Asia's Crypto Boom, Stablecoin Wars, and Crypto's Global Shifts | Roundup

it's a good reminder of this industry is actually like really big. Yeah. Like, of course, it's like, you know, it's big. It's like a $2 trillion.

Yeah.

But when you, when you see it like this in a conference, it lends a different dimension that it's just pretty awesome to see.

Actually, I got to spend a good amount of time with the OKX team yesterday. Like, they are not a crypto exchange. They are the next WeChat built on crypto rails.

Exceptional storytelling goes far longer and is a bigger— has been a bigger factor to success in the space. Than underlying tech and whatnot.

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. Supra Containers offers dedicated customizable app spaces running on Supra's 500K TPS Layer 1 blockchain, giving you complete control over gas tokens and fees. Get notified when Supra Containers are ready for builders at supra.com/containers. Everyone, the Polygon Community Grants program was launched with 1 billion tokens all for Polygon builders. Really excited to share that on today's episode of Empire. Season 1 of the Polygon Community Grants program is now live. It features $35 million in MATIC to support the next generation of Polygon projects. Join the aggregated future today by applying at polygon.technology/grants. Big thanks to Polygon for sponsoring Empire. All right, everybody. Feel, feel bad for the people watching on YouTube. There's a 50/50 chance this podcast is going to be the worst that we have ever recorded on Empire. Or the best. Or the best. Or the best. So we are currently sitting in a hotel room. Yeah, sitting in a hotel room in Singapore.

Um, so we're in the lobby, we're putting in that work. We're, we're in the lobby and, uh, and Yano looks at me, deep, deep stare, and says, hey, you want to come up to my room? And I Yeah.

And the two other guys we were with were very confused.

So it was like, this is what happens when you do podcasts for multiple years. You know, you develop a strong bond.

Strong bond. Strong bonds. But our clothes are on, shirts are on, so we're good, right?

They may not stay on for the duration.

Yeah, exactly. But we want to record this to tell you guys about Token and tell you about Singapore. And Santi might talk about rate cuts. I should not talk about macro because that's a horrendous thing. You don't want to hear that. But How's the conference been?

Oh, not much, man. Well, they have great kombucha here in—

We got great kombucha. Cheers. Big Apple.

And if Remedy wants to sponsor us—

Cherry plum. Cherry plum.

Cherry plum.

Cherry plum.

It's good to be back in Singapore. I'll start by saying I'm not a fan of conferences, but it's really nice sometimes to come in, meet founders, get a vibe for the room, what people are excited about. Just some data points. 20,000 attendees last year. Guess how much, how many?

10,000?

Yeah, 2x. And it feels packed. Like, not only that, but this feels more like a SaaS conference, like a Dreamforce conference.

Yeah, yeah.

Like, you overhear conversations, people are like closing deals. And it's one of those things where like every other crypto conference that I go to, like Breakpoint, which is happening tomorrow, I'll be there debating Solana versus ETH. You go to DEF CON, you go to ECC, and it's like very crypto native. You kind of recognize most people. I don't recognize anyone, and they don't even know— they don't even recognize you.

They don't even know who I am.

I'm having an identity crisis. No, it's actually— it's a good reminder of this industry is actually like really big.

Yeah.

Like, of course, it's like, you know, it's big. It's like a $2 trillion.

Yeah.

But when you when you see it like this in a conference, it lends a different dimension that it's just pretty awesome to see, actually.

Yeah, so in, in my— in, uh, before Blockworks, I worked at this data analytics company, and we would always go to the Gartner conferences. There are these big B2B events, and this feels much more like a Gartner conference where, you know, there were 10,000 people and it was all very B2B, getting deals done. Not saying this is all B2B, but yeah, just the size and scale. This is easily the— I mean, this is the biggest conference of the year. I think this is the largest crypto conference ever.

Ever.

Ever. Yeah. Period.

Like more so than, like, Consensus.

Yeah. The biggest Consensus ever, I think, was probably 2018. You remember that one in New York? Yeah. New York Blockchain Week 2018.

Yeah. Yeah. Yeah.

There were probably 10,000 or 15,000 people there. Yeah.

Yeah. Yeah. Venice is great too. Like in Marina Bay Sands. Like it's very concentrated, like multiple floors.

Yeah. Yeah. Okay. So one takeaway that I— okay, so this is my first time in Singapore and I've actually, I've been to Asia before, but Thailand and Vietnam, I've never actually been to, never actually done like a work trip while working in crypto to Asia. And there was this idea in my head that Token was just a bunch of Americans who fly over because a lot of the speakers are just US crypto companies. I'm trying to figure out the right words so I don't get canceled, but like, you're still going to get canceled. The attendees are— I need to— I mean, it's not American attendees. Like, it's all Asian attendees.

Rest of the world.

Yeah, it's the rest of the world. And it's very relevant to the last two podcasts that we've recorded, the roundup that we did and then the episode that I did with Alan, where there's this idea that it's like 'Oh, big in Asia,' right? And then the other side says, 'No, no, no, Asia is just a bunch of like bots and incentive farming.' And being at this conference, I can assure you it is not just bot farming in Asia. Like, there are— the sheer number of people here using crypto is just hands down bigger than the United States.

