The Blockworks Vision

Going back to crypto, we won. We actually won.

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 both Empire and Bell Curve, wherever time you are listening to this. You got Mike.

I noticed though that we're recording on the Empire with the Empire logo. I don't know if that's—

and who's doing the intro?

Yeah, I don't know if that's a subtle power play that you're maneuvering.

Years ago, Mike and I were debating founder 1 and founder 2. And yeah, for those who don't know, Mike is actually pretty nice at ping pong, and he beat me. He did a game of ping pong for who's founder 1 and who's founder 2, and he beat me. And he's held that title for years, and I'm Taking it back with this podcast.

You know what? We actually, we were a couple drinky poos into that game and I actually changed my LinkedIn title to like Founder 1 and Commander in Chief and then didn't log back into LinkedIn for like 2 years.

Didn't log back in. Oh, 2 years. Mike's LinkedIn title was Commander in Chief of Blockworks. All right.

All right.

Hopefully people listening to this know of us and are, you know, maybe this isn't your first time hearing from us. But anyways, uh, we launched a rebrand today. So Blockworks, um, yeah, did a big rebrand today. Mike and I just wanted to get on the horn and talk to you guys about it. And, uh, I think maybe my super high-level context and why I wanted to do this episode is I think for the last year I've been talking about, you know, crypto— there's this big line in the sand moment for crypto. You know, you got the first 15 to 16 years, and then I'd say 2025 was this line in the sand moment, and you got everything, you know, after 2025 And I would say this rebrand for Blockworks marks that for us. We've got Block, you know, Blockworks was started, you know, we started this December of 2017. Mike and I were living together in New York, started this December of 2017. So 8 and a half years in, this is the line in the sand moment for Blockworks. So maybe the best place to go to kick this off, Mike, is actually not about Blockworks at all, but I'd love to get your take on just the zeitgeist and this moment in crypto. And we're recording this the week of April 20th and it's kind of low vibes and there's all these DeFi hacks. And yeah, I would love to just get your take on what's going on in crypto today.

Okay, so let me try to put a somewhat original spin on this because the unoriginal take that everyone agrees with, and we have all this data to back up, is there's the institutional sec— section of crypto with the institutional bull market, which is real and happening. And then there is kind of the crypto native side of things, which is struggling a little bit more, but maybe to put another spin on it. And I think one that informs the sentiment more directly is crypto in many senses was an industry and a technology, but it's also kind of a political movement in a sense. And there's an ideology that underlies that political movement. And I think actually, funnily enough, what's causing the Uh, the sentiment drift here is that that ideological movement industry blob that is crypto won. And so now that it won, it moved from being a movement which is on the fringe, on the outside, and countercultural to one which is in the mainstream, and it's struggling with an identity crisis. So let me give you two examples of when this has happened in the past. Uh, one which is a little bit happier and one which is less happy. People have compared Bitcoin with the Catholic Church a lot, right? So this is actually a really good example because in the beginning, if you remember Christianity, the church, it was this outside, it was the ultimate outsider movement at the time. And then finally when it became into the mainstream and actually Roman society was kind of petering off, the Catholic Church had to assume a lot of the roles of the state, but it also had to reconcile with the state infrastructure, and you had to make all these weird compromises, like compromises like, hey, we used to rule the emperor as a god, but Christianity says there's only one God. We would be like, who, who cares? But that was 100 years of war. And then they finally were like, the emperor is an instrument of the God.

Boom.

There's your solution. Another example of this would be in, uh, you know, early 1900s when the October Revolution succeeded in Russia. And you had this crazy ideological movement of communism win, and then suddenly the communists are in control, but then it's like, whoa, we thought we were gonna share everything. Turns out that doesn't actually work. And then you actually ended up with a very central authoritarian state. Going back to crypto, we won. We, we actually won. Uh, the US didn't ban crypto. We embraced crypto. Uh, we, we, like everyone's kind of on board with this doctrine of ideology, but now you're figuring out Where does that actually not totally work? Right? Where does the very myopic definition of how we've defined crypto in the past for decentralization, where is that not worth? Okay, but you can get hacked for $300 billion. So yeah, the kind of long tail risk of someone co-opting a system is just way not as pressing as you can lose $500 million of DeFi in one month. So what this actually is, is a kind of ideological political movement, new technology that moved from the fringe into winning. This is literally what winning feels like, but now some of the parts of our ideology that hasn't survived contact with the real world are going to have to get changed. And, and that is the moment that we're currently in.

