It's Still a Bull Market, But Not The One You Wanted

Most of the people came here are not coming to this conference to figure out what token to buy. They're figuring out how to develop a strategy, how to become crypto-enabled, maybe hear some regulatory concepts. I'm seeing less and less of like OG builders too. You know, for better or for worse, a lot of those teams have just faded. But it doesn't feel like a bear market at all.

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You know, I feel like this is— have you seen the Andreas Antonopoulos video, 2011 Bitcoin?

That's how I feel right now.

I feel very much like there's this video of Andreas Antinopolis.

He's speaking in a room, I think it's 2011 or 2012, and there's 3 people in the audience, but they were the real believers. They were the real believers.

Yeah, we wouldn't scam. We brought in Rob hoping that he would bring on more of a TradFi crowd, regulatory crowd. No one's here.

So I saw Jason earlier for the first time in a month and a half, maybe 2 months, right? And he comes up and he, and he hugs me and he says, listen, since I haven't been on the pod, the listeners have been going this way. All right. He blamed you though. He said you haven't had your—

That's not true. So Yanowitz tells a story that when I joined, listeners went vertical. And Rob, I guess since you joined, it's—

No, no, when I joined it went up too. And then we lost our Jason Kalkanis. So that's what happened.

Never compare me to Jason Kalkanis again. All right, guys, I want to hear your guys' takeaway from DAS. I'm curious if there's— yeah, maybe Rob, starting with you, like, Just big, big takeaways from this conference. Big takeaways from maybe, I mean, you know, I think a lot of people here saw the stuff that was happening on stage, but maybe some of your private meetings behind the scenes. What are you, uh, any learned anything new? What are the themes? What are you talking about?

I don't know if I learned anything new, but what, what I did—

Rob's like, I already knew everything.

I knew everything. Uh, no, no, but, but what has happened is that you just continued to see acceleration of stablecoin adoption, tokenization. I think, you know, there was a— I was at a dinner maybe 2 nights ago and somebody said, hey, okay, you know, 2025 was the year of stablecoins and 2026 is the year of capital markets. And I think it's still the year of stablecoins, but I think it's also very true that we have seen so much interest from every traditional financial institution on figuring out ways to bring capital markets activity on-chain. And that's both for, you know, call it, or what it was originally for, like saying, OK, I'm going to issue some token, or I'm going to take one of my off-chain assets, and I'm going to then bring it on-chain. I'm going to sell it to crypto natives. But now it's not that. Now it's, OK, well, I'm going to enable trading for all types of assets on-chain, because I know that it is a better infrastructure to do 24/7 trading on the weekends. I cannot do collateral management on the weekends without it, right? And that realization, that interest, I think is just the thing that continues to get driven home. I mean, this is obviously a very institutional conference, and so we've seen a lot of that. And I think we've also seen— I mean, you've had several regulators here as well, and it's clear that, you know, on the regulatory side of what's happening in Washington, despite you know, what's happening in the Senate right now with clarity, like there is real support and a real understanding that this is happening. So I think it's just more of an exclamation point than like net new things. But that's great.

Yeah. Santi, any takeaways?

Well, I'll just fire off a couple of things. I agree a lot with what Rob said. I was shocked. I arrived like 9 a.m. on Tuesday and the line was longer than TSA at the airport. I mean, it was in all suits. I was wearing just a sweatshirt. I felt really out of place. I mean, we always know DAOs is an institutional conference, but it was just pretty amazing to see. I think I caught up with you separately, but the stats of the conference are pretty revealing. Like you have mostly financial institutions that are, whereas prior years they would send 4 people or 2 people, they're now sending teams of 10 to 20. That I think is indicative of like just the hiring spree that has happened. So I think that was just really exciting to see. And I think we're— it's just a reflection of where we are. Like adoption will continue, is continuing. It's just not where you want it to, meaning in the token price. So I was just at a panel with some really good investors, including Ben from Parify and a couple others. I don't think anyone disagrees the issues with tokens. Some here and there are excited to invest in tokens. But some of these conversations are happening because token prices are down. So, you know, but I think it is a healthy debate to have so that we don't make the same mistakes in the next cycle, in the next bull. So it was just a good discussion, but really exciting to see, you know, every time I come to a new conference, I see less and less familiar faces. And maybe that's my issue.

What year was your first crypto conference?

2012.

Yeah.

But it was a— 2012?

You were in that picture in 2013, the Bitcoin picture.

The sweater?

Yeah.

So funny enough, I think that might have happened in New York. And so I still remember the days where Galaxy had an office in SoHo.

I think Galaxy would host the Thursday parties.

They were hosting the Thursday parties. And I was working at a health startup that had like across the street. So I'd pop in there. But no, my first one was like just a small gathering. And I still wore a suit and tie. I was at JP Morgan at the time, and I felt totally out of place. It's just kind of surreal to see this.

Yeah, it's crazy. So the final stats on this event— so Blockworks has been around— we started December 2017. First event, we had 200 people. Our second event, we had 13 people. Yeah, it was not as tough event. We had just quit our jobs. We quit our jobs May 1st, and then 10 days later, we hosted an event, and 13 people showed up.

Just a little more than what's in the audience.

I was like, mom, I've made a grave mistake. Like, this is where I want.

Call my old bosses.

I come back? Um, yeah. And then, uh, first DAS ever was 500 folks. That was, uh, May 2019. It was a one-day event. I think the final numbers— I haven't got the final numbers from the team exactly, but I think it's somewhere around 2,900 people. Um, we projected like— I think it was somewhere— I think it was 2,000 people. Bear market, like, you know, bear markets usually dip, but there's still institutional interest, so we thought it'd be 2,000. Yeah, 2,900 people, which exceeded even our most optimistic bull case budgets. So it was a really good event. We also measure things by how many allocators come to the event. So first ever event, we had 1 allocator. Last year we had 22 allocators come out, like real allocators, like sovereigns or endowments or pensions. And this year we had 130 come.

