Crypto’s in a 20-Year Secular Bull Market | Weekly Roundup

2025 is a line in the sand moment for the industry. I think where we are is kind of 2003, 2004 for the internet, like boom, bust, rebirth. We're entering a 20-year bull market for the industry. There'll be some chop, whatever, but it's just a trend line up for the next 20 years.

This episode is brought to you by Blockdaemon. You'll hear more about them later in today's episode. 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, everyone, welcome back to Empire. It's going to be a fun roundup. We got Santi, we got Rob in person. Let's go. What's going on, fellas?

You know, in person always feels It's like much better. Like I'm really excited about this.

It's better.

Yeah.

Santi, how you doing?

I'm good, man.

What are you doing in New York? Uh, I come to console me.

I, I, I, I did. As a matter of fact, ladies and gentlemen, we've been doing this for now, what, 4, 5 years?

Yeah. Yeah.

Yeah. Good run.

It's been, it's been a good run.

Yeah. Podcasts are staying, ladies and gentlemen.

The show, let's just get, let's just get out of the back. The show is gonna continue.

The show goes on.

Yeah.

The show goes on. Um, Yeah, so this, okay, so a couple things I want to talk about. Rob, you were just at Money 2020. I want to hear about that. Um, a bunch of news like ZeroHash supposedly is getting acquired by MasterCard. ConsenSys is IPOing. Polymarket, Mamdani, like, you know, who's our foreign powers weighing the scales of, of, of, uh, the Mamdani market. Um, Visa and stablecoin Securitize going public. Western Union on Solana. Whole bunch of stuff, but I think we should maybe address the elephant in the room, which is Blockworks shut down our news division this week. So if you guys are good to start with that, I feel like it's a good, good place to, to go.

You should definitely start with that.

Yeah.

Good.

So yeah, maybe just to, yeah, to address it a little bit. So Blockworks, when Mike and I started Blockworks, we wanted to solve what we called the information problem. And the issue was that there were all these, space was super retail. It was going to become a big institutional asset class. These institutional folks were going to come in. They didn't want to listen to Crypto Panda on Reddit. They wanted a more trusted source of information. So that's what we've built for the last 8 years. Um, built events and news business and podcasts and newsletters and all that kind of stuff. Um, yesterday we made the really tough decision to shut down our news division. So we're keeping, keeping everything, show goes on with everything, data, research, D— we'll still have 3 DASs next year: New York, London, Abu Dhabi. All the podcasts are staying. Um, a couple of the newsletters won't continue, but like Byron's newsletter, the research newsletter, those will continue. But yeah, we shut down the news division, and unfortunately that meant we laid off, uh, we had 9 journalists, um, who got laid off. And that's just a, uh, yeah, yesterday just— or Wednesday was just a tough day. Um, that's never easy. And like, these journalists are I think journalists get a lot of crap from people who don't understand journalism as a profession. It is one of the hardest things to do. You're getting pitched all day long by people trying to promote something and show you something, and they're basically trying to sift through the marketing and the PR to figure out like, yeah, what's the real story here? And they have an incredibly tough job and a lot of the economics are fighting against them. Like we see journalism layoffs all day long, not just in crypto, but in traditional media and stuff like that. So anyways, yeah, we decided to do shut down the news division. It's not the thing that we wanted to focus on. We wanted to focus on the, on the data business. But, uh, yeah, did just want to give a lot of love to the journalists. They're all incredibly talented people.

And yeah, yeah, I've, um, engaged with a number of the Blockworks journalists over the years, I think Catherine and Jack and, and a few others.

Yeah.

And, uh, I think, you know, I had always referred to Blockworks as, you know, probably the best, uh, in terms of breaking news stories, at least over the last, you know, call it year or two. I think a lot of talent within the newsroom. And, you know, it's a sad day for anybody who has to, you know, gets laid off. But I think they'll land on their feet. And I'm really excited for, for, for them and then for your new direction. And yeah, that's, you know, I, I think as someone who had been through the global financial crisis, you know, that's obviously a different type of, of layoff that was happening at that time. But so many of the people that I knew, you know, in 2010 and 2011, they were able to go and I think really find, you know, another place where they were able to build a career that I think was in a direction that was a little bit different than before but was, you know, really exciting for them. And so, you know, all my well wishes to everybody on your side and all the talent you guys had. And, you know, it was a tough day for you, I know, as well. And you got a little bit of backlash online.

And so, yeah, I mean, that was a— I actually saw— so I I made this tweet, what Rob was referencing is I made this Twitter post announcing it. And, um, actually this was a really good lesson, so maybe I can learn the lesson so other people don't have to go through it. I think, um, there is a time and place to celebrate a company's successes and Blockworks is doing great. Like we have, and I, I mentioned we have record revenue this year. We're gonna have record revenue next year. Uh, post about layoffs is not the place to mention that.

Yeah.

Um, it's, it's not, it's a place to celebrate the people who are here. Help them find new jobs, land on their feet. And so actually in hindsight, I think it was fair to take some crap, but hopefully I say this out loud so that other people can learn from my mistakes.

Listen, I mean, I saw a lot of you responding, engaging with people and that shows it's not, you know, everyone's entitled to fuck up. Like, and I don't think, you know, the intention was good about what the post, the internet's always gonna come at you and there's always internet trolls and, you get hate, like social media is just a hate, excuse, hate platform. People just, and, but I think the way you responded to those and you very quickly like, you know, it was like, yeah, in hindsight should have done that. And I think that, you know, that shows everything that you stand for. So respect for that. Maybe going back to what is, what is like the, if you look at the evolution of Blockworks on the, on the news side, what were some of the highlight stories that you guys covered? I know there was the FTX, story, a lot of the reporting, right? The trial was going on. I remember that. But in your mind, like, if you like, what's the, the 30-second clip?

Yeah, we had, we had, I mean, we got cited. I like, I really think we are, we had the best editorial team in all of crypto at this point. We had an amazing team. It was a small team. Like, it was a really small journal. Like, when you look at the number of people who got like, oh, yesterday it was like, I think 9 journalists total. Like, it was a really small team and they just punched way above their weight. They were younger, scrappier, and very technical and understood crypto, which is, by the way, why I think they'll really land on their feet and find something quickly.

But yeah, we covered—

yeah, we covered— we wrote thousands of stories. We were, you know, mentioned in every mainstream publication. We were mentioned in, yeah, like pretty much every angle of the industry that could have been covered, we covered. And yeah, I feel very proud of it.

I will say, I think it was you guys. I looked at a lot of the posts of the reporters and all of those were overwhelmingly positive. They're like, look, Blockworks took an early bet in my career. I was straight outta college. They hired me. I came in here and like, that wouldn't have happened in a traditional media company. And I think like, yeah, there's a lot of noise. There's, you know, the data DeFi saga, if you want to talk about it. But I think to me, I immediately went into retweets. I immediately went to the, you know, the people that I know that have, I've contributed to stories and all of them were incredibly great.

That's the tough thing about a layoff is like you don't want to share too many details. So the only people, the people commenting online are the people who aren't involved, haven't worked at Blockworks, right? And so I think the best way to judge a layoff and just honestly a company's integrity is by the people who work there and who have worked there in the past. So, yeah, you know, people commenting on it don't know about severance details or they don't know Hey, did you just like one-click button, everyone's gone? Or did you get on and have like one-on-one conversations with every— and it's not our place to share that publicly, but yeah, I think the people who need to know know. So, and, and you know, crypto's interesting, right? Because most industries get fought from the outside. Like, you know, there's a, you have like a AI or something like everyone in AI kind of bonds together and then it's the outsiders who are like attacking AI or something like that. Or even like a construction industry or healthcare, like you kind of bond together as an industry. Crypto has such a, like an immune reaction because there's so many, there are, there are a lot of scammers in the industry and there are a lot of people with bad intentions. And so it's interesting to see. Yeah, the crypto, I mean, the crypto react, building something in crypto is a little more intense, I think, than building something somewhere else.

