Blockworks: The Future of Crypto = AI, Memecoins and DePIN - Jason Yanowitz Live @Permissionless

What started happening is all the protocols would come to us and say, hey, you spend more time looking at incentive programs than anyone else. We want to build an incentive program. Can you help us do that? Biggest takeaway from Missionless is that the apps are actually coming. Like if the first wave of apps in DeFi was like speculative ways to do things in finance, this wave of apps is going to be speculative ways to do things in culture and society. And then most of them are going to be dumb and gimmicky. But a couple of those will become the next Uniswaps and Aaves and Compounds. Every conversation that I have at Permissionless ends up coming back to 3 things: AI crypto, meme coins, and DePIN.

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This episode is proudly brought to you by Gnosis, a collective dedicated to advancing a decentralized future. Gnosis leads innovation with Circles, Gnosis Pay, and Metry, reshaping open banking and money. With Hashi and Gnosis VPN, they're building a more resilient, privacy-focused internet. If you're looking for an L1 to launch your project, Gnosis Chain offers the same development environment as Ethereum with lower transaction fees. It's supported by over 200,000 validators, making Gnosis Chain a reliable and credibly neutral foundation for your applications. Gnosis DAO drives Gnosis governance where every voice matters. Join the Gnosis community in the Gnosis DAO forum today. Deploy on the EVM-compatible Gnosis Chain or secure the network with just one GNO and affordable hardware. Start your decentralization journey today at gnosis.io. Welcome to Epicenter, the show which talks about the technologies, projects, and people driving decentralization and the blockchain revolution. I'm Sebastian Gauthier. I'm here with my co-hosts Frederic Guérin and Sunny Agarwal. We are very pleased to be with Jason Yanowitz, co-founder of Blockworks and of this fine conference. We're at Permissionless. In Salt Lake City. Jason, thanks for doing this.

Thanks for having me.

How you doing, man?

You guys liking the event?

It's pretty good. Yeah. Yeah. It's, uh, it's my first time in Salt Lake and my first Permissionless and, uh, I was expecting a good conference and I got a good conference.

Nice.

So good. Yeah.

Sonny is not saying he enjoyed it, but that's okay.

I had a great time.

Um, I'm sure everybody says this, by the way, when they come on Epicenter, but it's, uh, it's actually a very special thing to be on here because this is the show that I listened to for years. When there weren't like 50 podcasts in the industry and there was just one I could listen to. So it's a, I really appreciate you guys having me on.

Are you excited to have your little Polygon picture?

Yeah, yeah, exactly.

Yeah. So yeah, tell us a bit about this event. Like what's, what's going on here?

Yeah, the event is good. It's so a couple thousand people here. So events are interesting because they basically let, they're an indicator of what the industry was feeling 6 months ago. Because you sell a lot of your sponsorships and a lot of the tickets— actually, the tickets happen in like the couple weeks before, but a lot of the sponsorships happen and you kind of pick the size of the conference like 6 months before. So, uh, the event's really good though. Like, we're very happy with it. Um, a couple thousand people here. There's like a lot of founders and, uh, I think the conversation is like I don't know, a lot of talk about like apps, rollups, you know, Uniswap just made their big announcement this week, like with the UniChain, like what's going to happen there. So I don't know, I think it's a good event.

What's your goal for hosting a conference?

Okay, so Blockworks has 3 sides of the business. We have the media business where we own a lot of the podcasts and the newsletters. We have the events side of the business where we own 2 different brands. There's Permissionless and Digital Asset Summit. And then we have a research and data business. So 3 sides of the business. Actually, we just launched a 4th, which is Blockworks Advisory. We'll talk about it. But all of those kind of sides of the business serve different functions. So the media business serves the function of owning this big audience and owning the distribution and the relationship with like millions of people. Then the events business is here to make money, candidly, like it spits off cash flow. Uh, and then the research and data business does two things, which is it like builds our deeply like crypto-native brand, and then it drives enterprise value because that's where the like ARR and subscriptions come from. So if you take those things, like there are some media businesses, there are some event businesses, there are some like research and data platforms, but they all, I think you have to bring those three things together to have actually a viable media and information business in crypto. So they all serve different functions.

How did that evolve historically? Kind of, did you start with all those different facets, or did you kind of add to the offering bit by bit?

Yeah, we built a media company ass backwards. So the way that you're supposed to build a media company is you're supposed to launch a Substack or launch a podcast, and then maybe you build an audience, and then you wake up in like 18 months, you're like, oh my God, I need to monetize this thing. So maybe we should host some events, or we should get some advertisers for the podcast. Maybe that's what happened with Epicenter. You host a podcast, then you're like, oh, we should make some money and we start getting advertisers. Kind of a classic model. We didn't know what media was. We didn't know how to do media. So we were just trying to solve one problem in the market, which was in 2017 in New York City, there were all these events, but they were really scammy and pretty crappy events. I'm sure you guys went to some of these, the like really ICO events in New York. So we were just trying to solve the events in crypto. We were just trying to make better events in crypto. And these weren't even big conferences. They were just like 6 to 10 PM happy hours. So we started with the happy hours, turned them into big events. We initially had this outsourced podcast model where we would like sell ads for other podcasts.

For Epicenter?

We sold ads for Epicenter.

During like 2020, 2021?