Wow.

Which is, I think, a sign of just— now I'm not saying all of them are allocating and all, but yeah, real, real interest. Yeah. So That's a good way to measure, I think, the success of the industry. Santi, I'm curious because the, um, it was such a weird, it was such a weird event for me because every, every time we've hosted an event, in my head I'm like, that was a bear market conference or a bull market conference. That was a bear market DAS or bull. I have no clue at this point what is, what like time of the year it is. Is it bull or is it a bear? I mean, tokens are fair, but this is obviously an institutional bull market. How are you thinking about this contrast?

I don't think anyone— most of the people came here are not coming to this conference to figure out what token to buy. They're figuring out how to develop a strategy, how to become crypto-enabled, maybe hear some regulatory concepts. I'm seeing less and less of like OG builders too. You know, for better or for worse, a lot of those teams have just faded. And I'm seeing just, you know, a lot of this, you know, few companies that continue to come and show up. But there's definitely folks that just are no longer showing up. I think it's just a normal evolution, but it doesn't feel like a bear market at all. Like, I've never seen a line in a crypto conference, like a check-in line, other than maybe Token, where it was just a very different crowd. I think the crowd that goes to Token is more looking for like, you know, a lot of, a lot of BD happens there too, I've appreciated, but it's a lot of retail. But this does not feel like a bear market at all.

We had this— I think it was October— we had a podcast where the title was, it's a bull market, just not the one you wanted. And I continue to come back to that. Yeah, I think that's exactly where we are still to this day. And I do believe that the market's a pendulum. And I expect that tokens will come back and maybe not in the same kind of correlation where everything goes together, right? We'll have more dispersion. But I don't expect it's the end of— alt tokens, even though, you know, Santi continues to, to say that. I do believe, though, that the amount of acceleration that we are seeing on stablecoin adoption from real businesses, from tokenization, from the capital markets folks who are interested in the space, like, that's not going away. And that is only accelerating right now.

Yeah. Did you guys have a meeting of the, of the week or a quote of the week that you heard on a, on a panel or anything like that?

Oh, really?

Well, on my panel earlier, I think it was Luke Tuttle, who's like the chief technology officer and the chief product officer at MoneyGram. And he essentially said, use stablecoins or get left behind. And this is not a stablecoin founder. This is MoneyGram.

Yeah, I guess I have one, which is someone said that 25 times revenue was cheap. Um, goddamn. I mean, I don't know. I think we've been very— you know, like, you come to crypto and you have— as soon as you have the 10x, as soon as you have one 10x, and maybe you're lucky to have like a 20, 30, 100x, you're hooked for life. And, and, you know, I think this is just— it's a bit funny, but it's a reflection of, for better or for worse, retail is just moving on and chasing the lottery ticket. And I think that continues to be a segment of crypto that will always, like, even in a recession, like, people actually gamble more because they want to, like, win it all back. Um, but it's— I think sometimes it's just important to reflect, like, okay, this is not a normal return profile. Like, I should not be expecting to get, you know, a 10x or 100x. Like, you know, 10% on your capital compounded year over year is massive, and, and very few investors actually do that. And so I think like, I think we're in a state where my view, not to get too much in macro, is that the world over the next 2 years is just going to become quite like— my probability of a recession is much higher over the next 2 years. And I'm adjusting that to how I hire, how I am patient, and what I'm willing to pay for companies. But I think that I talked about it maybe in one podcast, but my view is the risk curve has changed quite a bit. And so when you go talk to someone and you say, okay, typically if you're a fund or you're a family office or just an investor in general, you say, I want to target this type of return per year. So if the stock— if Treasuries give me 4%, if the market gives me 8 to 10%, well, I'm targeting maybe 12%. I think the difference where you can really lose your money is not adjusting however much risk. So the difference between getting 10% and 12% return maybe a year or two ago was not as much. The difference now, I think you're taking a whole lot more risk going a little bit more, like every incremental percentage point that you're hoping to get, you're carrying a lot more risk given everything that's going on in the world. And that is something that, um, I feel that in crypto, for better or for worse, we're just used to the 10x, the 100x, and You know, it's—

are there any tokens that look appetizing to you right now? Take a little nibble out of?

SKY is pretty interesting.

I mean, not what I thought you were going to say.

I just like from a— I mean, they just announced something interesting. I think Parker from Framework was here. We've interfaced a lot with them just from the—

like when they were Maker.

Maker, now SKY. Like you saw a public company, I think Better, trying to originate basically get a facility from them. That's really exciting. Like, I continue to monitor public companies that are coming and using on-chain for some part of their business. And Sky is just an interesting credit facility on-chain. And so, like, if Sky can provide credit for Better, this like home—

Yeah, yeah.

Then I think—

This is the crypto-backed mortgages, right?

Exactly.

Yeah.

So it's just—

no, but Better Homes is like traditional mortgage originator?

Traditional. I know now they're doing crypto-backed loans, I think through—

oh yeah, that's not— no, that's the Coinbase thing today. But Better maybe is doing some crypto-backed stuff as well.

But like do they have a facility through Sky now?

You know, Sky is just lending for their business model.

They provide a credit line to this mortgage originator And the calculus for them is quite simple, which is they can lower the cost of capital by using Sky. The end customer doesn't see any of it. Better, just lowers their— they think they can squeeze out 100 basis points, which is pretty material. We'll see. There's obviously governance risk. There's a couple of things that they're not from one day to the other going to totally replace their existing facility, but they're going to supplement it with on-chain sources of capital, which is pretty interesting, I think.

Are you guys— are you— how many angel investments have you made in crypto since I left ParaFi?