Yeah, I, I love that. I love that. The history nerd in me especially loves that. I would maybe describe it. I'd put a, um, the way I would describe everything that you're talking about is we no longer have an enemy. So yeah, right. Crypto has always had, it was us versus the banks. It was, we're bringing down the financials. The financial system is broken. You know, we're, we're, we're, we're taking, building a new financial system. Well, what happens when the banks actually start coming in and they're actually the customers? And if you're in DeFi or you're an L1, you're, you're trying to partner with the banks. Okay. That, that's fine. Cause we still had an enemy. The enemy were the regulators, Gary Gensler. But actually now the regulators are our friends. So now the two biggest enemies that we've had were, I think, uh, I think we're a bit of an industry in search of an enemy. And this happens in, I mean, in both of those historical examples that you mentioned, we've had it at Blockworks over the years, right? You, when, when you have an enemy, it's really easy to rally the troops.

Uniting. Yeah.

Right. It brings everyone together and it. You know, it kind of pushes people. And then when you win and you beat them, it's a good feeling, but then you're kind of like, okay, well, yeah, we need something else to rally the troops, right?

And you know what else, especially at this moment in crypto, is there's no one to blame but us. So we are told all of these stories about why, and this is going to get to what I think is the heart of, what's happening at the heart of crypto right now. Which is a trust problem. We used to— hey, crypto, we're in a bear market because FTX blew up. We're in a bear market because Gary Gensler. We're in a market because Jane Street is selling, selling. I mean, it's just hilarious to me that now we're blaming Jane Street. I mean, if you think of the villains list, like how low the bar—

that's what I'm saying, we're going down. There's a necessity for an enemy and we're, we're searching for one.

But now I think we're realizing there's no one to blame but us. And you know, we've talked about why are these assets not going up because of, oh, it's a capital access problem. So we got that. No, it's not. We have an asset problem and we have a trust problem. That is, that's the core of what's happening right now, which is, you know, we'll get into some of the data that backs this up later, but I mean, the average token or the, the median net return of a token over the last 5 years is down 80%. That is, that's the problem with the industry. And there's a lot of startup market structure reasons for that, but there's a broken structural piece that's unique to tokens, especially I think at the moment. And as we, you know, continue to build up and as the industry find its foundation, which is going to do a huge, a huge part of what needs to happen is repairing that trust.

Hmm. Okay. You said two interesting things. One is The assets are broken and trust is broken. Where do you wanna, which one do you wanna start with?

Can we, I feel like this is actually where maybe there's a little bit of a unique perspective from our beginnings in media here.

Yeah, I agree. I agree.

And I think this, when you're building a media business, your whole asset, the whole thing that you're doing is trust really. And I think maybe that's something that we accidentally backed into or an insight that we had from. Those years of running a media business where we're like, this is really, really, really important. I, and I actually turn, I'm yammering a lot here, like just for people who maybe aren't as clear as, you know, what it is that you're building in a media business. Like, uh, let's talk about the history of Blockworks here and how trust was super central to that.

Yeah. Okay. So we, when we originally started Blockworks, there were actually a decent, so the, the only places where you could get information were CoinDesk, CoinDesk. Cointelegraph, one podcast, which was a podcast called Epicenter, and then Laura Shin came and Reddit and crypto Twitter wasn't even really a thing. And so the thesis that Mike and I had was eventually this really retail-driven asset class will become a big institutional asset class, and those institutions are going to need something that looks and feels more like maybe a Wall Street Journal or a Bloomberg, something that they— and I'd underline this word— trust. And it kind of came from getting laughed out of the room when I was working at this venture firm and, you know, I'd put like Crypto Panda, you know, Reddit posts in front of them and kind of get laughed out of the room. And so, yeah, we, you know, I think the institutional folks needed an information platform they could trust. And so we start, we built that, right? We, you know, we started with podcasts and with events and then had newsletters and, you know, a couple of years in, we realized that there were all these good news outlets. Right? Media brands, but they weren't, they were all catering to kind of this crypto native crowd, right? The, and also really the retail crowd. And so we decided to get into the news business, right? For better or for worse. And we launched the news business January of 2021, right? We hired reporters and, you know, we're no longer in the news business. We don't do that anymore, but we spent years building this up into what I think is one of the, you know, I feel like it's, you know, fair to say we're one of the most formidable media news outlets in crypto for a couple of years there, and we learned a lot about what it takes to build a trusted brand and the sacrifices you have to make to do that.

