Copper Founder: Building a Billion Dollar Company & Fixing Crypto Custody

Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice, or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed. All right, folks. Back on Empire, took a little hiatus there. Back on Empire, very excited about this. We're actually recording live from DAS, so hopefully this sounds all right. Looks good. Got the better looking guy than me, Dmitry Tokarev. What's going on, Dmitry?

Thank you for having me, man.

Yeah, yeah. So, um, yeah, I wanted to have Dmitry on because, uh, Dmitry was actually our first sponsor ever of our first DAS in May of 2019. So Dmitry is the founder of, uh, was the founder of Copper, raised like hundreds of millions of dollars.

Yeah.

High valuation and big business and now building Braun. So what's going on? How's life?

Life's been good, man. I think a lot of founders can relate. We were just talking, you know, that we roughly started businesses at the same time. You know, when you get a smaller team, you execute faster, you're closer to clients, to product. So, you know, it's been very exciting. I think a year and a bit now, roughly, building Braun. And it's been a fantastic experience. And, you know, transition from Coppa was also Pretty smooth.

Yeah. Good, man. Well, I want to hear all about it. So we're— all right, so we got DAS behind us. We have 2,900 people here this year. What do you think about just like, I don't know, like just, yeah, I love your macro take on how the industry has evolved. And yeah, we started Blockworks December 2017. You were January 2018.

Yeah.

Yeah.

You know, I'd say the following. It was the same thing in this May 2019 when we were the sponsors. I remember, you know, we put together $10, $20K or something of sponsorship fees. Like, okay, we got to make it count and everything because everybody's like, really poor and have not raised at that time hundreds of millions of dollars, etc. And but, you know, theme was kind of always the same. Institutions are coming and so on and so forth. I mean, we're sitting in Franklin Templeton booth right now. So, you know, evidently. Right. But I would say that a lot of people and projects that originated in crypto did so much more than they anticipated probably themselves. Some of them went already public, like, you know, Circle and BitGo, etc. Others gearing up to go public. I mean, all of these shops were around 7 years ago, but kind of hoping that there is, you know, those institutions that are going to come and rescue, save the day. But it was actually them and all of us who built this industry. Actually. So, the next— and, you know, we hear, and again, you hear people talking about the next wave, which is traditional assets coming on-chain. And then again, the question is, will the institutions come and save the day and bring those assets on-chain, or will it be, you know, players from the crypto industry that's going to do that directly and work directly with the consumer? And what do you think? Yeah, you know, we're approaching it from both angles here. On the Copper side, if institutions there, they need infrastructure, they need companies like Copper, and there's something good that's going to happen on that front. And if it's going to be working directly with the customer itself, then on the Bronze side, we're ready to support. The one thing I would say is that The way people approach generally investing in digital asset space, and I would say just generally investing, I think is changing right now. From the behavior of people, we're seeing that they're not really looking for a manager to manage their assets. They're not looking really to buy an index, being it an index in crypto, just bluntly, or being in an index in traditional space. So there is an increasing demand for people to understand themselves what the market dynamics are, and then subsequently take either single asset exposure or single commodity exposure, essentially palladium, gold, silver. They want to think for themselves. So that's one. And the second thing I would say that market cap of crypto is what, $2.5, $3 billion, trillion? Trillion, yeah. On any given— I mean, that's the market cap of Nvidia, right? Like, all of this today is servicing a market cap of Nvidia. No, no, but this is— it's not that, you know, we're trying to hide it, I would say, because if this is what it is today to service like this market cap, imagine when traditional assets are going to be here and infrastructure is going to be here. And all of those things are going to have to basically live coexist. Quote-unquote blockchain life. And to live quote-unquote blockchain life, you're going to have to have all of this. Yeah, essentially all of these companies are going to have to service the industry. So it's super exciting and we definitely want to play quite a big part of it from the Bronze standpoint as well. Yeah.

Let's talk. I want to hear the Copper story. Yeah. I want to hear the real Copper story. So you guys, how much money did you guys raise?

$300 million. $300 million.

At what val?

The latest one. I don't know if it's public. Well, you know, I'll just say But the latest one was 1.25B. Wow. Yeah. But I'll tell you, like, so Copper for the first, since like seed round, for the first couple of years, basically we were building a business, right? But in the zero interest rate era, you can't do that, right? Because you build a business, you're kind of like sort of dipping in and out of profit. You don't really spend much money, but then nobody knows about you. And that became a problem. You know, when you run a custody business, you kind of want to basically everybody to be aware of you because the awareness creates trust. So we're like, okay, we got to raise.

So then you had to raise because of the—

to spend money on marketing, to spend money on marketing, basically just to essentially just to be there, just to be everywhere that's humanly possible to be. And so we started raising. As soon as we raised, our competitors are raising more.

Who are the competitors? Fireblocks and BitGo?

Fireblocks, BitGo, Anchorage, I think is the— I mean, Coinbase Custody to some extent became like a part of the competitors.

I always thought about it was like you guys were like an Anchorage or a BitGo, but of Europe.