What, for someone, look, as I think of it, you guys existed in a time where we needed more integrity on the journalism side, more fairness in covering stories. You know, over the last couple years, traditional media publications were not positive about the industry, were not portraying it in a fair light. You guys, I think, played an immense role there. What's the future of journalism in crypto?

Yeah, yeah.

Where's the place, who's gonna build that?

This is one of the reasons that we felt okay doing this is, so like news had for a long time been the smallest business unit of Blockworks from a revenue perspective. Like it doesn't really make money, but it was kind of a public good. That you do. And that's, by the way, that's a re— that's the reason like a lot of news companies are owned by billionaires. Washington Post, Jeff Bezos, Time, Benioff, Forbes, like the, you know, LA, like LA Times, Boston Globe, um, The Atlantic, The Atlantic. Yeah, like the, the, the list goes on. Um, it's kind of— is because it's a really tough business model and it kind of does become a public good. And that's a little bit how we felt, is like, um, the news business We didn't think that the caliber of journalism in the industry was where it needed to be. Now I think that's changed a bit. You have, um, I think Laura's doing amazing work at Unchained. I think, um, I'm impressed by what the bullish people have done with CoinDesk. I thought they were gonna kill it and they've kept it alive and done a good job. Uh, this guy John Rice is back as the editor-in-chief at Cointelegraph. Um, The Defiant, there's a company called Coinage that has, is doing like interesting experiments around like community-owned journalism. Um, DL News, uh, The Block, like there's a lot of good journalism and actually the traditional publications are covering it better. Bloomberg's got a great structure team. Wall Street.

Yeah. Yeah.

Wall Street Journal.

Um, so when I, when I invested, um, you know, you and I have been, you know, starting the podcast Made Sense to Invest at the time. Um, we had a discussion around, hey, what's the evolution of Blockworks? And you've been thinking about this, I think, for a number of years, which is transitioning to a data company and kind of a, a Bloomberg type, right? Bloomberg has obviously print, you know, releases stories and has an editorial team, but they make 90% of their money on the subscription and the data, right? Um, maybe I don't know if there's anything else you want to talk about on the, on the news side, but I would love to maybe touch on the, the—

The last thing I'd say on news is like a company only gets one, maybe if they're extremely lucky, two things that they can be world-class at. And you're actually, if you do too many things, you're doing a disservice to the people who work on those things. And that's actually how I had come to feel about news is, yeah, you mentioned some of the names like Casey, Jack, like Catherine, like these are some of Ben, like McSweeney, like Jeff, like these are some of the best journalists in the entire industry. And even beyond just crypto, we were doing them a disservice because like, you know, when if you go inside of our leadership meetings, news wasn't getting any airtime. We're talking about data and software and things like that. And, uh, yeah, you end up actually— people aren't going to leave, or some people maybe, but like most people, uh, aren't— are like, most people don't like quitting jobs, but you end up doing a disservice to them by not giving them a platform that to really focus on. So like my actual recommendation, if these people want to stay in journalism, like, um, they should go somewhere where journalism is the thing that that company is excellent at. We're not going to be That's not our focus is to be world-class at new, you know, writing news or something like that. We're gonna be world-class at building software and data.

The one thing maybe I'd add before you move on from the news side is I actually had two portfolio companies of ours reach out yesterday and say, hey, listen, we, we really need help on comms. Do you think actually anyone from Blockworks would be good for that? And so if there's anybody out there, you know, and we'll reach out separately outside of the pod, but you know, from the news team that was affected by the layoffs and is interested in like portfolio company opportunities, you know, potentially in comms, things like that, um, definitely, uh, get in touch.

Um, when we're— yeah, it's, that's a natural progression.

Yeah.

Right. Is going from, going from journalism into comms.

Well, we're, we're actually, we're gonna post a role today. We, we're looking for head of comms. I mean, we, we're putting out so much content, hired George, uh, who was at The Block.

Uh, yeah.

And he's putting out a lot of research, uh, as we go through our data room. So it's like we, we need a, a comms person.

So anyways, Yeah, if people are hiring marketers, content people, comms people, journalists, ping me directly on Twitter and I'll set you up with folks.

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Talk about the decision to do the pivot in this way. Like, you could have maybe taken more time, but it was—

Yeah, I think there's just a— okay, at a macro point of view, the— I think Mike and my belief is that, and I've talked about this on Empire, 2025 is a line in the sand moment for the industry. I think we will— I think where we are is kind of 2003, 2004. 2004 for the internet, like boom, bust, rebirth. We're entering a 20-year bull market for the industry. Like there'll be some chop, whatever, but it, it's just a trend, 20-year trend, trend line up for the next 20 years. And I think we'll look back and say that there was kind of crypto was like 2009 to 2024, 2025 line in the sand, the industry forever on. And when that happens, you get You just get consolidation and the winners win big and the losers lose. And I think we plan on winning and we plan on winning and not losing. And so, but to do that, you have to make some tough decisions and you have to rip band-aids. You can't think about it for too long. You can't be like on your high horse kind of looking at, you just gotta rip band-aids. And I think we are in band-aid ripping season at Blockworks.

I think a lot of discussions you and I had before was Do you need to keep the news as a public good, as a way to get the data research platform off the ground? Because it feeds you from a funnel perspective, like users discover the story and then they'll be like, oh, I want to learn more about this particular project. Let me click. Oh, they have a dashboard. Oh, let me learn more. I think that had been part of the calculus before. What made you say, hey, listen—

So distribution's still incredibly important. I actually think distribution remains king. Like when, as software gets easier and easier to build from either vibe coding or AI or whatever it is, or just really talented engineers, distribution is super important. We had found that over the years our distribution was coming from podcasts, a couple core newsletters, and social.

Is that because Rob just—

that's because Rob joined. Yeah, exactly.

Before he said it, I was just going to say, well, you knew I was going to get that phrase. You know, someone again hit me up last week and said, hey, you know, are you doing free work? Your name's not on the masthead. So, and I was like, I am doing—

every morning Rob sends an automated message like, hey, my name's not on the masthead, fellas. Yeah, but yeah, our, like, um, so distribution, there's owned audience and rented audience. And when you have people hitting your website to read a news story, that's a rented audience. When you have people listening to your podcast every single day and reading your newsletter every single morning, that's an owned audience. And so we, well, like distribution and audience building is super important for us still, and I think it gives us a big competitive edge on the data side, but the focus is owned audience instead of rented audience.

Yeah.

Yeah.

Did you do a lot of analysis of like, maybe talk a little bit more about the data, right? Because I remember going to, I think it was DAS here or Permissionless or DAS where you launched the, you had just launched a research platform.

Yeah.

Yeah. Dan, there was like a small booth.

Yeah. Yeah. Yeah. It was jankiest little booth.

Yeah. I was like way in the back. I only went there because there was a beanie bag and I was like, yeah.

Yeah.

And you had just gotten it off the ground. Maybe talk a lot about what you're seeing that side of the business? What's the grand vision for it?

Yeah, I mean, the first— so we launched data in 2022. First year we didn't monetize it. Um, next 2 years we, you know, we— revenue was growing 100% year over year, but like it was still kind of small potatoes. Yeah, exactly. Um, but the last year revenue's grow— like the, the recurring revenue side of the business has grown like several hundred percent this year. And it's the first time in really— like we've been building Blockwork since December of 2017. It's the first time in basically 8 years where we have extreme product market fit. I would say we found who the customer is. We have extreme product market fit. Average deal size is in the hundreds of thousands for these data deals. And yeah, it's just the thing that we want to go all in on.

Who are your largest customers? Are that crypto native projects like Solana? Like if you're a major protocol, you probably are working with Blockworks on the dashboard side. But who are the larger— or is it funds? Is it—

Yeah, I think everyone knows like a lot of the chains pay a lot of money across the industry, but the thing that we get really excited about is the applications. I think the applications do not do an amazing job of getting their story out there and their financials and their data out there. Like, you have companies like Maple and, you know, Polymarket and like, uh, Hyperliquid and Pump, like real revenue, real on-chain revenue, and it's not— they're not telling that story in a, in a great way.