Yeah. And it's funny, I feel like that lesson is getting learned in even some adjacent areas. Like DeFi is a really interesting example that we'll talk about later in this podcast where, you know, if you asked your average DeFi founder, what are you selling? They would say something like yield, good risk-adjusted yield. If you were to ask a Fidelity product manager or fund manager, what are you selling? They would say trust. And I, I think that the whole industry is kind of converging on this same idea of needing trust. And yeah, I, I think we learned it, it's just so deeply in the DNA of Blockworks that is learned from the media side of things, and we've carried that over a little bit. Onto the data side of things. But, you know, for maybe it would be helpful. Um, this was a presentation that I went through at DAS this year, but it's one thing for us to just say, hey, things are broken. Uh, people really appreciate, I feel like, data getting put around this stuff. So I'm actually going to share, um, you know, just in a couple of really quick slides, um, you know, just how broken things are and what we say when we mean by this, because You know, when people say institutional bull market, obviously you and I believe that, but that's only half the story that we're talking about here, which is everyone loves a meme. But you know, we talk about the institutional bull market. I mean, we've talked about biggest guests we've ever had, chairman of the SEC and the CFTC, BNY Mellon CEO. These are things that were absolutely impossible a couple years ago, and everyone's talking about the same stuff. Stablecoins, RWAs, you know, uh, you know, the Treasury Secretary saying there's going to be $4 trillion in stablecoins. Just don't look at the tokens. And that's the thing that's really broken and still existential to the industry. So basically the bull market is here. It's not here for tokens. And here's just look at how bad the data is. So from a total market cap perspective, this is like, this is total crypto market cap. Now you and I aren't, you know, like TA trading guys, but you know, I could draw a little line here, you know, something like higher highs, you know, weakness becoming support. Blah, blah, blah. This looks pretty good. I'd buy this chart. This is the same exact chart, just with Bitcoin and ETH out. That still looks okay, but way less good, right? Like that looks like about, we haven't really done that much in the last, you know, since late '21, early '22, we've peaked out at about the same in terms of market cap. But then when you look at market cap, it's really a function of the number of assets and the price of those assets. So let's look at what's happened to the number of assets. Way more, way, way more. If you're not following along on your screen here, we've gone from about, you know, 2 million some tokens to just over 35. That is an explosion of the supply, right? So if you were to look at the normalized market cap and look at it on a per token basis, adjusted for the supply. It's this blue line here, which is way worse, which is basically, as crazy as this sounds, the average token is essentially where it was in July of 2020, pre-2 bull markets ago. And if you look at it from the peak, the average token is down about 50% in market cap terms. But that's not even the full story because as we know in market cap, you can inflate the supply of token. So if you were to take out that inflation and adjust for that and look at price, it's this purple line.

Whew. Nope. Not good.

Purple line here. And, and the last thing, because you and I hear this all the time, it's like, well, if we just built great products that were generating revenue, that would fix everything. That's actually not true. So in the beginning, uh, or a while ago, um, or Sorry, back in 2021, price and revenue, the amount of fees that were being generated on-chain, actually matched up pretty well. Look at 2025. We generated a ton of on-chain fees and the prices didn't move. So, net-net, what can you take away from all of this? It's not just a revenue story. It's not just build great products, generate tons of revenue. We're actually doing that and the prices still aren't going up. So what it tells you is there's a trust problem. Investors have stopped. They never really understood what the difference was between a token and, you know, equity in the project. There's not really shared understanding of how to value this stuff, where it all belongs. And token investors have been rugged so many times along the way in ways which would never in a million happen and, and never in a million years happen to equity investors, like just buying out all of the IP and team behind a token. And the token holders get nothing. That it doesn't matter if you generate a bunch of revenue because the investors are going to discount it and say, I don't even know if this is going to come to me. So yes, there's obviously a, we need better products and more revenue, but there's another problem. There's a structural trust. What am I getting here? Challenge.

Yeah. Yeah. And I think one, I think one of the things that happened is in a race and a sprint to build this industry, we abused some of the tools that we had, right? So if you look at tokens, they had the opportunity to be these great mechanisms. But it turns out we actually had a lot of things from the equities world that worked really well, right? Like shareholder rights and, you know, passing revenue back to folks. But a lot of these things were never actually possible because of the regulatory situation, right? And so now we actually have this— what I mean, one of the other big things that doesn't show in those charts is like, you know, the tokens sometimes weren't even able to do the things that they should do because the regulatory situation was so bad. But now, right, we have this regulatory regime that's actually going to let you do the things that the token, you know, that the token should do. And so now is probably, I would argue, the most important time ever to be, you know, for the folks who are running tokens, the most important time ever, and actually probably the greatest opportunity for people who run. I mean, it doesn't feel like that today because, you know, I think sentiment is pretty low, but I really do think it's the greatest time ever for people who are running these tokens. You just have to do it in the right way.