Yeah, I mean, all 4 competitors— like, I've lost 99% of deals. Let me rephrase that. 99% of deals that we've lost went to Anchorage, Coinbase Custody, Fireblocks, or BitGo, basically. And so, and all these 4 companies are in the US, right? So outside of the US, we were kind of like the only one on those type of deals. And yeah, and obviously, you know, they raise, they spend, and then you have to raise and you have to spend. And everybody did the same across tech landscape, really. It wasn't just unique for crypto because capital was essentially cheap. and people were looking to allocate more and more and more. And then 2021 came around, and that's where the valuations insanity began and everything. And we grew from— there's a lot of stuff which happened in that '21-'22 year. Yeah. Super big rounds all across the board, extreme rapid growth of revenues and of headcount. And then subsequently, you know, when interest rates started increasing, it's like you had to, completely change your MO to like, okay, well, we're now actually back to running a business, you know, where EBITDA is important. Yeah, exactly, exactly. Which was, you know, extremely hard. So, but I think the toughest piece there was not so much as raising capital and spending capital. It is actually relatively easy. Harder is to cut the burn, is the headcount, essentially. So when we went from like 36 people in October like '21 to 236 people in October '22, so slightly less than one person per day that got hired, right?

And then the whole system changes.

It's, I mean, everything changes, right? The culture changes and you can't control it. Now basically You rely on clusters of culture. Those clusters create their subcultures. The subcultures start colliding with each other. So it's pretty brutal, but it's not— I know the companies that, you know, done it even faster. I think partially, you know what, I think partially that's what happened to FTX because they went from like 17 people to 700 in a year. And that I just think like they just collapsed under the speed of growth.

Would you do anything differently? 'Cause now, I mean, maybe update folks, you're out of Copper.

Yeah, yeah, stepped down from Copper in December '24, Jan '25, and building Braun. We're building Braun with a much smaller team because, I mean, these days, different times, you know? First, I mean, and it changes every day. I don't know how you guys experiencing this whole cloud type of situation in the last 3 months, but like, We've been using AI since day zero, but I think 3, 4, maybe 6 weeks ago, something like that, there is a full cycle that you can now work very securely with those models. Well, we work through Claude Code and it changes completely, right? So we actually stopped hiring because of that.

Yeah.

So we're under 40 people.

Yeah. So would you, if you started Copper over again today, would you do it differently?

Oh yeah, I mean, of course. I mean, you live and learn, right? So there was a lot of lessons.

And well, if you're like a founder, you know, a lot of founders listen to it. What are the lessons?

I would say hire slow, right? Because if you think like that every problem that you encounter could be, solved by just hiring a person, you're wrong. Like, that's not gonna happen. Sometimes it just means that you're just gonna have to work Saturdays and Sundays and do it yourself until you figure out a scalable solution to it, which is, you know, has longevity and you're just not trying to throw people at a problem. And that's probably the main thing. Then It's a lot to do with hiring, I would say, is how you hire people, from where you hire people. There is a lot of kind of like bullshit that's being projected from like VC tech scene, you know, for example, you know, when people raise a round and they put like, "We're hiring," I'm like, "Why?" Yeah. Like, why is this a good thing?

Yeah.

Like, why is this like, you know, so it's like, we're not hiring should be like—

You wanna know the first company who I think changed that narrative? Was actually FTX. Oh yeah? I think there was a point in time when SBF talked about how small they were.

Yeah.

And he would brag about how small they were. And I think he was actually the first person I heard brag about how small they are. And now everyone's doing it because it shows how, you know, Claude-pilled you are, basically.

Yeah, yeah. Well, I mean, they went from 17 to 700 people, right? He blew it at some point because we were right in the middle because we signed documents with FTX to integrate them to Clearloop in July '22.

July of '22.

In July '22. So they were about to, they were about to, and we announced it, right? There was an article and everything. And like since then I've been chasing Sam.

Yeah.

I'm like, dude, where is it? And so, and every time we have a call, it's like 4 hours of him sitting somewhere on a basketball court or something and just talking to like some some nonsense, like delusional stuff. And I'm like, all right, when is the date that we begin writing code to integrate Clearloop into FTX? Like, yeah, but this is this and this and that. And then there is philosophy. And I'm like, okay, this is not going anywhere. And then basically, I talked with his team and I'm like, guys, it's like, dude, you don't know what's happening here. Like, he's got 130 people, direct reports right now, right? I'm trying to change the color of a button. And it's not happening, right? So I think the whole situation, the way it unwrapped, I would say there is no kind of like, obviously all of this stuff that they were doing is like crazy stuff and fraudulent, et cetera. I don't think it was just for the purpose exclusively of conducting like mass-scale fraud. I think it just, like he just lost control over what's happening. And then, you know, there was a small, maybe at that time it was like a small problem of them being able to leverage or take out clients' funds through FTT leverage from Alameda's side. And maybe in the beginning it was like a million or two. And then with 134 people, you can easily imagine that at some point when it became 1 to 5 billion.

You just can't stop.

Yeah, you're kind of like, oh, what's that? And then obviously, you know, having one of your largest competitors own like 10, 20% of that or however much that was. Like, you know, that was a bit of an oversight, one might say. Yeah.

What would you, other than not hiring as many people, what would you do differently at Copper? 'Cause we're at that stage now.