Yeah, exactly. We launched some other shows. We launched the Pomp Podcast, which was called Off the Chain back then. We did a show with Ryan Selkis. We did a show with Meltam and Jill, um, called What Grinds My Gears. We did a show with, uh, Scott Melker. We did a show with Charlie Shrem. So we had all these shows, and then, uh, COVID hit and 80% of our revenue got wiped out overnight. So that was the basically existential crisis for the business. We were like, do we sell it? We talked to CoinDesk. We were like, do we maybe just sell this to them for a couple million bucks? Do we Quit? Like, do we pack it up, basically? And we just decided, we said, look, there's all these media brands in crypto. There's like The Block and CoinDesk and CoinTelegraph and Decrypt. But we thought they were all kind of doing a decent job, but not an exceptional job. And the way that we saw it is they're all kind of catering to these like big audiences. They're shooting for page views and going for like 100-level content or 200-level content. And we said, hey, look, what if you built a media brand just focus on this, on the crypto-native audience, like really just focus on like, honestly, like the three of you in this room as our target audience instead of the random retail person. And so that's what we did. We decided to go all in and bet on ourselves and like launch this deeply crypto-native media brand. And that was 2021. So that was when we quit all of our other podcasts. We brought podcasts in-house, we launched Bell Curve and Empire and those kind of shows. And then a year later, 2022, we launched the research and data company.

So you told us just before we started the recording that you were kind of debating internally whether to kind of do it again next year. Tell us why you're of two minds about that.

Yeah, so yeah, we actually haven't really talked about this publicly. I guess we should make some public announcement about it that we're debating this, but we can also cut this out. No, no, no, no, no, no, this is good. This is good. Yeah, because I'd love the audience's feedback on it.

We should do this You had it here first.

You know, it's just that we get better products. I'll just tell people how we're thinking about it and someone will give us good feedback. So we have two conference brands. We have Digital Asset Summit, which we call DASS, and it's a very buttoned-up institutional event. It's like traditional, you know, JPMorgan, Goldman, KKR, BlackRock comes to learn about crypto. And there's a very clear— the way that I think about events is you're creating a marketplace. For 2 or 3 days and then you're tearing down the marketplace. It's actually a pop-up marketplace. So to have a successful event, you need to have really well-defined sides of the marketplace. So you need buyer, very clear buyers, you need very clear sellers. So for DAS, the very clear buyer, which is like anyone trying to get in front of an institution, Fireblocks, Anchorage, BitGo, you know, zkSync, anyone trying to get Polygon, trying to sell to enterprise institutions. And you have the sellers or the— excuse me, the buyers, which are like, I don't know, BNY Mellon looking for like a solution or something like that, or the funds maybe allocating capital. All right. So that's DAS. Beautiful event. Tickets sell out months in advance, whatever. We'll always do that event. What we're debating with permissionless is you don't really have that well-defined buyer and seller permissionless. It's just like— I'd be honestly curious to hear how you guys think about permissionless, but it's just We— I've always thought of it as like, hey, Consensus is not that good of an event because it's just not very crypto-native. ETH Denver is kind of chaotic, but I do love ETH Denver. Token— it's just Asia. It's not in the US. And so I've always thought of Permissionless as like a deeply crypto-native big conference, but it's not a very clear who's the buyer and who's the seller. Again, going back to that marketplace idea. So we're debating Do we keep doing permissionless? And because if permissionless is really successful in its strategy today, it ends up becoming like a token. It ends up becoming like a consensus. It becomes like an ETH Denver. And I'm debating the value of big conferences today. The other option we could do is I think there's a real gap in the developer conferences and the developer market. So if you look at some of the best developer events, you know, ETH Global does amazing work. Let's see, DevCon, obviously incredible, but they're very Ethereum-focused. And I think some of the coolest stuff happening in the industry is actually outside of Ethereum right now, but nobody's built events for that market. So that's what we're debating. Do we just keep going bigger with permissionless? Do we turn it into more of a developer conference? So that's a little look behind the scenes.

And a lot of the developer events I think are more kind of like foundation-run or they're closer to the actual chains. Than run by like, you know, sort of event companies or media companies.

Right. Yeah, you're still on a breakpoint and you've got the Avalanche thing in our space.

Because like they have an incentive to, you know, fund a hackathon and get a whole bunch of people on their chain. I think there's, I think, you know, it's complicated. I mean, unless you're running some kind of like hackathon, you know, as a service sort of business, it's hard to create that sort of like momentum around your kind of developer event.

Like our thesis for a developer event, the thing that I think we could do better than anyone is is we have an amazing event operations team. So sometimes if you go to these developer conferences, they're not the most well-organized events, I would say. And we know how to run a very buttoned-up event. Hmm. And the other thing I think we could do is like, so right now there aren't many new developers coming into the industry. Our thesis is that the number of developers who come into the industry is going to 100x over the next couple of years. And those developers, will want a place to go that's a little more open than something like just, this is the Ethereum developer event. So like my vision is like, okay, you put like Tobi from Shopify on stage with like, you know, Toly from Solana and you put Patrick Collison on stage with like, I don't know, Alex from zkSync. Like those would be some phenomenal conversations. The counter is like, you know, look at all these sponsors. Developers don't love having overly sponsored.

Yes.

So you need to make money somehow. I don't know. What do you guys think about that?

Well, I mean, you run a developer event. I've tried to do one for the last 3 years and have been like mildly successful with it.

You guys run one of the best developer events.

But I mean, their event's really terrific. What do you think? Yeah.

So I mean, it's been kind of the main event besides ETH Berlin at Berlin Blockchain Week. Since 2018 when we did it for the first time. I always regret doing it kind of like the weekend before I was like, ah, we are such idiots. Why are we putting this on again? Why are we doing this to ourselves?

Same, exactly. Like literally a week ago I was like, screw Permissionless. I hate this event. But then you get there.

Then you get there and it's actually super nice and kind of like people come and it's kind of like, it's a pretty low-key event. So kind of like there's, there's. Pretty high signal-to-noise. Kind of the way that we achieve it is kind of like, I mean, we are very much, Nosis is not an events company, right? So kind of like we run this because we think it should exist and kind of we want to go out kind of with a black zero. And that's kind of the goal. So kind of we, we don't collect enormous sponsorships. Kind of, I think our top tier has historically been like €25,000. Our, our tickets are pretty cheap. I think they're like €200 or €300 for 3 days, and kind of it includes food and everything. So kind of it's, it's not, it's not a revenue-generating event for sure, but it, it does actually create a lot of atmosphere, and people love coming. And there's a lot of people who actually, who are repeat attendees. Yeah. And I think that's for a reason. We always have a super nice side event dinner. With kind of like our BFF, you know, friends from the ecosystem and so on. And it's a thing. It's super nice. And for the first time, we're actually organizing a side event to DEF CON this year, the 2 days ahead of it called DEF Conflict. And it's kind of like the— yeah, it's kind of like the 6 biggest debates in in crypto at this point. So kind of like, for instance, the first debate is my co-founder Martin against Vitalik about whether Gnosis should become an L2 and kind of like debates like that. That's a good debate.