I 100% agree. You know, there have been times also emotionally at Blockworks. I don't know if this resonates with you where it feels like you're losing, but what you're actually doing is winning. Yeah, like I remember 2023, end of '22, '23 was probably the year where we leapfrogged many of our competitors at that time. So you might say, hey, that must have felt like one of your best years ever at Blockworks. It did not feel like that at the time. I do not remember that year feeling like we're winning here. I mean, it felt like we're getting punched in the face every single day. And I just, I have to pattern match that to this moment in time where it doesn't feel like we're winning, but I think we're winning. The rubber's meeting the road. The, the, the reason it feels so bumpy is because we've been accepted. We've gone from this fringe movement based on a lot of ideology to mainstream, but then there are some very tricky thorny problems where the ideology runs up into reality, and that's what we need to solve. So maybe that's a good lead in, you know, I want to talk about the rebrand. I also want to, even before we get there, talk one level higher about Blockworks and, you know, how we've reoriented our business a little bit to fit this current environment.

So yeah, maybe, maybe get into, so let's talk, maybe I can tee it up. I'll talk about this transition a little bit and then, and then let's get into the, the next phase of what's coming for Blockworks. So I guess taking us up through the timeline, right? I mentioned we got into news and media in January of 2021. We built this really formidable brand, right? Revenue grew year after year. Um, you know, profitable, bootstrapped for a while. In 2022, we saw this huge opportunity to get into data. And again, it was very similar to what we saw with media and news, which is, you know, there were other people doing, you know, other media outlets, but we didn't think any of them were doing it right. We saw that with data. There are other great crypto data players. We just didn't think any of them were doing it necessarily at a, you know, 10 out of 10 ability. And there were a lot of things that were lacking. And so it's not like we were dying to get into it, but we saw this huge opportunity and we saw, I think, a space where if nobody solved it, the industry wasn't going to grow. So we got into data in 2022. We raised our first outside round. That was, you know, the one which 10T led and Santiago participated in, the Framework folks participated. And, uh, we really started sprinting at this data opportunity. And, uh, yeah, hopefully folks know us for data now. Hopefully folks know that, you know, and that was really only in 2022, but really into 2023 that we started pushing heavily into data. So it's really only been a couple of, you know, a couple short years here. Um, I'd say about a year ago, we noticed a way bigger opportunity than just data. And that's maybe where, you know, if you want to take us into, I think what we're going after today.

Yeah. So I think what we ended up seeing was, if you're a Blockworks employee, you've heard this so many times, right? But it's assets coming on chain, right? That's the trend that we've been talking about internally for years at the business and orienting our product, our products around. But really what is happening here is that capital markets are getting rebuilt and they're getting rebuilt on chain. That is the big opportunity megatrend of the next 5 to 10 years. And so when you think about capital markets, what powers capital markets is trust, um, and infrastructure that connects investors and people with capital with people that want to use that capital, businesses, on-chain businesses. So that is the opportunity that we are orienting Blockworks around. We are the connective tissue, um, that powers these on-chain capital markets with a layer of standardized disclosures. Standardized data, and we connect investors who want to deploy capital with on-chain businesses that require that capital. And that's really the whole thing of what we're trying to do with Blockworks. We are trying to build trust in this new economy instead of capital markets that's being built on-chain. And by the way, we have no doubt that that's going to happen, but that is really the burning problem that needs solving. And so when you think about what are we attacking on a 1, you know, 12 to 18 month kind of time horizon here, actually going to start with one layer below the data because everyone's like, we need GAAP accounting and we need revenue. Before we need that, there's actually just a standardized layer of disclosures, right? Across right now we're focusing on tokens, but I'll talk about, um, you know, plans further out. This is getting jumpstarted for for all my legal nerds out there, that this is already happening with clarity. This is getting defined, and this is either going to get passed through the legislature, or the SEC is going to mandate this via rulemaking. But the days of tokens, just being able to launch this liquid instrument, not really define what it is, provide no disclosures about ownership, sales, those days are ending. And they, by the way, they should end. This does not work. Refer back to the data that we just showed. It's broken. It doesn't work. So there's actually a layer of disclosures that is the bedrock, which is just super table stakes, basic stuff. What does the ownership structure look like? What do the emission schedule look like? Who are the insiders? When are they selling? Do they have to disclose their sales? Super, super basic stuff like that, right? So there's a disclosure layer that, that is missing from the business that everyone needs. On top of that, there is kind of like a market, there's an intelligence layer, right? Which is, okay, now that I have that very basic information, how can I use data basically to inform either, you know, enterprise workflows like my listings or, you know, earn program integrations at exchanges or, you know, you know, stablecoin issuance at banks, kind of these enterprise workflows or, um, you know, kind of helping investor, like helping investors get to better understand tokens and doing things like investor relations. By the way, all of that whole data layer is powered by AI, right? So the days of— I used to be a consultant. Any analyst knows the pain of like sorting through 2.5-year-old 10-Ks and you're looking for one line item. All of that is going to be answered by AI. Like, we can do this stuff way The exciting thing about this is that we can actually do this much better than TradFi does. Right now we're operating at a 1 out of 10 compared to TradFi. We should be operating at a 15. We have all of the tools, we have transparency, we have real-time data. We're just not leveraging that. So anyway, to zoom back into the 12 to 18 months, it's providing that, it's building that disclosure layer and then the intelligence layer that plugs into investor and enterprise workflows.