I was actually putting all this into my CIO, which is Claude. Uh, 256.

We made 256 angel investments. Are you still— are you still making angel investments?

So I tweeted about this the other day. Uh, no. Uh, part of it is I'm just very focused on Inversion. Um, But I still get pinged quite a bit. I haven't done that many investments. Like my pace of deployment this year, like dollar-wise, is roughly the same as prior years, but it's very concentrated. So I've either invested in a couple of fund managers or things that are not crypto-related, like AI or, you know, I've known a founder for 4 years, he's starting something new. But certainly number-wise, like no. And I've talked to a lot of VCs about this, like, hey, is this an issue? Like maybe founders just don't want to reach out because he's like, he's no longer investing or too bearish on tokens or whatever. But I don't know, Rob, you and I talked about this on the podcast, like feels like the quality of founders is not that high. And I haven't seen anything truly novel. I've seen like the 10th prediction market, but I'm not going to invest in any of them because I have exposure.

That was one of my thoughts is I actually think there's really interesting, really solid companies at the I feel like all the good company— a lot of the good companies used to be pre-seed, seed, like there are all these hot companies early stage, and now actually a lot of the best companies have kind of matured and reached that Series B, kind of maybe late A, early C stage. But the pre-seed and the seed stages are, they're very dry right now. And it's, um, I was talking to an emerging manager, he mainly does pre-seed, Jason Yanowitz at this conference, and he's like, look, the bar to get funded as an early-stage pre-seed founder is higher than it's ever been in the 10 years I've been investing in crypto. And I think there's many reasons for that. There's like the LP risk, like LPs kind of want you to allocate to AI, not crypto right now. But I do think a lot of the good founders, it, yeah, it feels like it's dried up a little bit.

Yeah, I mean, I do think this all kind of flows downhill. So your point about LPs, there's less money in crypto funds right now.

There's not for Dragonfly. $600 million raise.

$650.

$650.

Come on.

I only said that because I knew you'd correct me.

Yeah, well. No, but you know, and then obviously there was, I think, an announcement that Andreessen and Paradigm are out raising funds right now. Although, you know, the last, I think, you know, maybe 5 or 6 deals that Paradigm has announced have all been non-crypto. There's—

Is that bad for the space? OK, so Paradigm, biggest crypto native fund in the world. Is not the 6th of—

Well, Andreessen's the biggest crypto native fund in the world, but—

Second biggest then. Yeah. I was just saying it because Paradigm doesn't do—

Yeah, they're on the other side.

Well, they don't— Their last 6 deals are not crypto deals. Is this a bigger problem than we're letting on to be?

I mean, to Sonny's point earlier, right, it is very clear that there are a couple things that people want to fund right now. People want to fund stablecoins. They want to fund tokenization. They want to fund prediction markets. Those are probably the core categories. There's a lot more, and we're doing this as well, of leaning into the things that are working, right? And so, you know, my panel earlier, I had Farouk, uh, from Rain on next to me. We've put more money into that business than we put into any business ever because we've taken the perspective that we want to look at what we know is working really well, we want to lean into it, and we want to continue to support. Polymarket, same thing. We've done a lot of that through 4 or 5 rounds now. And so So we're seeing a lot more of that at a lot of the funds because there is so much dispersion right now. And I think broadly in venture, not just in crypto, but there's a lot of bunching at the top, right? There's like, these names are working, we have to get exposure to this, so we're going to bunch into this thing. But then when you think about, call it the pre-seed space, well, the things I just talked about, the verticals I just talked about are getting funded, but the crypto-native stuff DeFi is not the thing that a new Stanford grad wants to do right now, right? Building a new L1 is not also what a new Stanford grad wants to do right now. And so when we look at the founders coming out of or building in those spaces, it is a different quality than it was necessarily the last few years. And also the funds, because of the fact that other than the few people I just named, have not raised new funds. I think ParaFi also just announced a new $125 million fund, but you haven't seen a lot of new funds announce new fund raises. And I think a lot of people are looking around and saying, there's existential risk to my business if this token market doesn't come back and I keep investing in these things that are crypto native. How do I think about my future? So there's a lot of risk.

So a couple things there to rattle off. One, I think Paradigm is smart. They—

I mean, obviously.

No, no, they're smart in the sense of like, like if you're, if your mandate is only crypto, I've always felt that like, yeah, we talk about crypto and fintech and that line's blurring, but like if I were to raise a fund again, which I won't, I would want to have maximum flexibility to invest in whatever. Like no one complains, your LPs won't complain if you make them a boatload of money. Well, no, but I do think there's a point here, which is that, yeah, you've got to stay disciplined and you got to tell them that your, your core competency—

yeah, because every GP wants as much flexibility as possible. Like, that's, that's obvious, right? Like, it— but you also have to go to market and say, this is my story, this is how I'm differentiated, this is how I can go and win a deal. And so there is that, that kind of natural tension that exists.

I can tell you it's very liberating for us as Inversion to be a holdco because I don't have to have all the fucking window dressing of, you know, I got to have a big team page and I have to— I'm like, I'm in the business of figuring out how to use technology and I'm long— I'm positioned in a way where the curve for infrastructure is only getting better for us. The cost for block production and block inclusion is going in one direction. The cost of AI, which is venture funded, is like, however, like what you get from Claude, is remarkable. You used to have to pay $500K for a glorified investment banking person, and now you can use Claude, and your judgment is what ultimately LPs are giving you money for. So I think from that perspective, so that's point number one. I think Paradigm's smart in saying, okay, we want to just capture AI in that bucket as we go on and try to invest in businesses. I mean, the natural conversions of AI and crypto is real, I think. Like agents will use, stablecoins. So, you know, you kind of want to traffic in both. Topology was probably the first fund to kind of do this. The second is like, I'm not too alarmed this idea that like the winners like end up capturing most of the dollars, like, like FTX did this like in prior cycles. The point that Rob made around the quality of founders I think is real, like because in prior cycles you didn't have AI and the Stanford engineer would eventually come into crypto. I don't think they're going to come back for a while.