Yeah, that's a good debate. So what would you do with permissionless? Would you keep doing it as we're doing it, or would you get into the developer event game?

I actually quite like this. So kind of, I enjoy coming because A, it's very Um, it's fantastic for meeting stateside people. So kind of like most of the European events or even Token, you don't get to see all the Americans. And I don't usually at these events, I think as an event organizer, you never like hearing this, but I don't go to a lot of the talks. Um, so kind of because those I can watch on YouTube later. Um, I kind of, I literally just network and kind of, uh, when I don't have meetings, I sit in the lobby and I run into people and it's kind of like, we, I actually love hearing that because my thought—

so the content just pulls people in basically, but I mean, we do all these event surveys and stuff. So 78% of attendees attend our conference, attend Permissionless specifically for networking, not for content.

Yeah.

So, and then it's not that 22% attends for the content. There's all these other buckets, but 78% attends for the networking.

So like, it's like, um, you know, you, you, you said that eventually this marketplace and I think, like you said, permissionless style events are not actually a two-sided marketplace. They're like a one-sided marketplace where people are coming to network with each other. And then there's this problem of you only want to go if other people you want to talk to want to go. And there's a bootstrapping problem. And I think speaker slots are how you solve the bootstrapping problem.

That's the bootstrap problem. Exactly. You get the big name speakers, and then you get the big VCs, and then the other VCs who are smaller are like, oh my God, these big name speakers My VC partners are there. I got to be there.

Yeah.

Yeah.

What do you think about permissionless, honey? Should we keep doing it how we're doing it now and just make it bigger and better? I mean, you could say that the US, you know, it's all— if you look at the event landscape too, all the big events have pulled out of the US. Consensus is going to Toronto. I don't know if they— they're going to Toronto. So there's this massive gap in the market for a huge US conference. So I'm curious how you—

I feel like— okay, so for some context, I've been conferencing for the last 3 weeks.

I'm sorry to hear that.

Yeah, because I was in Singapore first. So I didn't actually go into Token2049, but I was like outside it. I was there for Breakpoint. Breakpoint was exceptional. Then last week I was at Mainnet. I'm sorry, Mainnet. Which I felt was a little depressing, honestly.

There was no one there, right? That's what my team told me, that there was literally no one attending.

And then here—

You said it, not me.

Sorry.

I feel it. So I hear— I just feel like I think this is more well attended right now than Mainnet was, but still nowhere as close as Token and Breakpoint. And I feel, but I feel like, you know, I just feel like right now it's like the third event in a row where I'm like, okay, it's a little too generic. I feel that's maybe the challenge where it's like, I, and maybe what Breakpoint, what I liked about Breakpoint was it was actually very, very unique and very specific. Yeah.

So one of the things is like, yeah, I mean, there's nowhere, there's probably one sixth or one seventh the attendees that Token had.

Yeah.

Let's see, I could— you could do the math. I mean, Token had 20,000. Yes, about 1/6 of the attendees. So, but if you actually look back, like our— if you look back at 2022, that event for us had like several thousand attendees. That was massive. What's the big difference? The US regulators smashed crypto in the US, right? So last year, 40% of our speakers dropped out because their legal team wouldn't tell them they could speak. And most of our big sponsors, even this year. So this year we were able to get the speakers that we wanted, but even our sponsors who sponsor our podcast, our newsletters, our London conference, their legal teams won't let them sponsor a US conference still.

Wow.

So that's why you see these events like Consensus. Consensus doesn't want to leave the US. I don't actually know, but I would guess they don't want to leave the US, but they're feeling it just like all the other US conferences, including ourselves, or But we feel the impact of the regulatory landscape too.

Yeah, I think what you were saying about the event being, events being generic is something we've been thinking about also with Nebula, because I think one of the takeaways from Nebula this year was that it was a conference that didn't really know what it was. It didn't know whether it was like a modular conference or a Cosmos conference. And the takeaway is that we want to create something that's a little bit more targeted and focused on a theme, right? I mean, we're not going to do like an ecosystem-specific conference because that's not like sort of our strategy, but doing like sort of more thematic conferences, probably also smaller. So when we had a 500-person event, but even like a 200 to 300-person event, I think makes sense for us. But we're a fund, so like we're not, running an events business.

We're running a different— for you guys, yeah, fundraising business. The other, the last thing, and then, um, the last thing on conferences is one thing you're fighting against as a conference organizer is the fact that all the ecosystems are launching their own conferences.

Yeah.

So everybody saw the success of Solana Breakpoint and they said, well, we need one of those for our ecosystem.

Yeah.

So you got Avalanche hosting their event in Argentina. You got to imagine ZKSync, Optimism, Polygon. You got to imagine all these guys are going to do the same thing. So Uh, and like you said, Breakpoint was an amazing event. Like I also thought it was amazing. Uh, and so you're fighting against that, uh, momentum or inertia depending on how you look at it as a conference organizer.

Yeah.

Yeah.

Well, we, um, oh yeah.

Let's talk about Blockworks Advisory. You guys just launched that, uh, yesterday.

