actually. I never met Simon in person. To my right is the founder of of Archeum, which is crypto, like a, it started as a privacy protocol. It's now more like focused on private compute built on Solana. So really smart guys, actually they're coming up with some really interesting announcements. So anyways, I was supposed to catch up with him on Singapore and, and he, we couldn't. And then he's like literally two seats next to me in the flight back. I flew Singapore, Munich. And we're catching up. He's like, what are you doing on Monday? And this was Tuesday, we flew back Tuesday, Monday night. I'm like, I don't know, man, like, you want to come to Oktoberfest? And I've always wanted to go, but I'm not— I'm like, listen, I'm not much of a drinker. And he's like, oh, just come, you know, it's gonna be a great time. I was like, listen, if there's ever a time to do it, I might as well do it with locals. So all these guys are based in Munich. So that you have like most of the moon— actually all the Moonrock team and Arkim team, a lot of the Arkim squad.

So where'd you get this? Hilarious.

I get there, we get grabbed dinner the night before, and it's like Monday, right? It's like random, but it happens over, I believe, uh, 14 days or like 3 weeks. So anyways, uh, it's always on, which is crazy. So they're like, we made an appointment in this department store. It was like next to my hotel. I go and it's like there's all kinds of flavors, you know, as you can see there's like different colors of this, of the shorts and then it's a Lederhosen.

Is that what it's called?

Yes, correct.

Right. Uh, here. Oh, actually incredible.

You guys look good.

It's good outfit. Thank you. Good outfit. So you don't usually drink, right? So did you, did you drink?

I definitely did. As I told, uh, this guy's like, just one beer, bro. Yeah, right. You know, we, it was not just one. It was, by the way, these are like jugs. I know.

I've been to Oktoberfest.

There's some big boy beers.

Yeah. So the first beer, of course it was diluted with like sparkling water.

Water. So that, you know, that was good. And then after that, there was no more dilution. We just went at it. Um, we ended up fairly late. This is a great experience, honestly. I sort of was like, I'm gonna embrace it. I'm gonna do it right. I can't just be that guy that doesn't drink. So, um, they'll have to come on and, you know, attest to this, but I think I did it Correct.

It was a proper, yeah, proper.

It was a proper Oktoberfest. Nice.

I saw the Moonrock guys. They're quietly building one of the best funds in Europe, I would say. They're doing a great job.

You know, funny because I posted this picture right as we were headed to Oktoberfest and Mike from Geonet pinged me, said, hey, I've heard great things about the Moonrock guys. They've done really good work for the so-and-so portfolio company. And You mind connecting with them? I was like, immediately connect them.

But yeah, you're right.

We're very much focused on the same kind of sectors and opportunities. Good people.

All right. Pivot to a different thing.

Okay.

This one. He said, I got a rare watch allocation with a dealer I've never bought from and have invested little time building a relationship. We've either bottomed or going way lower. Was this a— do you actually think that this is a signal of anything?

Yes. Yeah, yeah, for sure. I mean, so the secondary, the secondary watch market collapsed right in line with like follows like crypto prices and just general market, but just like the excess liquidity in the market, like when people are making easy money or whatever, like the premium from across Rolex, Patek, AP, FP Journe, whatever was just 2, 3x, right? There you go. A lot of these prices like have really come down. And so that like, I track a couple of things, delta between the primary, so like the retail price and the secondary market and how that behaves across the board, by the way, like you would have thought that like, you know, on the margin, like certain Pateks, like vintage Pateks have held up better than like more modern ones like Nautilus and Aquanauts. Rolex has certainly taken a hit. But, you know, you could have said, you know, Rolex, for instance, produces like 1.1 million watches per year. Patek, I think, produces 58,000, 62,000. But even then, like, um, it's just the liquidity just dried up, and it's been a pretty down-only market from there, uh, over the last couple of years.

You think now is a good time to buy a watch?

I bought a watch today, let's put it that way.

Did you? Did you buy this rare watch?

No, that's a Rolex. I don't collect Rolex. Mm-hmm. But this was an absolute grail. Like, you know, at this point—

You want to say what it is or no?

No, no, no.

All right, fine.

At this point, my criteria is like, when I started collecting, I wanted to collect like 12, 14 type watches that were on my list. And I very quickly did that. I absolutely took the, like, the absolute top for a lot of these, like the highest price recorded for some of these watches. But again, like NFTs, I don't consider them an investment. Yeah, doesn't compute.

Yeah, you're just holding them for your life and you'll pass them down to your kids and stuff.

Yeah, I probably should do a better way to like be more patient, whatever. But anyways, I didn't, um, but this one I actually bought below retail.

Nice, nice.

Yeah, it's a, it's a grail, I think. Nice. I'll show it to you.

All right, um, last plug for Permissionless. Sad. We, uh, we have Permissionless next week. This is the last plug. We've got a code, it's YANO30. Tickets are ripping. We just had like back to back to back biggest ticket sale days ever. My life is not stressful at all because 50% of permissionless ticket sales come in in the 9 months before the event and then 50% come in in the last couple of weeks. So it makes my life really fun. Yeah, going to be a great night.

Yeah, I mean, well, let's talk a little bit about that. How many people? Because I sadly won't be going. How many people are going?

Um, it's really tough to tell, but we have a— it's probably gonna be like somewhere between— well, it's tough, it's tough to tell how many people actually go to the event versus just like go to Salt Lake. For example, Singapore, like 20,000 people went to Token and then roughly 50,000 to 80,000 actually went to Singapore. So for Salt Lake, I'd guess we'll have like probably 3,000 or 4,000 at Permissionless. And then maybe like 5, 6, 7, 8,000 kind of descend on the city. Wow.