Yeah, it's not just the talent. I think AI is sucking up a lot of the capital. Yeah, it's just like— also the— I mean, SpaceX IPO at $1.5 trillion, that's sucking up a lot of your IPO money right there.

The last thing, just, just around one thing I want to say is like, so I, I did probably one of my largest, uh, investments, and I've known this, uh, founder for a while, Thrive-backed business, and they were doing— they're a fintech company. So I put in some money.

Stripe?

No, no, no, no, no. It's, uh, it's called RentApp, Visible. So Thrive, Khosla-backed. They're basically trying to like, um, you know, that team sold their business to Square. So really good fintech guys in the evolution of like, they are now interested in using on-chain financing and using stablecoins, whereas like 6 months ago it wasn't in the picture. But I said, hey guys, have you looked at what Figure's doing? Have you looked at like Sky? Because they're paying a pretty high rate for, you know, credit facility. And so that to me is interesting. Like, they're very smart fintech guys. And, and I'm hopeful that more of— Rob, you talked about on the spot, like fintech companies will start thinking more closely about using crypto.

I mean, every single one is doing it.

It's happening right now. Yeah.

Yeah. I mean, the— to your point earlier about, okay, well, AI sucking the capital and sucking the talent. It's absolutely sucking the talent. I think on the capital side, it's also true. But stablecoins, the token— is really mostly stablecoins— is the one place where I see traditional investors still. So, you know, when I go and I talk to a new DeFi founder, it's very seldom that they tell me they were talking to, you know, name your, you know, traditional fund. When I go talk to the best stablecoin founders, all of them are talking to the best traditional funds. So it's actually gotten more competitive on that side of the market. And then when I spend time now in the Bay or in the Valley, there are a lot of founders who are now saying, especially on the fintech side, who are saying, I actually hate crypto. I think crypto is terrible. But stablecoins, like, I'm going to build my business.

Look at what—

We're seeing that by—

Look at what— maybe talk about what WAP did today.

Yeah, I mean, they announced that they're going to do 6% cash back using stablecoins.

WAP is one of the fastest growing—

Yeah, so maybe I'll— yeah, we can back up. So WAP is a marketplace business. And it's an infrastructure and sort of, you know, call it— platform business that allows people to build small businesses on top of small e-commerce businesses. And so a lot of these businesses are things like, um, a lot of like, it's like a lot of small e-commerce, a lot of people who are building, you know, call it like net new training videos. And I'm sure there's a bunch of other stuff and someone will yell at me, um, but the, uh, they, they have about $3 billion of annual GMV that happens on their platform from these companies that are currently on there getting paid by their customers. And it's growing very, very quickly. They took an investment from Tether at a $1.6 billion valuation. I think they announced it a couple of weeks ago. And then they announced today that— or yesterday— that they're going to offer 6% cash back if you hold stablecoins. Right now, I think there's a lot— and I understand there's a lot more to come there. And now they're thinking about their stablecoin strategy. And that's a marketplace business, traditional business, saying we're going to do a bunch in stablecoins. And I will tell you, the marketplace businesses, every single one of them will probably have a real announcement this year about stablecoins because they have global— you know, they have global customers both on both sides of the marketplace who want to be able to have US dollars and also want to be able to get paid without having to go through local bank accounts. And that's happening.

Yeah. If you're KPI internally, your company is GMV. You are looking at stablecoins.

Everyone, every single one.

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Hey all, Blockworks co-founder Michael Ippolito here. Quick break to talk about something we've just launched, Blockworks Investor Relations. As the market shifts toward institutional capital, investors want more transparency, more standardization, and a higher level of professionalism. But the traditional IR model is slow, manual and not built for how crypto works. If you're building on-chain, your data is already live, your business is already transparent. The challenge is turning that into a clear, credible story for investors. That's exactly what we're solving with Blockworks IR. It's a single platform that brings together real-time analytics, branded investor portals, and hands-on advisory support so you can communicate what matters. If you're an on-chain business looking to level up your investor strategy, check out Blockworks Investor Relations at blockworks.com/ir. Investor-relations. All right, back to the episode.

Yeah, I want to talk about Western Union. Uh, oh yeah, not to call off because, you know, when, when Rob and I entered into a bet in November 1st, months running of Western Union—

how, how far up is Western Union stock since we did that?

2.86%.

Okay.

Solana is down, and I know this because I'm a Solana holder too, much to my demise, uh, 56%. Rob, I think you're going to have to buy me dinner sometime.

You wanted to bet money and I said, look, Rob was trying to bet Santi $10K that Solana would outperform.

No, no, I tried to bet.

I tried to just get us a nice dinner.

I tried to bet his Patek.

His Patek. Yeah.

Are you going to give me your watch, Rob?

Yeah, we'll trade. Mine's worth a quarter of yours.

So, yeah, sorry, I'm going to win anyways.

But look, you had this entry. I want to talk about Western Union because you've been asking.