Well, I talked about in the roundup we did, I was in Korea at the time at Korea Blockchain Week, and, um, this idea that like, I feel that the way that consumer finance has evolved in Asia and the whole like internet giants and the like, the apps that have been built, you know, when people use— you look at WeChat, you look at Kakao, you look at Grab.

Like, so Grab has a— Grab has a wallet. So Grab, for people who haven't been here, is like the Uber of— it's like Uber and Uber Eats and DoorDash combined basically in one app. They automatically give you a crypto wallet. Built on Polygon. And then today I got a push notification from Grab saying, go, go get your PYUSD inside the app. Like, that's— imagine Uber gave everyone a crypto wallet and Uber was giving you push notifications about stablecoins.

Asia in some respects is a good window into the future of how I think the West will—

like, I mean, look outside, it also looks like a sci-fi movie.

Yeah, like Singapore feels like a very sci-fi, like it's a like Japan too. Um, and, uh, but yeah, it's, it's a good, uh, reminder that like there is like underlying utility. And I think it, it sometimes requires you to come to places like Singapore or, you know, elsewhere to discover how other people are using these applications. And, and it's actually quite, um, interesting.

Yeah. Um, would have been— go ahead. No, I was just gonna— I'm pulling up the, uh, the other crazy thing for me is just I don't know any of these companies. Yeah, so I'm pulling up the website right now just to rattle some of these off, like the sponsors: Sonium, Zebu, Oros— I guess they're a market maker— 4E, Creditcoin. Like, these are the top sponsors of the event: Creditcoin, Cross Finance, DOP, FastX, Incentive, Kava, KuCoin, Somnia, MTT Sports, Peak, Sahara AI, Tomi, Valor, Like, how many of those companies do you know? You know, it's not, it's not many.

No, there's a, there's, you walk around the booth and there's a lot of these products that never heard of them before, never, yeah, ever interacted with. But so what have been, um, I was in two ways. Yeah, I've been on two panels. The first one was, uh, I moderated a panel on crypto AI, decentralized AI. And then today was, I was speaking with, uh, like liquid versus venture, like allocation of money with, you know, a bunch of other investors, Multicoin, Dragonfly, Defiance.

Did I see you with the exchanges too? Bybit? Was that or is that—

No, I didn't do that. And then you were— you actually went right after me at a really cool one.

But yeah, I moderated one with Lando Norris, which was funny because he knows nothing about crypto and I know nothing about F1. So that was with Lando Norris and then the CMO of OKX, Haider. And then another one just now about like, is this cycle cooked? Like, what's the meta of this cycle with Antonio from dYdX, Mert, Alex, the founder of Hack VC, and then Jason Choi.

So, I mean, I think everyone wants to know how was the conversation with Lando? Like, what'd you guys talk about?

I mean, Lando was crazy because first off, we were in the speaker lounge. He walks up with like 30 people, like bodyguards and all these people. And I'm talking to him beforehand right before we go out on stage and this big boom mic comes over my shoulder and then these two cameras come right in our face. I was like, what is this like normal for you? And he's like, oh yeah, that's not— he's like, that's Netflix, mate. Oh, I was like, I was like, oh, that's Netflix. He's like, yeah, say something funny, you'll be on Netflix. I was like, I obviously couldn't say something funny. So, but no, that was good. That was good. All right. So one of my, one of my takeaways from the conference is just how much the Asian exchanges are printing. Like the— like we think in the US that, you know, who is it? Coinbase obviously dominates, then it's Kraken, right? The Asian exchanges are so much larger than, than in the US. It's just remarkable, right? So Binance, obviously everyone knows how big Binance is. Bybit, Bybit, is going to make $3 billion in profit this year.

Profit.

Profit. $3 billion in profit. Bitget, like, I think Bitget is fifth biggest right now in perps. So I think it's— I forget, I forget the order of these exchanges now, but I think Bitget is fifth biggest in perps. They'll do a little over $1 billion in profit. And that's Bitget. Like, I don't know one person who trades on Bitget in the US. And they're a billion in profit. Yeah, so these exchanges are just printing money out here.

I was talking to, uh, an individual from Binance right before going on stage, and he, he handles a lot of BD work, and he said that internally they feel that— so there's, I think their biggest market is, or first or second, is China. And he said, we actually think that India will be our largest market in the next 5, 10 years. I was like, is that because of demographics? And he's like, just everything. Um, so, so when you imagine what that looks like.

Yeah.

Uh, um, you know, if India comes on, like he said, obviously he's like, what other regions? He's like, so we think of Asia as a whole, but it's like they're very different markets. Like Vietnam, the Philippines are like a lot of the demand comes from there. Um, Vietnam's a lot of like devs too. Uh, but he said like Indonesia and India, like it's just these are massive markets that are just gonna that are going to totally leapfrog. Not just they don't have any financial infrastructure, but also from the demand side, it just, it's not just play-to-earn, it's a whole host of things that are going to get built. And so the question is, I guess, if you think about what does that look like, imagine a world where, like, would the next Tencent build without crypto rails or with crypto rails or with the next Kakao in these local markets?