So how's the reaction been, or have you seen kind of the influx of traditional finance people yet, or has it been still very crypto native on your side?

On the platform? Yeah, it's good. It's— yeah, it's very strong. It's— they care about different things than crypto people do. And you probably see this because I know you guys are investors in some other data companies as well. They are— they are much more sophisticated, I would say, obviously, naturally. But they're— I mean, they're in it. They're deep into the weeds. They're very— I mean, if you guys saw JP Morgan head coverage on Coinbase this week or last, I think it was this week. And like half of it was talking about Base, right? So they're like, they're, they're more sophisticated than people might realize.

Yeah. And so your plan is to, like, if you fast forward a year or two from now, the customer composition, you would say most of that will come from ex, like not crypto native?

We're going to, we'll share a little bit soon on like what, what we're announcing and what we're building next. We've got a bunch of big things underway that, yeah, you guys know, but don't want to share too much of it publicly right now. But I'd say the mega trend that Mike and I get really excited about is the last 10 years, the mega trend was assets moving on-chain. The next 10 years is going to be companies and real revenue moving on-chain. And, um, that's both crypto-native companies, you know, doing hundreds of millions, billions on revenue on-chain, but it's also Robinhood launching a chain and Stripe launching a chain and BlackRock moving their ETFs on-chain. So I think that's the mega trend that we get really excited.

I feel like we keep having this discussion about how, like, we're in this, like, multi-year bull market. Right after the actual prices on the timeline are like, go down and the timeline like is like really bearish. Like we had the Fed yesterday and we got like a little hawkish about December. Yeah. Bitcoin dipped under $110K and the timeline's all bearish and, you know, we'll just keep saying like, this is actually a bull market, just not the one people want. Yeah.

Look, you just keep saying bull market never die, you know?

Yeah.

But like your point, uh, when we were pitching like, uh, back in 2020, '21, like, like we would say, uh, you know, crypto is a secular trend, like the software. Like 2001, 2001, you had a very big shift. Not to do like archaeology, right? But like, it's, uh, you went from on-prem to software as a service. Companies like Salesforce totally changed the game. CapEx to OpEx. And then from 2000, um, 2001 all the way to now, you saw a huge proliferation of just adoption of software. So many companies, right? Public companies, whatever. Um, But during that time, of course, you had like macro shocks and whatever, but like that trend line was secular.

Yep.

That doesn't mean that the stock price doesn't go up or down of Salesforce or whatever. Is this time any real, like, because at the end of the day, like, you know, this is a levered NASDAQ play at the end of the day. Like if, if the any one of the Mag Sevens sneezes or has a bad earnings report, the entire crypto's going to, it's going to dump.

Like, well, and you're seeing it right now. Like, you know, the, I, I don't think the market's open yet. It's, we're, we're before 9:30, but Futures were down, it was down, you know, after market yesterday after the Fed. And then we also, we saw like all the big tech earnings last night. And the big tech earnings, I think people are still trying to figure out like, is there too much CapEx? Like, what is happening in terms of, um, AI? Is it— what is it really going to contribute in terms of, you know, call it future earnings and, you know, GDP? And the market seems to continue to have these kind of like hiccups around it. But to your point, like AI, crypto, like I don't know how you stop either of them, right? Like, and I don't know how you can't be really bullish over the next 10 years even if like every quarter we get these is, you know, kind of—

Rob, what do you do with your personal book? Like, when you see something like, you know, I— let's start talking about maybe there's a lot of public market news this week. Securitize, Consensus filed for an IPO. Um, but maybe the first one is OpenAI is preparing for an IPO at a $1 trillion valuation. When you see some of this stuff, do you like— are you just like long, long, long NASDAQ? Are you buying coins in your personal book? Like, what do you— do you own any—

I tend to be passive, right? So like, because I get paid by, you know, my clients, which is actually my LPs, to be really deep in a certain asset class and to be really deep with certain types of companies. I spend all day every day thinking about those companies, thinking about how to invest in or find edge in, you know, that type of investing. And so it's not really the right ROI on my time to be like digging through like Qs and Ks and like figuring out, you know, what, you know, individual stock that I actually want to, uh, want to buy. So I'm generally just like long, you know, technology. Right, and relatively passively. I believe in, you know, and you express that by long NASDAQ and long— yeah, probably my single biggest holding that is not my fund ownership in Dragonfly is, uh, that I'm long QQQ, right? And so, uh, but you know, I've definitely at times had opportunities to participate in like IPOs, and, um, I would say I'm— I hit the button more often than not because I'm just generally long, you know, technology. And doesn't mean it always works, but you know, things like, you know, I've seen and been a part of some of these like XAI and OpenAI SPVs. And, you know, I mean, it— I've got to tell you, on the foundational model side with like OpenAI and Anthropic, the, the growth— I, I don't think I've ever seen anything like this, right? You know, I think Anthropic is probably going to close— it's going to grow 10x this year. Again, it's going to grow from $1 billion to $10 billion in top line. Like, I don't think I've ever seen anything like that at that scale, right? I mean, you're seeing the same thing with OpenAI. Um, some of these, these application company companies, the cursors, um, and some of the others, you know, you look at them and they're going— I was talking to one, and I'm blanking on the name of the company, um, uh, like 2 weeks ago, and they had gone from basically $1 million of ARR to $200 million of ARR in 13 months, right? And like, this is growth of which we've never seen, right, in any sort of, uh, market. And so I try to get as long as much of this stuff as possible, but it's not my, you know, and I'm definitely not, I'm not buying tokens at all, right? I'm investing in, you know, other than, you know, I own Bitcoin and ETH and, you know, some, some large caps, but otherwise I'm getting all my, you know, exposure basically through the fund.

Yeah.

Let's talk about some of these public market deals. Maybe we can start with Securitize. So Securitize going public at a $1.25 billion valuation. What do you guys think? This is a, so it's a SPAC deal in partnership with Canner. Would love to, I don't know if you got, if you dug into this one, Rob, but would love to hear your thoughts.

So I haven't dug into it recently or the, the announcement yesterday. I, you know, we've looked at the round before. I've known Carlos for a long period of time. You know, he's been at this since I think 2018, 2017.

2017. They launched a few months before Blockworks, I think.

Yeah. So they've been doing this for a long time. They've had a really singular vision around, you know, what tokenization would look like. They've, you know, to his credit, they were early to this topic that is now, you know, really taking off. They're really finding product-market fit. They're, of course, you know, the, the, they're the issuer alongside, uh, or at least the transfer agent alongside, you know, BlackRock and others. So, uh, you know, excited for them.

I think what does Securitize do?

Yeah, okay, sorry. So to back up, I mean, Securitize is essentially a transfer agent and a fund administrator. So they bought MG Stover, which is the largest fund administrator in crypto. What does that actually mean? It means that they keep the records of who actually owns any tokenized security. They do the tokenization itself, they do the KYC AML, they understand, you know, who, when there are transfers, and then they manage all of the administration of these, basically these SPVs that they, that they put together, which includes things like, you know, payouts and, Making sure that, you know, things like K-1s get filed and the property taxes get paid and all that kind of stuff.

Make, make the valuation make sense. I mean, I know everyone's hyped up about tokenization. How much money is this actually business making? I looked at it. I hear the, the meta is strong.

It's like 80 of top line, right?

80 million of top line.

Yeah, I think so. I mean, you pull up the deck and it says so. Yeah.

Um, 80, 86 million.

Yeah.

And what's, uh, what's margin on that?

Um, I don't, I don't see it.

Like 20% more.

They're, yeah, they're making money with MG Stover. I think before they were probably losing money.