Yeah, let me share the Western Union story. So I interviewed the Western Union CEO. On Tuesday and was very skeptical going into it because I think maybe like a lot of you guys in this room, I've heard all these CEOs of these financial institutions say these things are gonna happen and then they never happen, including Western Union, right? Western Union partnered with Ripple in 2018 to go launch this thing and then it never happened. And then 2 years later they did it with Stellar and it never happened. And so I was like, all right, let's figure out if this guy's for real. He basically went as far as to say he doesn't like crypto, doesn't think that, you know, maybe crypto investors are the smartest investors, but thinks that stablecoins are the most amazing thing that he's seen in 20 years of working in payments as a payments executive. Before this, he was at Fiserv, and he walked through basically— he said, look, all you crypto people, you think that real-time payments, real-time settlement is a new thing. He goes, I've had real-time settlement at Western Union for 20 years, right? You walk into a 7-Eleven, you get the Western Union thing, send it to your, you know, mom in Guatemala, take out your WhatsApp, send the money, boom, good, it's there in 3 seconds. He goes, we've had real-time settlement for, you know, 20 years, but the way that we have real-time settlement is I'm floating $3 billion a day to make this possible, or $2 billion a day, or $4 billion, I forget the actual number. He goes, my stock is trading at, someone here can pull it up, I don't, it's, I forget if he said $3 billion or $4 billion or $5 billion, So let's make up the numbers here. $5 billion stock.

$3.6 now.

$3.6 billion stock.

Get prepared.

Yeah, I put in a position, man.

Locked in. $3.6, but do the math. $3.6 billion stock. Let's say the float, let's say he's floating $1.8 billion a day to do real-time settlements. Boom, he now gets all that $1.8 billion back, and he's gonna buy back their stock. So, and then not only this, so the customers of Western Union are the individuals, they won't know this is happening. They won't even know they're on stablecoins. But then to take it a step further, he's always wanted to launch bank accounts. It was too big of a pain in the ass. It's too much of a hassle, the regulatory stuff. He's got, you know, customers in every single, you know, 190 countries all over the world, can't roll out bank accounts. But now with stablecoins, they're working with Rain, the company that Rob was mentioning as their portco, to roll out stablecoin-backed cards, debit cards, to all 100 million customers, and boom, all right, now he just saved $2 million in the float daily, starts buying back the stock, the stock starts going back up, you know, he gets more cash flow, and he can roll out, you know, now essentially bank accounts to users.

You know what I think is interesting about this though too is, so, on the panel we did earlier, we had the MoneyGram CTO and CPO, and so MoneyGram's kind of the biggest competitor to Western Union, and they talked a lot about this, kind of float 0.2, and it's better for capital efficiency. But the other thing that he talked about was we have always seen our customer as the sender. So the person in the US who is sending capital to an emerging market, uh, into a family member. But all of a sudden we see stablecoins and stablecoin wallets and cards and ability to get yield on-chain as a way to make the receiver a customer as well. In the way to monetize the receiver. So it's not just the capital efficiency point, it's now this person can get US dollars, they can keep US dollars in a wallet, and then they can do things with that wallet that they couldn't do otherwise in that global ecosystem.

Those, those are the issues that I had from the beginning. I mean, we looked at a business that Western Union acquired called Intermax, and they were a smaller size for us. Um, but I mean, Rob, if I were you, I'd put some of the $650 million and get a board seat in Western Union, because for me, the real opportunity going on what you were saying is, so if you actually look at the— where— what the P&L Western Union, they pay a ton of money in commission. So when you talk about just-in-time movement of money for them, instant payout, they're paying a lot to facilitate that because they're not sourcing— in order for them to source the liquidity, they need to convince all the bodegas in Guatemala to have Western Union and to use part of their working capital to provide that. In exchange for that, they pay him of 40 to 60% commission. If you were smart, he wouldn't just stop with the float. He would say, huh, I can now become— I can have a digital wallet, and that the receiver doesn't necessarily have to cash out. Yeah, they can keep their money. But, but they're not going the step further. If I were them, or if I were Elliot, just take a board seat and be a little bit more—

wait, to take it a step further, they have 17,000— not to make this a, you know, long Western Union podcast here, but Um, they have 17,000 employees. Like, half of those are agents, not AI agents, like agents.

Like, hey, thanks for, you know, sending the people like from bodegas and stuff like that.

Yeah, yeah, but, but you know, not just bodega people, the people you call, people you call to be like, hey, my payment got stuck. Yeah, yeah, get people out of there.

AI that.

AI that.

I think there's not— again, not to harp on Western Union, the key message is most businesses that have distribution and are marketplaces can become banks. They can further entrench their relationship with a customer by offering financial, higher margin financial products in the form of stablecoin. And then you attach Rain if they want to cash out. And then of course you get interchange. And so to me, that like Western Union, if they end up executing in it or not, I'm still going to win the bet, Rob, sorry.

But I think there's a lot of time left.

There's a lot of other businesses that are going to start basically enabling— what airlines have woken up to this idea, which is they make more money off of the cards.

Yeah, there's— not to continue to harp on this stablecoin topic— and Western Union, who is a secret advertiser for Blockworks apparently.

Western Union, feed us. I've not gotten a dollar out of Western Union. We're pumping them.

Yeah. But we— there was another marketplace company which I can't say their name yet because they haven't announced anything. But one of the largest marketplace companies in the world who said to me, not at this conference, but at a conference a couple of weeks ago, that what they were thinking about doing in stablecoins, what they saw stablecoins doing, and then what they thought that they could do with stablecoins also with a card attached was the most interesting thing happening in fintech anywhere in the world right now.

Huh.

What's a— let's invert. What's a bearish case for stablecoins? Like for a year from now? We're going to be sitting here pontificating about some other stuff. Like, where would we have been terribly off the mark?

Because we keep rehashing in every pod, like, okay, yeah, like, this is a stablecoin pod.

Now, this is a stablecoin pod. And, you know, like, but where can we be very, very wrong? And I'm tempted to say, don't say regulation. Let's put that— things that we can't control, that we can't control. I know you're now going to DC quite a bit. Including regulation. What, what are the things that were like, could be terribly off the mark?