Yeah. The way I almost think about what we're trying to do here at Blockworks is, is a marketplace in some senses, right? So what we do is we connect investors and businesses in on-chain capital markets. We give the businesses a platform to earn the trust, and we give the investors the information they need to underwrite the asset class. And we have this unique competitive edge in, you know, the media and the events brands, right? Which you're, you're, you know, you're listening to one of our podcasts today. So we take basically the base layer, which is data and disclosures. We build things on top, dashboards, analytics, reporting, things like that. We give the, you know, the companies the tools and then we leverage our media and events assets as well. So yeah, we're excited about it. We're, um, I think, you know, if you think of one thing post this rebrand and what we're really trying to tell the market is we're building a platform here. We're building a platform, you know, on top of the software and the data and the AI that we've built. And we're using a lot of our media and events assets to grow that much faster than we ever could, you know, with, you know, if we didn't, if we didn't own these assets.

So, yeah. So let's talk a little bit about just externally what's happening in the market. 'Cause people always ask us too, like, why now? What is, what's happening now? The problem with crypto is that there's a ton of information asymmetry. That's fine in private markets where that's the status quo, but as soon as there's publicly traded instruments like tokens, that info asymmetry is not good. So that's getting solved in real time. Like, I would encourage everyone to get up to date on what's happening with clarity, but even if it doesn't happen with clarity, it's still going to happen via SEC rulemaking. Um, this is a part of the idea, like the ideology of you should just be able to launch a token and do whatever, it's decentralized to, okay, it doesn't actually really work that way in practice. And because it doesn't work that way in practice, we need a lightweight, hopefully pretty easy version of disclosures and things like that. So that is what's coming down the pike and actually changing things. The, the other thing too, that is a more thorny challenge for founders to think about is if you were to look at public company CEOs, anyone that has a publicly listed instrument, half— you have two, you have two products. One is your actual business and the product or service that you're selling, and the other is your instrument. So the CEO or the CFO. Of a publicly traded company spends a lot of time on their business, on their internals, all that kind of stuff. But they also spend a lot of time selling their other product, their stock to their investors. And the honest truth is that you just have to do both of those things. It doesn't really matter at the, at some point you will get to a point where you need to, you need to be active. You need to be out there telling the story. And there's kind of two distinct stories that are obviously very related.

Yeah, I mean, I would also point to one other problem that I think has existed with tokens so far, which is the founders and the team treated the shareholders and the, and the customers as the same person. And that was kind of actually the vision, which was a fun vision for a little bit, right? It's like Uber bootstrapping the network and the people, you know, the early Uber customers end up owning the Uber tokens. It's, it was a good vision, but I think in reality what's happened is that the, your shareholders are very different than your customers. And so this idea of governance tokens, you know, maybe, maybe it was kind of the wrong vision. And so instead of talking to your users and your customers like they're the shareholders, you actually have to talk to these people like these are, these are two separate groups, right? And especially as the institutional capital moves into the industry, you know, you've got your customers, right? This is your product marketing and kind of you know, your, your more standard conversations about how you talk about your product and stuff like that. And then you have your shareholders and this, there are retail shareholders, but there's also institutional and everyone in between.

So this is one of those ideas that sounded nice and was kind of an ideological pillar of early crypto and just got shredded as soon as it actually ran into reality. There probably is some overlap in terms of users and investors, there have been unsuccessful projects. You point to Bitcoin or Ethereum potentially, or Hyperliquid is probably a great example of this in a more modern sense. But even those projects, as it gets more mature, even if you think about the stakeholder governance of something like Bitcoin, which is the ultimate decentralization, there's no real product other than the money. Yeah, you look at the governance of the core devs plus kind of the miners, and that's very distinct at this point from You know, the holders, there's a more tenuous connection, which is those people probably have a lot of Bitcoin and they're incentivized to make it go up, but they're, they're just very different groups of people.