Is that normal, that ratio?

Yeah, it's pretty normal. Like Mainnet was this week. I went to Mainnet on Wednesday, moderated a thing with Mike from Pyth. Not many people at the event, but like a lot of people in town for Mainnet.

Mm-hmm. Yeah. Got it.

Yeah. Come to Permissionless. We got a code for you.

YANO30.

That's all you got.

See you next time. What are the— I guess what are they going to be— what are you most excited about? Conference, are there particular speakers? I know there's certainly the election is front and center. All the debates have happened, right? So there's no more debates. So, but there will be key representatives coming on, right?

Yeah, we've got, um, so actually if you look at the, if you go on our site and you look at the speakers, we've got a pretty, a lot of political speakers. There's, um, we just got the first senator to ever speak at a Blockworks event, Senator Mike Lee. Um, Senator Mike Lee, who's going to be probably a pretty influential person if Trump ends up winning. He's one of the senators from Utah. We've got John Curtis, who's in the House right now, but he's most likely going to win to be the second senator in Utah, taking Mitt Romney's seat. We've got Ritchie Torres, who's been doing some great work recently. We've got Tom Emmer. I'm very excited to hear Samara Cohen's chat. She's the CIO of BlackRock, uh, CIO of the ETF business at BlackRock.

Uh, you got Paul there from Coinbase, who is a great person to follow on Twitter.

Yeah, we've got, uh, Paul Graywall from, from Coinbase. Um, and then we've got like a lot of the protocol founders. So Keoni and Shriram and Pacman and, uh, Harry from Arbitrum and, uh, Kane and Brian from LayerZero and like just a whole bunch of great folks. But there's actually a couple speakers who rarely do public appearances, like Devin Finzer, the CEO of OpenSea. Like, I haven't heard from Devin in years. So like, I'm, you know, we have a panel, it's Pac-Man and Devin Finzer and Luca from Pudgy Penguins. And I think it's gonna be a pretty spicy one. So like, I'm excited for chats like that.

That's great.

Yeah. I'm excited for Kane and David Hoffman's fight. That's gonna be good.

Oh, yeah. What's the prediction market at now? We showed it last time. I think it was like Cain, uh, 66% or something like that. Cain has not been, uh, they're all, you know, trash talking each other. Cain uploaded a video of him like doing training. Oh really? It hasn't changed much.

Hasn't changed.

When we record, I mean, there's, there's no volume. Like when we recorded, it was like 6 and a half, 6 and change thousand volume. Now you're like basically at 11,000. So very thinly traded.

Not doing so hot on my Eric Adams trade.

Wait, what was that?

Uh, will Eric Adams be out as mayor before 2025?

Oh, okay.

I, I bet, I bet yes, and I'm down 40%.

Yeah, you got to remain objective with these things, right? It's not like what you want to happen versus credibly think can happen, because then it could be betting on New York politics. I have no idea You gotta love it. You love politics, so what do you— yeah, true. Yeah. Um, by the way, I mean, speaking of Interactive Brokers, like, everyone's not launching a prediction market. Like, uh, now I believe it was Interactive Brokers that today came out with, um, like, presidential betting, and there was cash— like, they came out saying that it was finally legal, uh, I think, uh, here.

Yeah, call sheet, call sheet, call sheet, a big thing.

Yeah, exactly. So anyways, it's, uh pretty encouraging how this is.

It's funny because Kalshi feels like a crypto company, but they're not.

No, but they had, they had trouble with the CFTC, I think, initially. Right. It's backed by Sequoia, I believe, like very heavily funded.

Hey everyone, Jason Yanowitz here. I wanted to talk about something that's been on my mind a lot recently, and that is where are all of crypto's killer apps? We often ask this question on the show, so I'm excited to tell you about Empire's latest partner, Anoma, the Universal Intent Machine. Intents are a new way to build dApps enabling users to say what they want without needing to specify how it's done. Let's say you have an NFT on one chain, but you want to swap it for a token on another chain. To make things even worse, you also don't know which bridge to trust or how to navigate different DEXs on each chain. Disaster, right? But here's the good news. Thanks to intents, you can just tell the app what you want to do and Anoma's Solver Network takes care of all the complexity in the background. We're excited to see what cool dApps Anoma's architecture will unlock. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at anoma.net. Special thanks to Anoma for sponsoring today's episode. Let's face it, building on crowded L1s or expensive L2s is just not going to unlock the next generation of applications in crypto. That's where Supra Containers come in, offering a completely new solution that transforms your development control. Imagine dedicated, customizable app spaces running on Supra's 500K TPS Layer 1 blockchain. You get complete control over gas tokens and fees with the freedom to use your own token, create local fee markets, or even go gasless. Scale on demand and build with better customization than appchains. All at a fraction of the cost. Plus, with multi-VM compatibility, you can easily deploy your EVM, Move, and SVM smart contracts. It's time to rescue your projects from the costs, complexities, and fragmentation of traditional solutions. Get notified when Supercontainers are ready for builders at super.com/containers. US presidential election markets are legal officially. Finally, Kalsi prevails. Yeah.

Nice.

Yeah, they took on the CFTC, so that's impressive. All right, let's get to some fun stuff. All right. You tweeted out, dPIN and payments will take off in Solana. I actually would love for you to flash me back to what DeFi— I think Jason Yanowitz tweeted out, dPIN is DeFi in 2019. I would love for you to flash me back to like what DeFi felt like in 2019, because a lot of people don't know this. You actually approached me to— you and Ben approached Mike and I to launch a DeFi podcast in, I think it was late 2019. And Mike and I said no because we didn't think that anything was happening in DeFi. We're like, this market's way too small. Nobody cares about DeFi. 7 months later, DeFi Summer took off. You guys were vindicated. Obviously, that would have been a good podcast. Um, I'd be curious to get your take on like what DeFi actually felt like in 2019?