Well, I mean, the thing that has happened, of course, is like, we got Genius. Genius was incredible. It was very good for getting every single boardroom to say, I need a stablecoin strategy. I think it, uh, was, um, Kai Sheffield who says that all the time. He's like, last year was the year of, of the stablecoin strategy, right? This year is the year of stablecoin adoption, right? But But the thing that is true is every single conversation we're having about whether it's Western Union, or MoneyGram, or this WAP, or these other people I'm talking about, every single one of them are implementing this right now. But most of them are actually not live in production, not in at least real scale. And so, OK, regulation is, of course, a concern. But you want to tell me what the— I guess if you ask what is the risk between now and then, is that as people start to scale, it doesn't actually operate in the way they think it will. It's not as actually— they still have to do some prefunding because there's still a lot of, call it, friction at the edges. And they can't get people to actually hold the stablecoins, so they keep wanting to off-ramp. And when those things happen, they just don't get the consumer behavior they expect. And so they have to put not as much of their business into stablecoins as possible. So that's the risk still.

So here's an idea. I listened to a podcast by the— founder of Column. He was a co-founder of Brex, and he kind of made a dig— not a dig, but he was just talking about like, you know, we've been very skeptical of stablecoins for a long time. But I do think that he hit me— made an interesting point, said, look, we've had the ability to do a lot of the stuff that stablecoins purport to do. The reason why we don't do it is because for other reasons like fraud prevention. So for instance, instant payout. Well, you know, sometimes it's good if your bank account call— if your bank manager calls you so you don't get scammed, right? Your grandmother, you know, may not be as sophisticated. Where I'm going with this is this year we've seen a spike in hacks. I think it's like DeFi is now— you're seeing that it was dormant for a while. Most of the issues, like, I think there's been over $130 million of lost capital were in March. Um, and it's the same issues keep coming up, which is there's an oracle problem, but more so vaults have become real-world assets have become this topic of conversation. And I feel like as an industry, we hopefully don't make the same mistakes that TradFi has done. But again, if you look at some of the issuers like RWA protocols, they have brought low-quality stuff and you kind of have this redemption, asset liability mismatch, liquidity mismatch.

But that's just a V1. Like, I think you gotta have the crappy assets first. It's like, yeah, I don't know. I think it's like DeFi summer, like the craziness of that, like did lead the path for Aave and Uniswap, which then turned into Morpho. And like, you gotta have some of the chaotic stuff to actually, with the crappy products.

Yeah, like chaotic innovation, I guess it will always be a thing here. But what I'm trying to say is I think that, Yes, we're in a bear market, but RWAs I think are a bit overhyped. I think that, you know, I'm, I'm cautiously skeptically optimistic about RWAs, but I see a whole lot of issues that I'm hopeful we don't kind of run through the same issues that TradFi has had to learn the hard way.

Well, I think it's like so it's not even V1 or V0. Okay, so like let's use tokenized stocks for a sec. Like nobody right now can do tokenized, is doing tokenized stocks. Like, Kraken's not doing tokenized stocks. Ondo's not doing tokenized stocks.

Yeah, if you mean like direct issuance, right? There's a lot of these like wrapped—

they're just pointing. They're a price feed.

Yeah, well, I mean, they're a tokenized price feed that goes to the stock. Sure. I mean, it's an SPV.

Yeah, exactly. So it's— but it's like, it's so— eventually you got to actually tokenize these stocks. And yeah, like, OK, so like we just—

I mean, this was— but this was the NYSE— the NYSE Securitize announcement was that they're going to do direct issuance.

This is obviously— this is what Superstate's trying to do. It's just really early days right now. And so there's all these issues. There's all these issues with—

The problem with the early days and then maturing a little more is that there's a lot of damage. Yeah. And a lot of capital loss. And it's not unlike move fast and break things in the Zuckerberg coin.

You shouldn't move fast and break things when things have to work.

If there's a bug in Facebook, maybe your photo doesn't load. If there's a bug in a protocol, you lose billions of dollars. And that hurts us to onboard users and with regulators and in that conversation. I'm just, I'm hopeful that we avoid some of those mistakes.

I agree. I agree. We've got a couple minutes left. Anything else that you, coming out of this conference, that you guys are thinking about?

Listen, I mean, this was the conference, right? It was tokenization of assets. It was stablecoins. It was prediction markets. Those are the things everybody's talking about.

Agentic payments.

Agentic payments, which is not a thing that exists today, even though we keep talking about it. You know, I think X402 did like $600,000 yesterday. MPP did like $300.

More than L2 is making money, you know.

That's definitely not true.

$10.

Yeah, OK. What was the best panel?

I mean, for me, it was the Western Union fireside chat was the most enlightening and eye-opening conversation.

He's been like, if you go back a couple earnings quarters ago, he was quite like he did a whole 180, very anti-stablecoins.

I mean, he told me backstage, he's like, the only reason we could do this is Genius. And I think, I mean, I actually think Clarity was like an under-discussed thing at this event, um, because it's kind of been talked about so much that people are sick of talking about it.

But well, also people don't want to talk about it because I think most people feel, at least what I feel, which is that it's like probably not going to happen. And yeah, what, yeah, yeah, I mean, it's, it's, uh It's still 60% on Polymarket. So clearly there are some people who feel that it is going to happen.

How bad is it if clarity doesn't pass now?

I think it depends, right? So if you go talk to the banks right now or you go talk to a lot of the asset managers, they're telling you they're going to go and push forward with all of this tokenization stuff anyways. Both the SEC and the CFTC put out joint guidance. I think it was a week ago, maybe 2 weeks ago. That allows for a framework and a taxonomy for continuing to push forward on these efforts right now. But the risk is, of course, that, you know, in 2, 2 and a half years, that there's a new regulatory regime and that that regulatory regime reverses course. And that because, and without clarity, there's, it's not kind of cemented into law. But, you know, if you go talk to the banks, I think a lot of their perspective right now is, well, if we build this thing for 2 and a half years and there's like real world activity that's happening from real clients on-chain, it's even if, you know, there's a lot of concern about, you know, some of the long-tail stuff in crypto, there's no way that a net new, even like very, you know, anti-innovation regulatory regime would try to reverse course and shut down all of these markets. And so I think people feel that there's enough time to get ahead of it even without clarity. But I do think it is, it is bad that it doesn't happen. It does create a lot of ability for things to get changed at the edges that are bad for, I mean, at least a lot of the startups.