Totally.

And you gotta talk to both. Now, if you're a super early stage company, you should just focus on finding PMF, but then you probably shouldn't have launched a token either yet, you know? Right. So that's, that's the other thing too. If you have a token and you don't want it to keep going down, you you know, you gotta talk to people and you gotta tell the story and you don't have to do it all alone either. Like you can get support, you can plug into networks, you can leverage data to tell that story better, but you gotta tell the story.

Do you think this idea of broken tokens is the biggest thing holding the market back today?

I do. I think it is the nu— I actually, I think that if you had not even every token, because it's not going to be every token. 10 to 15 tokens, if 10 to 15 tokens started to compound and return, I think it would solve every problem because it would force others to join.

It would for— and by the way, I actually do think that's how we get out of this bear market is that a few tokens say, you know, we're going to maybe kill our equity. We're going to drive all the returns back to the token. And, um, we're gonna have one simple structure. We're going to generate revenue. And, uh, those tokens will get rewarded in the market and then other founders will see those tokens get rewarded and it will start to, the flywheel will start to happen.

You know what else, not to keep putting this in, um, sociological kind of terms here, but if you think of crypto as a political movement, any movement is you're building a coalition of people who actually want different things, but you unite under one roof and party. And crypto actually was that. There were different motivations for people to be in this industry. And the cypherpunk one was the only socially acceptable one for a long time. You had to be like, I live and breathe cypherpunk, that's why I'm here. I think a lot of people were LARPing when they talked about that. I think there's a really strong contingency of that. I also think it's not mutually exclusive. I care about a lot of that stuff. Another huge reason though, why I wanted to work in crypto, it is because you're getting in the ground floor of an industry and the pace of innovation is so fast and it's so interesting. It's so, stimulating that, that's a huge reason why a lot of people work here. And as this industry collides with reality, it's given people permission to say, you know, there's another, there are other reasons to work in this industry other than just, you know, the pure ideological cypherpunk stuff. And I think that's a bigger one for people than they would actually really admit. And I think what people want is the ability to bet on companies at an earlier stage, like Dell went public at $150 million market cap. You could have bought Dell for $150 million in the public markets at one point. That's freaking cool. We should go back to that. I think it sucks that private markets are now so big and okay, great. OpenAI is going to IPO at a trillion dollars. So there's like 1,000 people that have made money on that. That sucks. That sucks. So tokens getting fixed solves this problem. It allows people to open up, it opens up the market at an earlier stage and allows people to get access to this stuff at an earlier stage, which is a societal good. Now what you need to solve is you need to find the right balance of how much ish, how much information do you need to disclose so that it's not so painful for those issuers that they're just like, screw it, I'm going to stay private. And that's where crypto fits because all of that data is live. It's literally live data that already exists. All you got to do. Is organize it. And I think that over time, you know, those businesses should be treated, you know, with kind of like an equity light sort of framework because you're disclosing so much more than your average business. Yeah.

The other, the other interesting element here is as equities come on chain, right? As more and more, not just equities coming on chain, but as more companies do things on chain, right? Figure, Coinbase, Robinhood, Stripe, right? Uh, Cloudflare is launching a stablecoin. Like as more businesses do things on chain, you can actually start to see their metrics and their numbers in real time. And this is, uh, one, one very fun example of this right now is Figure, right? A lot of Figure's business is on, uh, provenance, right? It's on-chain. So, uh, if you look at most, when, uh, you know, when, when most equity, when most stocks have earnings, the price moves because they either, you know, if it's a maybe a newer stock, like they're still fig— like they either miss big or they hit big. And you know, the stock tends to move a decent bit on earnings day. Figure doesn't move that much on earnings day. And the reason for that is because the analysts on Wall Street are actually all just looking at the on-chain data. So you can see their 90% of their business. So the earnings days are actually kind of not that big of a deal for a company like Figure, and that will become more and more of the norm.