I would not try to do things which I'm not good at, right? You personally? Yeah, so I'm a product person. It took me a while to learn that. I build stuff, like that's what I really, really enjoy. It depends what kind of scale of the company you want to be running, but like some people get a kick out of sales, some people get a kick out of management, some people have OCD and they really like this admin tasks, etc. And some people have like— so it's really knowing yourself and not trying to, you know, make a fish climb the tree, like, because you can't be good at everything. And but the things that you are good at and the reason why you're sitting in the seat which you're sitting, it's, it's that piece. It's in spite of all the other stuff that you've done in the business. If you don't know how to hire people, just like find somebody who knows and don't ask them to do other things, just ask them to do that. Yeah, it's really playing on each other's superpowers and asking for help in areas where, you know, but yeah, that you're not good at. But as a founder, you kind of like expect it. It's like you look at other founders, you're like, well, Sam Altman might be phenomenal at all of those things. I guarantee not. I guarantee that there is definitely a group of people that's augmenting something that he's not good at, and he's just doubling down on things that he's good at. So, I think those are two kind of large lessons.

So, you're out of Copper now. Do you think— I was having a long debate with someone about this. Do you think that non-founder-led companies can succeed at that scale? Like maybe, you know, like Uber is doing quite well, right? Travis is out of Uber. They've got, what's his name, Dara is in.

Yeah, Dara, yeah, yeah.

And he's doing a great job.

Yeah.

But they were already a public company, already at scale. Can you put a non-public, can you put a non-founder in at Series B or C or D and get big?

It's risky. And like, I was just catching up for drinks with my friends from the headhunting firms that basically brought Omar to COPPA. He's like, look, like, from what we're seeing, like, this has been the cleanest transition we've ever seen, essentially. Because, you know, you bring a person, you need to stay out of their way, right? They're gonna create a culture that they think is the best. They will create a plan, and you need to back the CEO that you've brought in because there's no other way. Otherwise, it's a recipe for disaster. So when things don't go well in those transitions, that we kind of like keep hearing about, etc. It's a majority of this is basically because the person never had a chance actually to implement what they really wanted to do because there was always founder that's standing in the way going, no, you should—

yeah, yeah.

So it takes, it takes a bit of discipline, and it also takes like a lot of self-awareness and like trying to, you know, shove the ego, you know, where sun doesn't shine, and then kind of like go like, okay, we're here to do business, and like, let's let's focus on that. It is weird, you know, so, and it is difficult.

Is it weird giving up your baby in a sense?

I never thought about this as like a baby baby, you know, I have 2 kids, they are my babies, you know, like, so I love the product, I love the people I'm working with, so, but you do it in a weighted way, the thinking, okay, so what Copper strategy should be? Like that was our thinking. Like, so one is we should be closer to financial institutions, right? Financial institutions are in America basically. So, 'cause like Europe, I'm sorry, but like it's, you know, pedestrians, right? In comparison to Wall Street. So, you know, let's just call a spade a spade. So two is what the exit would look like for the business. And I was like, okay, it was probably gonna have to be also in America, right?

IPO or an acquisition?

No, any exit, right? Like any exit, but it has to be US, right? So you do need to have a US CEO, right? American CEO, US-based CEO, because otherwise such a core piece of critical infrastructure, it just needs to have American center of gravity. And that's kind of like what we wanted to achieve with this move, essentially. So when you— When you give up the control, you basically know the reasons why you're doing this, because unless Europe turns around or UK turns around and say like, okay, we're now going to be the capital of not only crypto, but the entire capital markets, it's not going to happen, right? In the next 4, 5, 6 years. So that was, I think, the main motivation and the main reason. The other is that when you work in a regulated business, um, the, the limit— the limits of what you can create as a product guy are basically bound as to what regulators are going to permit for you to create. I built stuff that's sitting on shelf there, like, that's never going to see a light of day over the next 10 years because—

and now I'm even more certain of that than I was because the regulators will not just snap—

because don't like I thought that it's just going to take them a while to understand it. I think like certain things that I've built and shelved, like I don't think that people are capable of understanding this. Yeah, maybe. I mean, Claude understands it, but like I don't think people can understand what the features, the pieces of the products that we've built essentially, because that's what I would do, right? If I would be running Copper, I would be building stuff. And I think, you know, in terms of building stuff. If you are limited to what regulators permit you to build, it's like there is only so many things you could build.

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Well, look, there is a, there is a whole gap that we've identified, which was actually shocking to find out. Because 6 years or 7 years ago, on your event actually, I remember explicitly, two founders of crypto custody companies were having almost a fistfight over, will, like, MPC or HSMs.

Yeah, yeah, I know who that was.

Exactly, exactly. And that was kind of the last battle, right? Since then, everyone's using MPC, right? All the actors that are basically And, you know, for people who are listening, MPC, essentially, it's a technology where you don't have private keys. So, you know, like all of you probably have to like write down seed phrases and create private keys. Like institutions just don't do that for the last 5, 6 years. Like that's just not a concept. So no one sitting at BlackRock or rather at Coinbase servicing BlackRock and writing, you know, a seed phrase for Biddle Vault 1.

Right.

Like, this doesn't exist.

We lost the key.