Yeah, I will say like, again, regulation is something that we necessarily can't control. What we can control is delivering extreme value to the end customer. And so like Uber, like look at Uber, like Uber was able to get these licenses and fight one of the most fiercest lobbies, the taxi lobby, because the consumer, the constituents loved it. And they would call on their congressman and say, Why all of a sudden, like, you're banning Uber? Like, this provides extreme value. So I still think that, like, when you go and talk to a regulator, when you go and talk to, you know, you say something, most people hate crypto still. It's not popular. You go and walk in the street, they're like, oh, you know, like, I don't think most people hate crypto.

I think most people are indifferent to crypto.

No, people hate— like, there are people who hate it, but most people are like, you know, they're— they know so, like, someone that has made a lot of money and they hate that. And, and, you know, it's real. It's like, oh, my cousin. Yeah, he's dumb as a brick.

Everyone hates Santi is what he's saying. He's upset.

No, no, but like when you—

Santi's like, I was too successful.

Like, no, I mean, but it's a reality of things. Like, you know, you see this in bull markets. Like, people just don't take it seriously because it's not relatable. Like, I get that stablecoins are very relatable when you can earn in dollars and get paid in dollars. And, you know, we need more of that. And I'm encouraged. You and I had a discussion around like, what is something that we can do as an industry to improve that? Like, prediction markets are all the rage. Like, I did the seed round of Polymarket. I have a lot at stake, but I wrote about earlier, which is why did it take so long to be reactive to something like update your terms of service, make a disclaimer in any market, say if you have inside information, you shouldn't be trading that, it's against our terms of service, if we find this out, we'll kick you out.

Rob, do you agree?

No, I'm encouraged to see— but by the way, I'm encouraged to see this in the pod last week.

I didn't listen.

You didn't listen to us debate this? We had this debate.

We debated and then I wrote about it and then I was like, why is it— Kalshi actually did have it. I was surprised that Polymarket is like, why don't you have in your terms of service? And I get the chain, as much as I love him, he said, oh, look, you know, these are truth-seeking machines. So this is actually good. But I'm like, I don't think we can agree that, like, if you get—

I think this is a sideshow. This is like, it's a complete sideshow.

Like, it's a sideshow.

Yeah, because it just like the— whatever's happening in terms of service, terms of service doesn't really matter.

You know what's not a sideshow for the prediction markets is sports gambling.

Uh, it's definitely not a sideshow for Kalshi. Um, I mean, not for—

what do you mean? They're doing the exact same thing with sports gambling. Uh, it's like 80 to 90% of both of their revenue, right?

No, that's not true.

Of their market volume.

No, that's not true. So for Polymarket, it's about 40-45%. For Kalshi, it's about 90%. So the Yeah, so I mean, follow my Twitter, you'll see some, some good content. Um, but the, actually a lot of the, um, the Polymarket volume right now, I mean, they, they own all the, the politics markets. Uh, they're doing a lot of these crypto markets, which is like kind of—

I like their crypto.

Yeah, what will Bitcoin be, crypto down market, stuff like that. Um, and then they, they're actually getting a lot of volume right now, like the Danish election. Um, and so they, there's a, uh, it's much more varied at Polymarket, but Kelsey, yes, is primarily sports. We're also in the middle of March Madness, which is a big time of the year. But I think the reality is— and I have this discussion with people all the time because we spend so much time talking about Polymarket these days— which is that there's a— sports was the easiest market to serve first. But it's, I think, very clear to a lot of people. And you've had ICE running around here, and they put a bunch of money into Polymarket. It's very clear to a lot of people that this is a real financial innovation that can affect equities. It can affect broadly business exposure. It can affect hedging. It can affect commodities trading. And there's an expectation that these markets will get a lot bigger. It's just that, hey, sports was easier to serve on day one. We just had an announcement this week from both Kalshi and Polymarket that was— FIS is going to plug into or allow for Calshi contracts to be on their accounting system for the hedge funds. We also just had an announcement from Susquehanna that they are going to allow you to post USDC collateral or fiat collateral at BitGo, and then they are going to do an OTC trade with you, and then they'll probably offload the risk on Polymarket because this is Susquehanna Crypto. And so those are the first two things I've seen where there's like, oh, well, we can make this for institution, right? I know one of the big G-SIB banks was telling me this week that they're thinking about trying to offer these types of OTC trades as well. And so we're seeing that happen. It's just, it's going to be slower at the, for, at the big institutions.

I'm not like, I'm not, I'm not disagreeing. Like, my thesis is prediction markets are phenomenal truth machines. They can help us with insurance markets, discrete markets around, hey, like if you have a home in Florida, you want to insure against hurricane insurance, you can price that risk in real time. You don't get an insurer to do that for you. So, like, we can get there. All I'm saying is, I don't think we can disagree that, like, most people look at prediction markets today and say, "Yeah, that's gambling. That's Vegas." And—

It's like 60% if you look at the latest data.

Again, I'm not disagreeing on the data. I'm disagreeing on the perception of the industry. What you could do if you're in that seat as a founder, I think it's a really hard choice. To do, like— I'm not suggesting that, like, these guys shut down sports. Sometimes you gotta do these things that will fund the other part of the business. And, but I do think like, again, I don't want to talk too much about regulation, but as an industry, it will serve us well to make sure that the consumer is protected. And it's not perfect. I don't think you perfectly ever get there, but I do think you need to stand for something and you need to make sure that the perception of this industry, whether Genius pass, like whether Clarity passes or not, I think that we can still, as an industry, make sure that we continue to level up and raise the bar around consumer protection, disclosures, transparency.