Yeah. And I think some of the nuance here to figure out too, because if you're a founder listening to this, you're like, ooh, do I really want all that information public? There's, there's probably the right amount. Think about the way that companies disclose information. If you've ever pored over a 10-K, companies get some amount of discretion in terms of, okay, I don't need to disclose the terms of every single enterprise contract. That doesn't make any sense. But I do get to see the business broken out by some people, some divided by geography, the North American business versus the EMEA or whatever, you know, type of like business. Or you can break it out by a product line. And I think we'll find some way of doing that. But I also think, I mean, the Coinbase example is so interesting because Coinbase gets punished from volatility because the analysts consistently miss on the direction of just how cyclical crypto is. So if you, so I've listened to every single Coinbase earnings call ever, because it's just fun for a, for a long period of time, they were the only public company. In bull markets, if you go back and look at the analyst expectations versus especially the transaction-based revenue, it's always off. So Coinbase benefits a huge amount. Their stock rips because they outperform the analysts. They get punished though on the way down because the analysts just— this doesn't exist in public markets, right? Like you don't have public companies where a revenue line gets cut in half, you know, depending on the cycle. And so then they get punished too much on the way down. That transparency, having the real-time data, if the right amount is displayed, actually smooths volatility. It smooths the volatility over. So that's the opportunity for on-chain businesses. And then because all of that data is just live and it's up to date and real-time, I feel like Coinbase and any public company that does that should get some props. You should be right. They should have to do less of the other bullshit that comes along with being a public company. So yeah, that's what I feel like the vision here.

Yeah, I agree. I agree. So where do you think, um, maybe we can talk more about just like the, this, this updated version of Blockworks. I wouldn't, I think calling it new Blockworks is probably the wrong way to look at it. Updated version of Blockworks, uh, you know, Blockworks 2.0, whatever we want to call it. Where do you think? RWAs and on-chain capital markets and, you know, bonds on-chain, where does that fit into kind of what we're doing here?

So yeah, I think maybe right before we get into that, this would be a good time to review kind of the storytelling part of the rebrand here. And for design nerds, you, you'll love this, but basically, uh, to give like a quick minute and a half description of this, almost every brand that you see out there today is like going into space. There's a lot of like, it, it's the era of like SpaceX and OpenAI and everything. Everyone's looking up, which is super cool. I do that in my personal life. I'm a huge, I don't wanna discredit everything I said. I'm a huge space guy. You know, I love the James Webb shit. Love looking out into space.

Big UFO guy is what you mean.

Hey, whoa, I didn't use that word. So we actually went the opposite way and we went down into the bedrock and the foundation. And if you look at a lot of our branding, we're keeping that signature Blockworks purple. But we have a lot of imagery of stone and solidity and caves and identifying things via echolocation. And that's the, that's the reason why I think this is so cool. And it informs what we view as the opportunity for this space, which is, for lack of a better word, it's the seam. It's the seam in between the capital markets that exist today. In the capital markets that are getting built on-chain. You need a lot of help and support to actually do that. So we first approached tokens, right? And this is what are the fundamental building block disclosure, basic information that you need for a token. But as we know, there are other types of instruments which are getting represented on-chain. Today we just call these RWAs, but a treasury fund or the share of a private company or public companies that are getting traded on-chain. Turns out, you know, a share of, uh, Tesla, one share of on-chain Tesla does not equal the other. Some of them are in these weird SPV structures. Some of them have like built-in liquidity sleeves that change, that fundamentally change the actual definition of what the product is. Everything that we just talked about for tokens is going to need to get built for RWAs, vaults, general earning and yield products, all that stuff, right? There's a huge market here. And then when you think about all of the supporting infrastructure of capital markets, now everyone says crypto's so complicated. Look at a diagram of what capital markets look like in crypto. You just don't question it anymore. But Jesus, there are a lot of layers to this. And in crypto, there are businesses like Moody's, you know, that gives you, if you want to issue bonds, it gives you some kind of rating, right? They have their own data and analytics and research business. There's Morningstar, which takes a look at funds and asset managers and gives them rankings. There's this kind of smorgasbord, very actually fractured, uh, supporting infrastructure of capital markets. All of that needs to get rebuilt. And our thesis is that this is going to happen in one consolidated business. The dynamics and the returns to scale of actually building out crypto data, which is maybe 100 times harder than people actually think. Um, all like, that's the kind of foundational building block that you need to build all of these businesses. And so we think all of these different types of like kind of fractured data framework businesses that exist in capital markets are going to get rebuilt in crypto and it's going to be one consolidated winner. And that is the market that we're re— that's kind of the future. So if we laid out all the work that we're doing with tokens around the framework and the intelligence solution, you can expand that into different types of instruments. And that's the market that we're tackling. Yeah.

Big, exciting, exciting, exciting, exciting.

Is this the most excited? How do you feel? Sentiment.

We've been doing this for years. The leading question. The leading. What if I said no?

No, this is, this is actually take all the air out of this podcast. Like, nah, this is like fourth, fourth.