Uh, so the thing that gave me the most amount of conviction was Maker having survived as the backbone, allowing people to basically be this, like, like this bank that allowed you to, in a very seamless, automatic manner, deposit ETH, get back a stablecoin called DAI with a single collateral DAI backed by ETH. This all like coincided with ETH, the value of the collateral, collapsing 80+ percent, 90% from the top, and DAI maintaining its peg. And so to me, I looked at that and I said, okay, well, this is really interesting. Um, and I referenced Maker because that was quite literally the only thing around, and that is the backbone for DeFi. And so then of course, you had the legacy protocols, AAVE, Synthetix, Compound had just raised around. So things were kind of gearing up and people are paying more and more attention. But it was really this idea that Maker had provided a very valuable resource to people that had ETH, didn't want to sell it as prices came down, but could borrow against it. And that was pretty awesome, actually. That mechanism was profound. It still is. And then it was like things like really moved. Compound launched liquidity mining and then like things just really accelerated. But the analogy that I draw, and I know analogies are not perfect, But I sort of see Helium in that, in that what Maker did for DeFi, I think Helium is doing for DePIN because it is making crypto incredibly relatable. It is— I'm looking at carrier offloading stats we showed in the last pod as a very strong proof point that this is real, it's working, it's getting usage. And I get more excited about Deepin than I— maybe overly excited, because it's like, it's so tangible, it's so real that you could argue that stablecoins, you know, there's some good, you know, stablecoin usage was like very interesting. And you heard like anecdotally that it was being used in places like Argentina and whatnot. But it just— finance is one of those things that, you know, people don't check their bank account like 23 times a day, you know what I mean? Finance is not something that everyone likes to think about on a daily basis, but DePIN, on the contrary, I think is one of those things that is so very much tangible. And I get really excited about that. Like you can't— said differently, for the first time ever, I can go to someone that is skeptical of crypto or doesn't care about it and say, hey, here's Helium. Same data, same plan, fraction of the cost. You can use whatever phone you want. Like, why wouldn't you use it? And that's a hallmark of some really, you know, some really good tech. And so is it perfect? Are the tokenomics perfect? I don't know, but I would never fade a product that is getting usage. And as more and more carriers are offloading happens, I think that's a really strong signal. Mm-hmm.

What would you—

and the best founders I backed, by the way, in the last cohort, the last 10 founders, a lot of them are deep in because I'm very focused on that. Neil, Mike, Neil from Adrena, Mike from GeoNet, Brandon from ZAR, who just kind of came out of stealth and Breakpoint. Yeah, they're all very experienced founders with Web2, deep Web2 experience, and just appreciate how deep-end elements can really transform their business. Yeah, and that's kind of like the thesis that I have for the private equity fund that I want to build, which is the exact same transformation. A lot of businesses are challenged, have friction points. You can introduce crypto elements And I'm not thinking about a token. Some are, but I'm not. To streamline operations or to enhance the growth of a particular protocol, to introduce capital efficiency, yada, yada, yada. And like, you know, I, I don't know if that answers the question, but I actually, yeah, I think Deepin is like the, what email did for the internet in 2000, early 2000s.

Yeah. Yeah. I bet I would recommend people go listen to 3 episodes if they want to learn a little bit more about what you're talking about here. There was the, um, we did an episode called Why Air Rights Are Trading on Crypto Rails with, um, with, uh, Jonathan from Skytrain. Yeah, we did, um, uh, uh, how crypto fixes the internet monopoly with, uh, Neil from Andrina.

Andrina Don. Yeah, yeah. Um, and then we did Mike from GNET.

Oh, we did Mike. Yeah, Mike's brilliant.

From, uh, with, uh, what's, uh, forget his name, from CoinFund.

Yeah.

Um, look, I'm an investor in all three. Uh, again, I want to be— I'm not in the business of burning money. Uh, so, uh, I, I do, I do get very excited about these, and I think we're just scratching the surface, uh, of what will come. But, you know, like, I think Helium is probably, um the more important deep in protocol right now.

Yeah. By the way, we got a— there are every week, all the time we try to take people's feedback and actually incorporate it. So we got feedback that we need to do better disclosures, like we need to actually, because we have a little disclosure thing at the front, but actually we just built, we just built this and launched it. So If anybody wants to see what anybody at Blockworks holds, we just launched our— this disclosures page on Blockworks. So you can literally just Google Blockworks disclosures and you can see our every employee. So anyone who creates content, any material holdings, which is $5,000 or more, there's anyone on editorial.

Wait, wait, hold on. Oh, wow.

Yeah. There's any— our entire research analyst team. Uh-huh. So you can see like, oh, okay. So you see that Boccaccio, who's the host of the 0x Research podcast, is like talking about like, you know, something and you're all upset that it's like, oh, well, I don't know if he holds this or not. Well, now you can actually see and we update it monthly what they actually hold. And you can see the NFTs, you can see the crypto equities. And then we've got the podcast hosts too. You can see our exec team, podcast hosts, you can see research, you can see reporters. So just a new Blockworks research resource.

I guess I'm not there, but—

well, we don't do it with external hosts. Like, we're not asking like Mert or you to do it, but I will make a point anytime.

And I think I've done this forever.

Yeah, I think, I think you make a point almost immediately.

I'll tell you if I have a position. In Helium, I don't. Yeah. All right.