But again, MG Stover is a traditional fund administrator. Like we worked with them, I think at ParaFi, and then we transitioned out. A number of funds I'm an investor in use them. How real is the technology? Or is it, you know, 'cause I candidly, like a lot of it seemed like a wrapper, but underneath it, like they were just doing a lot of manual work, which look is okay, but—

I mean, I think that is probably right. Right. So, so the, the question on, on transfer agents, So if you look at the traditional markets, transfer agents, fund administrators, these are really sleepy traditional businesses. They're very manual. There's a lot of paper pushing and you're just managing a lot of processes, right? These things do not trade well. So you don't see things that trade at, you know, 15 times the top line, right? But I mean, I guess if we want to talk about mid-curving things, which we, you know, had discussion about last week and I think I've done before on certain, certain companies, there is a secular tailwind right now behind tokenization. There are— I think a lot of people believe, and I'm one of them, that the tokenized asset space is going to absolutely explode, right? When this goes public, it will be the only avenue for people to express that.

Yeah.

And so other than, you know, in stablecoins, which is kind of a different, different market. And so there is something to be said about that, which I assume is a big part of the reason that, you know, you see the SPAC deal again.

I think you hit the nail on the head. Yeah, I think, um, reminds me— this reminds me of Circle. Like everyone on crypto Twitter being like, Circle, such a bad business. Like, you know, interest rates are gonna come down, Circle's gonna get whacked, a bunch of competition.

It did get whacked.

No, no. And all, all of that was, but Circle's $240 kind of right. Except, except, except that Circle stock ripped. And why does Circle stock, stock ripped? It's the only asset in the public, public markets where you could get long stablecoins. Circu— securitized is gonna be the same thing. Well, it's the only way to get long tokens.

See, that's to, to me, that's lazy thinking, right? It's like, yeah, I get we're in an environment.

Markets are, I have in this market, markets are so much lazier than in this market.

In this market. Yeah. But you know, you, you're, the thing is, I don't think you think in, in, in, in this market environment, it's like you wanna hold the bag for 2, 3 years. You know, people forget, but Coinbase went all the way down to $13, $20.

Did it go that low?

Yeah.

I think $30.

$30.

$30.

I remember 'cause I was buying it back. Yeah. Like they, they had, they, that day they got hit with like an SEC suit.

Yeah.

A bunch of shit.

Yeah.

And Paradigm, put a position there, I think between $30, $40 bucks. But that's the thing I'm saying, like, help me understand how you make a fundamental case. Like if you had a public fund right now, like Liquid Book, would you, would you buy this thing at a billion?

I haven't done that much work, but I don't know if it would be like a core position. That said, I think one of the main things to think about here, the point you're making is often around timeframe, right? And when you're investing, you have to think about like what your time frame is. And there are different types of investment funds or different types of investors. And we've seen a, a lot of things happen on short time frames that maybe, you know, don't happen on the long time frames and vice versa. And so listen, the Circle stock, you know, it's behaved I think incredibly differently than I think any of us expected. And I don't know what it is pre-market today, but just a couple days ago it was $240 when you know, priced at $60, right? And, you know, they had a hard time selling secondary at less than that, you know, before that, a year ago. And so it seems very clear that some— there is some of this dislocation happening, you know. Let's see what happens to the Circle stock. I think they have the unlock in 2 weeks, uh, and so, you know, we'll, we'll see some price action around that. You've seen a lot of options activity around it as people, people hedge. But there is this like secular trend, and maybe the secular trend matters more than any individual company. And I think you've seen that in AI, right? I think you've seen that in like software as a service, right? Over the last decade. Yeah, like you, were you better off owning, you know, NVIDIA versus like AMD? But like, if you owned either, did you make money, right? Like, so I think there's a lot of conversation to be had about just catching the right trends in the right market.

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Let's talk about another public company that I've talked about here extensively, Western Union. They recently launched or announced a partnership with Solana. Solanana launch her own stablecoin, I believe. There's a lot of, I think, ETH heads criticizing, speculating that Solana Foundation had paid Western Union to launch this.

Every foundation is paying everybody.

Yeah.

So we can talk about that.

Do you think, do you know for a fact if they are or?

So I don't know for a fact about this specific deal. What I will tell you, and this should be a, we can talk about the deal itself and what that means, and then we should talk about the pain Uh, let's talk, let's first talk about the deal and what they're doing. Yeah. Okay. Let's talk about that first. So the deal itself, uh, essentially Western Union is going to launch their own stablecoin that's going to be issued by Anchorage.

USDP.

Yes. I think that's right.

US dollar payment token, right?

Yeah. The US dollar payment token issued by Anchorage. It's the first of Anchorage's, call it like white labeled, uh, tokens.

And this comes on the back of them acquiring, uh, Mountain Protocol.

Yeah. So I think, I think Martin from Mountain is basically kind of running this with a guy, Sergio. Who's their, their head of stablecoins, uh, but it's the first of their white label tokens. They'll issue it Genius-compliant way here in the US. Western Union, I mean, you know, they're in, uh, they've got like, they're the largest remittance operator in the world.

They have a $3.95 billion market cap. The stock has gone absolutely crushed, uh, it's trading at 4 times P/E ratio. And it's, I started looking at it, they acquired a company that we're looking at called Intermax, which is very, um, one of the second largest operator, smaller remittance operator in the US-Mexico corridor, and they bought that for $500 million. But it was one of those deeply unsexy businesses that just totally left for dead because the analyst— I don't think the management team is very competent. The CEO, if you look at the transcripts over a couple quarters, he constantly got asked, hey, what do you think about stablecoins? Because MoneyGram, probably the second largest remittance operator owned by Madison Dearborn Partners, took I took them private. Um, they, uh, yeah, I think the CEO is just very dismissive of stablecoins.

Well, they've been dismissive of like digitization broadly. That's been part of the problem, right? So they— I remember talking to the team in 2021 around— that was the first time they kind of thought about stablecoins. And but it was part of like, okay, well, we're going to try to digitize, we have a Western Union app, we're going to try to bring everybody into like a much better experience because they were starting to lose market share to things like Remitly.

right?

And a lot of these, you know, new fintechs, you know, Wise, et cetera. And they've just been very bad at that, right? It's been very sleepy.

It's been very traditional, old school, go into, you know, the, a storefront and, you know, but, you know, again, you talk about Remitly and other like more sexy technology-forward remittance operators, they trade at like 20 plus. Some of them are not even profitable. Like it, it's just, I couldn't explain, again, going back to fundamentals, why there was such a big disconnect. One is overvalued, the other one's deeply undervalued in my mind. It's like the market I think tends to do this thing where everyone's so hyped about technology that you go max long stuff and forget about their monetization model and profitability. And then you leave for dead something, you know, like a Western Union that has distribution, has connectivity. You walk around the street here in New York with anyone that is sending money, what's the number one name that they'll tell you? Like where would they go and who would like Western Union?

It's probably Western Union. Yeah.

And so you look at that and it's like, you know, I think distressed steel mill operators back in the '80s were trading at like 8 times PE and I was just like, make it make sense. This business is not going to go away. To me that was like a screened, if you're an activist fund, go buy 5% of this company, maybe change management. Yeah. Implement this strategy. Like where's Ackman? Is he, is he still interested in crypto or is he still—

I think he's a politician.

He's a politician.

I would put in a semi-protest.

But this again, I mean, for me it was, if I had that type of strategy, this is the Howard Marks, right? The market pendulum swings to extremes.

Yeah.

But the fundamentals are there for a business like Western Union.

The one thing I do want to say here though is if you look at the last 15 years of public markets and you say, okay, I was a fundamental investor or I was a growth investor who made money, the growth tech investors, right? And what we've seen is the market is willing to pay for growth, especially in a world where you have, you know, inflation, right? In a world where you have— I mean, let's see what happens with, with interest rates. But there's expectation for most of that period of time interest rates have been low or zero environment. We're probably going there again. Right. And so people are much more likely to pay for growth. And the belief was that Western Union might just like bleed out to zero. Right. And so maybe that's not true. And then this is where the opportunity comes in for your business specifically, right? Because you can buy the distribution, you can buy the brand name, and then you can bring growth. Right? But the market will— today they do not care about fundamentals if you are a secularly declining business.

I was reading a book, Michael Dell's book called Play Nice But Win, or Play Nice But Win, I think is the name of his book. I first listened to the Founders podcast.

Yeah, the interview with him.

Phenomenal book.