So I think these are the next big companies.

Yeah, that's—

yeah, these are the next— like, like, OK, what OKX is doing right now, I got to spend a good amount of time with the OKX team yesterday. Like, they are not a crypto exchange. They are a— they are the next WeChat built on crypto rails. Now, I don't know if it's going to be OKX or it's going to be someone else, but— and I think another big theme that I've learned from being out here is the M&A market is getting very hot very quickly. The exchanges are all pushing into— so basically the exchange space has been very regionalized. So in Vietnam there's a different exchange than in Thailand. There's all very regionalized. And so now if you're, let's say, OKX or Bybit or Bitget, you want to push into these, into these different regions. So let's say you want to expand to Thailand, you want to expand to Vietnam, you have to— the governments are now starting to enforce their licenses more strictly than they ever have. But they're not allowing new licenses because they say you acquire basically a license, you have to— you're acquiring licenses. So there's a crazy amount of M&A activity that's starting to happen in, uh, where these exchanges are racing to acquire licenses. And it's no different than, you know, uh, you know, and, and, you know, Kraken acquired TradeStation Crypto, right? They did, right, for the licenses. Like, I think, I think that's a big theme that's happening right now.

Yeah.

For sure.

Yeah, it's a really good point. Like, you know, when you think about the— so in fintech, um, the value of a customer, the long-term value of a customer is extremely high. Um, you know, if, if your parents use JP Morgan, you're likely going to open an account with JP Morgan. They're going to open it for you, and then you're likely going to stay with them for life, right? Um, and you could argue that in crypto, the barriers to entry and exit are lower. Like people can just switch exchanges on-chain.

They are. But I think with the exchanges, you pick one and you stay.

That's my point.

Yeah.

Yeah. It's still very much that relationship. People don't want to think about switching providers, opening accounts elsewhere. So there's, there's the point to be made around like if you're sitting at the exchange, you're like, okay, I already— I'm already the on-ramp. And probably with stablecoins, a primary bank relationship. For younger generations.

Yeah.

What else can I build?

Right.

And I think you can sort of imagine that in their whiteboard they have a whole roadmap of owning that relationship with the customer.

Mm. Yep. Okay. I have another takeaway.

Okay.

There is about to be a proliferation of new stablecoins that are yield-generating stablecoins. And this is important because it's going to— it's going to be really interesting to see how USDC responds. So let me explain this relationship right now. So Circle— Circle— and this is all public information— Coinbase and Circle have a partnership for USDC. So there's— so Coinbase and Circle have created— have basically created USDC together. Circle creates it and Coinbase is basically the distribution engine for them. They have like roughly a 50/50 rev share with a little bit more, I think, going to Coinbase. Everyone has woken up, has recently realized two things. One, hey, we all compete with Coinbase, right? If you're a custodian, you compete with Coinbase. If you're trying to build a prime brokerage, you compete with Coinbase. If you're an exchange, you compete with Coinbase. If you're an L1 or an L2, you now compete with Coinbase because of Base. So they've realized that. And then the second thing is they've realized that USDC captures all the yield, right?

So buying Treasuries and keeping that 5%, they've—

they Yeah, they keep the 5%. So anytime someone's minting USDC, holding USDC on behalf of customers and their clients, you are funding your competitor. So a lot of the— there's a couple of things in motion right now. There's all these new stablecoins coming to market. PYUSD, PayPal stablecoin, pays, pays users 10% or 5% right now. Compare that with USDC, which takes the 5% for themselves. So there's that. And then there's all the custodians and prime brokers and exchanges, etc., and L1s and L2s who don't want to be funding their competitor in Coinbase. So they are now thinking about, hey, how can we actually move out of Coinbase and into something else? So, well, I'm very interested to see how USDC responds.

I had a, I had a conversation with one of the best VC investors out there, um, and he said, everyone— and he was, he oftentimes comes to me to talk about crypto. And so we were having a conversation, he says, everyone in Palo Alto Everyone in Silicon Valley is talking about Tether and the sheer, like, profitability of this. Like, that headline, like, Tether is making more money than, like, every other bank.

Than BlackRock, right? Didn't Tether make more than BlackRock?

That headline has been circled around to pretty much every investor and was like, how the hell do these guys get to where they are?

Yeah.

And so your point's a good one, which is, you know, there will be a proliferation of stablecoins. The question is, so Fast forward 5 years from now. How does, how does the stablecoin market look like then and there? Is Tether still the dominant one? Do we have central bank digital currencies?

Yeah, like, I think Tether will remain the dominant one, but I actually think folks like— I was very— I was originally bearish on things like PYUSD because I'm like, oh, that's PayPal's like enterprise stablecoin, whatever.

Were you bearish because it's like because they're an enterprise.

Yeah, because they're a corporate. Yeah, exactly. But then this guy Paul came on Empire and you weren't able to make that episode, but he runs their stablecoin. I was like, oh, this guy kind of gets it actually. Like he's talking about like putting it onto MarginFi and Aave and I was like, oh shit, he kind of gets it. And then I'm— and then I basically think either USDC will have to respond and change how they offer the yield and they'll on that point, people go listen to the episode with Jeremy.