There was, there was another tweet that you posted about Bitcoin. So maybe I can do an abbreviated version for folks and then I'd love to hear you actually expand on this. So your post basically said Bitcoin is an asset that takes more than 10 years to really play out. The thing about Bitcoin is that people don't have the patience, right? It is an op— it is basically a call option for a chaotic world. It is a call option, I think, as you said, for a scenario where things turn south. It's, uh, it's an insurance of sorts. And your post kind of outlined, uh, your, your thinking here. So I'd love to hear you just talk about, um, you know, we talk about DePIN and L1s and L2s, but like, what are your, your, your— what is your current working thesis around Bitcoin?

Yeah, well, I saw, if you could scroll down, I saw Zero Hedge tweet something to the effect of like Bitcoin's not doing its job. It's not a safe haven. Like, it is volatile. Like, I get it, gold's been tearing and Bitcoin is, you know, just a younger asset, um, and has a lot of vol. You could argue that it trades in line with M2. Like, I think the chart, uh, with M2 is, uh, very, very correlated. Um, but I, I still don't think that— sort of like the difference between near-term and long-term. I think what is interesting about Bitcoin is that it forces you to kind of think about in what scenario does this actually work. And it's one where things really turn south. And it's sort of a combination of things. I think it's like some amount of Bitcoin could serve as an insurance. It's like very low-priced credit default swaps. Like that would be the analogy, like, you know, Paulson and Michael Burry, right? Like it is in a scenario where things really blow up, Bitcoin may, you know, really take off then and there. We haven't, we just haven't seen that scenario, right? Bitcoin as an asset has become more and more accepted. It's, you know, not small by any stretch of the imagination, over $1 trillion. It's been talked about. Its central banks hold it. But I guess the question is, like, everyone agrees. So I'll lay out a couple things. Everyone agrees that the financial situation, the, you know, monetary policy is untenable. Like, the fiscal situation of the US government, other governments around the world is untenable. Like, the percentage of the budget that goes to servicing debt keeps growing. They're running huge deficits. Like, in a normal company, they would have gone bankrupt if you're not the US, if you're Greece, Argentina, any other country, like you would have hyperinflation and your currency would like totally, you know, go to shit. But the US is like, it's sort of like continues to be the safe haven, right? It's like it is the world's reserve asset. So a lot of the allocators I've talked to, it's like, okay, what else do I buy? Like, it's just like, we sort of accept the fact that this is untenable, but at the same time, we're just going to invest to beat inflation. And that's fine. But I think like the thesis for Bitcoin is you hold some amount because if things— if the dollar were to depeg or really take a shit, then I think Bitcoin really catches a bid then and there. And then the last point I made was like, I don't think you need to believe that that full extreme scenario plays out to build a conviction around Bitcoin. I just think that, you know, from a funds flow perspective, like, what do you think is like— it's just starting from a much lower base. So like from a percentage basis of you're seeing central banks increase their allocation to gold, especially starting when Russia and the Ukraine conflict started. We have more instability happening now in the Middle East. So it's just more of a question like, you know, more central banks may want to— the probability of Bitcoin becoming more relevant and interesting as something that should serve in your portfolio for this type of scenario, I think keeps going up. Anytime Bitcoin continues to exist, I think that probability goes up, uh, for central banks and then institutions.

Yeah. Well, the first thing— so you were quote tweeting Zero Hedge. The first problem with Zero Hedge's chart was that it was an hourly chart. Uh, Bitcoin, I think for a very long time is going to— because it trades on the weekend and it's a macro asset that has made its way onto the screens of CNBC and onto the Bloomberg terminals and onto the trading platforms of these folks, It's always going to be the first mover, I think, on the weekends. Like if it's after hours or on the weekends, it's the first thing when, you know, traded down on geopolitical risk over the week, over the— I think it was after hours. Like I think it will perform like that for a long time. The thing about Bitcoin is you have any, any moment in time when someone loses trust in governments or banks or institutions, the March 2023 banking crisis, the Canadian truck standoff, the Cyprus banking crisis from a while, currency debasements, Bitcoin tends to move higher. So that's my kind of like, that's how both of these things can be true. Bitcoin can go down in a geopolitical crisis because it's the most liquid asset. It's the most liquid asset because it is not because it is the biggest market, but because it's available 24/7, 365. And it can also go higher when people lose trust in institutions. That's my working thesis.

I agree with you. I think the— again, gold is this social consensus store of value. Like, it's not a very good semiconductor. It doesn't have a lot of industrial applications. It's used, and like, a lot of it comes from like wedding season in India drives a huge amount of the demand for gold. It's crazy. But like, you know, it's taken centuries to ossify as a kind of like store value, like the social consensus. Bitcoin might achieve that far faster because you could argue that the world is more connected, and so this idea is like percolate faster. But I do still think that it may take time. My point is, um, the percentage allocated to Bitcoin I think grows, and this idea of it becoming a social like a store of value becomes stronger by the day.

Yeah.

And quite literally, it is a better— you could argue it's a better store of value with the same properties of— you go read, you know, The Bitcoin Standard. I don't need to go into a lot of that detail, but even if you don't truly understand Austrian economics or whatever, I think you can agree that holding a lot of your money in Bitcoin could serve its purpose in a scenario where things, you know, become very murky or, or challenged.

Right. And it's not a hedge to a market crash, it's a hedge to local— it's a hedge to banks and governments and institutions harming your assets in one way or another.

Correct.

Yeah.

And, and I guess you could, you could say, well, what about stablecoins? And again, yes, true, like I think a lot of the, you know, I'm not here to say that like people might fully appreciate the censorship or lack thereof of some stablecoins, but there may come a time where Bitcoin becomes true store of value, censorship resistant, easily transported, easily exchanged. And that's pretty powerful. Yeah. So yeah. To me, that's like the— it's the ultimate meme coin. And what is it to stop it from going to $100, to $200? Like, you know, obviously fund flows, but you got to appreciate most institutions and central banks are at zero right now.