Yeah. I mean, it's funny too, but this is how basically crypto industry functions today when it comes to retail. And we're talking about retail with billions of dollars which are sitting on those napkins with 24 words and et cetera. And so there are 3 generations, I would say, of wallets. There is Gen 1, which appears straight out of the gate, where it generates your private key. You write down the seed phrase like a software wallet, right? Which is basically, you know, and currently they exist as well because they're quite convenient. Your private key just lives in memory like MetaMask and Trust Wallet and whatnot, right? Phantom. Then there's Gen 2, which is like, okay, people like, if this laptop gets hacked and memory is drained and then there's like North Koreans that are sitting and sniffing everything, like it's easy to steal private key. So like, let's put it on the device. So it solved that problem. Like Ledger, Trezor, like, and so on. Let's put in device. So that solved that problem. And then Gen 3 solves the other 9 problems remaining. And that's basically what Bron is doing. We are Gen 3 self-custody wallets. Which, and what are those problems? If you've lost everything you've ever created on Bron, your devices and so on and so forth, we can help you recover. So you can't lose that wallet. Right. If you get hit by a bus, like, you can appoint successors and your family and relatives are gonna get access to your crypto, right? It's also— this is probably creating the most supply reduction over the next 10 years. It's not the protocol itself, it's just like people dying and not telling where their stuff is. And that's already happening with Matthew Mellon, I think the guy named Ripple. Yeah, there's a bag of Ripple for like half a billion dollars that's gone forever, right? Then increasing problem that people experience. Well, there's also, you know, you need to protect against fraud, right? So you can't give, you know, a lawyer or an accountant your seed phrase. That's crazy. So you need to solve for that. We solved for that. Then weirdly, a lot of that happening in France, but there's so much more of that happening globally, which gets underreported, physical attacks.

Yeah, physical attacks are like very underdiscussed.

Man, it's insane. I mean, I'm part of like several groups. And again, you know, we can turn this podcast into a very, very sad podcast. And like, and I'm in two hearts of like whether to tell people what's actually going on.

Well, I mean, give me the scoop.

I mean, look, like if you have anything anywhere, like on a wallet which has a seed phrase, Install Brawn and don't have that. That's my advice. Because if somebody walks up to you and politely asks to give it up, you're going to have to give it up. Right? And—

But how frequent are these attacks happening?

Weekly. That I'm aware of.

Yeah.

Probably daily.

Is it mostly to big public figures? Or is it to people who they see in maybe like the Ledger?

It's mostly people. Big public figures. So you see, when you talk about physical attacks, It's the main thing there is to make yourself extremely unattractive. Like, you don't want to be an attractive target. So if you're a public figure, like, the risk associated with robbing you is pretty high because people will care and people will try to, you know, that's one. Two is you potentially are thinking about those things and you have security in place.

So they're not really going after the public?

Yeah, because I mean, come on, like, what, you're going to go after Michael Saylor? You know, this is crazy. Well, who you want to go after, like, or who criminals go after, they figure out like, who are the people who bought Bitcoin for $100?

Yeah, and they're 80 years old, they live in Palm Beach, they don't have a security, they have a dog as security.

Exactly, exactly. Or somebody who's flashing their portfolio, for example. So somebody who's basically— and then you kind of get from the demeanor of like, who's serious about their security, or who's like paranoid and who's not. 'Cause you know, you don't wanna also, you know, rob paranoid people 'cause they have also processes in place, et cetera.

Do you find the lowest?

Yeah, exactly. I mean, what's the best way to protect your brand, your motorcycle, is to park it to the next brand new Ducati, you know? Because like people just gonna try to steal Ducati first before you get to your bike. So there is a lot of that happening. And we not, like all of those things that I'm explaining, Like, we're not going to move forward as a space. I'm surprised we actually got to this state at the moment with what normal people have as infrastructure.

Yeah, but most people don't do that. Most people just use Coinbase or Kraken. I mean, most people like the centralized exchanges, just— I mean, it all went to the exchanges.

If you've got access to those exchanges, right?

Yeah.

You can lose access to those funds also during a polite visit by somebody with a machete.

Yeah, that's true.

Right? So, two is biggest problem there is actually social engineering scams. This is another way to lose.

Right, yeah, the text message saying from Coinbase.

Well, I mean, the most popular mechanic has been lately is that they would bribe a support center person to leak the data 4 accounts, then they would call people. I had 3 friends basically who got scammed that way, and these are not stupid people basically. One of them actually, they made him transfer $100,000 of Bitcoin to a different address. And I'm asking him, because he knows me, right? And I'm way less reserved when I talk about those things off camera. And I'm like, this is why we're building Braan, be paranoid and so on. Stole everything, yadda yadda yadda. And I'm like, did you think for at least 10 seconds during this whole episode that they might be scamming you? He's like, yeah, but they were so convincing. They have fantastic British accents. And they had all my details. They had all of his details.

So they must have bribed a customer support person.

They bribed a customer support person. They identified— they basically told him on which dates, which transactions he sent. Wow. Like those type of details. Like, you know, if somebody calls you from Amex and says like, let us identify ourselves. You know, on this day, this is the amount that's been charged to your card and this is— and you're like, okay, well, let me also tell you some details. Like, you know, here's your— this is when you created your card. This is the address where we shipped your card. You're like, okay, that's— you can't really ask for more in terms of like identifying, right? And same thing, right? So people willingly do just give up their crypto and they say like, look, your account is not safe, we just need a confirmation code and number, etc., etc. Sometimes, like, that's more rare, but also a mechanic— you can also lose your crypto by just generating API key.