Fantastic one. We asked him this question.

Yeah.

And he said we can't do this, right?

Regulatory said we can't do this. Yeah. So what gives? I don't know how others are doing it. Like, I don't know how PYUSD is giving it because that—

well, it's not— I think, I think the nuance is, and I'm speaking out of turn, but my hypothesis— people should comment and tell me I'm an idiot— they are giving you a yield but it's not directly attributable to what they're earning from, um, the, you know, their, you know, treasury management business. It's more so they're giving you— it's like acquiring a customer, like a marketing expense.

Uh, like, yeah, yeah, yeah, yeah, where the, where the expense is coming. Yes, exactly. I think that's right.

It's not that they're classifying it as pass-through revenue.

I think that's right.

But like, at the grant— like, at the end of the day, it doesn't matter, right?

Yeah. So I've spent a lot of time with Rune. You know, you end up at conferences running into— you've got like 5 people you just keep running into. Rune has been that person for me. So I moderated a panel with Rune actually as well. And then I was at the Rune— Rune announced— had this big announcement where they updated Maker into Sky and they had a party last night and there was like this big announcement and big, big party announcing the launch and Sky.money went live. And Rune, Rune, Rune was also backing this up by saying, look, there's— we have this new stablecoin and it's a yield generating stablecoin. And I asked him this question. I said, look, DAI is big, but it really hasn't been able to get like that big relative to USDC and Tether. How big do you think your USDS will be, which is their new stablecoin relative to DAI? And he thinks within 2 years USDS will be 100 times larger than DAI because there's going to be a demand for yield generating stables as people don't want to sit in Tether or USDC, which gives them no money. So I think actually we're going to see some really fun stablecoin competition for the first time in years.

Yeah, you could argue that you had— we had Nick from Castle Mountain Protocol. I mean, Mountain's been trying to do this for a while. Have they?

Mountain's doing a good job. I was with Martin. Yeah, yeah, they're— they have some really good stuff coming.

I'd love to look at the actual traction that you get because they've been—

again, the key is you have to get in with the exchanges and the custodians. It all comes back to the exchanges.

I was with Guy from Athena. I mean, him and I go way back and we're talking about this.

Yeah.

I mean, it's really a distribution game. And the question is, again, to your point on exchanges, if you're an exchange and you appreciate that, then, you know, you kind of hold the keys to the kingdom now. The counterargument to that is so like every exchange launches their own stablecoin. Fine. You capture your user base and your user base grows. But I think like there likely is the stablecoin that actually wins is sort of a Switzerland model, which is you have to sit a layer on top that is neutral.

Yeah.

So whether it be a central bank digital currency or like some new start, like Tether is just like an independent entity that has all these relationships and everyone has to at this point work with them.

The best model is probably all of these exchanges and custodians coming together to launch like one. Yeah. In the same way that Circle and Coinbase came together.

Yeah.

So there's one way like, yeah, there should be like some consortium trade association or consortium of like 20 of these coming together.

Sure.

Yeah.

Then there's probably an incentive for someone to detract.

Yeah, exactly. Yeah.

But hugely profitable businesses. I mean, yeah, I mean, it's almost like too obvious, right? It's like, yes, people want to hold dollars and this is a digital dollar. And you go to these places, ex-US, and like the demand for Eurodollars is really high.

Yeah.

And it's insatiable.

Yeah.

Like it's like unmet demand. And so it's just you're just meeting people and like I think if you walk around these, like I think in Hong Kong in the FX markets, like they're quoting you on Tether. They want to exchange like, really, it's holding you in tether.

It's crazy. Yeah. Yeah. So, okay, so one takeaway, the exchanges are bigger than I even realized. Number 2, the users are real. Like, there are just a lot more users here than in the States. 3, M&A markets are picking up. 4, I think we're going to start to see the proliferation of stablecoin competition. What else have you thought about?

I think there is a growing cynicism in the industry.

Yeah.

Again, there's a distinction between being—

I mean, Antonio on this panel said, fuck all the new L1s. I mean, he's coming out and just saying, fuck all the new L1s.

Antonio's never been afraid to speak his mind.

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Yeah, so two things. One, I think a lot of founders— I've noticed in my— maybe it's just in my portfolio, a growing way, a new wave of startups closing shop.

Um, closing shop because they ran out of money or founder fights or they're just tired?

No, they're tired. It's not running out of money, actually. They're distributing back 20, 30 cents on the dollar. Like, we haven't found product-market fit.

Yeah.

Uh, and the question that I only asked him is like, what was your learning? Like, why? And there was a combination of founder disagreements Um, but the other one is really like not having very clear what the problem that they were solving was. Um, and I've reflected a lot on that actually. And, uh, I tweeted about this yesterday and then I appreciate that the word— the wording was not— it was not often.

What happened? Did you get shredded?

Like, very quickly, it's like when my phone was blowing up, I was at the gym. I'm like, and I tweeted a lot, but I'm like, Okay. And it's almost like, yo, did you actually mean to imply this? I'm like, definitely not.

What did you say?

What did you— it started off something like, I think most teams are mediocre in crypto.

Ah, nice. Yeah, that'll rile up the crowd.