Right. So then maybe I'll flip over to this tweet that you sent. I'm kind of just going through all your tweets these days, which is— damn, you said— yeah, yeah.

Oh, boring person.

Santi's Tweets analysis episode. You said it's going to be harder. It's probably will be hard in the next decade to outperform a basket portfolio of Bitcoin, Solana, Tesla— didn't think you were going to put that in there— and a meme basket. Do your own work, not financial advice. I will likely not hold this bag and change everything constantly and underperform because of overthinking and overtrading. But, um, and then someone said, don't forget Ether. And you said, don't see a reason to hold it. So I mean, you got to— yeah, you got to expand on this.

Well, I quite simply think from my crypto portfolio, I just think Solana eclipses Ethereum and far surpasses it, particularly because of things like DePIN working in Solana, payments working in Solana, the best founders are building in Solana. I don't see that level of integration and cohesiveness within the Ethereum ecosystem, even though I still believe it has a place. But I, again, Solana is at $75-80 billion fully diluted market cap and Ethereum is at $350 or so. $380. Um, and I just think that that is, that is the— there's, there's a clear disconnect there. Yeah. Um, Bitcoin for all the reasons I articulated. Tesla is a bet on AI working in a very meaningful way. That how they have a lot of data, self-driving cars, the robots. I mean, it's just like it has an interesting fan of returns profile, not just for EV cars. I'm actually more interested in self-driving cars and what that does to just really truly transform the transportation industry. And third, like the robots, right? Uh, like that, that could really truly transform. Like, robotaxis are really interesting. I, I like, I like these investments where they have like very interesting fan-out returns, limited downside, but asymmetric, like, fan-out returns, right? And Tesla, I think, fits that bill. Um, uh, meme basket. Much smaller size, but, you know, tokenization of attention, uh, will continue to be a thing. Um, the— so does that make any sense? Because then I was going to say something else about like an alternative type of portfolio that might perhaps even outperform this one.

Yeah, go ahead.

Uh, levered S&P index, 20%, very low chance of being called or liquidated.

20— what does the 20% mean there?

Just like 120%, right? Like you basically—

oh, you lever—

you lever— you lever 20% on top, right, to, to go long the index. Why? I was reading a report by JPMorgan. The number of companies— like, the composition of the index has changed dramatically over the last 25, 30 years. It used to be exclusively industrial. Now is almost, almost primarily— exactly, almost primarily tech. Like, the top 7 tech companies account for a vast disproportionate share of not only gains but also just the index itself. Um, the— like, this creative destruction— like, this is a great chart— that will only continue to go up. Um, you're seeing these companies like OpenAI just raised, uh, $6.5 billion. I think they, like, The rise of these companies is just going to, I think, continue to go pretty exponential, but also the rise and fall. And I think we're just living in a more chaotic— this sort of idea of creative destruction period, in large part by AI, in large part of just how connected we are. And so yeah, I think it's one, really hard to outperform the index, whether it's NASDAQ or S&P. Like most hedge funds, most private equity funds, most investors don't. So why fight it? And then you go levered because there are— there is a subset of, you know, private equity or hedge funds that like do outperform. But you could argue you're taking liquidity risk, you're taking other types of risk. Whereas if you go levered long the index, I think the max drawdown of the S&P or the NASDAQ was like 20 to 30% max. So like you're very unlikely going to get liquidated or called, but you're going to capture, you know, meaningful outperformance. And so, and you're also, you know, it does the work for you. Like the rebalancing is probably the most important feature, right? Like, let me ask you a question. Would you rather launch a venture fund and invest in the cutting-edge AI companies and you have $100 million fund, you need to make I don't know, 10 to 15, 20 investments. Uh, what do you think outperforms that type of fund, or someone that just longed NASDAQ or S&P with 20%, like with leverage?

Long the S&P all day. Yeah, yeah. I mean, why can't you combine these? Why can't you—

yeah, I would add the S&P.

Like, why don't you just do this basket: Bitcoin sold, Tesla meme, and then plus index, slightly levered index.

Yeah, yeah, slightly levered index. Yeah, I like that. Uh, I was talking to Purnav earlier today and like we were like discussing this. Uh, does any of that make sense or like would you change any of it?

Um, I mean, the meme basket will get smoked in a bear market. Like you, so, so like Bitcoin, Solana, Tesla, levered S&P, you can be comfortable holding. You can be comfortable holding for a long time, I think. And yes, you'll go into at some point another crypto bear market and things will go down and that's okay. But like the meme basket, most of, most of those will go down to zero, not down 70%. They'll go to zero. So the basket or the memes?

Well, not all of them, right?

Um, not yet. Not all, not all of them.

The performance of Doge.

No, no, not all of them will go to zero. You're right. I mean, okay, so then what's, what's in your meme basket? Because like, I don't know if you look—

well, I guess you practically speaking, you can't really construct like a meme basket, so to speak. Yeah. I mean, Murad's been very vocal about this.

Yeah. Like, yeah, Murad, I don't know where this— he's been tweeting too much, but he just posted it like his revi—

he revises like constantly.

Like, you know, he's like, do you buy Murad's meme? Oh boy, I can't take this seriously. Do you buy like a basket like this? Do you buy WIF? Is it like the basics, like Doge?

I would feel more comfortable longer term thinking about picking the best meme in a particular ecosystem, one or two.

Yeah.