Yeah.

So like, two things people should look out for, like, have a look at the API keys that generated on your accounts, because like also sometimes even if there is a whitelisting, there is a way to steal through the exchange.

You know what I just saw? I just saw an API from blockfolio that was feeding into Blockfolio. Yeah, that had trading enabled.

Oh, shit.

Yeah, no, no, it never— Yeah, no one took advantage.

Yeah, yeah, yeah.

I just found it the other day.

Yeah. So, so, so that's— and the other thing, which is kind of like also these days, if you're using DeFi services, yeah, there is— it's gotten so bad that US Secret Service, UK National Crime Agency, and Ontario Police formed a task force called Operation Atlantic, I think, which basically fighting phishing, DeFi phishing scams. So you can, you like hook up your wallet, issue an allowance on some website, no private key revealed, no nothing, just gets drained straight away. It's similar to Bybit hack, actually. Yeah. Issue an allowance. That's all you have to do, basically. It looks like Aave, it looks like Amino, but like—

So why do you, how do you guys solve this? When someone like Coinbase can't solve this?

Oh, the Coinbase would, on the Coinbase side, well, there are a few things.

Or maybe don't just compare it. So like, yeah.

On the DeFi phishing side of things?

No, not that, but just like, yeah, how are you solving the—

So there are a few things.

So MetaMask doesn't solve it.

So here's the thing. You only, so one of the, so when we create you a wallet, there is no private key that's created. That's how institutions do it. You know it, right? Basically been the default case for the last 5 years, right? There are no private keys. Nobody in institutional space operates private keys, right? So it's seed phrase wallets. So people use MPC, which basically creates key shares, right? Or AKA shards, right? So one shard here, et cetera. So the way it works is that one share, it lives on your device, be it laptop or a mobile phone, and one share lives on a Bronze server, which you program. So you program the server, the share, to do things, for example, such as, hey, if my cumulative transaction volume over the last 24 hours exceeds $100,000, I want this person that you added to your account to approve my transaction. Otherwise, don't sign with me, right? Or for example, if we exceed $1 million, right? Then I want 48-hour security delay activated on my account. Then we have protections against random crime. So if somebody on the street asks you to open the wallet, you can basically hide wallets. And from the interface, you won't be able to tell if they even exist.

Yeah, you showed me this.

That was my favorite. Yeah, it's pretty cool, right? I mean, obviously, it doesn't help with organized crime, because if people point a gun to your head, you'll quickly remember all your hidden accounts. But the policy engine does help with that. If you get hit by a bus— there is a full recovery mode that could be enabled by your successors. So that's your inheritance feature. And if you just— and people lose devices every single day, or like that, they just basically go through recovery process, which takes 48 hours, and you basically regain access to your key share that's lost. It's essentially Bron and a trusted third party that basically appointed on your behalf as a backup. Yeah, Bron and that trusted third party is like a sibling or a friend or No, no, we work with a company called Crypt. They do quantum encryption. Oh, they're—

Right.

So then basically you inform them that, hey, I would like to basically recover my share. And so after security delay, we essentially print back the keys.

Like a 2-of-3 multisig.

Yeah, yeah, yeah, yeah, yeah.

Interesting. Why are you going after individuals?

I think because—

Isn't that like a worse business model?

Look, I think in order for us to advance as a space, this needs to be solved. We cannot be operating as a space where people, you know, gonna lose their 401 savings because they forgot where they store, you know, a napkin or like their, I mean, the stories I've heard, guy had a backup at a bank, bank burned down in LA fires, right? Turned out, and they called the bank, it's like, we don't know where it is.

Gone.

Gone, yeah. Then one guy basically had it in a safe 6 feet, like, under his office, basically in the basement. Floods came.

Gone.

Gone. So, and I'm talking about like tons of millions of dollars gone, right? So we can't continue as a space, especially like, you know, it might have been also acceptable when the volatility was so insane that, you know, one day you have a million, another day you have $100 million, another day you have $50 million, etc. Etc. But like now that it's more and more dying down and it will turn like, you know, into more digital gold-like type of scenario, like you would want to have a reduced level of risks associated with self-custody of such assets. So it's extremely important. And then again, crypto is part of the story of assets that live on blockchain. We will see other assets moving on-chain. And if you want to hold those assets, you should be able to recover them. You should be able not to give up, give them up that easily, etc.

Is there some new technology that made this possible for you guys?

Well, MPC, essentially, that we just took what works in institutional world. We just took what basically we've been doing in institutional, us and competitors.

2021.

Yeah, like it's basically since 2020. Exactly. Since 2021, everybody's been using MPC. So we just took that and when we apply, but why? Because people deal with, you know, $20 million is a lot of money, so you want to have proper infrastructure. Well, $2 million is a lot of money, and $20,000 is a lot of money. So it should be accessible to everybody. So we're basically democratizing access to the technology that's been used by institutions for the last, you know, better part of half a decade now.