Well, and then I was like, I was— but I still respect them for trying because being an investor, I appreciate, is a— it's, it's my money, so I'm risking my money that I've earned over the years. I've like—

it's—

so I'm putting stuff. But being a builder in crypto, you're risking not just that, like, it's your livelihood. It's, it's stressful to build.

Yeah.

And so, so I sympathize with builders. The, the thought that I've had is like, for the many years that I've been in the space, I felt that every year, every cycle, we saw the quality of builders go up. And that to me is like the primary reason why I'm here, because I think crypto continues, continue to attract really high caliber people. Of course, of course, there's always a normal distribution. There's, there's just, it normally like not everyone is super high talent, but I felt that we've either plateaued or gone down on that scale. And I don't know if this is an implication or like a ramification of like FTX, Luna, and just really talented builders, or the regulatory environment.

I don't think it's that. My take on that is these are probably founders who you invested in in 2021 who— I don't know, I don't know if that's true or not, but like, I have met a lot of people here who they are, they are, they're not in it for the long haul. And I'm like, when did you come into the industry? It's like 2021. Like, oh yeah, you came in at the peak of top. And a lot of those people end up— it's like the founders who came in in 2017. Like, you know, Mike and I did that. We launched Blockworks in 2017. But a lot of the people that I remember going to these events with, like they're, they're long gone, right?

Yeah, yeah. So, so it's, it's— I've been doing a lot of meditating on this thought is like, is, is the quality of builders going up in the space? Um, and, and so, and then the second one is like more so because I've been maniacally listening to Founders.

Yeah, it's like the Founders Podcast. Yeah.

And, and the question that I now really like to ask founders is like, at what point did you know that you were a builder. Because when you listen to a lot of these episodes of some of the greatest entrepreneurs of all time or athletes, a lot of it was just like, there's a, there's a common denominator of just persistence and hard work.

Yeah.

And, and so the tweet was something like, you know, it's, it requires a lot of hard work. And I, I guess it's like very discouraging when you're really smart, you're, you're like, but you haven't, the users are not there and we haven't had like a lot of this wave of onboarding of users. And so in usage is not there, there. And so there's exceptions like Helium and stuff like that. But I guess it could be very demoralizing if you're building something and no one's— no one cares, no one's using it. I was at a dinner last night with one of the best cryptographers in the world. There's like 5. And he's built a chain. You can try to imagine which one. And they're getting zero attention. Token is not performing well. but he's still really passionate.

Is it a new one or it's been—

No, no, no, it's been around for a while.

Starkware?

I won't comment on the particular name because I don't know what you're talking about.

Yeah, yeah, sure, sure.

But my observation is you also see a wave of really talented builders being demoralized for this reason, which is like you have memes and all these things like working and then no one cares about what I'm building. And I think it's just a matter of time. Like I think really good quality products will shine over time. The question is you just have to stay in the game and survive to a point where usage really starts to happen. My thesis is there are— I think the, the, the bar for being quote-unquote successful in the space, meaning token go up price, your protocol being worth X or Y, has been very low for two reasons. One, it's like this phenomenon of like the Cardano phenomenon. You don't have usage, you don't have revenue, so you can paint this rosy picture and people— if you're a good storyteller, yeah, you can get away with it. And I guess there's a skill in being a good storyteller.

Yeah.

Um, but when I think of like most teams are mediocre, like I appreciate that is a skill in and of itself, but I just find it that the really smarter teams maybe not are as good.

I think those are the folks who are the most frustrated, right?

Yes, correct.

So I sat down with another guy I spent a lot of time with, with Shane from Polymarket. Yeah. And, you know, he, he said, he's like, I genuinely think we're one of the only people who puts— who operates in this order. We go, what is the problem in the market? What is the problem that exists? How do we build a product that we get there? That solves that? How do we acquire the users? And then how do you put marketing at the end of that supply chain to boost the users? Because everyone right now is— because everyone's got a token, you actually have to flip that and you have to put narrative at the very beginning. And if you just focus on product, it's not actually going to work for you. Because— and I think some of this is, you know, we talked about it on this panel. It's like there is a downside of having tokens. Oh yeah. The downside of having tokens is you have to focus on the narrative more than you would if you were just building in like Web2 or whatever.

I guess what I'm trying to say, it can be very frustrating at times, like, um, that you— exceptional storytelling goes far longer and is, is, is a bigger— has been a bigger factor to success in the space than underlying tech and whatnot.

Yeah.

And look, sometimes you see this, VHS, Betamax, whatever you want to call it, sometimes the best tech doesn't win. But I'm actually optimistic in the sense that if you extrapolate and you say, okay, when real institutions come into the space, as more institutions come into the space and they look under the hood, they evaluate these protocols, they evaluate these vendors of who they want to work with. That is where the real tech, not just the storytelling, succeeds. And we, but we just haven't entered that. We're close. I think we're entering that stage where you see Helium, for instance, like, you know, there are carriers offloading the network on the Helium network because it works. Like, you wouldn't do it otherwise. It wouldn't jeopardize or compromise their ability to service their user base if they didn't think that Helium was a good product. Yeah. And so naturally, I think the space will become more competitive as this space continues to grow, more people enter. And so the, the caliber of founders will have to go up.