As a proxy for a levered— again, what are memes? Memes are just levered bets on the ecosystem. Yeah. A ton of liquidity. And so that is very important in bear market, your ability to come in and out of these positions. Like WIF, for instance, sometimes has traded or trades more volume in certain exchanges than Bitcoin. Like, that matters when, you know, the exit door needs to be really wide when you want to exit these positions. And I think, you know, memes just have like a very strong product-market fit. And they are levered bets, right? And WIF is a levered bet on SOL, right? And that ecosystem, you could argue PopCat does that too. Um, and, and again, but I do agree, like the survivorship bias, like most of these will go to zero and not really break out. I would feel more comfortable picking some of the more mature ones, like, you know, that are +500 or a billion. Um, and, and, and, you know, just look at Doge. I mean, Doge was just They vastly outperformed Ethereum. You talk DeFi Summer? Yeah, Doge outperformed that and NFTs. Yeah, yeah.

Why isn't— why is Tesla in there but Coinbase is not?

Just because I think Bitcoin and Solana— like, I'm mindful of the crypto concentration.

Yeah, yeah.

You could swap perhaps maybe Maybe you could go, you know, some sort of strategy of doing Coinbase spot plus some more sophisticated strategy and like long-dated call options or whatever.

Yeah. So how do you think about— because I'll do this exercise sometimes too, thinking about the right portfolio, but then I, I find myself stopping fully short. I find myself stopping short of 100% executing it. Like, so I'm curious when, you know, is, is your portfolio— do you own no assets outside of I just told you about a watch.

Well, I guess I don't count that as an asset.

No, don't count a watch. Don't count real estate. Like, is your liquid portfolio Bitcoin, Solana?

No.

Tesla, meme coins, and leveraged S&P? I would guess no. So then the question is—

Well, no, because I have a venture portfolio that, you know—

I know, but of your non-venture?

Some of them are liquid or become liquid. So that introduces at any given point in time, a little bit of noise in the equation. But I'm always constantly looking to grow the, what used to be the ETH stack, the SOL stack, or the Bitcoin stack. Like that to me is like the, like one, because if you're not growing that, you're not outperforming that benchmark and then that's a problem.

Right.

But yeah, you're right. I mean, it's not perfect, like in a vacuum. I like to do these exercises too, as if I had a blank sheet of paper, can I redraw my portfolio from scratch, which is not possible. But if I were to do it, this is how it would look like. And that then informs how I want to work my way into that. Right. And I think it's still a useful exercise. You know, you can never kind of like liquidate all of your portfolio and then just redraw it from scratch. I'm not in that position. I can't do it easily. Because of liquidity and position sizing or whatnot. But I still think that it just allows me to identify areas where I'm over or under allocated, so to speak.

Yeah.

Like, why has it been a challenge for you? Taxes? Like you don't want to surface taxable?

No, it's more actually, this kind of ties back to the investor versus founder conversation. Like I, it's easier for me to sit and maybe not have the perfect optimized thing, because then I don't have to think about it at all. And I can spend all my energy thinking about Blockworks. That's actually, that's my most real.

Yeah, no, that makes sense. I think Mark Andreessen was someone in Effective, like, if you had $100 million, like, how would you invest? He's like, all in the index, all in the S&P. Yeah, $10 million. I'm like, it's like, there's a great chart of like, why do we keep fighting this? Like, it was like, the market's up like 20+%. Year to date. And like, I don't know, a lot of other people are trying to do more financial wizardry, haven't been able to do that, right? It's like, go put it on the index and like live your life, you know, build a business, do something. Don't stare at charts. Yeah, um, I agree, I agree.

I have a buddy who made, uh, sold his company, made probably, I think it's like $70 or $80 million, um, And he was, he was like really actively trading it. It was like investing in all these deals and LPing into funds and really hated it. And like just had got no energy from it, basically, but felt like that's what he needed to do.

To feel relevant.

Yeah, that's what he like, yeah, exactly. Needed to do that and needed to like angel into companies, needed to meet new founders. And then he realized the thing that gave him energy was starting businesses. So he moved all of the capital into an S&P and into treasuries and started a company.

Nice.

Started another company.

Maybe that's what you should do, man. Just put everything in the S&P and go build a fund.

So I want to talk about a thing that went completely under the radar, which is BitGo's stablecoin. Did you see BitGo launch the stablecoin?

No.

Yeah, not many people did. So you remember I told you that there's going to be pressure on USDC? Did I bring this up publicly in the podcast?

Because they're not sharing. Yeah, the interest.

Exactly. So, all right, here's the key. So I finally looked through BitGo's information. I actually think it's really interesting. And let me lay out the reason why. And I actually think it will— whether or not BitGo's stablecoin is going to be the successful one. I don't know that because there's all these things. You need a good go-to-market strategy, a good BD team, all this kind of stuff. But it's going to put pressure on the market for other stablecoins. So let me lay out the 3 types of stablecoins. Right now, there are stablecoins that keep all of the yield for themselves. That's most of the stablecoins. They, they, they make the money, they keep all the yield for themselves. And by the way, USDC passing yield on to users via Coinbase is not USDC passing on the yield. That is a Coinbase rewards pool. That is— so that's like a—

shows up in their P&L or something else.

USDC gets— is marketing, keeps all the yield for themselves, and they— and then they can figure out what the— them and Coinbase can figure out the rewards pool, and they obviously split the money with Coinbase. Okay, so that's bucket number 1. Bucket number 3 is our user— our stablecoins that pass on the yield directly to users. That is a— the problem with that is that is a security.

So, and, uh, Jeremy said that in the podcast.