Yeah. How's it going so far? You raised money or?

Yes, we did something differently. So I've read a book by Chris Dixon, you know, from Andreessen.

"Read Write Own." Yeah, exactly, exactly.

As I was transitioning from Copper, you know, I've sent you pictures from the beach. That's where I was reading that book. 'Cause I was like, let me brush up on like, what's this whole deal with Web3, right? And like, I didn't learn much new, But it succinctly explained, gave me an opportunity to explain to people what Web3 is. And Web3 is allowing your clients that help you early on building business to grow with you. And—

Oh, this is where the BRON token comes from.

Yeah, and then we build the tokenomics essentially. We don't have, so here's what we've done differently. We don't have a company with equity. It doesn't exist.

There's no equity.

There is no entity that has equity. And I know it's been kind of popular in blockchain space. There is equity company for founders and VCs, and then there is a token for governance. Yeah, like, great.

Now we're changing that. Obviously that was the wrong model.

I mean, like, for whom?

Yeah, for the users.

Exactly. For the users, it sucks, right? So we just decided essentially, like, it's just going to be a token. There is an opportunity to pay subscription if you don't want to deal with the token. We're not shilling the token, you know, it's an option. It's a pure 100% utility token.

So you have no equity at the company?

It doesn't exist. I only have tokens. Yeah.

Is it a fixed supply?

It's a fixed supply. But here's another part. What people also normally do is they do time-based unlocks. Yeah, right. What we do is KPI-based unlocks. So the more users we have, the more unlocks we have. If we don't reach the users, I think our first time-based unlocks are like somewhere in deep in 2030s.

Why would you, um, why would you have fixed supply? Uh, that model's like never made sense to me because it's taken from Bitcoin, right? So that's why everyone does fixed supply. But like, Copper didn't have fixed supply of equity. Like, you go raise another—

Yeah, yeah, no, totally. Yeah, it's, it's actually a good question. You— what I've done, I basically took Copper's fundraising journey and said like, okay, we're probably before exit there might be another round, like, if we do that this way, etc. This is how this would look like. And we literally just copy-paste it and said, like, this is the final state of the token table, right? Like, it's not CAP table, right? And so, and that was it, right? That was the idea. But you're right, like, there are definitely ways of doing, you know, you dilutes over time and you raise and etc. But then again, times change. You don't optimize the business also like for like infinite fundraise cycles, right? Like you just build something which is sustainable and grows in line with the user base that you have, essentially. And what's good about this model, by the way, is normally In a SaaS world, you have customer acquisition cost and you have lifetime value, right? And then your LTV could be like lifetime value. You can calculate it over the, you know, 5-year period of time and your CAC you can calculate and say like, so how many of those years essentially or months will this customer pay back for acquiring that customer? The good model about token is essentially, you get your LTV straight away. So you don't have to wait for 5 years to get the LTV because the customer is already there, right? So again, it's all super experimental. It's 100% utility. And but so far it's been working, working very well. We, we're going to be continuing improving like how to tell the story about that. But then again, some people go like, listen, Dmitry, you know, your token, I'm not too sure. No problem. You could just pay subscription.

How were you guys the only place to buy Canton?

We were, we were, we were. Yeah, so Canton's been, Canton's a great project and, you know, super bullish on it because like when Wall Street is writing DAML, like you kind of like don't really need to know more. Like you kind of, you know, people, the roots already going very, very deep on Wall Street. So if there are DAML engineers, sitting at banks and writing code, right? So what we've done is that we were looking at how the swaps ecosystem evolved and what people are doing in terms of swapping assets, etc., like Uniswap and 1inch and yadda yadda yadda. And so we stumbled upon an intent-based approach, intent-based protocol. And we really like it. And we thought like, you know, why don't we launch Intents? So we launched Intents and it allows essentially for you to do cross-chain swaps. And the first kind of like pairs that were launched on the Intents were KANTON pairs.

Because you were bullish KANTON?

Well, because we're added KANTON, because, you know, we know the team. I worked with the team also during the KOPPA times. And as as Brawn went to production, essentially, it was like, okay, so what should we focus on? I was like, you know, chatting with the teams, like, okay, why don't we launch Kantons? So we added Kantons. Everything pretty, like any blockchain we add, we add automatically an ability to do the swaps. So you can do that. And so extremely capital efficient.

How do you track success? Is it AUM? Are your assets on the platform?

Yeah, we got, it's a proxy. So we're yet to determine what's our north star our metric is, but it's number of users and, you know, and the like average amounts that these guys are holding on Braun. So we're at about 1,000 users at the moment. We're at about a billion of assets.

Wow.

So, and mostly family offices, executives, founders. You know, the biggest problem, this is going to be the exercise for the next sort of like 9 months. So one influencer does the Braun wallet review. Like kind of like posted in YouTube comments are, who in their sane mind is launching a wallet in 2026? Like, what's the matter with these people, etc.? Because obviously retail have no clue what, you know, who are the Copper people, right? So, so like interesting. And then, and then basically I'm like, so the problem that I'm solving is that the listeners of your podcast probably don't know what Braun is or like, or learning what Copper is, etc. Et cetera, like some do. But the guests on your podcast are Brawn users.