Dell—

I was at JPMorgan when he took it private. The TMT Group was doing it. So the book's a phenomenal kind of account of that. But that to me is an example of similar instance where the market back then, 2012, you know, the PC market was in a terrible, you know, wasn't growing. People were again saying PC's gonna go away, your business is dead. Michael being, you know, founder, CEO, he was like, look, the market just does not understand the story. Just hadn't really accounted for like that being a core moat to do other stuff. He had to take that business private. Because again, being in the public markets I think is just very distracting. Word of advice for DAT companies and other crypto people that want to go public. And so I think, again, I agree with you, the market just may not appreciate, like, they're all super hyped up on growth and it probably is hard for a company like Western Union to implement on this playbook in the public market. So, but the moat is there. Like, I mean, Dell is a phenomenal business. Uh, but it was so hard for him to execute in the public markets, he had to take it private.

Um, so yeah, but one, one of the interesting things about what happened yesterday too is, so they announced this deal and, you know, congratulations to them for being forward-thinking here and, and for the, the partners around the table. We, we announced we had, we had led a seed round into a company called Tsar, uh, last year. And then I know you're an angel investor.

I was the first, I was the first, quite literally the second investor in the cap table.

Yeah. So you're, you're an angel investor and then Andreessen just led the yay and, and we continued to, to participate. And ZAR is basically doing— they're trying to recreate in many ways what Western Union, but from a digital-first perspective, right? A stablecoin-first perspective. And very successful founders who have exited a business before. And so the question that, you know, I ask myself is, do I believe that somebody coming from first principles with a digital-first perspective is able to go and disrupt versus do I think the incumbent is able to call it digitize their business and grow their business? And I mean, that's the trade-off in the decision I'm making all the time as an investor.

I love Brandon, who's— and Sebastian actually went to school with.

They—

Brandon built the first, I think, neo bank of Pakistan and had a decently good outcome. A lot of the conversations I had with him were, look, I believe in stablecoins. We're all bulls here. But where I focused on getting to know him is like, how are you going to leverage distribute? How are you going to source liquidity? How are you going to acquire customers? And that's, I think, to your point, as the industry continues to grow, we just need to ask ourselves that kind of question. Like for him, I think he's been very creative. He went, I think to the A16Z like startup school and worked a lot with them. And a lot of the time that he's been spending on is solving for like working with like local merchants and convenience stores, tiendas, or to really kind of solve for that. 'Cause that's what Western Union has. They have an incredible amount of relationships with people want easy cash in and cash out. That doesn't go away. Like as much as technology comes in, like solves a lot of the stablecoin like transfer, you don't have to have as much FX risk, like you can transfer money faster. You still have to source liquidity.

Yeah. And you have to recreate the human element.

Exactly. And so I think that's where we see, I see a lot of opportunity of like finding these companies where, you know, you could be sitting there as an analyst hearing Carlson Brothers talk about like stablecoins or room temperature semiconductors and you're like, holy shit, like max long on everything that if you control F a 10-K, like write an LLM of like if there's a stablecoin tokenization thing on any 10-K, 10-Q earnings call, max long. I don't know that, like, I just think we, it misses the point around like, there's still friction and stablecoins don't solve everything. You, you have to think about yet, but no, but you, you, you're not going to solve that, that, that, yeah, there's still things that don't change. Consumers still want cash in emerging economies.

Yeah, I, I, that's true. I do think, listen, all economies are going more digital. So over what timeframe? Let's, you know, let's see. But if you look at like Alipay, Alipay has like 90 8% distribution or penetration in their core markets in Asia. Like everybody is using digital payments and then you come to some of these other markets, they're not, but it's coming, right? It just over what timeframe.

So let's talk about the payment part. So I don't know if you guys saw the kind of controversy on Twitter, Rob, I think this was the second part of your conversation that you were alluding to, but people, so there's this guy, jrag.eth, he said $50 million paid by Solana Foundation to Western Union for 6 months. Exclusivity. You'll see the Western Union stablecoin on Ethereum L1s and L2s. Not long after that, Camilla, who is the chief growth officer at The Ether Machine, said, what you don't read: Solana had to write a $25 million check with $25 million in liquidity stimulus for only a 6-month exclusive. It's tempting for legacy orgs to de-risk their proof of concept with a big check, but they'll regret it when they're— when their chosen blockchain goes down and millions of payments are offline. So ignore the second part of that. First part of it is basically there's, there's, there's a couple things I want to dig into. One, did Solana pay this or not? Two, are other people paying this? And three, is it even, is it, is it bad to pay? Right?

Yeah. So, uh, I don't know and I don't have any inside information about this specific deal. What I will say is, do I think it is likely they paid them? Yes. And the reason I think that is true is because almost all of these deals are paid, right? I, I, in almost every instance where you've seen a large org come and build on a specific chain, uh, they have wanted to de-risk their initial build-out through some sort of payment upfront. And a lot of it has also been around the liquidity incentives. So this was true of— name all of the names that you can think about. I don't know what's public and what's not, uh, but pretty much every large org that has come on-chain, that has issued an asset on-chain, they have either been paid to build there or they've been paid in liquid incentives or both. Right? Now, this is typical of, you know, call it a lot of types of partnerships that exist, and, you know, outside of crypto. So I don't— it is certainly not bad that that is happening. I think the question becomes, is there real ROI on this, right? And so for, you know, in some of these products— so, you know, for Robinhood, for example, I think there was a controversy around this as well. There was a bidding war for Robinhood on where they would build. Uh, you know, we know what— who won and who didn't win. Now is that, you know, chain— because it, uh, going to accrue a lot of value to the token of the protocol that won? Well, so far that has not been true, right? Now maybe it'll be true over time as, you know, Robinhood builds and they get, you know, this types of, uh, you know, they get a lot of volume, etc. But I think there's a real question on that, right? And we see things like, you know, for, for instance, some of these tokenized equity projects I know have been paid as well, and, um, you know, none of them have any volume, right? And so like, you know, you look at that xDox on Solana, Kraken keeps saying they're doing tons of volume on Kraken, but xDox is doing basically no volume on-chain whatsoever that you can track, right? And so I think there's a, there's a few things that are happening here. One is that people want real business on-chain. There's a belief that that is where the market is going. There's a belief that you need to win that market if you're going to be the winning chain in the future. There is an attack on the monolithic chains by the more opinionated ones right now. And Solana and, uh, and everybody involved with Solana has a very specific view on, you know, how Solana is supposed to grow and why you would be on a monolithic chain. So do a lot of people on ETH. And then at the same time, you have people like Robinhood and Stripe and, uh, Circle and all these people building their really opinionated chains. And so to win— these people believe distribution— you have to probably pay for that, right? And so that's natural, and that's what's happening. That's what happens in traditional business, whether or not there is ROI on it. I think remains to be seen. And it might— I think in a lot of these cases, and probably most cases where people are paying, there's probably not actual ROI.

There was a good tweet about, um, I mean, we've been studying a lot of these remittance operators, and like, uh, MoneyGram, um, has a pilot with Stellar out of all companies.

And they used to have one with Ripple.

And they used to have one with Ripple, which, um, you know, is this time different?

Unclear.

PayPal, you know, they had both Ethereum, I think they had dual liquidity pools in Ethereum and Solana.

I think it started in Solana primarily though.

Started primarily in Solana.

Yeah, and you saw, and that's a good point, not to interrupt you, because you saw PYUSD, I think, go up to a little over a billion dollars on the back of what were like heavily incentivized yield farming, right? And then when those incentives went away, the, you know, the token came kind of straight back down.

So the takeaway is TBD on whether this is going to be actually accretive. What is the measure of success here?

Well, it's different for Western Union and for PayPal than it is for Solana, right? And it's different for, and so for Western Union, we just got done talking about why this makes sense for them. Yeah.

Margin profile.