Yeah, that is a security thing. So then it's like, okay, well, what is the solution here? You, what USDS, which is BitGo stablecoin, is doing is they are not passing the yield to the user. They're not keeping the yield for themselves. They're actually passing the yield onto the holder of whoever's holding the stablecoin, which is most likely the exchange. So they're, Basically, let's say, let's say a stablecoin can earn 5% today. They're, they're only keeping 10 bps for themselves and then they're passing on 4.9% to the exchange and then telling the exchange, this is your yield, you go do what you want with it. You keep the 4.9% or you pass on, you know, 2.5% to users. You keep 2.4% for yourself. You, you split it amongst different people like it is on them and I actually think it's a really, really, really good model. And I think people are going to either adopt something like USDS or they're going to— the stablecoins are going to have to pivot to figure out this. Because if I— here's what I would imagine happens right now. And this is all— I'm all theorizing stuff right now.

Conjecture, ladies and gentlemen.

Yeah. If I was an exchange, here's how— here's what I would do right now. I'd pick up the phone and I'd be like, hey, Jeremy. Hey, Mr. Allaire, I'm sitting on $3 billion of USDC. Give me some of that yield.

And if I'm Jeremy, how about right fucking now?

Yeah, right fucking now. And if I'm Jeremy, guess what I'm saying? How about no? And then if I'm the exchange, I'm saying I need that yield right now. And if I'm Jeremy, I say no. And then they go back and forth. And then finally Jeremy says, you know what, you're a nice guy. You're holding $3 billion of USDC. I appreciate your exchange onboarding and offboarding us and pushing it to your market makers and stuff like that. I'll give you some of the yield. I'll give you 1%. And I want you to strike a certain deal with Circle. And if I'm the exchange, I'm like, Well, frick, I don't, you know, I don't really have any other options. So then what I'm going to do—

until now, until now, right now, right now.

And what I would do is it then, you know, when, whenever the market forces your hand, it's a build versus buy conversation. So you can either, I think, and in this case, in this case, it's like you could actually use something in the market, which is something like USDS, or you could go build your own stablecoin. So I think what's about to happen is two things. Calling my prediction here. One, we're going to see about 100 new stablecoins launch. We're going to see the custodians launch stablecoins. We're going to see the exchanges launch stablecoins. We're going to see fintechs like Robinhood launch stablecoins. I just saw today Visa is helping BBVA launch a stablecoin. We're going to see the banks launch stablecoins. Everybody and their mother is going to launch a stablecoin. That's the first thing that's going to happen. The second thing that's going to happen is their, the stablecoins, their hands are going to be forced and they're going to need to figure out how to give yield back to the users. And the way that they're going to do that is not by giving yield directly to the users, but by giving it to the people, probably the exchanges who are sitting on the yield. And that is why BitGo's stablecoin, which didn't get that much attention, I actually think has all of these downstream impacts on the industry that I think people should pay attention to.

Yeah, I mean, it's like your margin is my opportunity kind of thing. They do have like brand power, I guess. I think they— well, Coinbase is— I'll give them credit. Circle and Coinbase have built, you know, this incredible product called USDC, and that has staying power. You know, it's still, you know, not Tether. Tether is like vastly more used internationally. But the— I think what you're getting at here is like, what is the moat of a stablecoin? Is it distribution? Is it like— and how defensible is that in a world where everyone and their mother is now realizing that BlackRock— I mean, that, uh, Tether might be the most profitable organization in the world, right? You know, like, per employee, certainly. And like, yeah, it's caught a lot of headlines, as you're pointing out right now. Like, everyone— a lot of traditional fund managers, they're all asking me about this. They're like, What is this? How does Tether work? You know, I'm like, I don't know, like they've just built this thing that is like used everywhere and then they're like using all those billions of dollars and putting in Treasury and keeping it all for themselves.

Huh, that's great.

But okay, explain to me, like it feels like this like loophole of sorts. It's like, what is the difference between like Circle giving the yield to the exchange and then the exchange deciding what to do with it? Like Is it this one step removed that doesn't make it a security and you're able to share it with your partner but not with— like, what you could argue that the exchange is also a customer in the same way that you could— the holder of USDC are a customer if you're hosting in a wallet. Like, the exchange is hosting it for you, like, custodying it for you. Like, why is that not a security versus Coinbase directly paying you or Circle paying you that yield to the end customer, so to speak?

Like, I have no idea.

I don't make any sense. You know what I mean? Like, it just seems like an outdated rule that allows for this.

Like, I mean, like, I saw, like, so I'm looking at Mike Belshi's tweets right now. Mike is the CEO of BitGo, and he tweeted, we swear. And it's here. I'll just— I mean, it's a jab at Coinbase. Um, it is, uh, here. So it's a Coinbase email. Update to your USDC rate. Starting October 1st, the USDC rewards rate is changing. Please visit your account, etc. Um, and then he tweets, we swear, uh, Gary Gensler, it's not a security. We just coincidentally reduced our rate, our reward, with quotes around reward, our reward rate a week after the Fed reduced rates. It's not related to the fact we earn less than the dollars at all. So again, I actually don't know the legal aspect. I'm sure someone will tell us in the comments, uh, or on Twitter.

But wouldn't it be just nice if they could just pass, like, just pass the stablecoin? Just pass the security. It doesn't matter, like, who's being hurt here? Actually, people are losing out on the amount of interest that they could be earning, you know what I mean?

Right?