I did. I did. Uh, some, some people did say that they didn't like the name because, uh, advisory is like, oh, you're getting advisory tokens on the side. Uh, so, so that is, I was like, oh God, we should have thought of that. Uh, no, so, so basically, uh, so the story of Blockworks, like I was saying, so like for 5 years we just did media, did media and events and good business, whatever. And then, uh, May 2022, we similar thing to when we launched the media business, we looked around and we saw, yeah, Messari and, uh, you know, I actually don't want to name too many names, but we saw a lot of like research and data providers. We're like, these are solid, but maybe 6 out of 10, they're not exceptional platforms. We think we can do it better. We don't really want to go build this thing because it's a lot of money and time and you have to hire engineers and that's hard to do, as you know very well. But our customers are in our clients and our audience are really requesting it. So let's go do it. Okay. So that was May 2022. We launched the research and data business. We have like 20, 25, like analysts and engineers and stuff like that. And the byproduct of that is that our analysts got— so our analysts got super deep into the weeds. We're one of the largest delegates in Uniswap. Top 5 or 10 delegate in Arbitrum. I think the 4th largest or 3rd largest delegate in Wormhole, one of the largest delegates in zkSync. So we're like big, we're very deep into the weeds of all these protocols now. What started happening is all the protocols would come to us and say, hey, you spend more time looking at incentive programs than anyone else. We want to build an incentive program. Can you help us do that? Hey, you spend more time looking at grants programs and you, you know, can you, you know, we're Arbitrum. We just, you know, we've got this huge grants program. We're worried that we're going to waste all this money. Can you analyze this grants program to see how we should do it? Hey, we're Solana. We— there's no one creating dashboards on us. Can you like, can you help us like get our dashboards out into the analytics, out into the open? So there's all this stuff like foundation creation, incentive designs, grants programs that we started helping people with over the last year. And that's what we just launched this week was Blockworks Advisory, which is like, I guess in one line, it's helping protocols with growth. That's it.

And any exciting like launch partners or teams that you're working with?

The initial batch was Uniswap, Athena Labs, Arbitrum, Polygon, Optimism, and Avalanche.

Okay, so these are like, you're not like trying to like help like small startups. These are like big projects that kind of you're like—

These are the big projects who are sitting on a boatload of capital and have no clue what to do with it. We're also working with some people who like not publicly sharing their names yet, but who have like TGE coming in the next couple of months and they just have no clue how to do it. Like, you know, you're not taught how to launch a token.

Yeah, you're—

there's no, there's no, I mean, there's no, there's no course out there on how to launch a token. So what you usually ask these teams to do is just like study all the other token launches, but that takes away from your other work, right? You have to go launch products and keep doing BD. So What we've done is like, we know how to launch a token. Like, we've studied all the best token launches. We've studied the incentive programs, we've studied the grants programs, we've studied the go-to-market strategies, and we can help these protocols be more successful. So that's— yeah.

And like, are you also working with, say, like with funds that have portfolio companies that want, you know, can benefit from this program?

Yeah, exactly. So I was speaking with one venture firm. They have 14 portfolio companies launching tokens in the next 5 months. So November, December, January, February, March, 14 tokens are going to launch just from their portfolio companies. And you multiply that by the, you know, 100+ funds or whatever funds are in the industry, you're going to see the— you're going to see hundreds of new protocols and apps and whatever launch tokens. And so we're working with what, who we consider to be kind of the tier ones of those groups to see if we can help them, yeah, be more successful and like do honestly do what they do best, which is like build good products and BD and stuff like that. We're trying to take some of the heavy lifting off their plate.

Well, so you mentioned Uniswap. So like Unichain was announced this morning. Were you guys involved in that at all? Did you participate in?

We weren't involved in Unichain, but we're helping them with some, some other governance stuff. Yeah.

Okay. Yeah. Maybe we can, we can switch gears a little bit and talk about apps and infra. This was like one of the topics here at the conference. Yeah. Yeah. What's your sense of where we're at right now?

So yeah, I kind of went back and forth on this all year because, you know, you go on Twitter and it's like, oh my God, the applications are coming and I don't know about you guys, but I was like, are they? Are they really though?

They are. They are.

Are they? I was like, are they really though? And my big, honestly, my biggest takeaway from Missionless is that the apps are actually coming. And I think there's a couple of things leading to that. So the first thing, honestly, like a lot of things in crypto, a lot of it comes back to not the users, but the funding mechanisms. So the first thing that's leading to this is there was this model that worked from kind of 2020, 2021 up until 2024. Which was you go raise a seed round, a Series A, a Series B, and then you launch your token and every round is higher and then your token launches even higher. And that just worked like it, you know, kind of worked for everybody. And what's starting to happen over the last couple of months is your tokens going live at a valuation that's lower than your last private round.

Yep.

That breaks the cycle. That breaks this model of, of doing this. So when you raise your private round at $3 billion and your token goes live at $2 billion, That's not good. And that starts to kind of make the VCs question, should I keep investing in infrastructure? Okay, so that's the first thing that's happening. The second thing that's happening is the apps are starting to get funding for kind of the first time. Actually, I'd say the second time. The first, we already had a big wave of applications, right? It was Uniswap, it was Aave, it was Compound, right? These were applications, they were just DeFi applications. So what's happening? So the second thing that's happening is like folks like Infinex and other applications are starting to be able to raise money. Like Infinex raised, what, $54 million in like a week or two, I think. That's the second thing. Third thing that's happening is the applications are launching tokens. So I think you're going to start to see some of the big applications and the one that kind of everyone has been talking about Recently launched a token soon. And there was a fourth thing, but I kind of forget what it is. So yeah, I don't know. What do you guys— So anyways, my takeaway is like there's going to be an actual proliferation of applications. Some will be hyper— I think a lot of them will be hyper-financialized ways to do things in society and culture. Like if the first wave of apps and DeFi was was like speculative ways to do things in finance. This wave of apps is going to be speculative ways to do things in culture and society, like bet on Taylor Swift and, you know, Travis Kelce getting married or bet on will MrBeast say the word chocolate in his next video. And then most of them are going to be dumb and gimmicky, but a couple of those will become the next Uniswaps and Avis and Compounds. So you were saying you agree that there's apps coming?