Yeah. And if it, if Western Union can digitize their business, they can put all of their volume on chain and if all of that volume goes through Solana, then absolutely, like it's a win for everybody, right? And it's absolutely worth whatever they paid, if they paid $25, $50, $100 million even, right? And so, you know, you can see obviously the strategic rationale, but if it's, you know, hey, it's, you know, 6 months of exclusivity and then they're going to go do what most of the stablecoin companies do today, which is that they, they actually allow the, you know, whoever the customer is to decide what chain to put it on. And you know, we just, the Artemis guys just put out a stablecoin payment report, an update to it last week. You know, we're investors in Artemis, full disclosure, but we helped draft the report, both the first one and the update. And the, you know, it shows that, you know, B2B payments is up 300% over the last year. You know, P2P is kind of trending down, but we're seeing some, or kind of flat, but we're seeing some—

We talked about this last week, B2B, or maybe two weeks ago, B2B payments and stablecoins are going to be the next big phase.

Yeah, the next big phase. Because right now it's less than a third or so.

with not even—

no, no, now it's the largest.

Now it's the fastest growing and the largest of—

yeah, of the people that they go and look at and firms of the— for payment activity specifically, right? But if you still look at that report, all of the payment activity is still on ETH or Tron or a little bit like Polygon or BNB, right? It's not really on Solana. I think Solana is either the fourth or fifth. And so there's— that's still what's happening because the clients are the ones picking and the clients either have stablecoins already or there's liquidity already on these chains. And so clearly what Solana is trying to do is they want to play there. And so if they can get Western Union to put the flow through, it makes complete sense. The question is whether or not a deal like this actually results in that happening. Yeah.

Yeah. I don't hate the payment as much as, so, you know, everybody on Twitter hates the pay-to-play game basically. And I think they have that because in the past it's failed, right? Whether it's Polygon and Starbucks or Arbitrum and Robinhood, like Actually, Arbitrum and Robinhood probably will work out, but I think people don't look at the history of like platforms enough. And this is a very, very, very common thing, right? Whether it's, you know, Facebook paying publications like CNN and Fox to come onto their platform originally, millions of dollars, or maybe a better one is Amazon Alexa. When Amazon was starting, Jeff, you know, Bezos went to all the Domino's, Uber, Walmart and said, hey, we'll pay $20 million to go develop on the Amazon Alexa.

Yeah.

You gotta kickstart the flywheel in some way.

Totally. I, I agree with you 100%. Yeah. Like this is how business works and there's, we constantly see this in crypto where people get like really upset about like just business operating because of, I think the ethos.

No one in crypto has actually worked at a real company.

It's like, it's like very odd.

I just experienced.

Yeah.

Um, question, would you rather buy SOL at, uh, what is it? $200, $193 or Western Union, um, at a $4 billion valuation? 3 times P/E ratio.

So, so, okay, I'm paying for growth.

So one year from now, I'll make a bet, 6 months from now, Western Union outperforms Soul.

In the next 6 months?

6 months. Yeah, this thing trades at $3 billion. Western Union is $3 billion.

Western Union is $3 billion.

What's the P/E ratio of that? I think it's 3.95.

Keep talking, I'll look it up.

But put it in. Santi and I are gonna put 10 grand on it and we're gonna talk about it. And do you wanna do this?

Okay, so we'll each put 10 grand.

Oh, 10 grand.

That's what size, what size, what size is this? So you put, you're gonna put 10.

Oh, I got it.

P/E ratio is 4.15.

4.1. It just kind of, how much did it go up like yesterday? Like 2%? Not even.

My size is not Santi's size. That's what he said. No, no.

For shits and giggles, ladies and gentlemen, 10K. You're gonna put 10K in SOL. Yeah. I'm gonna put 10K in Western Union. Or maybe a couple more decimals. And then we will, we'll come back here in New York and whoever wins is going to pay for, you know, coffee or whatever.

Or no, you shouldn't each put it in. You should just pay the other person.

Just pay the other person 10 grand.

We'll put it, we'll, we can put whoever in 6 months from now, whoever has done better in fake, in fake money pays the other person 10 grand.

No, you know, pay for lunch or something. You know, like betting money doesn't move a needle.

You know, it's more of a ride.

You know, I'm going to, I'm going to have to give you something to convince her.

No, it's not about that.

It's like, it's like, I don't like making bets for money. Is it more of a symbolic thing? Like, it would be all right.

All right.

One of your protects. That's all.

As a board member of Inversion Bank. All right. So one of you guys will buy a nice dinner.

Nice dinner.

And then I'll join dinner at Teresa.

And he'll be the benefit.

I'll join. Yeah.

Yada's just gonna ride the coattail.

I'm the house baby.

Let's, 6 months from now.

6 months from now.

Dinner at Teresa. All right, let's do it.

All right, sir, let's do it. All right.

Nice bottle of wine you can buy.

Great.

Whatever you want.

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Let's talk about ZeroHash. So ZeroHash rumored— Ben Weiss at Fortune broke the story. After losing out to Coinbase on BVNK, Mastercard is poised to acquire ZeroHash for between $1.5 to $2 billion. Did Coinbase finalize the BVNK deal?

Still rumored. So, okay, let's see what happens or not.

All right, cool.

Are you guys investors?

No, we're not investors in either.

Okay, cool.

So ZeroHash, did you look at the deal? Like everyone on Twitter was like, who the hell is ZeroHash?

I've looked at most of the deals that ZeroHash have done. I mean, they raised that round in '21, then didn't raise again until recently.

That's BVNK or ZeroHash?

No, ZeroHash.

They just raised at a billion.

Uh, so they, the re— the round they raised recently was primarily basically all of their strategic partners. Uh, they did talk to, and we talked to them as well, a lot of the venture funds, but the, um, the investors were almost all strategic partners in the recent round.

Yeah. I've actually known, so there, uh, it was started by this guy Edward Woodford.

Yep.

Um, in like 2015 or 2016, it was called SeedCX. It was a commodities in Chicago. In Chicago.

Oh shit. It was like a hemp business.

It was a hemp. It was a hemp exchange. It was, they had licenses for, for, yeah, it was a, it was a trading platform.

Shit.

For, for hemp. Look at my shares of this company.

Very, very interestingly, actually, the first wave of all the stablecoin companies in crypto, and a lot of the ones we're talking about now, all started as exchanges. So they all started as exchanges and they were like more crypto native and they sort of pivoted into this like stablecoin payments meta. One of the themes that we've had as investors, not to derail this, has been that Uh, now the actual payments people are coming into the space and they just kind of understand money flow, I think, a little bit better than some of these other guys. And so I think, you know, my guess is that a decade from now, the names that we're talking about today are probably not the names that we're talking about then.

Yeah.

Wow.

CTX.

Yeah.

CTX. So Edward Woodford actually is one of the first ever podcast— our first podcast was Pomp's podcast Off the Chain.

Yeah.

Now it's called the Pomp Podcast.

That's amazing.

And Edward Woodford was like the third guest ever in 2018. Anyways. They, they shuttered their trading platform in 2020 and went all in on focusing on basically they provide the licensing and the technology for the on and off ramps, I would say.

Well, though I would add one caveat to that, which is that they do the largest part of their business today is still their quote unquote brokerage as a service. So what does that mean? That means like for IBKR or E-Trade. Yes. They, it's not just like call it on and off ramp, but it's also like, hey, I want to buy Bitcoin or ETH or interact Active Brokers wants to launch crypto trading, they do that through ZeroHash.

Yeah, yeah. They also, if you go on Kalsi and you try to put crypto onto Kalsi, that's ZeroHash on the back end. Um, yeah, they've got— what are the licenses? MTL and MSB, I think, are those licenses.

They have most of their MTLs in the US, in the States. I think they have—

they got the BitLicense in 2019. What?

I hear you. Uh, this was June 12th, 2018, my message to, um, Edward.

Yeah.

I hear you, Edward. We think you are far along and have impressive traction, which makes it particularly hard to pass at this stage. I sense we may end up looking back and kicking ourselves for it. That said, it's best for us to stick to our decision at this stage. Let's definitely stay in touch.

What was the valuation, Ira?

I'm looking at here. Good afternoon, Santiago. Coinbase is doing just over $200 million a day.