Yeah, agreed. All that. Yeah, yeah. Um, right, we're at time here. Content of the week. Did you guys stop doing content of the week?

No, no question.

I haven't, I haven't listened to you guys once.

Yeah, I cannot believe you haven't listened to once.

I haven't, I haven't tuned in at all.

Yeah, well, you're the reason that, you know, the, the list—

that the show was good. I know.

What you should have done is put us in the background. The baby would have slept much easier because we're boring as hell.

I will tell you, I, uh, I did a fireside chat with Amy Oldenburg yesterday.

Amy's great.

Yeah, she's the, the head of digital assets at Morgan Stanley. And she starts the, the fireside with, you know, it's great to, to be doing this because I fall asleep to your voice all the time. And I was like, does that mean— are you, are you nagging me? Like, is that— does that mean the podcast is bad? Like, I didn't understand. You should try to be nice.

Listening is a bad—

yeah, I don't So, but can I give you one suggestion for the live pod next year?

Yeah, don't do it the last day.

Yeah, exactly. Do not make it the last.

We've lost a lot of you guys for sticking around. Yeah. Do you guys have a good desk? Nice.

How many people in here work for Blockworks? How many people?

How many?

Don't tell them.

How many people here work for Inversion?

Santi made all of his employees come here. All 3 of them.

100% of Inversion is represented in this room. Keyman risk.

Before we wrap, anything you guys want to know? Thoughts, questions?

Yeah.

I think identity passporting is obviously going to need to be part of the way we do all of these tokenized assets. But it's unclear to me. Why that needs to be decentralized. And it's unclear to me that the people who are going to be controlling the ins and outs of these markets are going to care about that. I don't know. That's kind of the 30 seconds.

The first thing— well, decentralized identity like Civic and all these experiments before have not really worked as much. I think your wallet is your identity in some ways if you want to extend credit. And I think as more traditional institutions that have KYC'd their user base start plugging in on-chain, you will stitch together transactional data on-chain with a KYC'd person that is—

Yeah, but their identity is the KYC.

No, I understand that. Well, if we want to extend credit, like, a big part of your—

If you want to scale it anyway.

You want to like underwrite, like, you know, you place a lot of value on that. But I think proof of humanity is going to be more and more important. And you obviously have cryptographic— like, the only way you will be able to prove that you're human is with your cryptographic keys. And that, I think, is something that is not talked about enough. But in a world of deepfakes and AI just becoming more and more sophisticated, I think that's where crypto really can fit in to prove, you know, that's actually human.

I think it'll end up being a big theme actually of the next couple of years. I mean, you look at what the— I don't know if you guys know Snowflake. Huge software company. The Snowflake founder is now working on is this video real or not real online, right? So this whole concept of like, is this video real? Was this article written by AI? Is this person real? Like that whole theme Like what world?

That's very different than just decentralized identity though. Like I think we all agree that like there's a lot of like agentic or AI-powered like deepfakes and things like that that we need to have some ability.

It's not just deepfakes. It's like, is this person—

Yeah, no, but—

Isn't that what decentralized identity really is? Is like, is this person a credible human being or not?

No, I don't think that's what he's asking.

Well, I will say like if you want to in a world where you have—

Oh yeah, it is because it's— Oh, it's just—

Well, for me, so I guess we're disagreeing what decentralized identity is, but when I think about it is like, so as an early investor in Filecoin, distributed file storage is important in a world where if you want to preserve mission-critical documents and files, you want to probably do it in a system of record like Filecoin, where you have sufficient guarantees that that data is there, it's sharded. And you, 'cause pretty much every company has or will be hacked. And so your data is exposed. If you want to store stuff, I think you're going to want to do that in a system of record like Filecoin. Because you can have real cryptographic proof that your identity or your document is sharded, meaning not a single node can have access to the full document and can't piece it together. And you have enough economic guarantees that if you wanna retrieve that file, you can very quickly do so. So for me, that's what I mean about, you know, if you wanna preserve your identity, and you wanna store mission-critical stuff, we will start using something like Filecoin.

Santi started talking about Filecoin, a guy walked out of the room. Let's do content of the week. Rob, what do you got, content of the week?

I'm gonna go back through all of the live streams of Das and watch all of them.

Yeah, that's my content.

I'm gonna watch every single one.

You know who does that?

You?

Kyle Simone.

Wait, if he doesn't— he does that for Salon Breakpoint.

It's a lot of Breakpoint.

And then he tweets about it, but I don't know if he'll do that anymore.

Yeah, true.

Uh, I, I'm gonna cheat because I talked about it last week. Um, Born to Be Wired, um, John Malone.

Yeah, cable guy legend.

So there's a book about him, Acquisition a Week.

Acquisition every 2 weeks for like a decade.

Yeah, the cable industry is fascinating, and then net neutrality and all that. Now of course he owns Formula One, tracking stocks, really interesting instruments. Great book, uh, fairly recent too. Uh, I'd read Cable Cowboy, um, a while back, also a really good book about him, but this, this book, he wrote it himself. So really, really good book. Um, yeah, fascinating.

Dang, I have a TV show on Hulu. It's not as informative. It's called Parasite. It's pretty good. So I'm—

you sort of broke the trend here. I was hoping to get a thriller so that I could watch it on the plane.

I did see Project Hail Mary.

Project Hail Mary.

Yeah. It's a good book.

It's a good book. And it's now a movie.

All right, I'm wrapping us. Good das, everybody. Appreciate you guys. Thanks for sticking around. Thank you, everyone.