Well, I think so. So I think if there's no apps coming, there's really no, you know, right to existence for this space because kind of you don't need infrastructure for infrastructure's sake, right? And if you want to build applications that are in some respect legitimately useful and usable to real people, because otherwise there's no point. Right? Otherwise, this is going to become or stay super niche. So, and I think in principle, we have so much infrastructure that kind of allows us to offer the kind of user experience that people are used to from Web2. Yeah. And I mean, it's, I mean, just with passkeys and kind of like account abstraction and kind of like, you know, ZK proofs and whatever. So there's so many different, so many different parts that you can put together to make something genuinely usable and useful to people. So basically, I think we kind of have to take a step back and actually look at why did we start building in this space in the first place? Right? Because kind of like building on a truly decentralized stack, it's hard, it's slow, it's expensive. So why do you do it? Right? And so the ultimate value propositions that kind of we were thinking about at the time, and I think that should really come into play now, are agency and ownership. And ultimately also user experience, because kind of like on permissionless platforms, you can build better user experiences than you currently have. But I think kind of that, that's still a little bit away. But I think the agency and the ownership, this is something we can do now. And I think this is going to be the first wave of apps that really are going to hit the mainstream.

Yeah, I remember the other thing, by the way, which is the fourth thing was, like you mentioned before, Uniswap launched their Unichain, right? So what they're calling it, Unichain. Yeah, Unichain. This is like the start of all of these I mean, I guess you could say dYdX was the start of this, but like, this is the start of probably hundreds and then thousands of these appchains happening, which— what?

There we go.

Nice. No, all good. So what happens when the funding is— okay, so the funding is rolling over for infrastructure, applications are starting to raise money, applications are launching tokens, and applications are launching chains. I mean, that's, that's the new— that that is the incentive for venture to start investing in applications, which you'll get a crazy speculative bubble in applications, which is, and then that pulls good founders into the industry.

It's going to be like Google and Pets.com, you know, they, they came about in the same cycle. It's going to be the same again. And yeah, absolutely. 100%. And I think what we'll also see this cycle is kind of a much more nuanced approach to kind of what part of the stack actually needs what level of decentralization security guarantees. Because kind of those are things, kind of like when all the grants run out and so on, those are things you'll have to pay for, right? So kind of really looking at it from an engineering and security perspective and evaluating what parts of your stack should sit on what chain. I think that's something that's going to happen for sure too.

Sunny, what do you think about this?

I don't know, maybe a little bit more bearish than you guys on this. Yeah. I guess for me, like, I think there's a handful of applications that I'm like very bullish on. And like, but I would say I could probably count them on like two hands.

Like what?

Bitcoin prediction markets, permissionless perps taxes, which is like payments apps, especially private payments apps. And then I think that's probably like, I guess like DEXs and like Bitcoin-related DEXs.

Social media.

Not bearish. Very bearish. Gaming? Very bearish. More bearish. Less bearish on social media. I can see it. I just don't think that decentralization on its own is enough. I think you need to crack some— every social media is like new social media paradigm, like cracks something that like a different form factor that makes it different than everything that came before, right? Like Twitter, like, oh, okay, short-form content, you know, TikTok, short-form video, you know, Instagram, photos, right? Like, I think, like, I just feel all the social media stuff today has just been, like, decentralizing or tokenizing existing form factors. And I, like, until someone figures out a new form factor, then it'll work. But then I don't see why that discovery of the new form factor necessarily will come from crypto.

Or if kind of existing alternatives become even more horrible. So kind of like, I mean, I'm— the only social media that I use personally is Twitter. And it's, it's, it's gone downhill so much. It's terrible. It's, it's a really bad user experience. So kind of like the, um, For You Reel is basically just TikTok, like random, random videos. You can't, you can't look away, but it's, it's horrible. And then the, the following, that's just, there's no curation at all, obviously. And then kind of like, that's, it's unusable for me.

Yeah, I feel it too.

You feel it too? So kind of, I, I want a platform where kind of I can have different, different curation algorithms that kind of show me content that I actually want to see. I don't want to, I don't want to, um, I don't want to have the choice between, uh, you know, this one curation algorithm or no curation at all. I want curation. I just want the choice of different styles of curation here. And I think, um, being able to offer that, and I think everyone really aggrieved with Twitter. So I think there is—

I think maybe another way of boiling down is my take is like, okay, I think at the end of the day, almost all of crypto is about trading. And so either you're doing like, you know, you're either building a way of trading assets that like bringing in existing assets that maybe are not accessible everywhere. And then making them accessible on-chain for trading. And I think that's what like things like, you know, permissionless perps markets will end up doing, right? You'll be able to trade US stocks on-chain, right? And like give global access to these things, right? So, I think that's one. And that, or, you know, people being able to trade stablecoins, like in countries that don't have access to US dollars. Or the other is you have to invent a new asset type that people can trade. And I think like Bitcoin was an example of inventing a new asset type. I think these current meme coins are a new asset type. I think prediction markets are this like tokenization of something, and I think it's a new asset type. So I think, you know, it really comes— that's why I kind of agree with your take of like, okay, a lot of it will be speculative around, you know, culture and society. And so I think a lot of like the new growth will come not from necessarily from you. I guess maybe that's where it's different, was like, I don't know if a lot of it's gonna be necessarily new. I think the base action you're going to do is still trading, but it's going to be new asset types that are going to be invented.

Hmm. I think the thing that we're all forgetting is how much regulation has handicapped the applications. So like, how, how amazing would it be if Uniswap was just able to turn on the fee switch and do things like— if you could play with things like that. And like, we're all forgetting that, like, we're just, we just can't do some of the most innovative, unique things, not just in like these social apps or prediction markets, but like even back in DeFi, like there's all these things that we can't do because the regulation is really tough in the US, in the US, or even like, you know, I was thinking about this when the, when the banks blew up, like SVB and First Republic blew up and everyone was like moving into Bitcoin and the, and the trading. And then like when, when trading stuff gets halted as well and like some of the trading platforms shut down then as well. And you couldn't trade stocks. It's like if we could just trade equities on-chain, what would that unlock? Like, I would just stop using my TD Ameritrade or my JPMorgan account and I would just like sit in, I don't know, I'd like buy my Coin stock or I'd buy like my Tesla shares on Uniswap and then put them into AAVE and then take a loan out on it like that. Even that alone is a massive unlock and we just can't do those things because The administration is not allowing those things to happen. And not just the administration, the SEC and CFTC and stuff.