Yeah, yeah.

And that's basically kind of like, that's—

yeah, you have all— I mean, that's why I wanted to have you on, is like, I mean, I feel you're like, you know, we usually don't bring on like early stage people.

Yeah.

But, uh, yeah, it's like all the founders and CEOs are on now.

Yeah, it's all the founders. I'm like, if only— but again, it's kind of weird to go and ask them like, hey, listen, can you like tell the whole world where all your stuff is at?

Yeah, yeah.

And they're like, Dimitri, what's the matter with you? You know, it's Just leave me alone.

Yeah, no one wants to say where they're—

Stop texting me.

Yeah.

So, but it will come with time. So, but, you know, bridging this gap and explaining to people, word of mouth is pretty strong as well because— and this is exactly what we've been trying to achieve is that, you know, probably in your family circle, definitely my family circle, when people like have a crypto question, they come to me, right? It's like, Dmitry, what do you do with this? And that was always the objective, is to bring those cool people that are technically savvy, or founders of the crypto projects, or executives that are working in digital assets, or working on Wall Street, et cetera, get them as users, so then on Thanksgiving Day, carving turkey, they will tell people how to set up—

To use RUN.

Yeah, exactly.

What did you learn about raising money, Do you think you raised too much money?

There is no— look, nobody gives you option. Nobody gave you option to raise less money in 2021, 2022, because if you raise less money, you don't exist. Yeah, it was as simple as, you know, we had like, you know, have you seen our commercial with Rebecca Ferguson touching the waterfall? And like, you know, there's like 60 people crew that flew to Iceland to film all of this stuff, etc. It's like, it was insane, but you had to do I mean, it costs so much money that I did not watch Dune Part 2, not to remind myself how much we spent on that commercial. So I'm like, yeah, a lot, man. A lot. Ask Tyler.

Yeah, I will ask Tyler.

So because I think there might be some paperwork and stuff like that involved into revealing that side of things. But Yeah, nobody gave you any money.

You had no option.

There was no option.

Do you think that's happening right now with AI stuff? It seems like you have no option but to raise massive amounts of money.

At the moment, if you're an AI project?

Yeah.

Man, I mean, AI, like, I mean, Claude Co has been ruining my life in February. You know, I've been like, right? You know, you've been deploying stuff like, you know, I'm I'm techie, but I'm not like, you know, I'm normally I would not set up instances on AWS with S3 buckets and, you know, cron jobs.

Now you can do everything.

Exactly, exactly. So I'm like, wow, this is, this is so cool. I wish if I would have had that at 24 as an entrepreneur, like, it would have been so amazing. So right now, if you're a founder, if you're 24 and you've got like, and you're weird, like you just want to build stuff, like there's just never been a better time. Yeah, like, and also, like, somebody said, I've read recently, like, this is the dumbest that this technology will ever be, right, at the moment. So you feel it, it's like every month it gets better, every, like, morning to afternoon, you know. So, so, um, in terms of, like, raising more capital, I'm not sure, like, I don't think it's a good thing at this day and age. Um, the most important thing is, is a customer. Customer, right? If you raised a lot of capital, it's easier to convince people to give you money than to a customer to pay you money, right? Yeah, yeah. So the very first thing you should do, and again, it's just not to waste your time really, like you need to convince a customer to pay you real dollars for the product that you're building or built, um, and then the money will follow. So I would not start with the fundraising.

Yeah. What'd you learn about spending a lot of money marketing, other than spending with Blockworks is a really, really good idea?

Yeah, yeah, of course, that's it. So I think one thing I've learned is that to build a brand, it costs money. Like, and there is no, there's no kind of like a magic secret which is like spend $2 million here and then all of a sudden you've got a brand. So it takes time. But it's totally possible, and if you are present and if you are creating value for people, you will build a brand. And so, and patience pays off as well. Like, I would say one thing which is, it was like nobody knows you, nobody knows you, nobody knows you, and all of a sudden it's like your household name. And you're like, how's that?

That's how I feel about Blockworks.

Right?

Nobody knew us for even like 5 or 6 years.

Right. Yeah, exactly.

And a lot of people are like, I've loved Blockworks since day one, long time. I was like, no, no, no.

It was like, why we spending $20,000 on this? This is the type of the conversation that people were having. But you know, you build a connection with people, you have, and you're like, let's give it a go, let's try it, right? So brand building on marketing side is something that takes time. You're not going to see ROI straight away. And it will look like, you know, the dolls you burn. And one thing with this new AI type of situation, which I think is, let me put it this way, I'm super bullish on salespeople again.

Really?

Yeah, because fast forward 2, 3 years with all the AIs, with all the people going to stop buying like that, people are going to basically go back. I think we're going to go back to like almost closer to door-to-door salespeople because this is going to be such an under— it's going to be a life hack.

You don't think you'll just go into Claude and be like, hey Claude, what's the best CRM?

Oh no, no, like CRMs are not gonna— like it's, it's gonna be difficult, right, to continue CRM businesses as it is right now.

Then where are the salespeople good?

Salespeople are, well, it depends what kind of a buyer you are, right? So if you are buying for a corporation, you can't point, like why McKinsey exists, right? You pay them so that—

Cover your ass.