Like, they're taking a risk. There is a risk by holding the stablecoin. You have to believe in the proof of reserves. They could depeg, as it has in the past. So the consumer that holds USDC is taking risk. Anyone that holds a stablecoin is taking some degree of risk, and they're being shafted because they're not earning any of that. Or very little of that yield. And by the way, this is true for banks too. I think banks have made a killing. I think like there's a crazy stat, I'll have to pull it up, but I just saw like there's earnings of banks, like they passed on basically zero in normal checking accounts to their customers. It's, it's like, it's crazy. Like, you know, that should be going to the customer or, you know, And unfortunately, unsophisticated customers don't know about other money market accounts or whatever. Like, you would think it's so obvious, right? But very few people actually do it. You know, people are not checking their bank accounts daily. They don't— they're not as sophisticated with their money. Like, financial education is a problem. But like, these laws actually make it— you ought to wonder why these laws are put in place. And I think The— I'm very much what is the actual result and the implications in practice of the law. And it's very clear that the consumer is definitely hurting here because they're not earning that interest. And who fucking cares if it's a security? Call it whatever you want. Pass that yield over to the customers taking the risk. If you're depositing money in a bank account, you're taking a lot of fucking counterparty risk. If you're holding stablecoin, you're taking that risk and you're not earning any interest on that. I mean, I'm sorry, but call it the security, call it whatever you want, but like, it's very clear that the law here is, is meant to protect certain, um, certain, certain institutional institutions and not the consumer, which to me, that's— you have to look at what is the intent of the law and what is the actual implication of how that law is being like exploited or not. And, you know, Again, it's just like a, it's quite frustrating.

Yeah. Yeah. Um, all right.

That was my vent.

Good, good pod.

Good pod. Well, you know, you reference all my shitposts, so this was easy.

I didn't do any prep for the podcast. I just literally scroll through your Twitter as you're talking.

I would like to, I would like to do a, uh, founder type episode with you. I know you've done a few and I've looked at and listened to it. A few of them, if you're up for it. I don't know, just go deeper in your journey. Maybe Mike can come on. Did we ever do that? I think we were talking about doing that.

Yeah, we did one of those maybe like 2 years ago, but I actually just did this episode on a podcast called When Shift Happens with this guy Kevin, and it's probably the most open I've ever gotten on a podcast. I have these things called cluster headaches. I've never talked about them publicly because I thought it would you know, make me look weak and, um, like just a bad, bad optics.

And don't worry about it, you already look weak.

I, I am weak. I'm mentally and physically weak, but I didn't want people to know that I am mentally and physically weak. Uh, you're not, but I, you know, I talked about it on the podcast, so I— people should, people should go listen to this episode. If you just like go, I think if you Google when Shift Happens and my name, you can see it. But yeah, we should, we should do that. I mean, I think about that kind of stuff a lot, um, so I'd love to do that.

I mean, I, I think when we open up the most is when people like it. Like, I've gathered a lot of feedback from people and then, uh, I think generally, again, back to rounding it full circle, I think when we talk about people that are successful or not, like, we tend to glorify and we tend to just highlight the good and not enough focus because we forget it. We don't want to think about it of like the day-to-day. And I hope that this podcast is relatable to people. I think when I did the mistakes, which I could have gone for many more hours, uh, and people really like this, said, hey, you ought to do more. I'm like, yeah, I have, uh, laundry Many more things that I can discuss. So we'll, we'll have to maybe do that. And then also, yeah, your journey in building an organization, particularly because it's really impressive. I mean, it's been bootstrapped or has had been bootstrapped for a long time. And it's, I think it would serve founders in crypto, not just crypto, well, to understand that there is a different, there is other ways of building a company that don't necessarily, you know, are like, oh, you know, raise money and brand and all that, just being really frugal. And I know and have some understanding of how you built the organization. But I also would like to personally understand that journey better.

I love you going down this founder rabbit hole. I love it.

Every hour of the day, I'm at the gym, I'm cycling, I'm walking. Literally, David Senra actually like commented on one of my tweets. I'm like, dude, I've listened to 200+ of your episodes. 2 at 2.2, 2.2 speed. The best.

Literally the best. You listen on 2.2 speed?

Yes. Yes, I'm savage.

I respect that. Yeah, I respect it. All right, man, great pod, great chat.

One great chat. Yes, one recommendation, movie. Have you seen the, um, the WWE, the Bill— the wrestling documentary on Netflix? Mr. McCann. McMahon. Oh, McMahon. Goddamn it, this is— people are gonna butcher me. I'm fucking English as a second language. Mr. McMahon.

Oh shit, I just closed the window.

How do you fucking pronounce it?

Oh, I'm thinking of, um, a different— I'm thinking of a different documentary. I'm thinking of the documentary on, uh, the gladiators. You ever see that show American Gladiators?

Oh, someone did tell me to watch that. I haven't. Yeah. Um, American Gladiators. Yeah.

Yeah.

Okay.

Uh, you're, you're, you're talking about the documentary on Vince McMahon?

Yeah. Vince McMahon. Yeah.

Yeah.

Uh, yeah, it's okay.

There's just psycho human being. I haven't seen the documentary. Go look up Vince McMahon's text messages unless it's in the documentary.

If you wanna see some, some egregious, uh, anyways, I mean, it has some good, it has some good gems in it.

Sexual harassment. I don't know another way to describe it.

It's like, I mean, there's a lot of things, right? That, But yeah, he's an interesting character, to say the least. Anyways, thanks everyone for listening. Drop us a comment. I'm sure there's going to be a lot of things that you can— I'm actually excited to watch the comments. It is a highlight.

We love reading the YouTube comments, so we actually read all of them. And the more you shit on Santiago, the happier I am over the weekend. So you know what to do. Great pod. That's the end.

I thought you would have plugged Permissionless. I was going to plug Permissionless, but yeah, go shit on me.

We're done. See you folks. Thanks for watching today's episode. Just wanted to quickly mention that the wait for crypto's killer app wave is nearly over thanks to today's sponsor, Anoma, the universal intent machine. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at anoma.net. Thanks again to Anoma for sponsoring today's episode.