Yeah. We look, this is year 9 now of Blockworks, right? We're 8 and a half years into this journey. This, this is like definitively the most excited I've ever felt. It was funny. Uh, you, you, you sent out a tweet the other day saying like, you know, this is the most excited I've been about crypto. And there were a couple founders who messaged me saying, why is Mike trying to like, like basically we're not happy that you sent that out. Cause they're like, this is such a depressing time to be a crypto founder. Why is he trying to like drag us in the mud? Um, I was like, oh, that wasn't, I mean, what wasn't really meant, certainly not the point of the tweet, certainly not the point. But, um, yeah, it's, it's, uh, I think the industry is kind of splintering a little bit, it feels like. And there's a, I mean, it's definitely because of the reasons that we talked about at the top of this episode, but I think there's, it's an interesting time of consolidation in the industry, which we haven't talked about really on the show at all yet. But, you know, Santi and Rob and I have been talking a lot about on Empire is the winners are going to win big here. And, you know, by definitely not because of our skill, but a lot of luck. We have found ourselves in a good, good position here. And yeah, it's a good, it's a good time to be at Blockworks.

So. I think that that's going to happen all across, zooming out of everything that we just discussed. I think that that's going to happen across many different sectors in crypto. And, you know, one interesting place that you've seen it is with capital availability based on the stage of business. So at one point there was so much capital that was available for early stage businesses. And you had a lot of VCs that were actually closet token flippers, right? And the risk was inverted generally in startup land. The later the stage you are, Series B, C, the less risky it is because you've proven out and you've founded, you found product market fit. It's the opposite in crypto where the idea was if you get in super early at a super low val, the token will go live and that's your lower cost basis. You're actually, you have less risk the earlier you go. Now, one, because of how poorly tokens have performed and because there's consolidation around the categories that win, now another effect is taking place, which is winners consolidate, winners are going to keep winning. And so you've seen investment move further out along, you know, in the, in the capital stack. But also I think you're the barriers to entry, like good luck competing with Polymarket or Kalshi if you're a prediction market. You know, my prediction is that no one's going to compete with them. They kind of won the category at this point. So I think that you're going to see, that's why kind of threw this number out of like 10 tokens that are going to win because there are about 5 categories that everyone believes in and there are probably 1 or 2 winners. So I don't think it's going to be this huge surge in everything winning again. I do think there'll be some knee-jerk surge where capital moves back into the space and maybe the dino coins pump a little bit, but you, that dispersion trend and the winners winning and compounding. I think will happen and it'll give faith to everyone again. It's like, ah, yes, we, this is what we're doing here.

Do you have a sense of what the timing is? Do you have a, not to get too far away from the topic here, but yeah. What's your timing for like what, what this looks like?

I mean, I think everyone overcomplicated and something like the 4-year cycle is clearly in effect here. And if you look at how this has played out in the past, there's the initial dump, then there's kind of actually an initial recovery, ha, faster than you think, that no one really believes. 'Cause it doesn't translate. Business sentiment and activity lags price by about 6 months.

Right. This was 2023, right? Prices started to move higher, double, you know, went, went up 2x, 3x, 4x.

Go back to 2019. Go back and look at 2019 too. It was the same. Bitcoin doubled that year.

Yeah.

And it was, I remember it as one of the most depressing years of, of the time that we've been in crypto. So that's what I think this year will be. And then I think you'll start to see a resurgence and people will think, oh, everything is back. And then the winners pull ahead. And that's if I had to hazard a guess, and maybe that starts to happen around, I think you'll see the general move and sentiment start to align towards the tail end of this year. But the compounding of this market, we already saw this last market, didn't we? I mean, it's not like everything won. There was clear dispersion, but I think there will be, uh, I think that that trend will continue into this next, this next cycle.

Yeah, I agree. I agree.

All right, partner, this was fun. Uh, this was fun.

Oh, I should go. Um, so the one, one last little tidbit about this rebrand is we did this entirely in-house. So the way that most companies, I guess, of our stage do these rebrands is you hire a big fancy agency and you spend, you know, there's another company that just did a big rebrand. I talked to the founder the other day. They spent $850,000 and it took them a full year to do it. We did this entirely in-house. So big shout out to our, yeah, creative team, Reed, who's been, uh, at Blockworks for 8 years, head of creative, and Zach and Crystal and yeah, everyone internally. It's, uh, I would really recommend people go check out like our social handles and our, actually just go to our website, especially on, on desktop. It's really, really nice. And yeah, if you guys have feedback or you love it or you hate it, mostly if you love it, let me know. So yeah. And, uh, yeah, exciting guys. And just, yeah, thanks for listening to the pod. And there's a lot of cool stuff that we have coming out of Blockworks and making another fun announcement next week. So yeah, appreciate everyone.

All right, cheers everyone.

Cheers folks.