At the start of the conference, you and Mike were up on stage and you were talking about like the kind of 3 big topics this year, which ties into this, which was institutional regulatory change, a shift from apps, from infra to apps, which we talked about, and new tech. Yeah, maybe just dialing in on this institutional and regulatory change. What is your sense of like institutional adoption right now and what is, what is kind of leading institutions to adopt crypto even though the regulatory landscape is, at least in the US, is not favorable?

So there is this idea, this notion that the ETFs came out and the institutions started buying up all of our Bitcoin and ETH and we were really happy. and I got to spend a couple of days with Samara Cohen, who's the CIO of BlackRock's ETF business, before this conference. And she spoke on stage here as well. And she, she, she shared this stat, which is somewhere between— I'm going to misquote the exact number, but let's call it 70 to 80% of people buying BlackRock's Bitcoin ETF, the biggest Bitcoin ETF out there, 70 to 80% of people buying BlackRock's Bitcoin ETF. That was their first ETF that they had ever bought. So what does that tell you? This wasn't the ETFs. This wasn't the institutions buying Bitcoin for the first time. These were crypto people buying ETFs for their first time.

And then they can tokenize it, tokenize them and put them on chain, and then you can buy them on Uniswap.

There you go. Yeah, exactly. There you go.

Why? Why do people do that?

Why do crypto people buy Bitcoin ETFs? I have no clue. I have no— I have no idea why they bought these.

Is there a tax advantage of having—

Yeah, you could put it in your Roth IRA, 401, something like that. So maybe, maybe that's a reason. There's probably a lot of people like, I don't know, my dad or something who like, likes Bitcoin, but like just doesn't want to deal with the hassle of like I don't know, private keys or something like that, or even like maybe scared of Coinbase was like, oh great, I can buy through my Charles Schwab account. Probably a lot of people like that, self-directed folks. But I still think this idea that like, oh, the institutions are here. I mean, there's, there's only two public pensions that have openly bought Bitcoin. It's Wisconsin and one other. We're like 1% of the way there. And I don't think it's because they don't— and, you know, you asked me a couple of years ago, It's a couple of years ago, it's because they don't believe in this stuff. Now it's because the regulatory risk is too high for them to take the risk. But if there was different regulations and it was clear if these things were securities or commodities, then, then I think there's, there's, there's a massive flood of capital that comes in. That's why I think people are really underestimating just how crazy 2025 can get. Like if there is an administrative change or even if, you know, Kamala gets elected but like shows that she's pro-crypto or whatever, the— I like, you know, Bitcoin could be at $150K before we, you know, before we know it. And what does that do to alts and to meme coins and to the industry? Like, I think people are really underestimating how quickly that could happen.

Yeah, I tend to agree with that. I think that whatever happens after the elections, I mean, you know, we're fundraising, right? And like, as a VC and I've talked to a lot of VCs, there's a lot of institutions and LPs are reluctant to deploy right now just because of the lack of clarity.

I mean, it's not because they don't want to deploy, right?

It's just there's like uncertainty in the markets right now. And I think whatever happens, whether it's Trump or Kamala, at least like, okay, now there's no more uncertainty. We know sort of what the kind of roadmap is moving forward and that will lead more investors to, you know, sort of—

By the way, Republican or Democrat, crypto I think will boom in 2025. I think crypto is going to have an extraordinary year in 2025, a year that will look very similar to maybe the middle to late half of 2020 or, you know, early 2021. I think it will be really crazy. It's just does it happen in the United States or not is the question. To me, it's not a question of will 2025 be good for crypto, bad for crypto. It's going to be, I think, a really crazy, amazing year for crypto. It's just will that success flow through the United States or will it flow through, you know, Dubai and Singapore and Hong Kong and other places?

Yeah, it's not flowing through Europe. Sorry.

No, no, no. Sorry.

The pendulum has swung to Asia and it's going to swing right back to the US.

By the way, as it does for— as it has for years. Like, this isn't a new thing. Like, remember, US was super hot, then it went to China, then China shut down Bitcoin mining, then went back to the US, and then regulatory space. Now it's in China. It's going to come back.

Yeah. And EU regulators are twiddling their thumbs with regulatory frameworks.

I'm also—

I mean, like, look, like, I think I'm curious to get your thoughts on this, but I think the EU framework will— MICA will enable like Binance and Coinbase and large players to come and establish their offices in Europe and like start selling to retail in Europe. But for startups and projects that are just launching or, you know, even semi-established, like, decentralized projects like Gnosis, the compliance cost is like super high, right? Like, I mean, we're talking about, you know, half a million to a million a year, possibly just for compliance.

Well, it depends on how you build your dApps, right? Kind of like, so we've traditionally and are still doing that, have built our dApps such that they are maximally decentralized and they fall out of scope for this sort of regulation, except for where it explicitly had to fall in scope. For instance, kind of because you have, you integrate with off-ramps like Visa or IBAN and so on.

And so the last thing that we didn't talk about is the new tech. And so I think, you know, you mentioned ZK and AI. What are you most excited about?