Cover your ass, exactly. Like you won't be able to cover your ass with Claude, but like, you know, you're gonna jump on a call with, you know, Jason Yanowitz or Dmitry Yanowitz, who's gonna basically like trust me this CRM system is going to work so that you commit your budget and then your CTO like is not going to fire you because you basically, you know, just wasted $2 million on this project. Right. And so like you need, you need a person to tell you that so that you look them in the eyes to see how convincing those eyes are. Right. So, so I'm super bullish on that. I think in the IRL events. Right. It's, it's, it's also that's going to be disappearing. The whole like COVID era was not like really nice and well, and that actually from the, from the, from the copper standpoint, actually it gave us this, bridged us in terms of the capital, because all of a sudden it was a level playing field because it was booth-to-booth sales. Yeah, it— because you couldn't go to events, right? And we did not have capital to be at events. So, so, so, so, so that was great, but that was like past. People want to go and talk to people, people want to hang out together and they learn from each other. Like, we're not— like, we're already way dumber than AI, you know, at the moment. So we're gonna have to live with our monkey brain, which requires socialization and requires, like, a couple of beers. A couple of beers, exactly. Yeah, yeah.

Um, this is great, man. Anything else that you're thinking about these days?

Well, now that you mentioned, I'm thinking about a couple of beers.

Yeah, there you go.

Let's go get this. Well, look, um, It's interesting how the space is going to move. I would say that this is the third Bitcoin funeral I'm at. And last year, like, we were waiting for it. We knew that this bull market is at some point going to end, and then everybody's going to be like, well, told you. And then there's quantum computers that's going to basically— like, all of this is now going to disappear. Slightly started to go away, even like from comparing to like, you know, 6 weeks ago, because like 6 weeks ago I was in Dubai meeting a friend of mine who's a very smart crypto guy. He's like, listen, I'm worried, like there's like now like 8% probability. And I'm like, dude, like you realize that this is like the bottom of the market? Like if you are like thinking that way, like this is—

I bought Bitcoin for the first time in like 2 years when when we attacked Iran and Bitcoin went up a little.

Yeah.

And I was like, it should go down on— because it goes down on the tariffs, it goes down. It's been going down on any bad news.

Yeah.

And when it got down into the $60s, I was like, okay, this just feels— yeah, it feels bottomy.

The realized value right now is about $56,000. So realized value is basically how much— look, what's the average global buying price for Bitcoin? Across everybody, right? And people are just really bad at fixing paper losses. So historically it did not dip anywhere like lower, like by far, than the realized value. It's a pretty solid metric. Like if you look historically, it's quite interesting. And I'm also tracking generally fiat and grid index. That's been quite interesting to watch.

Yeah, it got to like 4. 4 out of 100.

Yeah.

And it's like, so then what do you buy? So you buy Bitcoin or your own token? Yeah.

So I've, uh, um, I'm pretty bullish, like, and not the financial advice or whatever disclaimers I need to make.

Yeah, we've got enough.

Yeah, but you, you have, you have it on your website, right?

Of like, we have everything. Yeah.

So I, I have, uh, the big 3, let's say, you know, the, uh, Bitcoin, Solana, um, I'm super bullish on Canton. Because that's something which I believe Wall Street is integrating and not just talking about integrating. I just think it's going to take a little bit of time before those things ship to production and then actual, like, proper bank-like, industry-like scale. And the other things which I'm thinking about— oh, so I got a little bit of Zama. Yeah, so fully homomorphic encryption. Yeah, it's basically, you know, on existing rails, like, you know, so Ethereum, on Ethereum, you know, you can just basically make your USDT disappear and you can move it around, etc. So I think that's pretty powerful. And also at the moment I'm thinking of potentially accumulating a bag of decentralized protocols for perps, lending, trading, options, essentially, because I I think, and this is what's— there are quite a few things that we are working on in that regard. Just a little bit of a teaser. But the decentralized venues—

Like a Hyperliquid?

Like Hyperliquid, Lido, Aster, Derive, Aave, Kamino, Jupiter. Like there's quite a few protocols. Like some of them, obviously, some of them I think are going to become absolutely massive. Hyperliquid already showing. What's possible. These guys are not stopping with HIP3 markets, now HIP4 markets.

Who do you think becomes massive there?

Well, I mean, at the moment, it's probably Hyperliquid, of course. Like, you know, with the tenacity and the ferocity and just discipline that these guys have built, if that continues, if their strategy works, and it looks like it's pretty solid, it's done. Definitely going to be hard to catch up. But I don't think it's a winner-takes-all. It's going to be the same situation we've seen in centralized exchanges. Like there's Binance with 50% of all the volumes. But there is Bybit, there is OKX, and there are like Bitget and all the others, which are also seeing their share of volumes. So that's basically a trend that I'm super interested in keeping a close track of.

Nice. Awesome, man. Good to see you.

Likewise. Thank you. Yeah, thanks for having me.

Sponsor, huh? When are you gonna sponsor?

Well, we're gonna discuss this now over those two beers that you mentioned, probably.

Good. All right, folks, good to be back on Empire. Missed you guys for the last two months. And, uh, Dmitry, congrats, man.

Thank you so much.