Well, that's okay.

Well, you're pulling it up. That's fine.

Okay.

Customer, they've, they have huge customers too. Interactive Brokers, Stripe, uh, BlackRock's Biddle Fund uses them for tokenization. Um, and a lot of the—

uh, what do you mean they use them for tokenization? They might do some of the ramps with, uh, Securitize, but Securitize does all of them.

Uh, yes, you're right.

You're right.

You're right. Um, Franklin Templeton, uh, DraftKings is a big customer for them. Uh, Moon, MoonPay, a lot of these guys. So Shift4.

So anyways, shout out Series B deck in 2018. Keep going.

Yeah. So, so they—

Yeah.

So the business, as I understand the business is roughly the same size of BB&K. They're really similar sizes. They, you know, the majority of the business today though is still, as I understand it, this broker as a service. It's less around called stablecoin money movement in the way where it's, where that's entirely BB&K's business. you know, a fan of Edward. I, and obviously they've been leaning into even growing, you know, the stablecoin, you know, orchestration type business and the on-ramp offering business more, um, and as kind of the core part of the, the future. I find it for Mastercard a very kind of odd deal personally.

For Mastercard?

Yeah. Yeah. I, um, you know, they, Mastercard clearly through like their Send product, They want to do a lot more like, you know, merchant-type payments. They want to be able to get a lot of different payment types in. They clearly want to be able to have the infrastructure to move, you know, a lot of these. They want to be able to move stablecoins. They want to have good wallet infrastructure, et cetera. I—

we interrupted.

$35 million valuation, ladies and gentlemen.

Oh, that's a tough one.

Well, there is a lot of money since then.

What about—

I did a lot of daily shit.

So I was working a lot with Ted.

Oh, this is when they were still an exchange. Oh yeah, that was a CEX tech.

35 million valuation back in 2018. I was having this discussion with Briar, who I think is one of the largest holders of Circle, and they're on the board. And my comment to them back then was, I don't think you outperformed Bitcoin. And they, as much as Circle's run up a lot, you would've been better off putting just Bitcoin outperformed.

Even at $240, is that true?

Yeah.

No, but now, now the challenge, which, which means Circle raised at $3 billion in 2018.

The, the challenge with this analysis of course is in a vacuum. Yeah, but like you would have had 100 different moments where you would have sold Bitcoin.

Well, risk-weighted and most funds have underperformed Bitcoin at this point, but they would have had to— a pension has to deal with a 90% drawdown.

Have you met Rob from Dragonfly?

Have you met— you know, I don't know if you looked at our funds, but two of the three, two of the three of our funds—

no, not really.

Um, okay, a deal like this, how does this come to be? Is this like— this is Mastercard comes to them with the deal?

Mastercard's been kicking the can, uh, or kicking the tires of a lot of these guys. So they've been talking to pretty much everybody. I, I, you know, I was just at Money2022. What you said earlier, Money2020, for people who don't know, it's the biggest fintech conference in the world. A lot of payments, a lot of banks, a lot of people, you know, building across all, you know, parts of the stack in fintech. And every single large org are kicking tires of potential acquisitions in stablecoins right now.

Who are, um, who are the next logical targets? Like, who are these like infra companies no one really knows about?

So on the orchestration— so I, I think on the orchestration side, so there was basically the, um, the largest orchestration businesses were Bridge and BVNK, and then there was kind of a step down. And you've gotten, you know, ZeroHash— they've obviously— they're large from about the same size of BVNK in total revenue. I think of their orchestration business, they're kind of a pretty big step down. Um, ConduitPay, which is one of ours, mostly Latin America. Uh, yeah, we're really big in Latin America as their main market. Um, uh, Rail got acquired by, uh, by Ripple. Earlier this year, uh, but for $200 million. Yeah. And there's— there was kind of that big gap in size between Bridge and BB&K and then the, the rest of these guys. I think there'll be a few more that get acquired. There'll be some acquihires. Uh, you know, we— one of the things that I think about is actually as each one of these assets gets taken off the table, the remaining assets get more valuable. Yeah.

Like in hindsight, right, Bridge sold way too early. Way too early. Yeah. I was I was on the record saying that's like an Instagram acquisition for Stripe. Talking about Stripe, Tempo, some of the commentary in the timeline yesterday was, hey, you have now Mastercard. I don't know if it's an actual good analogy. I want to get your take, but like, or a point, which is Mastercard buying ZeroHash, Coinbase buying BVNK. Where's— give us an update on Tempo, like beyond like they're hiring like crazy. How do you see players like Mastercard and Visa like going on, like, are they just going to want to do their own? Are they going to deploy?

So I don't think the networks are going to do their own chains. Right. And so I think for the networks, the whole pitch is we are credibly neutral. Right. And Stripe has taken the perspective, depending on how much they lean into Tempo, which depending on who you ask, they lean more or less into it. Uh, and depending on who they're pitching, they lean more or less into it, but that's a very credibly non-neutral play. For Stripe, right?

So they would disagree with—

well, no, no, the Tempo guys would disagree with you, but the Stripe guys would not disagree with you. And depending on— but, but I will tell you, I know for a fact that there is now Stripe employees, a CRO there who is actively packaging a bridge plus Stripe plus Tempo capability and selling it to people, right? And so like, this is happening at Stripe. So Tempo can say, well, it's like we're credibly neutral because we're going to let all these other things happen, which fine. But, uh, I would be— and, and I will tell you that the, the networks and the other PSPs they might, and they, and they definitely will support Tempo because if their clients want to use Tempo, they will allow it.

Yeah.

But they will actively push other things.

Yeah.

That's what will happen.

So credibly neutral is one of those things like decentralization that can mean it's sort of amorphous. And you and I were talking about in the, in the, in the panel at DAS, like, what does that actually mean in this case? Because you have, for instance, Western Union deploying on Solana, you have, uh, Circle launching, what is it, Arc?

Yep.

You have Stripe launching Tempo and then you have, you know, public infrastructure like Ethereum and whatever. What does credibly neutral mean? Because then like the, so Robinhood, for instance, is interacting with public infrastructure, but what the end customer can't, like they can deposit tokens, but they can't, they can't leave. So they're imposing restrictions. So like they're using, again, credibly neutral public infrastructure, but the end user is definitely being served in like, it's a very opinionated offering to capture the most amount of LTV. When you think about credibility neutral, like, what does that, what does that mean?

Yeah, I mean, it means a lot of things. I think the question that people have to ask themselves, Brandon, because you started this with, okay, what does it mean for Visa and MasterCard, right? Visa and MasterCard are networks that want to serve all banks. They want to serve all merchant acquirers. They want to serve all PSPs, right? They want to serve all merchants. And to do that, they have to take an opinion every day around how much they want to compete with any of those people or how much they want to push a winner or a loser. Right. Visa and MasterCard have very clearly taken the perspective to not compete at a lot of parts of the stack and to also not push like a certain bank versus another bank, right? They— we might see that change over time as people try to control their fiefdoms. And I think, you know, to the point around acquisitions, like, you know, MasterCard buying ZeroHash, maybe that pushes them to push something versus the other. And I think, you know, everyone is looking at acquisitions at this point. But when you're a service provider like Stripe and you launch a wallet infrastructure and virtual accounts, and then you launch a network that theoretically allows you to bypass your biggest partners, you are clearly not neutral anymore. Mm-hmm. On top of that, like if you launch a chain and you say, okay, well this chain is for payments, and so we want all payments companies to come on chain, but our main distribution partner is the competitor. To all of these other payment companies, then why would they want to use it, right? And so it might be clear, or they might be able to build infrastructure that is better than everything else that exists, and people just say, hey, I need to use this infrastructure because it is so good. But if you are any other PSP, why would you want to send, you know, money through a chain and infrastructure through a chain and help your biggest competitor? I mean, I think this is very clearly— you look at this right now and there's even some conversation on the timeline around like, why does Solana want to have, you know, USDC be the biggest stablecoin on Solana when Base is their biggest competitor. And I think people are very clearly coming to understand that you do have to be more opinionated about how you go to market and who you, um, and who you partner with. Because Stripe, let's just be very clear, they have a long history of doing this. They get close with partners, they farm you for information, they compete with you, right? And there's a lot of companies are going to do this, and we're going to see this happening in stablecoins as well.