So ZK, I'm a little torn on. So I did, I spent the weekend before we got here with the ZK-Sync team and we had a lot of ZK conversations at Permissionless and it feels like it's just starting to, the products are just starting to hit the market, right? Like you saw Optimism and who they partnered with, Synced. You know, you got to imagine Arbitrum is racing to do either probably build versus buy question. Like, I don't know what they're doing, but probably some racing for some sort of ZK thing. ZKSync is like obviously making a big push. You've got Polygon's like ZK EVM. Like, it feels like they're starting to finally push live products. I'm a little more skeptical. Like, I think we're probably a year, a year out from— I think if you take this, if this stuff starts hitting market too quickly, you're probably making some compromises that you don't want, that you shouldn't make. But I do think it's getting closer to being real. AI crypto. I have no intelligent takes here. I'm like, I, I'd be talking out of my ass, I think. But it does. But what I will say is every conversation that I have at Permissionless ends up coming back to 3 things: AI crypto, meme coins, and DePIN. For some reason, every conversation and historically conferences you can, if you have a— you can kind of see where conversations flow to. And like usually every year there's like 2 or 3 things that things flow— every conversation eventually gets to. And this year it's DePIN, AI, crypto, and meme coins. So the other thing that's interesting this year is that is happening right now under our noses that nobody seems to be talking about is a change in the stablecoin markets. So right now there's Tether and USDC. And I really, I really am curious to get your guys' takes on this. So there's, there's kind of 3 buckets of stablecoins. Actually, there's really 2 buckets of stablecoins right now. There, there's folks like USDC and Tether where they kind of keep all the yield. And then there's another bucket. It's called bucket number 3, which they— folks who are thinking about passing the yield on directly to users.

The—

there's a new bucket that is starting to emerge where they are passing the yield on to the businesses that hold their stablecoin, right? Exchanges and custodians and saying, hey, you figure out the yield. And the reason this is super interesting is the problem that's happening with folks like USDC. So the problem with Tether is a lot of folks are offboarding Tether right now. Problem with USDC is that a lot of the custodians and exchanges basically— there's two problems. One of them is the whole industry competes with Coinbase. And if you hold USDC, you know, whether you're an L1, an L2, and you're minting it or a custodian or an exchange, you're funding your competitor and Coinbase. The second thing is if you, let's say you're a, I don't know, you could be an exchange and you hold like billions of dollars of USDC, you usually don't get any of that yield, right? That goes to Circle and sometimes to Coinbase as well. So I think And then the problem with the third bucket of these stablecoins that pass on the yield directly to users is, you know, I'm not a lawyer, but probably security. It sounds like. So there's this new bucket. You know, you saw BitGo launch a stablecoin called, I think, USDS. Nick Van Eck launched Agora, I think it's called. So what they're doing is— and all these new stablecoins are doing is they're passing— they're basically saying, hey, we get 5% on this. But custodian or exchange, you decide what to do with the yield. We're going to take like 25 bps or like, I don't know, 100 bps or something. We'll pass the other 4% on to you. You can keep the 4%. You could, you could pass the 2% on to your users, keep 2%. You could pass all of it over to your users. And I think that is that model is either going to shake up the market share of the stablecoin market or it's going to force Coinbase and Tether's hand to change things.

Coinbase and Tether do actually pass on some of the yield to the exchanges that kind of hold the— I mean, not everything but 25 bps, but like half or so.

So yeah, so like, yeah, if you like, if I hold USDC in my Coinbase account, I'll get some of that. I think the bigger problem is that everybody competes with Coinbase.

Sure.

So if you're Anchorage, or you're BitGo or you're Fireblocks or you're Copper or you're an exchange and you're holding a bunch of USDC, you're inadvertently funding Coinbase. Why would I want to do that?

Sure.

Yeah.

Yeah.

So yeah, I think that's going to become more and more common. And I think, yeah, like, you know, I hold USDC on Coinbase mostly just because it's easy and it gives that yield. I guess the other thing though, but The nice thing about USDC on Coinbase is it's 1-to-1 transferable to my bank account. And it's USDC. It's what's already most liquid in DeFi as well. So USDC is in a pretty strong spot there. So it'll be— I think what will end up happening is it might end up forcing—

I think it probably forces their hand. I think USDC, probably their market share remains massive. Probably forces their hand. Yeah. And it'll be interesting to see how quickly that forcing of the hand happens with their race to go public. Right. There's this— so it's an interesting dynamic that's happening in the stablecoin market.

So you think that like they'll be forced to start giving up some of that yield to—

more of the yield, I would say. That's what I would guess. How— and the counter take on this is that fees can remain high, higher, longer than people think. So for years people have been saying Coinbase's fees on retail are going to come down. Coinbase's business is going to get crushed because fees will come down. I can assure you fees have not come down on that thing, right? Like, you know, go trade on the retail platform on Coinbase. Fees are high. So fees can remain high, much high, much longer than the market thinks that they should.

Yeah.

I want to talk about podcasting a little bit. You a little while back, I think maybe like a year or two ago, you put out this tweet which was— I'm going to like butcher this, but like basically the lessons you learn from launching a successful podcast. And do you remember this?

No, but we could talk about it. Always, always dangerous if you pull back my tweets longer than like 2 weeks ago.

So yeah, so I mean, like Blockworks, you know, as a company has been really successful, but your podcasts have been also enormously successful. I think Blockworks or Empire is consistently in the top 2 or 3 crypto podcasts now. Yeah, yeah. That's huge. That's a position we once held.

I remember. A tear falls out of his eye.

Those were the days.

Yeah.

But yeah, so I mean, what's your key to success here?

Yeah. I mean, first off, you guys know that with the podcasting game, the only way to grow a podcast is just doing it over and over and over again for a very long amount of time.

And we've been doing that.

Yeah. Check, check, check. 10 years.

11.

11 years.

You guys have been hosting this for 11 years.

Yeah.

That's remarkable. That's remarkable.

Yeah.

So you guys have gone on to— the difference is you've gone on to bigger and better things. We're still stuck podcasting, right? You guys figured out that podcasting is a tough business. Yeah. So we, I mean, we own, for those who don't know, like Empire, Bell Curve, On the Margin, Forward Guidance, Lightspeed. Expansion, like all these podcasts. We have 1000X.

Love that podcast.