Yeah.

And so I'm excited for that. I just think we've been in this weird stage where the qualities— yeah, in order to be successful, quite low. Yeah. All right.

So another thing I've noticed at the conference is the lack of the big L2s. There's no conversation about Optimism, Arbitrum. And what do you, what do you make of that?

Well, it's not an Ethereum-centric conference.

Yeah.

So you appreciate—

yeah, yeah.

Tron is very prevalent here and always has been. I remember coming here in 2018, 2019 for the Binance— first Binance conference. Like, Tron had the same booth in the same place. Like, it's just, um, yeah, it's, uh, but it's true though. Yeah.

You know who's done a phenomenal job of marketing to this part of the world is BearChain. I have noticed that I've met more people here building on Bearachain than I have built— that I've met building on Optimism or Arbitrum. Stark difference from the US. Yeah. Yeah.

So they built a really good, like, their MVP program.

I funded 3 or 4 startups and I'm not an investor in Bearachain or in any company building on Bearachain. But, you know, as a non-biased person, like, it's just been very I'm like, wow, a lot of talk about BearChain.

Yeah, they— there was a— people were posting pictures of— they did this event. I think there was 10,000 people that signed up, only 800 got in. Smokey tweeted something to the effect of like, ah, I'm the founder, I can't even—

I can't even get in. Yeah, that's funny.

Uh, so I wasn't here for that, but, uh, yeah.

Uh, another non-crypto takeaway, first time Singapore person here, this country is amazing. It just runs so flawlessly. And actually I've had some You can always learn a lot about a country by the taxi drivers. And the taxi drivers are, first off, so friendly. But I had a long— I went and played paddle this morning, and the paddle place was like 30 minutes away.

Thanks for the invite.

You're not— you're not— no, you're not a team sports kind of guy. Not team sports kind of guy. More of a runner, biker, you know.

Uh, this is what you get about working with someone for 3 years.

It was actually good that you didn't come. I almost passed out. The heat was like just debilitating. But he was right. This guy was really ragging on the US. He's like, you guys have homeless people everywhere. He's like, he was laughing that we— zero homeless people, zero homeless people. So they have a— they hang people for drugs. He's like, yeah, as he said, he said, as they should, they should be hanged if they're, if they're using drugs, why wouldn't they be hanged? They have— they cane people. Like caning, adult spanking, adult spanking.

Yes, it hurt.

I've heard it hurts like a motherfucker. I've heard. Yeah. A friend told me. Yeah.

The reason why I'm sitting on the couch.

Yeah. Yeah. No, but he was just kind of ragging on the US. He's saying like, he's like, we view the US as a dysfunctional system at this point. He said it's obviously great that you guys are big and stuff like that. And it's very— your history is very impressive. But, you know, you're, you're, you have very high crime. You have these two politicians running for president who are both imbeciles, in his words. You've got like this proliferation of drugs basically all around. Your public transportation doesn't work. He was really laughing at the fact that we give free money to people like stimulus checks and all that stuff. He's like, we would never do that here. And he was just explaining these little things they do that make the country run better. For example, The air quality here is really good, whereas in a lot of other countries it's really bad. And one of the things that they've done is you have to give up your car after 10 years. If you're a taxi driver, 7 years. If you're a regular driver, 10 years.

And the reason cars cost 2x here—

tariffs, tariffs are crazy. But also you have to get a paper that costs $70,000 just to apply to get a car. So you can't walk up to the car dealership and get a car. You have to apply, then you pay $70,000 to get a piece of paper, then you can get your car. Um, but then at the end of 10 years, you have to give up your car, and they export the car to third world countries, as he said, because the pollution generated by old cars is so much worse. So they have all these little policies. And then the last thing he said is, he said politicians in the United States are— he's like, it's the— you get, you get the worst people, right? Running for office. Like, the best people go work at tech companies, hedge funds, build things, founders, engineers, uh, whoever it is, PhD people, scientists. He said in Singapore, he said the elite of the elite, the best of the best, go work in government.

Yeah, and they're very successful before coming into government.

Yeah, and he said we pay really well in the government. So I just found— I've just been blown away by uh, how, how intensely they run the country, but how amazing it has turned out.

So yeah, I've had the benefit of coming to Singapore over the years many times, and the, the criticism of a city-state like Singapore, Monaco, some of these, is can you scale that? Yeah, can you scale the model that has worked in Singapore elsewhere? I don't pretend to be a political expert, but that has always been just the criticism. I guess you can relate it to, you know, scalability, crypto and— but it's— can you create—

well, I think you can talk about it in the light of this whole founder mode thing, which I don't know if you've been seeing. Have you seen founder mode? Okay. It's, you know, I had lunch with Alex, the founder of Nansen, and he was telling me there's this great book that I want to read about. I forget the guy's name, but it's called— I think it's called Third World to First World. It's about the— who's the guy who's, you know, I don't know, the guy who did all the changes in Singapore. Uh, but he— Lee Kuan Yew, I think. Yeah. And he ran the country like a founder. He's just basically— I mean, like a good dictator, basically just went into founder mode and put in place all these changes, kind of thing. Yeah.