So maybe to make the comparison here, um, How would that been different from Libra? For instance, Facebook launching their own, um, and, and having a network, like a consortium of partners on like the validation side or whatever. Very different, right? Like Facebook, not a payments company. Stripe, payments company. So in that case, would you have considered Libra a bit more credibly neutral, viable for financial institutions to work with?

Yeah, I mean, definitely more neutral, right? Uh, because they're not directly competitive, right?

If it's not directly competitive, I then it's not, it's viable. Maybe not like neutral, it's opinionated, but it's viable.

If you're checkout.com, like you do not want to do anything with Stripe, right? You do not want to let, you don't want to send your flow through them. If you're, but if you're any payments company, you're happy to do work with Facebook. Maybe, you know, uh, whatever. Google is not going to use Diem, right? In that case. Right. But all the payment infrastructure will because they're not going to be competitive. Yeah.

Do you think 4 or 5 years from now Tempo is a huge success or a total failure?

I mean, there's a lot of gap in between those two things.

We're, we're binary people here.

I think Tempo will be a very good thing for Stripe, and I think Stripe will continue to be a huge success. Do I think Tempo will be very successful in its own right in a neutral manner outside of Stripe. Let's see.

Yeah, I mean, it's valued now $5 billion. That's 5% of Stripe's market cap. Feels about right.

Yeah, but I tell you what, if they launch a token today, like it'd be $15 billion, right? It's— there's so much excitement around it. So I don't actually think the $5 billion was, was that expensive.

Can we get 30 seconds on MegaETH?

Did you follow?

Because you guys are both investors in MegaETH. They did. I've noticed like we talked about this last week or the week before, there's a big trend in basically doing like new kinds of token drops and new kinds of allocations. I don't know how closely you followed MegaETH, but—

Well, we're the largest investor, so—

Oh, you're the—

okay, there you go. Yeah.

I'm the largest—

so you followed it— I'm the largest angel. Oh, there you go. I remember when you guys did, when you did that, you got a lot of shit for MegaETH. I remember every new project. Yeah.

I just, everyone, every new, every new person, every new Well-funded company gets a lot of shit, but they, uh, so, so actually it was, I think you guys, a seed, or you called me around, you were doing the round. I participated in the round.

Um, it was a seed, I think.

Yeah, it was a seed. And I met, you know, I came into the call, uh, and Shuya and, and Namek and, uh, Yushen.

Yushen.

Uh, they just delivered like key insights in the pitch, like in the first like 5 minutes I was like, guys, okay, why do we need another goddamn chain? And they're like, oh, we're very opinionated on the validator. We're going to juice the validator. And, and that, and that was in a world where like, Everyone's giving them criticism around like, you know, you had Espresso and a couple other like decentralized and just like the validator. And they're like, no, no, no, we're just going to custom and we're going to juice it up and this is how we're going to run this chain. And this is how we solve Ethereum's like scalability issues and whatnot. I was very impressed by that and immediately kind of committed. And then I flew to Berlin where they had their first Mega ETH, Mega Mafia. GT was there. Funny enough, I ended up passing. That was the only company that I didn't like in the cohort. For a very specific reason, which they have now detracted and left MegaETH. And so I don't think I was wrong in my decision to not invest, but of course they've done well. They've partnered with Polymark and all this stuff, but I invested in a number of other projects there. But yeah, it's good to see that. I think they've been experimenting on the type of—

So Mega, the reason I bring them up is they just did an ICO. They're 14 times—

They're doing the ICO, right?

They're doing the ICO, but I think it just ended.

They raised $50 million at a billion dollar valuation.

14x oversubscribed.

Oh, did it just end today or tomorrow?

Okay.

Yeah, but it was what, $50 million raise?

I like what they're doing. They really haven't— I mean, I know they raised from you guys, but like they haven't raised that much institutional capital. They did the Echo. Yeah, they did one or two Echo raises, then this ICO. I just calling them out because I like, I like what they're doing.

Yeah, they did this auction where, you know, it could have been $1 through $1 billion. Obviously they're oversubscribed. It ended up at $1 billion, but the cap cap, I think is nice because I think most people, I think on Hyperliquid, the pre-market is trading between $4 and $5 billion today. So at the cap of $1, similar to Monat, uh, it's like 20% less.

So here are the final numbers. Over 50,000 total bidders, total committed is $1.39 billion, oversubscribed by 28x.

So, I mean, it's great. And in the US they have a 1-year lock, so it's not like it's just traders. Yeah. Um, so, you know, they're trying to get as much community distribution as possible. They've Taken that stance from day one. And so, you know, we're really excited about what they're doing. Yeah.

Again, uh, you know, in this idea, they, uh, I'd be curious. Monad also has this card thing going on.

Yeah. Yeah. Just, I, I hear Monad's airdrop thing is, they also have a cool portal. I've got 3 days of an airdrop interacting with it.

It's like every day you can like, it's cool.

It's nice. It's like a nice, like, uh, it's very retail.

Like it's very retail. Yeah. But I, I don't know as many projects, I haven't invested in as many apps on built on Monad. I've seen a few, yeah, uh, like 42.ai and a couple others. Uh, but, uh, MegaETH, I think, has a pretty, pretty good cohort of apps like Euphoria, uh, and a couple others that have like building on there. So we'll see. It's pretty good.

I know we gotta wrap. Content of the week.

You go first.

I always go first. Well, yeah.

Yeah. Uh, again, you're the most junior person in this podcast.

Wow.

Stand up.

I gotta go, I gotta go back and look at my board docs, right? Like, like, can I buy you. So taking over Inversion.

Um, Rob, you don't want to be running the day-to-day.

I'm sending a message, put him on the masthead now. That was it. That was the low.

Um, 2 days away from Halloween. Frank— New Frankenstein. Oh, incredible movie.

Incredible.

Really?

Do you go to— do you go to the movie theaters?

I love the movie theater. Really? When, when I am in town.

Rob, I love your viewing habits of these things. These are great.

No, I go to— so I, I live in Brooklyn There's an old movie theater called Nighthawk.

Great place.

Great place to go.

Yeah.

I, we, we go to Nighthawk all the time.

Like I know the owner, like you go, you have popcorn, hot dogs or candy.

No, I, but I, but I, yeah, I get, I get a, they have, they have Old Fashioneds on tap. So, oh wow.

Yeah.

So I get a, I get a little Old Fashioned.

You're an Old Fashioned guy.

You know, I've, I've get a, a little, you know, chicken sandwich. I watch a, you know, Frankenstein.

So that's good.

We're always thriving.

Always thriving.

Who's the, who's the actor there?

That's great. Santi, what do you got for us?

The book about Dell, I think it's Play Nice But Win.

Yeah.

Really, really good book. I really enjoyed that one. It's just, you know, you hear about the story of Michael, like, which is amazing. And yeah.

Nice. Yeah. I have, I've got two actually this week. One is Soft War. It's a very intimate look at Larry Ellison, but it was written in 2003. So it's about Larry Ellison. It's not about the new Oracle. It's not like the old Oracle, like Oracle's like database and ERP business. Very interesting to look at like the growth of Oracle.

Now the richest man or—

now I think the richest guy in the world. Yeah. Or one of maybe top 2 or 3, but yeah, I think number 1. The other is Dynasties on HBO. It's about the, it's like each one is a different animal. It's like, it looks like the gorillas and like, oh, then the next one's like the penguins. It's actually really cool.

This seems pretty sick actually. It's actually really cool.

Is this like what Brian Atwood or whoever? David Attenborough, the classic. Yeah, it's him, but it's such good footage. Who—

what's your, uh, you know, people identify with certain animals. Like, what's your— like, are you a lion?

Are you a manatee, baby?

That's a great way to end the pod.

All right, folks, thanks for listening. We will see you Monday.