Jonah and Avi are going to get mad I didn't mention them. I'm sure I'm forgetting some others too, but we have a— we have copied basically the Barstool Sports playbook. So Barstool, I don't know if you guys— do you guys know Barstool?

No.

Wow.

That is— do you know who Dave Portnoy is?

No.

Yeah. Wow. Wow. That was— that's fascinating. Okay. They are actually, I don't even need to— okay. We copied a successful podcast model of another media company. Um, where basically the model is you have one host who's full-time internal and one big name host externally. And we've— so the hardest part about podcasts is growing a show because a lot of other mediums and content mediums, you have native growth baked into it, right? You have native ways to grow a channel and there's an algorithm that will promote you. There's no algorithm in Spotify and Apple, or there is a Spotify and Apple algorithm, but like you don't get native growth inside of those platforms. Maybe sometimes Spotify, if they see that I listen to Empire, so they're going to promote Empire to me, but it's very, very, very minimal. Compare that to something like YouTube where you can just get in someone's feed. Very different, right? So the hardest part is growth with the podcast. The way that we've kind of hacked that growth is with— it comes down to the hosts. So we have one full-time host internally. They're basically the P&L owner. They're the operator of the business. They run the podcast. Then there's another host who's the KOL, we could call it in crypto, right? They're the influencer. They're the big name. So let's, let's look at a couple Blockworks podcasts. So you've got for Empire, you've got me. I'm the boring guy who knows nothing. And we've got— but I can run the show. Then we've got Santiago, who is the, you know, the KOL. We've got Lightspeed, right? We've got Jack Kubanek, who is a reporter for Blockworks. He's the host. He kind of runs the whole show, makes the wheels run on time. And then we've got Mert, right? This kind of KOL. We've got Belkoff Podcast, Mike, is my co-founder, he runs Bell Curve, but then we've got Michael and Vance, you know, big name investors at Framework Ventures. They help drive growth to the show and, you know, put that model on repeat and, you know, kind of the list goes on with our shows. So that's our model. That's been really helpful for growth. And the other thing is I think we have a hack basically, which is once you get one podcast that's successful, It serves as a launchpad for the other shows.

Yeah.

And it starts to build this really nice flywheel effect of the shows growing other shows and like cross-promoting other shows. And Mike will come on Empire and I'll go on Lightspeed and Lightspeed will come on Expansion and creates this really nice feedback loop.

How do you make sure you have enough like content differentiation amongst them, between them?

Great question. So eat— so the way that we actually have structured our whole content business is Uh, come— it comes back to a thesis that we have around media, which is there's two ways to build a successful media company: super niche or super big. So super big would be like New York Times, very successful. Bloomberg, very successful. Fox, very successful. Um, uh, even someone like Business Insider doing very well right now. Then there's very niche, which is, uh, you know, crypto, uh, basically like deeply B2B media, um, where you're targeting a really, really, really niche audience. The dangerous place for media companies is when you fall in the messy middle, when you get too big that you're no longer niche and you start targeting a generalized audience. So that's what was happening to Blockworks, right? We'd been around for like 5 years. So we launched internally, we call it kind of like Project House of Brands, where we're, where Blockworks sits up here and it's almost like an LVMH model where we now have sub-brands that cater to a unique audience inside of crypto. Oh, the other podcast I forgot was 0xResearch. I knew that was for you.

David's going to be mad.

Yeah, sorry to the research guys. So what we've done is, so let's say there's a— who's a strong community inside of crypto? The research analysts, the analyst crowd, the research crowd, kind of nerdy, like loves getting into the weeds, reading the long reports. We have a newsletter for them called 0xResearch. We have a podcast for them called 0xResearch. That's a brand, 0xResearch brand. Who's another community, Solana community, really strong community. We've got the Lightspeed brand for them. The Founder community, right? That's Empire. The kind of like modular, like expansion community. That's the Expansion brand, right? Podcast, newsletter. So we actually build, we think of these as actually mini media companies under the broader umbrella of Blockworks.

It's super funny because Empire is the one I listen to and kind of I'm adhering to my category.

You are in the category. Yeah. Sunny, do you listen to any of them?

I listen to 0xResearch and Bell Curve sometimes.

Nice.

That's what we want.

I listen to Empire mostly. Yeah, I do. I do listen to 1000x and then realize like just how much of a horrible trader I am, you know? But like, I just always learn a lot listening to those guys. I really like this, you know, this idea of having sort of the hosts and then like the KOL and You know, we were talking about this earlier, like when you're hosting a podcast, like I was thinking about this recently in 11 years of podcasting, I've retained surprisingly little information because, you know, when you're hosting a podcast, at least for me, you're very much in the weeds of trying to make the show engaging and interesting and you're sort of like thinking about what's my next question, how do I bounce back on this, et cetera. And having two people really helps because, and especially if you have this role, right? Like these roles are clearly defined where one person, in case of Empire, you sort of direct the conversation and then Santi can go on and he can just like, you know, do his thing. He doesn't have to think about that. And you sort of like reel things back, you know, take the conversation in another direction and you're sort of, you know, curating the conversation. Not to say that you don't bring good insights, but you do have that role of kind of acting as the host with this other host and perhaps like a guest.

That's exactly— so I don't know if people listen to the All In podcast, but Jason Kalkanis gets a bunch of shit. Yeah, because he's not as interesting as the other guys, but that show wouldn't exist if they didn't have a Jason Kalkanis. Yeah. You need someone to drive the conversation forward and basically moderate it. Yeah.

Anything else you want to talk about?

No. All right.

Well, let's— we're done driving the conversation forward.

Yeah. Yeah. Let's, let's button this up. Thanks. I appreciate you guys coming to Permissionless. Means a lot. Yeah, honestly, very fun to be on this podcast as someone who's been listening for not 11 years, but probably, yeah, 8 or 9 years now.

So that's pretty OG.

Yeah. Yeah.

Thanks, Jason.

Appreciate you guys.

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