Yeah, that's always been the challenge. Um, and I'm not like convinced it's not possible. Um, now do you want to create there's reasons why people wouldn't want to live in Singapore, and I appreciate what, you know, that.

But it's hot, it's really hot.

No, well, like, it's, um, you know, um, I guess people, if you like vaping, you can't vape in Singapore. You, uh, you know, there's the, the, there's always that trade-off of some liberty, very strict rules, some pure expression to of doing what you want with, uh, order, cleanliness, security. And, and, you know, that's a trade-off that you can make. But yeah, it's actually, um, it's very nice coming here, being able to walk, not think about security, not think about— yeah, yeah, other things that, you know, are a problem in other places.

Yeah. Any other takeaways from the conference? So there are 900 side events, uh, it's Yeah, 20,000 people, like Santi was saying. There are 5 floors at this event and 900 side events over the course of the week. Combine that with— there's also Breakpoint happening right now, and there's Formula 1. It's—

and there's a Milken— in my hotel, there's a Milken Asia Summit.

Is there really?

Yeah, it's just crazy. So a bunch of like bankers and hedge fund guys.

What do you think of this whole side event thing?

Well, it's nice, you know, like There's like a lot of people that's like, I don't even want to go to the conference. They just go to the side events. They're more intimate. You can get, you know, closer to people and have actual conversations. Conference is crazy.

Yeah.

But I'm— yeah, that's good. Yeah. You going to any nice ones or have come to some good side events?

Yeah, good. Some good side events, but there's just a lot.

So anyways, are you speaking at Breakpoint?

No, not speaking.

Yeah.

Are you excited?

Yeah.

Santi's got a nice little debate. Solana versus ETH.

Yes. Is, uh, the name of the panel is what's more future-proof, Solana or Ethereum. And I'll be doing that with Avicii from Electric. You can guess who's taking the floor.

Avicii. I don't think of him as a big, see, big ETH guy.

No, I initially, yeah, I guess, uh, you could bring on someone that is a bit like, see, probably like would be more like.

Oh, here's another takeaway from the conference. The big venture funds, there is a— I think a lot of people put like Pantera, Polychain, Dragonfly, Electric, Paradigm, like all these big kind of tier 1 framework, like in this one bucket. And, you know, it's like the best venture firms in crypto. There's a dark difference in how— in the return profile of those funds. All, I mean, all of them are out raising right now, it sounds like. And some of them have done incredibly well. And I think you're gonna have— it sounds like you're having an easy time raising— not, not easy, but are having— they'll be able to raise a good amount of money. Other ones really had a tough couple of years. And I think they're really struggling to get some numbers. I mean, there are folks who raised, let's say, 300, 400, 500 million last time who I think are going to raise funds of 100 or 200.

Like the return profile. Uh, because I don't— that vintage has not been crystallized still, right?

It hasn't, it hasn't. And I honestly don't know what the norm— like, you know, you're talking like DPI and— yeah, I actually don't know the norms and what's good or what's bad.

But, but if you were to canvas like what is a tier 1 venture fund vintage, pure venture, like what are the returns that they delivered in their last fund that was probably raised 2020?

I actually, I actually don't know.

10x, 30x, is it 25x? Uh, I actually don't know the answer to that because in traditional venture, if you've— in the 3 to 5x, NVCA, National Venture Capital Association, puts out these numbers, um, and they survey, you know, yeah, these funds and pension funds that are investors because they have all the data. I think if you are 4x, 4 to 5x places you in the top tier venture funds.

4 to 5x over what, the lifespan of the fund, which is what, 7 years or something?

Yeah, but it's the vintage, right? It's the 20— the latest fund which is probably raised over the last 5 years. Yeah, or 7 years, because most of these funds have a 10-year life. Uh, in crypto it's a bit shorter than that, but yeah, that return is, uh, from what I can see as an investor in some funds and Yeah, it's, uh, we're able to do it's multiples.

Yeah.

Yeah.

So I don't think the same thing that happens going forward, the same thing that's happened with retail where if you, if you didn't buy Solana or meme coins this cycle, you have not made money. Same thing with these venture funds. And now they have to go to their LPs and the LPs say, well, why are your returns bad? And yes, you can say, well, it's only been 2 years since we raised the last one. But, you know, a lot of the LPs invested in 8 different funds. And if 2 outperformed and 6 have underperformed, those 6 aren't getting your money again.

You would think.

You would think. You would think.

But also it's a, it's a, in crypto, much like in venture, a lot of it, you would think that rationally speaking, you would invest in the, in the manager that has outperformed historically. But a lot of times it's like, what's it come down to? The relationship. Storytelling. Pedigree of the founder.

Yeah. Um, and so yeah, um, the other thing I've realized is you really only have to hit one or two. You have to—

it's been my MO. It's— you have to get one or two things exceptionally right each cycle.

Yeah.

And if you're not in that, you missed it. Yeah.

And it's like, you know, Dragonfly hitting Near, Framework hitting what, Chainlink or something first, whatever they hit, you know.

Power5, we were early in you know, DeFi or something.

Yeah, yeah.

You have one or two things that it's very much parallel and you return a fund on that basis.

Yeah.

They— so I've been, just as a closing thought, because we always give homework to people, sure, I've been on this point around returns and, you know, you, you read books on your phone? Uh, I have a Kindle actually, and my— I, I usually always do it on my phone. It's a bit marginally more distracting, but just because I always have it on me, I can read like when I'm in a taxi or like I want to talk people, I just pop up the Kindle and pretend like I'm very busy. I do that a lot.

Sir, I'm actually reading right now.

I was on a date once and we go to dinner and then we go to this like nightclub and whatever. She goes to the bathroom.

You took your date to a nightclub?

In Monaco.

Okay.

And so she goes to the bathroom and I was reading this book. I was like, you know, like you want to finish it? But I popped up the Kindle app while I'm like sitting there and she comes back and she's just like, It took a while. I'm like, God, dinner must have been heavy. I look up and she's like looking at me and be like, what are you doing? Why are you reading?

I'm like, I guess just reading at the nightclub.

Yeah, he's reminding me of this. We're still friends, I guess. Um, but anyways, I do read on my phone, but people should buy the kit. It's really good.

A lot more questions about your dating life, but we'll, we'll, uh, stop the recording.

It's non-existent. Uh, There's this really good book. I've been thinking a lot about, um, success, um, the difference between like skill, luck. In investing, a lot of it is— it's not like pure skill-based, um, activity. In certain sports, like you're a sprinter, you're a swimmer, individual sports, like it is, um, there's less element of luck. Like Michael Phelps, he can have it.

It is only you. Yeah, but there's— there are not many variables.

But you like basketball? Basketball is very different than baseball. Basketball, because there's many points. Yeah. Like the teams that have the best shooters, like they tend to win. There's many games and there's many points. And so the, there's always an element of luck, but the degree by which luck plays a factor is quite low on that spectrum. Then contrast that with soccer.

There's one or two goals.

One or two goals.

So it could get lucky.

And the referee. Yeah. Offside.

Yeah.

Penalties.

And it can—

and I guess there's an element of why people like soccer, because it's very like, um, in developing, it's like very aspirational sport. Anyways, so the really good book, shout out to Michael, uh, um, Jay Lee, who recommended this book. It's called The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing. Fascinating read, by the way. The best, um, book that I've read on this particular subject.

Interesting. Okay.

Um, really good. It also is kind of fun too, because you're reading about these sports and investing, but But it's— there's a whole chapter dedicated to, um, investing. And I often think about that a lot, you know, in the context of like, are rates going to go to record low lows as they did for the last decade? No. So you invert and you say, am I going to continue to be successful implementing the same strategy? Um, how much of it was luck? How much of it was driven by—

I feel like you've been thinking about that a lot. We're going into like this, this interest rate regime. We, we haven't even talked about interest rates, but I mean, I bring this up because obviously rates have come down, but we're not—

if I ascribe to the Howard Marks thinking, which is we're not going to go back to zero. And, and so that matters. And it probably matters more so than people think. And so I always second-guess myself. Like, I've only started my professional investing career. I graduated and it was post-financial crisis. I've only invested in a record low interest rate environment.

Yeah.

And so, and also, by the way, you just saw the formation of a new asset class from $0 to $2 trillion. Like, yeah, the— I think it's a— I'll leave listeners with this. I think you ought to constantly be thinking about, you know, it's almost like a 10x is like underperforming in crypto.

Yeah.

And I, I think it's, it's useful to constantly recalibrate and, yeah, and remove that anchoring effect and that bias and saying, what is a realistic return?

Yeah.

And I've said it time and time again, I think of now I'm trying to optimize for at best capturing like 50% of the return.

Yeah.

Of a cycle. Because going from 50 to trying to optimize for 80, you're gonna put yourself way much— I think you're gonna do many more mistakes.

So if you're trying to optimize for 50% of the cycle, does that mean you're selling early or taking less risk?

No, selling early.

Selling early.

Yeah, like, like capital preservation.

Yeah.

And people be like, oh, you know, because your size is different. Marginally true, but I still think that you, you invert and you say we have many, many more cycles ahead. Yeah. And it's always fun— funny— because when you should be investing, no one has money.

Yeah. Yeah.

You want to be there with money and investing. So like right now I'm not doing many privates because I don't— just don't think it's— we're in that point of the cycle where you should be doing— like, I don't want to do private Um, but who knows, you know?

I'm reading this book, Boyd: The Fighter Pilot Who Changed the Art of War. I needed a non-business book.

It's good.

It's really good. Yeah, it's about, uh, this guy who became the most famous, um, uh, greatest fighter pilot in American history. Really kind of broke through the bureaucracy of like the military and completely changed how we how we fight in the air. Um, F-15, F-15, and F-16s, and basically transformed, uh, yeah, just like the art of war in the air. So that's my book.

Nice.

Yeah. All right, folks, this is Singapore tuning in. Look at those lovely—

these are the gardens. Futuristic. This looks like Star Wars, kind of like.

It really does. Look at that. Crazy, huh? Yeah. All right, folks, that's all she wrote.

All right.

See ya. 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.